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Encyclopedia > John Law (economist)
Jean Law
Jean Law

John Law (bap. 21 April 1671 - 21 March 1729) was a Scottish economist who believed that money was only a means of exchange that did not constitute wealth in itself, and that national wealth depended on trade. He is said to be the father of finance, responsible for the adoption or use of paper money or bills in the world today. John Law File history Legend: (cur) = this is the current file, (del) = delete this old version, (rev) = revert to this old version. ... John Law File history Legend: (cur) = this is the current file, (del) = delete this old version, (rev) = revert to this old version. ... Baptism in early Christian art. ... April 21 is the 111th day of the year in the Gregorian calendar (112th in leap years). ... Events May 9 - Thomas Blood, disguised as a clergyman, attempts to steal the Crown Jewels from the Tower of London. ... March 21 is the 80th day of the year in the Gregorian Calendar (81st in leap years). ... Events July 30 - Baltimore, Maryland is founded. ... Motto: (Latin for No one provokes me with impunity)1. ... Paul Samuelson, Nobel Prize in Economics winner. ... An example of Money. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... A fruit stand at a market. ...


Law was a gambler and a brilliant mental calculator, and was known to win card games by mentally calculating the odds. An expert in statistics, he was the originator of economic theories, including two major ideas: 'The Scarcity Theory of Value' and 'The Real Bills Doctrine of Money'.


Biography

Law was born into a banking family from Fife; his father had purchased a landed estate at Cramond on the Firth of Forth, and after his death in 1688, Law travelled to London and lost large sums of money in gambling. Fife (Fìobh in Gaelic) is a council area of Scotland, situated between the Firth of Tay and the Firth of Forth, with landward boundaries to Perth and Kinross and Clackmannanshire. ... Lauriston Castle as it appeared in 1775, before the 1827 addition by William Burn. ... Cramond is a village built on the east side of the River Almond where it enters the Firth of Forth forming a natural harbour, now a suburb of Edinburgh. ... The Firth of Forth from Calton Hill The Forth Bridges cross the Firth Satellite photo of the Firth and the surrounding area The Firth of Forth (Abhainn Dhubh [Black River] in Scottish Gaelic) is the estuary or firth of Scotlands River Forth, where it flows into the North Sea...


On 9 April 1694 John Law fought a duel with Edward Wilson. Wilson had challenged Law over the affections of Elizabeth Villiers. Wilson was killed and Law was tried and found guilty of murder and sentenced to death. His sentenced was commuted to a fine, upon the ground that the offence only amounted to manslaughter. Wilson's brother appealed and had Law imprisoned but he managed to escape to the continent. April 9 is the 99th day of the year in the Gregorian calendar (100th in leap years). ... Events February 6 - The colony Quilombo dos Palmares is destroyed. ... The examples and perspective in this article or section may not represent a worldwide view. ... Elizabeth Villiers ( 1657- April 19, 1733), was the daughter of Colonel Sir Edward Villiers of Richmond and his wife, Frances Howard. ...


Law urged the establishment of a national bank to create and increase instruments of credit, and the issue of paper money backed by land, gold, or silver. The first manifestation of Law's system came when he had returned to his homeland and contributed to the debates leading to the Treaty of Union 1707 with a text entitled Money and Trade Consider'd with a Proposal for Supplying the Nation with Money (1705). After the Union of the Scottish and English parliaments, Law's legal situation obliged him to go into exile again. The term national bank has several meanings: especially in developing countries, a bank owned by the state an ordinary private bank which operates nationally (as opposed to regionally or locally or even internationally) In the past, the term national bank has been used synonymously with central bank, but it is... Credit as a financial term, used in such terms as credit card, refers to the granting of a loan and the creation of debt. ... Paper Money is the second album by the band Montrose. ... General Name, Symbol, Number gold, Au, 79 Chemical series transition metals Group, Period, Block 11, 6, d Appearance metallic yellow Atomic mass 196. ... General Name, Symbol, Number silver, Ag, 47 Chemical series transition metals Group, Period, Block 11, 5, d Appearance lustrous white metal Atomic mass 107. ... Walter Thomas Monningtons 1925 painting called Parliamentary Union of England and Scotland 1707 hangs in the Palace of Westminster depicting the official presentation of the law that formed the United Kingdom of Great Britain. ...


He spent ten years moving between France and the Netherlands, dealing in financial speculations, before the problems of the French economy presented the opportunity to put his system into practice.


He had the idea of abolishing minor monopolies and private farming of taxes and creating a bank for national finance and a state company for commerce and ultimately exclude all private revenue. This would create a huge monopoly of finance and trade run by the state, and its profits would pay off the national debt. The French Conseil des Finances, merchants, and financiers objected to this plan. In economics, a monopoly (from the Latin word monopolium - Greek language monos, one + polein, to sell) is defined as a persistent market situation where there is only one provider of a product or service. ... Tax farming refers to the method of tax collection practiced in France during the days of the Ancien Régime (prior to Louis XVI). ...


The wars waged by Louis XIV left the country completely wasted, both economically and financially. And the resultant shortage of precious metals led to a shortage of coins in circulation, which in turn limited the production of new coins. It was in this context that the regent, Philippe d'Orléans, appointed the Scot, John Law of Lauriston (1671-1729), as Controller General of Finances. Louis XIV King of France and Navarre By Hyacinthe Rigaud (1701) Louis XIV (Louis-Dieudonné) (September 5, 1638–September 1, 1715) reigned as King of France and King of Navarre from May 14, 1643 until his death. ... Philippe of Orléans Philippe II, Duke of Orléans, Philippe Charles (August 2, 1674 - December 2, 1723) called Duke of Chartres (1674-1701), and then Duke of Orléans (1701-1723) was Regent of France from 1715 to 1723. ...


In May 1716 the Banque Générale Privée ("General Private Bank"), which developed the use of paper money was set up by Law. It was a private bank, but three quarters of the capital consisted of government bills and government accepted notes. In August 1717, he bought the Mississippi Company, to help the French colony in Louisiana. In 1717 he also brokered the sale of Thomas Pitt's diamond to the regent, Philippe d'Orléans. In the same year Law floated the Mississippi Company as a joint stock trading company called the Compagnie d'Occident which was granted a trade monopoly of the West Indies and North America. The bank became the Banque Royale (Royal Bank) in 1718, meaning the notes were guaranteed by the king. The Company absorbed the Compagnie des Indes Orientales, Compagnie de Chine, and other rival trading companies and became the Compagnie Perpetuelle des Indes on 23 May 1719 with a monopoly of commerce on all the seas. Of course, the system however encouraged speculation in shares in 'The Company of the Indies' (the shares becoming a sort of paper currency) and inflation. In 1720 the bank and company were united and Law was appointed Controller General of Finances to attract capital. Law's pioneering note-issuing bank was extremely successful until it collapsed and caused an economic crisis in France and across Europe. Headquarters Paris, France Central Bank of France Website banque-france. ... The First Provincial Bank of Taiwan in Taipei, Republic of China was formerly the central bank of the Republic of China and issued the New Taiwan dollar. ... A bill can refer to: Look up bill in Wiktionary, the free dictionary. ... In August 1717 Scottish businessman John Law acquired a controlling interest in the then derelict Mississippi Company and renamed it the Compagnie d’Occident (or Compagnie du Mississippi). ... This Article does not cite its references or sources. ... Thomas Pitt Thomas Pitt (July 5, 1653 – April 28, 1726), born at Blandford Forum, Dorset, to a rector and his wife, was a British merchant involved in trade with India. ... In August 1717 Scottish businessman John Law acquired a controlling interest in the then derelict Mississippi Company and renamed it the Compagnie d’Occident (or Compagnie du Mississippi). ... A joint stock company is a type of business partnership in which the capital is formed by the individual contributions of a group of shareholders. ... In August 1717 Scottish businessman John Law acquired a controlling interest in the then derelict Mississippi Company and renamed it the Compagnie d’Occident (or Compagnie du Mississippi). ... The Caribbean or the West Indies is a group of islands in the Caribbean Sea. ... World map showing North America A satellite composite image of North America. ... Headquarters Paris, France Central Bank of France Website banque-france. ... The terms Royal Bank, Banque Royale, Banco Real can connote several different things, RBS, the Royal Bank of Scotland RBC, the Royal Bank of Canada Royal Bank Plaza, headquarters of RBC in Toronto, Ontario, Canada. ... Louis XV (February 15, 1710 – May 10, 1774), the Beloved (French: le Bien-Aimé), was King of France from 1715 until his death. ... The French East India Company (French Compagnie des Indes Orientales) was a commercial enterprise, founded in 1664 to compete with the British and Dutch East India companies. ... In August 1717 Scottish businessman John Law acquired a controlling interest in the then derelict Mississippi Company and renamed it the Compagnie d’Occident (or Compagnie du Mississippi). ... May 23 is the 143rd day of the year in the Gregorian calendar (144th in leap years). ... // Events January 23 - The Principality of Liechtenstein is created within the Holy Roman Empire April 25 - Daniel Defoe publishes Robinson Crusoe June 10 - Battle of Glen Shiel Prussia conducts Europes first systematic census Miners in Falun, Sweden find an apparently petrified body of Fet-Mats Israelsson in an unused...


Law exaggerated the wealth of Louisiana with an effective marketing scheme, which led to wild speculation on the shares of the company in 1719. In February 1720 it was valued for a very high future cash flow at 10,000 livres. Shares rose from 500 livres in 1719 to as much as 15,000 livres in the first half of 1720, but by the summer of 1720, there was a sudden decline in confidence, leading to a 97 per cent decline in market cap by 1721. Predictably, the 'bubble' burst at the end of 1720, when opponents of the financier attempted en masse to convert their notes into specie. By the end of 1720 Philippe II dismissed Law, who then fled from France. This Article does not cite its references or sources. ... In finance, cash flow refers to the amounts of cash being received and spent by a business during a defined period of time, sometimes tied to a specific project. ... The livre tournois (or Tournoise pound) was a currency used in France, named after the town of Tours, in which it was minted. ... Market capitalization, often abbreviated to market cap, mkt. ... A commodity metal, historically gold and silver, backing money or currency. ...


Law subsequently moved between London and Venice where he contracted pneumonia and died a poor man in 1729. London (pronounced ) is the capital city of England and the United Kingdom. ... Country Italy Region Veneto Province Venice (VE) Mayor Massimo Cacciari (since April 18, 2005) Elevation m Area 412 km² Population  - Total (as of December 31, 2004) 271,251  - Density 646/km² Time zone CET, UTC+1 Coordinates Gentilic Veneziani Dialing code 041 Postal code 30100 Frazioni Chirignago, Favaro Veneto, Mestre... Pneumonia is an illness of the lungs and respiratory system in which the alveoli (microscopic air-filled sacs of the lung responsible for absorbing oxygen from the atmosphere) become inflamed and flooded with fluid. ...


Books

  • Millionaire: The Philanderer, Gambler, and Duelist Who Invented Modern Finance by Janet Gleeson (2000). (ISBN 0-684-87295-1)
  • Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay. First published 1841, and still available.

Charles Mackay (1814‑1889) was a British poet and journalist, son of a naval officer, born at Perth, and educated at the Royal Caledonian Asylum, London, and at Brussels, but spent much of his early life in France. ...

External links

  • John Law
  • Project Gutenberg Edition of Fiat Money Inflation in France: How ...

  Results from FactBites:
 
John Law - LoveToKnow 1911 (3062 words)
JOHN LAW (1671-1729), Scots economist, best known as the originator of the "Mississippi scheme," was born at Edinburgh in April 1671.
It was republished at Glasgow in 1751 with Law's name attached; but several references in the state papers of the time mention William Paterson (1658-1719), founder of the Bank of England, as the author of the plan therein propounded.
Law now gained the full confidence of the regent, and was allowed to proceed with the development of the "system." The trade of the region about the Mississippi had been granted to a speculator named Crozat.
John Law (350 words)
John Law (1671 - 1729) was a Scottish economist who believed that money was only a means of exchange and did not constitute wealth in itself, national wealth depended on trade.
Law urged the establishment of a national bank[?] to create and increase instruments of credit, and the issue of paper money[?] backed by land, gold, or silver.
Law exaggerated the wealth of Louisiana with an effective marketing scheme, which led to wild speculation on the shares of the company.
  More results at FactBites »

 
 

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