The John Law story reads more like fiction than fact. A bankrupt Scottish gambler, nicknamed Jessamy, is convicted of murdering a well-known socialite in a duel in London's Bloomsbury Square in 1694, but subsequently escapes from prison with government connivance and moves to continental Europe. There he uses his mathematical skills to amass a private fortune in the gambling houses of Holland, France and Italy.
Yet the convicted murderer turned gambler also turns out to be an original economic thinker and in 1715 his ideas come to the attention of the dying Louis XIV. During the Regency that followed the Sun King's death that year, Law gains financial control of France, implementing his unusual ideas on credit and paper currency, setting up a centralised trading company which takes over the gigantic state debt, issuing a new paper currency and launching a state trading company. An economic boom quickly follows but the "system" collapses dramatically in 1720, leaving behind a whiff of economic scandal and widespread bankruptcy. Law then flees abroad and dies of pneumonia in Venice in the spring of 1729, leaving behind him a collection of almost 500 paintings which included canvasses by Titian, Holbein and Leonardo da Vinci.
It was certainly not a dull life, but was Law an unlucky genius or a plausible rogue? The question is not trivial, for his experiment represented the last serious attempt on the part of the French crown to restore its ailing finances before bankruptcy brought the structure down around its ears in 1789. Had he succeeded, French armies might have been able to dominate 18th-century Europe, French kings would have had a viable paper currency at their disposal to rival those of the Dutch and British, and the French Revolution need never have happened.
Yet historians have always been divided over the value of Law's ideas, for few have had the economic expertise and archival experience that Antoin Murphy displays in this impressive book. In a series of clearly written short chapters Murphy outlines Law's early career, and the influence on his thinking of the growth of large banking and trading companies in Britain or the United Provinces. With deft archival detective work Murphy sorts out Law's genuine publications from the many false attributions, and argues that he was an original thinker who left behind a rich vein of economic writing.
An autodidact, but none the worse for that, Law was both intelligent and original, envisaging an economic system based on paper currencies that had no direct relationship to gold or silver. In short, he foresaw the kind of currency system that we have lived with since the US dollar lost its convertible status in 1971. Law was therefore a strikingly modern figure, an independent mind who spent more time at the gambling tables than he did at his books, but who for a short period had the enviable opportunity to put his dreams into practice by running the economy of the world's most powerful country. It ended in tears and tragedy, less because the ideas were wrong than because their implementation was flawed.
Law was a man ahead of his time, but one whose failure stopped the clock of reform for the French monarchy and doomed it to shifting around the deckchairs on its financial Titanic instead of implementing major reform. This is not the first study of the unusual Scotsman's career, but is by far the most complete and authoritative, written with great clarity and based on meticulous research. Law himself might have been intrigued by the fact that it appears at a time when monetary union and a new paper currency are imminent in the European Union. It is to be hoped that European finance ministers will not repeat his fate by dying in exile in Venice.
Hugh Gough is Associate Professor of Modern History in UCD; his book on the Terror in the French Revolution will be published next month