John Law would always be remembered as the man whom had invented the Financial Bubble and, indirectly, accused of causing the French Revolution by blowing its country’s finances; a high-born Scottish genius that loved gambling so much that his greed had led him to his own ruin. In 1694, John Law got in a duel on which had resulted in killing his foil, and thus sentenced to death; but he escaped from prison and flew to Amsterdam. In those times, Amsterdam was the World Capital of Financial Innovation. The Dutch not only introduced lottery loans which allowed people to gamble as they invested their savings in government debts, but also created the best invention ever: the join-stock company. Law saw this as a great opportunity to gain money, and gambling was his best suit. To understand better about investment and …show more content…
Law based his scheme on the absolutist theory of finance (the crown borrow money in a hand-to-mouth way to finance wars) that its gain was the monarchy would delegate his credit to a trading company on which the whole nation become a body of traders, who have for cash the royal bank and by consequence all the commerce, money, and merchandise re-unite. Empire was the key to Law’s vision, hence proposing to take over France’s trade with the Louisiana territory. In 1717, a new company called “Company of the West” was given the monopoly of the commerce of Louisiana, and the control of the colony’s internal affairs as well, for a period of twenty-five years. In its expansion, the company had reached to take over the East India and China companies to form the Company of the Indies, mostly known as the Mississippi Company, meanwhile the country’s economy was growing; and in 1718 the Banque Generale became the Banque Royale i.e. the first French central bank. In the end, Law had secured the profits of the royal mint, wrested the lease of indirect tax farms from a rival