1 00:00:00,080 --> 00:00:01,280 Speaker 1: Hello, odd lots listeners. 2 00:00:01,320 --> 00:00:03,600 Speaker 2: I'm Jill Wisenthal and I'm Tracy Allaway. 3 00:00:03,680 --> 00:00:07,800 Speaker 1: We hope you're enjoying your holiday season and we're taking 4 00:00:07,800 --> 00:00:10,319 Speaker 1: a little break ourselves, so we wanted to bring you 5 00:00:10,360 --> 00:00:13,520 Speaker 1: an episode from one of our fellow podcasts here at Bloomberg. 6 00:00:13,119 --> 00:00:16,280 Speaker 2: A special holiday present, if you will. This is from 7 00:00:16,360 --> 00:00:19,520 Speaker 2: the Marin Talks Money podcast, which is hosted by Maren 8 00:00:19,600 --> 00:00:23,800 Speaker 2: summerset Web and John Steppeck, and it is all about 9 00:00:24,120 --> 00:00:28,600 Speaker 2: one of the most interesting historical economic figures. It's John Law. 10 00:00:28,880 --> 00:00:33,239 Speaker 1: Yeah, that's right. So John Law, eighteenth century gambler, murder 11 00:00:33,640 --> 00:00:36,519 Speaker 1: economic visionary, like I think people say he like, is 12 00:00:36,560 --> 00:00:39,800 Speaker 1: sort of the mind behind fiat currency as we know 13 00:00:39,840 --> 00:00:43,320 Speaker 1: it today, so his influence is still felt. And check 14 00:00:43,360 --> 00:00:44,080 Speaker 1: out the episode. 15 00:00:44,120 --> 00:00:44,880 Speaker 2: We hope you enjoy. 16 00:00:47,960 --> 00:00:54,279 Speaker 3: Bloomberg Audio Studios, Podcasts, Radio News. Okay, look back through 17 00:00:54,320 --> 00:00:56,040 Speaker 3: the history of money, and quite often it seems like 18 00:00:56,120 --> 00:00:58,560 Speaker 3: nothing is happening, long long bits of calm, and then 19 00:00:58,600 --> 00:01:01,480 Speaker 3: suddenly there's a catalyst of some kind. Stuff changes right, 20 00:01:01,640 --> 00:01:05,240 Speaker 3: and you get everything exploding, things flipping, a period of chaos, 21 00:01:05,480 --> 00:01:09,680 Speaker 3: and then everything seems to reinvent itself. John Law. John, 22 00:01:09,800 --> 00:01:14,280 Speaker 3: you know all about John Law. His history reflects exactly that. 23 00:01:14,720 --> 00:01:17,480 Speaker 3: So what we're trying to do here over this holiday 24 00:01:17,560 --> 00:01:21,480 Speaker 3: and over two episodes is tell his story, which tells 25 00:01:21,560 --> 00:01:24,319 Speaker 3: us a lot about money, right yeah, and we need. 26 00:01:24,160 --> 00:01:26,200 Speaker 4: To take two whole episodes to do it. This is 27 00:01:26,720 --> 00:01:31,360 Speaker 4: a special series, Folks, Join Laws Stories. The story based 28 00:01:31,600 --> 00:01:36,000 Speaker 4: fugitive Scotsman clearly identify with that quite closely. Briefly became 29 00:01:36,000 --> 00:01:39,240 Speaker 4: the most powerful mine in France and the richest I'm 30 00:01:39,280 --> 00:01:42,000 Speaker 4: the richest, yeah, which is even more important. And then 31 00:01:42,040 --> 00:01:46,200 Speaker 4: doing so he changed both monetary and arguably European history forever. 32 00:01:46,480 --> 00:01:48,960 Speaker 3: Wow, it's a big story. So stay with us for 33 00:01:49,000 --> 00:01:51,200 Speaker 3: it because his rise and it's for us not just 34 00:01:51,240 --> 00:01:53,760 Speaker 3: about history, is it. It's about the monetary system that 35 00:01:54,040 --> 00:02:02,000 Speaker 3: we live in today. John Law, he might not be 36 00:02:02,040 --> 00:02:04,880 Speaker 3: as respected as like Adam Smith, but he pretty much 37 00:02:04,920 --> 00:02:07,920 Speaker 3: laid the foundation for the monetary system that we use today. Right, 38 00:02:08,080 --> 00:02:12,560 Speaker 3: So you could arguably say that his thinking is more 39 00:02:12,560 --> 00:02:14,840 Speaker 3: important than a lot of that academic muk. 40 00:02:15,000 --> 00:02:17,680 Speaker 4: Yeah you could. And actually and whatever else he was, 41 00:02:17,880 --> 00:02:22,280 Speaker 4: he was a gambler and sometimes murderer. He was also 42 00:02:22,320 --> 00:02:25,440 Speaker 4: a practitioner. He did what he believed and of course 43 00:02:25,480 --> 00:02:28,480 Speaker 4: as we'll find it that didn't necessarily work to his advantage. 44 00:02:28,480 --> 00:02:30,600 Speaker 3: All the time, I think you know, you're already giving 45 00:02:30,600 --> 00:02:34,519 Speaker 3: away the fact that, despite the fact he's a murderer, gambler, 46 00:02:35,120 --> 00:02:38,280 Speaker 3: the beginning of the end of monetary systems, and all 47 00:02:38,320 --> 00:02:41,200 Speaker 3: sorts of other appalling things, John rather likes John Law. 48 00:02:41,600 --> 00:02:43,520 Speaker 4: I think I'm really quite find. 49 00:02:43,280 --> 00:02:44,800 Speaker 3: Of it's the charisma every time. 50 00:02:47,280 --> 00:03:01,480 Speaker 4: Well, yes, yes, perhaps chapter one the beginning, Well, is 51 00:03:01,520 --> 00:03:04,120 Speaker 4: this horrible Pusan Bonne. Well, let's wind by call the 52 00:03:04,120 --> 00:03:07,720 Speaker 4: way back to April sixteen seventy one and John Law 53 00:03:07,800 --> 00:03:10,880 Speaker 4: is born in Edinburgh. He was one of twelve children, 54 00:03:11,000 --> 00:03:13,679 Speaker 4: four of whom died in childhood. His dad, William Law, 55 00:03:13,760 --> 00:03:17,320 Speaker 4: was a goldsmith, and his mum, Jean Campbell, was William's 56 00:03:17,320 --> 00:03:20,280 Speaker 4: second wife, and she had three sisters and they'd all 57 00:03:20,280 --> 00:03:23,320 Speaker 4: married well. So he's basically from a kind of upper 58 00:03:23,520 --> 00:03:27,399 Speaker 4: merchant class background. So in sixteen eighty three, when John 59 00:03:27,480 --> 00:03:31,079 Speaker 4: Law's twelve, his father William goes to France because he's 60 00:03:31,080 --> 00:03:34,040 Speaker 4: got a kidney stone. He has to get an operation. 61 00:03:34,680 --> 00:03:37,800 Speaker 4: The chances are that he'll die under the knife, but 62 00:03:37,880 --> 00:03:40,240 Speaker 4: it's his only chance, and there happens to be a 63 00:03:40,280 --> 00:03:44,160 Speaker 4: company of barber surgeons of great reputation in France who 64 00:03:44,200 --> 00:03:46,360 Speaker 4: do this kind of thing all the time. So before 65 00:03:46,400 --> 00:03:49,360 Speaker 4: he leaves, he puts his affairs in order, says goodbye, 66 00:03:49,360 --> 00:03:52,400 Speaker 4: he's eight kids and his wife, and then heads off 67 00:03:52,440 --> 00:03:54,720 Speaker 4: to France, and as it turns out, unfortunately, he does 68 00:03:54,800 --> 00:03:56,200 Speaker 4: die on the operating. 69 00:03:55,880 --> 00:03:58,160 Speaker 3: Table, leaving behind eight kids. 70 00:03:58,240 --> 00:04:01,960 Speaker 4: Leaving behind eight kid and so Jane takes over the 71 00:04:02,000 --> 00:04:04,880 Speaker 4: family business, and she also avoids getting married again so 72 00:04:04,920 --> 00:04:06,720 Speaker 4: it's not to have to sign the business over to 73 00:04:06,840 --> 00:04:11,360 Speaker 4: her husband. And at this point, Goldsmith's are already in banking, 74 00:04:12,320 --> 00:04:15,560 Speaker 4: so one of Johin's brothers takes over the kind of 75 00:04:15,640 --> 00:04:18,520 Speaker 4: goldsmith side of things, actually making stuff out of gold, 76 00:04:19,080 --> 00:04:23,480 Speaker 4: but Jane and Join sort of jointly kind of operate 77 00:04:23,520 --> 00:04:28,359 Speaker 4: the banking side of the business. So lending money, this 78 00:04:28,480 --> 00:04:30,800 Speaker 4: is already something that goldsmiths are starting to do. 79 00:04:31,320 --> 00:04:34,239 Speaker 3: So we're not into fractional reserve banking at this point, 80 00:04:34,360 --> 00:04:35,240 Speaker 3: not quite yet. 81 00:04:35,240 --> 00:04:40,160 Speaker 4: Well not formally, but actually goldsmiths really are lending out money. 82 00:04:40,360 --> 00:04:41,800 Speaker 4: It's not like they have to have a one to 83 00:04:41,880 --> 00:04:45,680 Speaker 4: one correspondence. There's not one hundred percent reserve requirements, and 84 00:04:45,720 --> 00:04:50,000 Speaker 4: people know that people need credit, and there's no way 85 00:04:50,040 --> 00:04:52,640 Speaker 4: you could do that and have all the gold still 86 00:04:52,680 --> 00:04:54,960 Speaker 4: sitting there in the bank and demand at any time. 87 00:04:55,240 --> 00:04:58,080 Speaker 4: I mean, that's that's an interesting called bailment. And this 88 00:04:58,120 --> 00:05:00,320 Speaker 4: is where if you want your goldsmith to look after 89 00:05:00,360 --> 00:05:02,159 Speaker 4: your gold, you put it in a bag and you 90 00:05:02,200 --> 00:05:03,960 Speaker 4: give it to them, and that means that you want 91 00:05:04,160 --> 00:05:06,839 Speaker 4: that gold back. But if you give them loose coins, 92 00:05:07,120 --> 00:05:09,480 Speaker 4: and there's an understanding that that money can be lent 93 00:05:09,560 --> 00:05:12,280 Speaker 4: out and it's not necessarily the same gold coins that 94 00:05:12,320 --> 00:05:14,720 Speaker 4: you're going to get back. So basically, if everyone came 95 00:05:14,800 --> 00:05:17,280 Speaker 4: to the goldsmith's at once and wanted all the money back, 96 00:05:17,320 --> 00:05:19,559 Speaker 4: it wouldn't be there immediately that day. 97 00:05:20,200 --> 00:05:22,120 Speaker 3: I reckon I would won my own gold coins back. 98 00:05:22,560 --> 00:05:23,920 Speaker 4: I mean, I think he probably would at this time 99 00:05:23,920 --> 00:05:26,400 Speaker 4: because a lot of them are debased. 100 00:05:25,920 --> 00:05:28,120 Speaker 3: But people's maybe chipped in kleptics out there. 101 00:05:28,880 --> 00:05:31,159 Speaker 4: Yeah, so I mean you kind of maybe want to 102 00:05:31,360 --> 00:05:32,039 Speaker 4: use the bailment. 103 00:05:32,520 --> 00:05:36,520 Speaker 3: As a child, he's already learned about gaging interest rates, 104 00:05:36,640 --> 00:05:40,559 Speaker 3: monopolies gold. Yeah, he's kind of off before. 105 00:05:41,000 --> 00:05:43,840 Speaker 4: Yeah, he's up in that because I suppose another interesting 106 00:05:44,120 --> 00:05:46,159 Speaker 4: one of the core things about being a goldsmith, So 107 00:05:46,480 --> 00:05:49,400 Speaker 4: is that he's used to that world where gold is 108 00:05:49,400 --> 00:05:52,720 Speaker 4: an object, so it's it's jewelry, it's plates, it's things 109 00:05:52,760 --> 00:05:56,440 Speaker 4: like that, but it's also got a separate financial function. 110 00:05:57,040 --> 00:06:01,080 Speaker 4: Does this thing called moneyness somewhere that is a kind 111 00:06:01,080 --> 00:06:04,880 Speaker 4: of abstract property of the gold And he appreciates that 112 00:06:05,160 --> 00:06:08,560 Speaker 4: there's a difference between the gold object and gold has money, 113 00:06:08,920 --> 00:06:11,400 Speaker 4: and that's probably already kicking around and his brain I 114 00:06:11,400 --> 00:06:13,479 Speaker 4: wout of thought. A look the things he has a 115 00:06:13,520 --> 00:06:16,479 Speaker 4: tear away. His mum actually sends him off to a 116 00:06:16,560 --> 00:06:19,520 Speaker 4: boarding school in a little village called Egoshum, which is 117 00:06:19,600 --> 00:06:22,480 Speaker 4: still about an hour and a half drive from Edinburgh, 118 00:06:22,520 --> 00:06:24,760 Speaker 4: and at least part of it, according to sources at 119 00:06:24,800 --> 00:06:27,000 Speaker 4: the time, is to keep him away from the temptations 120 00:06:27,000 --> 00:06:30,359 Speaker 4: at the big city. He's interested in things like gambling. 121 00:06:30,520 --> 00:06:32,520 Speaker 4: And it does get to a point where he comes 122 00:06:32,560 --> 00:06:33,839 Speaker 4: back he's. 123 00:06:33,720 --> 00:06:35,919 Speaker 3: Sixteen because of the bet. 124 00:06:36,279 --> 00:06:42,760 Speaker 4: Was that yeah exactly, yes, class war even then. But 125 00:06:42,839 --> 00:06:44,880 Speaker 4: he comes back and they have a falling out, him 126 00:06:44,920 --> 00:06:47,400 Speaker 4: and his mum. They actually is a kind of court 127 00:06:47,480 --> 00:06:49,520 Speaker 4: case over it. It sounds like he's almost like trying 128 00:06:49,520 --> 00:06:51,599 Speaker 4: to divorce her and get his inheritance so that he 129 00:06:51,640 --> 00:06:55,200 Speaker 4: can be free and she says in the court documents 130 00:06:55,240 --> 00:06:57,839 Speaker 4: that actually the true cause of his deserting of my 131 00:06:57,960 --> 00:07:01,400 Speaker 4: family was because of my motherly apprehending him for biding 132 00:07:01,480 --> 00:07:03,919 Speaker 4: late out at night and going to the lottery and 133 00:07:03,960 --> 00:07:08,120 Speaker 4: other games. So basically he's just a naughty boy and 134 00:07:08,160 --> 00:07:13,400 Speaker 4: she's kind of fed up. Way sixteen sixteen seventeen. 135 00:07:12,920 --> 00:07:15,920 Speaker 3: And a lot of mothers in Edinburgh today similar feelings. 136 00:07:16,160 --> 00:07:19,320 Speaker 4: Yes, I can imagine there's a lot of pushing pull, 137 00:07:19,400 --> 00:07:22,160 Speaker 4: but it doesn't ever fully go to court, and it 138 00:07:22,200 --> 00:07:24,800 Speaker 4: does eventually get settled by the time he's twenty one 139 00:07:25,080 --> 00:07:27,480 Speaker 4: in sixteen ninety two. But the point is, I think 140 00:07:27,520 --> 00:07:31,800 Speaker 4: this illustrates that a he's already someone who's very much 141 00:07:31,960 --> 00:07:36,560 Speaker 4: pushing the boundaries and excited about getting out from under 142 00:07:36,760 --> 00:07:39,640 Speaker 4: and making his name in the world, and also that 143 00:07:39,760 --> 00:07:46,960 Speaker 4: he's someone who kind of enjoys taking risks and actually 144 00:07:46,960 --> 00:07:57,240 Speaker 4: probably isn't that careful with money despite his upbringing. So 145 00:07:57,440 --> 00:08:00,600 Speaker 4: sixteen ninety two, John Law's twenty one and he's finished 146 00:08:00,600 --> 00:08:04,000 Speaker 4: his education, he's inherited the money that he's owed from 147 00:08:04,000 --> 00:08:06,640 Speaker 4: his mother, and he goes down to London in the 148 00:08:06,640 --> 00:08:09,520 Speaker 4: company of a chap called John Campbell, who's a fellow 149 00:08:09,520 --> 00:08:12,400 Speaker 4: Scott who wants to set up a Goldsmith's in London. 150 00:08:13,200 --> 00:08:16,040 Speaker 4: Now he does this and that actually eventually becomes Cook's Bank, 151 00:08:16,600 --> 00:08:18,960 Speaker 4: and John Law himself ends up living in Saint Martin's 152 00:08:18,960 --> 00:08:21,440 Speaker 4: in the Field, which for anyone who's not based in 153 00:08:21,480 --> 00:08:24,280 Speaker 4: London is pretty much where a charing Cross station is today, 154 00:08:24,800 --> 00:08:26,960 Speaker 4: and at that point it actually was a field. 155 00:08:27,280 --> 00:08:29,400 Speaker 3: It's quite brave move, even as a young man to 156 00:08:29,480 --> 00:08:34,280 Speaker 3: move from Edinburgh to London. Quite a journey. Yeah, alien 157 00:08:34,320 --> 00:08:37,680 Speaker 3: place to Scott's stand as it is today. 158 00:08:38,240 --> 00:08:40,000 Speaker 4: If I remember the move, I went to London for 159 00:08:40,040 --> 00:08:42,240 Speaker 4: the first time when I was twenty one. Thinking about it, 160 00:08:42,400 --> 00:08:44,840 Speaker 4: I think it's it's a brave move. I think he 161 00:08:45,040 --> 00:08:47,840 Speaker 4: is clearly ambitious at this point. I would say he's 162 00:08:47,840 --> 00:08:51,160 Speaker 4: more reckless than anything else, for reasons we'll see in 163 00:08:51,160 --> 00:08:53,520 Speaker 4: a moment. I think basically just wants to have found 164 00:08:54,080 --> 00:08:55,920 Speaker 4: because he spends a lot of his time gambling, to 165 00:08:55,960 --> 00:08:57,719 Speaker 4: the point where he actually has to write back to 166 00:08:57,760 --> 00:09:02,200 Speaker 4: his mum and handover a chunky inheritance in exchange for 167 00:09:02,520 --> 00:09:03,120 Speaker 4: more cash. 168 00:09:03,280 --> 00:09:05,439 Speaker 3: Basically she must have been fit up by that point 169 00:09:05,559 --> 00:09:08,120 Speaker 3: if you would think when you actually it's weird through 170 00:09:08,600 --> 00:09:09,160 Speaker 3: their lives. 171 00:09:09,200 --> 00:09:11,320 Speaker 4: They don't have a major falling out again, and she 172 00:09:11,360 --> 00:09:13,880 Speaker 4: doesn't disinherit them or anything like that. So although he's 173 00:09:14,120 --> 00:09:19,560 Speaker 4: leading somewhat forcibly dissolute life and he's kind of known 174 00:09:19,600 --> 00:09:22,600 Speaker 4: as a dandee and a ladies man when he does 175 00:09:22,760 --> 00:09:24,960 Speaker 4: like gambling and partying and all the rest of it, 176 00:09:25,040 --> 00:09:26,760 Speaker 4: she doesn't ever actually cut him off. 177 00:09:27,600 --> 00:09:29,040 Speaker 3: Maybe the other kids are worse. 178 00:09:29,200 --> 00:09:32,160 Speaker 4: I mean possibly, possibly, they'd have to try quite hard. 179 00:09:32,880 --> 00:09:34,960 Speaker 4: So down in London he gets known as bow Law 180 00:09:35,520 --> 00:09:38,560 Speaker 4: A bow is a dandye, a kind of it boy, 181 00:09:38,600 --> 00:09:42,040 Speaker 4: a kind of man about town in Bau right b 182 00:09:42,200 --> 00:09:46,280 Speaker 4: e Au Yes, as beautiful, I guess. And then we 183 00:09:46,400 --> 00:09:49,720 Speaker 4: come to a massive turning point. It's fair to say 184 00:09:49,840 --> 00:09:52,320 Speaker 4: that if this hadn't happened, John lawMy just have ended 185 00:09:52,360 --> 00:09:55,720 Speaker 4: up as another London society man, maybe dabbling in politics, 186 00:09:55,760 --> 00:09:58,520 Speaker 4: maybe pushing money making schemes around Exchange Alley with the 187 00:09:58,520 --> 00:10:02,240 Speaker 4: other stock jobbers. Instead, he's about to embark in the path. 188 00:10:02,280 --> 00:10:05,120 Speaker 4: We'll put him in a position to play financial alchemist 189 00:10:05,320 --> 00:10:11,320 Speaker 4: with one of the biggest economies in Europe. Chapter two, 190 00:10:11,960 --> 00:10:26,120 Speaker 4: the due in April sixteen ninety four. John Law is 191 00:10:26,160 --> 00:10:28,840 Speaker 4: twenty three and he gets involved in the life of 192 00:10:28,840 --> 00:10:34,400 Speaker 4: a fellow dandy called Edward bo Wilson. Edward bo Wilson 193 00:10:35,480 --> 00:10:39,000 Speaker 4: is just another it boy, like John Law, another dandy, 194 00:10:40,120 --> 00:10:42,760 Speaker 4: and people are really intrigued by him because he's spending 195 00:10:42,840 --> 00:10:45,880 Speaker 4: an awful lot of money down in London. Even the 196 00:10:45,920 --> 00:10:47,960 Speaker 4: lough of the family that he comes from is not 197 00:10:48,080 --> 00:10:51,199 Speaker 4: well off. They're sort of gentry, but they're the lower 198 00:10:51,280 --> 00:10:54,240 Speaker 4: end of the gentry, so for perspective, he's thought to 199 00:10:54,280 --> 00:10:56,440 Speaker 4: be spending something in the region of about four thousand 200 00:10:56,440 --> 00:10:59,440 Speaker 4: pounds a year, which in current money is about six 201 00:10:59,559 --> 00:11:03,680 Speaker 4: hundred seventy five thousand pounds a year, and in terms 202 00:11:03,720 --> 00:11:05,480 Speaker 4: of what people were saying about them at the time, 203 00:11:05,640 --> 00:11:08,760 Speaker 4: there's the equivalent of a local gossip columnist who writes 204 00:11:08,760 --> 00:11:11,160 Speaker 4: to his employers and devon who'd like to be kept 205 00:11:11,200 --> 00:11:13,600 Speaker 4: up to date on the news in London, and he 206 00:11:13,720 --> 00:11:16,480 Speaker 4: tells them that Wilson is the subject of the general 207 00:11:16,559 --> 00:11:19,320 Speaker 4: chat of the town. He has no gamester, neither is 208 00:11:19,320 --> 00:11:21,880 Speaker 4: he known to keep women company, and it cannot be 209 00:11:21,960 --> 00:11:24,640 Speaker 4: yet discovered how he came to live at so prodigious 210 00:11:24,880 --> 00:11:28,960 Speaker 4: an extravagancy. We never get to find out where Wilson's 211 00:11:28,960 --> 00:11:31,440 Speaker 4: money comes from because in the ninth of April sixteen 212 00:11:31,559 --> 00:11:34,960 Speaker 4: ninety four, he enjoined fight at Bloomsbury Square and Join 213 00:11:35,040 --> 00:11:37,400 Speaker 4: stabs him in the stomach with an iron and steel 214 00:11:37,559 --> 00:11:40,400 Speaker 4: sword of a value of five shillings, which about forty 215 00:11:40,400 --> 00:11:43,000 Speaker 4: pounds to day, into a depth of two inches. That's 216 00:11:43,000 --> 00:11:46,800 Speaker 4: all according to court documents. And he dies immediately, which 217 00:11:46,800 --> 00:11:48,720 Speaker 4: strikes me as a tiny bit odd. But I don't 218 00:11:48,760 --> 00:11:50,400 Speaker 4: know any about anatomy. 219 00:11:50,120 --> 00:11:51,719 Speaker 3: Okay, so this is really unlucky. 220 00:11:51,960 --> 00:11:59,360 Speaker 4: It is unlucky. We don't know why they fought. A 221 00:11:59,480 --> 00:12:02,959 Speaker 4: later claimed that Elizabeth Villiers, who was King William's mistress, 222 00:12:03,000 --> 00:12:05,120 Speaker 4: was involved, but there's no evidence for that, and it 223 00:12:05,200 --> 00:12:09,079 Speaker 4: lightly originated the century afterwards, And there's also a scandalous 224 00:12:09,080 --> 00:12:12,120 Speaker 4: pamphlet from the seventeen twenties. And then this suggests that 225 00:12:12,160 --> 00:12:15,440 Speaker 4: Wilson was actually living an affair with a nobleman who 226 00:12:15,520 --> 00:12:18,920 Speaker 4: was the person paying for his lifestyle, and that Law 227 00:12:19,160 --> 00:12:21,600 Speaker 4: killed Wilson to silence and so effectively he was acting 228 00:12:21,640 --> 00:12:27,240 Speaker 4: as a kind of eighteenth century hitman. But that seems 229 00:12:27,240 --> 00:12:29,600 Speaker 4: to just be pure gossip meant to damage Law's reputation 230 00:12:29,679 --> 00:12:32,240 Speaker 4: at the time, and the more plausible if somewhat less 231 00:12:32,280 --> 00:12:35,400 Speaker 4: dramatic account mentions a Missus Lawrence, and she was a 232 00:12:35,440 --> 00:12:37,800 Speaker 4: friend of Law's, and she was the landlady of a 233 00:12:37,840 --> 00:12:42,240 Speaker 4: house where Wilson's sister lived. Wilson then discovered that Law 234 00:12:42,360 --> 00:12:44,880 Speaker 4: was keeping a mistress there, and he told his sister 235 00:12:44,960 --> 00:12:48,800 Speaker 4: to leave, and Missus Lawrence took offense, probably because like, oh, 236 00:12:48,800 --> 00:12:50,599 Speaker 4: what are you accusing me of running some kind of 237 00:12:50,679 --> 00:12:53,840 Speaker 4: you know, broadle or something. An argument followed, and that's 238 00:12:53,880 --> 00:12:56,440 Speaker 4: where the duel came from. So basically Law might have 239 00:12:56,480 --> 00:12:59,600 Speaker 4: been defending his friend's honor, which I think is prob 240 00:13:00,080 --> 00:13:04,040 Speaker 4: Bobblay quite believable because he's clearly still quite hot headed 241 00:13:04,080 --> 00:13:06,560 Speaker 4: and reckless. But I mean, ultimately we don't know the 242 00:13:06,600 --> 00:13:17,240 Speaker 4: real reason. After the fight, Laws arrested, and the key 243 00:13:17,320 --> 00:13:19,719 Speaker 4: legal question is whether it was a planned duel or 244 00:13:19,720 --> 00:13:24,000 Speaker 4: a spontaneous fight. The jewels were common but illegal, and 245 00:13:24,080 --> 00:13:25,720 Speaker 4: I mean, this will seem a bit weird. That's about 246 00:13:25,720 --> 00:13:29,280 Speaker 4: Premeditation is what made it murder and therefore punishable by hanging, 247 00:13:29,640 --> 00:13:31,760 Speaker 4: whereas a kind of heat of the moment impulse fight 248 00:13:31,880 --> 00:13:34,880 Speaker 4: meant it was manslaughter. And basically, basically in those days 249 00:13:34,880 --> 00:13:38,240 Speaker 4: you got away with manslaughter. So Law claimed that Wilson 250 00:13:38,240 --> 00:13:41,040 Speaker 4: attacked him suddenly in Bloomsbury Square and that would have 251 00:13:41,080 --> 00:13:44,240 Speaker 4: made it self defense. But the prosecutors argued that it 252 00:13:44,280 --> 00:13:46,559 Speaker 4: was pre arranged and it kind of they showed letters 253 00:13:46,559 --> 00:13:48,440 Speaker 4: and things to show that they had are ongoing feued, 254 00:13:48,640 --> 00:13:50,080 Speaker 4: so it was kind of cut and dried from that 255 00:13:50,120 --> 00:13:52,760 Speaker 4: point of view. So the jury agreed, they convicted them 256 00:13:52,760 --> 00:13:56,040 Speaker 4: with murder and they sent them to hang. Now the 257 00:13:56,120 --> 00:14:01,160 Speaker 4: king reprieved them because the low jewels were technically illegal. 258 00:14:01,320 --> 00:14:03,040 Speaker 4: They were also sort of seen as a way that 259 00:14:03,120 --> 00:14:05,880 Speaker 4: young men let off steam, so no one was actually 260 00:14:06,240 --> 00:14:09,560 Speaker 4: they can of execute people for them. But Wilson's family 261 00:14:09,679 --> 00:14:13,240 Speaker 4: appealed and that left join Law kind of rotten in prison. 262 00:14:13,840 --> 00:14:16,560 Speaker 4: The jails then were privately run, so he was able 263 00:14:16,559 --> 00:14:19,560 Speaker 4: to pay for better quarters, so you know, in certain 264 00:14:19,600 --> 00:14:21,280 Speaker 4: parts of the prison, poor people were kept and they 265 00:14:21,280 --> 00:14:23,560 Speaker 4: were awful, whereas the bit that he was in was 266 00:14:23,600 --> 00:14:25,880 Speaker 4: probably a little bit more pleasant, maybe like a kind 267 00:14:25,920 --> 00:14:28,240 Speaker 4: of three star B and B. So he remained there 268 00:14:28,240 --> 00:14:30,600 Speaker 4: for nine months while the appeals dragged on and on 269 00:14:31,080 --> 00:14:33,640 Speaker 4: and in the background. Because he was quite well connected 270 00:14:33,680 --> 00:14:37,040 Speaker 4: or from a well connected family, Scottish politicians were lobbying 271 00:14:37,040 --> 00:14:39,320 Speaker 4: the king for his release, while at the same time, 272 00:14:39,360 --> 00:14:42,000 Speaker 4: Wilson's side was lobbying for him to be hung, and 273 00:14:42,040 --> 00:14:45,240 Speaker 4: the King was kind of stuck in the middle, and 274 00:14:45,480 --> 00:14:47,520 Speaker 4: you get the sense that the King just wished the 275 00:14:47,600 --> 00:14:50,440 Speaker 4: problem would go away. And as early as kind of 276 00:14:50,440 --> 00:14:53,480 Speaker 4: made that year, you've got officials hinting in documents that 277 00:14:53,640 --> 00:14:56,400 Speaker 4: Law could easily escape from this prison, and it was 278 00:14:56,440 --> 00:14:58,400 Speaker 4: kind of stupid of them to just be hanging around 279 00:14:58,400 --> 00:15:00,640 Speaker 4: waiting to see where they'd get a pardoner one. But 280 00:15:00,640 --> 00:15:02,760 Speaker 4: I think that's a little bit unfair because obviously he's 281 00:15:02,800 --> 00:15:05,480 Speaker 4: a society guy, he's a gentleman, and if he does 282 00:15:05,600 --> 00:15:07,480 Speaker 4: escape from prison, that's going to make him a fugitive. 283 00:15:07,560 --> 00:15:09,680 Speaker 4: So you can see why he might have thought, well, look, 284 00:15:09,720 --> 00:15:12,960 Speaker 4: I'd rather wait for this pardon, which is surely forthcoming 285 00:15:13,000 --> 00:15:15,600 Speaker 4: at any minute. But in the end of appeal doesn't 286 00:15:15,640 --> 00:15:18,400 Speaker 4: go his way, he sends to be hung. There's a 287 00:15:18,480 --> 00:15:21,400 Speaker 4: quote in Johnson's recollections in which he recalls that one 288 00:15:21,440 --> 00:15:23,760 Speaker 4: of the kings right hand men told him that the 289 00:15:23,840 --> 00:15:27,040 Speaker 4: King wouldn't pardon Law without the consent of Wilson's brother, 290 00:15:27,680 --> 00:15:30,320 Speaker 4: But he also said that I think the King is 291 00:15:30,360 --> 00:15:33,120 Speaker 4: willing he should be saved, provided it can be done 292 00:15:33,120 --> 00:15:35,320 Speaker 4: in such a manner as that his majesty did not 293 00:15:35,400 --> 00:15:38,520 Speaker 4: appear in it. And then at that point, reading between 294 00:15:38,560 --> 00:15:42,200 Speaker 4: the lines, King William tacitly gives permission for him to 295 00:15:42,320 --> 00:15:43,640 Speaker 4: be bailed out. 296 00:15:43,840 --> 00:15:46,680 Speaker 3: Fascinating. The King is so interested in this case, right. 297 00:15:46,480 --> 00:15:49,040 Speaker 4: It is interesting, But I suppose we need to remember 298 00:15:49,080 --> 00:15:51,880 Speaker 4: that Law is basically a foreign national who's under threat 299 00:15:51,880 --> 00:15:55,520 Speaker 4: of execution in a foreign country. So the Scottish legal 300 00:15:55,520 --> 00:15:58,560 Speaker 4: authorities were almost bound to say something, even if Law 301 00:15:58,680 --> 00:16:00,920 Speaker 4: wasn't as well connected. And he actually, you know, he 302 00:16:01,000 --> 00:16:02,640 Speaker 4: is quite well connected. 303 00:16:02,280 --> 00:16:02,960 Speaker 3: So he get that. 304 00:16:03,720 --> 00:16:05,920 Speaker 4: So the Law makes his escape, or rather the sounds 305 00:16:05,920 --> 00:16:09,520 Speaker 4: of it, he's rescued. Johnston, that's the Scottish Secretary of Estate. 306 00:16:09,560 --> 00:16:12,240 Speaker 4: We mentioned earlier reports that the King's right hand man 307 00:16:12,280 --> 00:16:14,320 Speaker 4: came up to him and whispered to me in a 308 00:16:14,360 --> 00:16:16,760 Speaker 4: crowd that my friend was at liberty but had been 309 00:16:16,920 --> 00:16:19,960 Speaker 4: very slow to understand matters, and prayed me to keep 310 00:16:19,960 --> 00:16:23,360 Speaker 4: the secret, which I did until King William's death. And 311 00:16:23,440 --> 00:16:26,360 Speaker 4: from that point we don't know exactly where Law goes. 312 00:16:26,520 --> 00:16:27,400 Speaker 3: That's the point, isn't it. 313 00:16:27,480 --> 00:16:29,840 Speaker 4: John Really well it's yes, yes, when you go on 314 00:16:29,920 --> 00:16:32,560 Speaker 4: the run, but yes, this is a major turning point 315 00:16:32,560 --> 00:16:35,160 Speaker 4: in his life, probably the major turning point, because it's 316 00:16:35,160 --> 00:16:38,480 Speaker 4: his fugitive status that will eventually drive him to France, 317 00:16:39,000 --> 00:16:55,040 Speaker 4: which is where he will create monetary history. Chapter three, 318 00:16:55,920 --> 00:16:56,920 Speaker 4: Lot on the Lamb. 319 00:17:06,920 --> 00:17:09,560 Speaker 3: There's a gap before he arrived in France where it 320 00:17:09,600 --> 00:17:12,000 Speaker 3: was such a refined his monitary physical thinking. 321 00:17:12,160 --> 00:17:14,640 Speaker 4: Yes, this is when he does that. Also, while he's 322 00:17:14,640 --> 00:17:16,560 Speaker 4: in jail, this is probably when he meets his long 323 00:17:16,640 --> 00:17:19,960 Speaker 4: term partner, Catherine Knollys, who is oddly enough a great 324 00:17:20,000 --> 00:17:24,240 Speaker 4: great granddaughter of Mary Berlin, who was Anne Blynn's big sister, 325 00:17:24,440 --> 00:17:27,199 Speaker 4: the one who got away from Henry the eighth, And 326 00:17:27,240 --> 00:17:31,680 Speaker 4: that actually introduces the tantalizing prospect that just maybe John 327 00:17:31,960 --> 00:17:34,919 Speaker 4: Law's children had showed her blood in them, depending on 328 00:17:35,040 --> 00:17:40,600 Speaker 4: exactly who was the father of Mary's kids. Anyway, Catherine's brother, Charles, 329 00:17:40,680 --> 00:17:43,199 Speaker 4: who's a sort of dissolute upper class scoundrel, is in 330 00:17:43,280 --> 00:17:45,840 Speaker 4: jail at the same time as Law for mothering his 331 00:17:45,920 --> 00:17:48,439 Speaker 4: brother in law, and so you have to assume that 332 00:17:48,560 --> 00:17:50,520 Speaker 4: this is how they meet, because she just sort of 333 00:17:50,560 --> 00:17:54,199 Speaker 4: appears in his life in the historical record otherwise, And 334 00:17:54,240 --> 00:17:56,520 Speaker 4: this is something I find really interesting about law in general. 335 00:17:56,560 --> 00:18:00,199 Speaker 4: He never gets married, so they're happily living together, like 336 00:18:00,280 --> 00:18:03,119 Speaker 4: essentially out of wedlock. He's born a Protestant, but he 337 00:18:03,160 --> 00:18:10,560 Speaker 4: converts to Catholicism purely for political pies. It's so interesting, 338 00:18:10,680 --> 00:18:14,119 Speaker 4: who does wars being fought over religion all over the 339 00:18:14,119 --> 00:18:17,000 Speaker 4: place At this point, I just find it fascinating what 340 00:18:17,080 --> 00:18:24,000 Speaker 4: I kind of unusually free thinking individual he seems to be. 341 00:18:24,600 --> 00:18:27,800 Speaker 4: And I don't know, Messa where that comes from. And 342 00:18:27,880 --> 00:18:29,879 Speaker 4: perhaps there were a lot more people like that in 343 00:18:30,200 --> 00:18:33,200 Speaker 4: Scotland and England and France of the time than we 344 00:18:33,600 --> 00:18:34,400 Speaker 4: traditionally think. 345 00:18:34,880 --> 00:18:39,160 Speaker 3: If he's changing religion between Pritain and catholic back then, 346 00:18:39,200 --> 00:18:42,320 Speaker 3: it did shows a kind of open mindedness and a 347 00:18:42,440 --> 00:18:45,080 Speaker 3: lack of being but not being wedded to an ideology 348 00:18:45,160 --> 00:18:47,359 Speaker 3: of any type. That you could say that more or 349 00:18:47,400 --> 00:18:49,560 Speaker 3: less the same, but we won't go there on those customers. 350 00:18:50,359 --> 00:18:52,439 Speaker 3: You know, you're not wedded to a particular ideology. You're 351 00:18:52,520 --> 00:18:56,200 Speaker 3: open minded, you're thinking freely. You've escaped from prison, yes, 352 00:18:56,280 --> 00:18:59,280 Speaker 3: got your girl with you a prison. Catherin's with them. 353 00:18:59,600 --> 00:19:01,760 Speaker 3: We don't know where he's gone. But he turns up in. 354 00:19:02,880 --> 00:19:04,960 Speaker 4: Well, he turns up in general, but I think the 355 00:19:05,040 --> 00:19:07,840 Speaker 4: other thing he kind of contextualized stuff a little bit 356 00:19:08,119 --> 00:19:11,359 Speaker 4: at this point. So sixteen ninety four, Wili's in jail. 357 00:19:11,680 --> 00:19:14,000 Speaker 4: This is also when the Bank of England gets established. 358 00:19:14,640 --> 00:19:18,160 Speaker 4: So England and France are basically both skint because they've 359 00:19:18,160 --> 00:19:20,399 Speaker 4: spent so much money on either being at war with 360 00:19:20,440 --> 00:19:24,040 Speaker 4: each other or the other European powers. So England's fiscal 361 00:19:24,040 --> 00:19:27,360 Speaker 4: problem dates back to Charles the Second. So he'd been 362 00:19:27,400 --> 00:19:30,320 Speaker 4: borrowing money from the goldsmiths and they would lend the 363 00:19:30,359 --> 00:19:33,200 Speaker 4: money deposited with them to the Crown and it would 364 00:19:33,200 --> 00:19:36,120 Speaker 4: be secured against tax revenues coming during the near future. 365 00:19:36,520 --> 00:19:41,720 Speaker 4: So it's basically an early but very very primitive form 366 00:19:41,720 --> 00:19:44,639 Speaker 4: of government debt. But by sixteen seventy two, a combination 367 00:19:44,760 --> 00:19:47,240 Speaker 4: of war and good living means that Charles is out 368 00:19:47,240 --> 00:19:50,119 Speaker 4: of money, and so he suspends interest payments to the 369 00:19:50,119 --> 00:19:53,119 Speaker 4: goldsmiths and an event which is known as the stop 370 00:19:53,200 --> 00:19:55,800 Speaker 4: of the Exchequer. And as it turns out, the payments 371 00:19:55,800 --> 00:19:58,760 Speaker 4: are never fully made and there are running court cases 372 00:19:58,840 --> 00:20:01,800 Speaker 4: right up until the seventeen hundreds. But in the immediate 373 00:20:01,880 --> 00:20:05,080 Speaker 4: term it bankrupts several big Goldsmiths, and also means that 374 00:20:05,119 --> 00:20:08,160 Speaker 4: many wealthy families lose their money because they had been 375 00:20:08,200 --> 00:20:11,120 Speaker 4: depositing it with the goldsmiths and that had been lent 376 00:20:11,200 --> 00:20:14,520 Speaker 4: to the king. So anyway, that has a big shadow 377 00:20:14,640 --> 00:20:18,800 Speaker 4: over the Crown's credit worthiness. And so comes sixteen ninety three, 378 00:20:18,880 --> 00:20:21,359 Speaker 4: the king has changed. It's King William now in the 379 00:20:21,440 --> 00:20:23,560 Speaker 4: middle of the Nine Years War, which is a big 380 00:20:23,600 --> 00:20:27,280 Speaker 4: European war which is basically France versus everyone else, and 381 00:20:27,359 --> 00:20:30,359 Speaker 4: England's at war again, and William needs to raise money 382 00:20:30,359 --> 00:20:33,320 Speaker 4: to rebuild the navy after a defeat. But of course 383 00:20:33,359 --> 00:20:36,760 Speaker 4: the remaining Goldsmiths have no interest in financing the crown anymore. 384 00:20:37,320 --> 00:20:39,439 Speaker 4: But at the same time, the London financial sector, if 385 00:20:39,440 --> 00:20:41,920 Speaker 4: you like, is buzzing. People have got lots of ideas 386 00:20:41,960 --> 00:20:45,240 Speaker 4: about how to raise money. Let's talk a lotteries. Thus 387 00:20:45,280 --> 00:20:47,679 Speaker 4: talks about lots of other kinds of schemes, but the 388 00:20:47,720 --> 00:20:50,040 Speaker 4: scheme that does eventually get support is the idea to 389 00:20:50,080 --> 00:21:00,240 Speaker 4: set up the Bank of England. So the idea is 390 00:21:00,280 --> 00:21:04,120 Speaker 4: to establish a bank that will sell shares to raise 391 00:21:04,160 --> 00:21:08,400 Speaker 4: one point two million pounds in that money, so one 392 00:21:08,400 --> 00:21:10,800 Speaker 4: point two million a lot more than that today's money 393 00:21:11,080 --> 00:21:13,879 Speaker 4: from shareholders, and in exchange they'll get an eight percent 394 00:21:13,920 --> 00:21:17,919 Speaker 4: annual interest rate which is backed by tax revenues raised 395 00:21:18,000 --> 00:21:22,440 Speaker 4: on excise duties from ships coming up and down the Thames, basically, 396 00:21:23,200 --> 00:21:25,400 Speaker 4: and that's the start of a kind of more formal 397 00:21:25,440 --> 00:21:30,640 Speaker 4: way of raising debt for the country in a way 398 00:21:30,720 --> 00:21:34,800 Speaker 4: that doesn't purely rely on the whims of the crown. 399 00:21:36,520 --> 00:21:38,680 Speaker 4: We used since it has a bit, it has a bit. 400 00:21:38,760 --> 00:21:42,239 Speaker 4: But as she's getting your institutionalized and your institutions are 401 00:21:42,240 --> 00:21:44,680 Speaker 4: starting to get built was in France, you still get 402 00:21:44,680 --> 00:21:48,840 Speaker 4: this very kind of old system. Louis the fourteenth has 403 00:21:48,840 --> 00:21:51,359 Speaker 4: already experimented with paper money and then banned it because 404 00:21:51,359 --> 00:21:54,520 Speaker 4: he didn't trust it. The tax is raised largely from 405 00:21:54,520 --> 00:21:57,520 Speaker 4: the poor. Nobles and the clergy are exempt. The tax 406 00:21:57,560 --> 00:22:00,919 Speaker 4: raising powers are sold to people who then pay for 407 00:22:00,960 --> 00:22:03,120 Speaker 4: the right to raise the taxes. But then when they're 408 00:22:03,160 --> 00:22:07,000 Speaker 4: collecting them, obviously there's massive scope for corruption involved in that, 409 00:22:07,359 --> 00:22:11,320 Speaker 4: and so you got a much older, less efficient, more 410 00:22:11,640 --> 00:22:15,359 Speaker 4: corrupt and also more vested interests kind of system of 411 00:22:15,640 --> 00:22:18,440 Speaker 4: financing the country in France. So that's kind of where 412 00:22:18,440 --> 00:22:22,280 Speaker 4: we are at that point. So I think that's just 413 00:22:22,440 --> 00:22:24,720 Speaker 4: useful for thinking about what happens next. 414 00:22:24,920 --> 00:22:29,560 Speaker 3: If you see an organization set up out with the crown, yeah, 415 00:22:30,000 --> 00:22:35,439 Speaker 3: supposedly independent or a separate organization, but also allowed to 416 00:22:35,520 --> 00:22:38,320 Speaker 3: raise money, Yeah, with the power of the state behind it. 417 00:22:38,359 --> 00:22:39,679 Speaker 3: I would definitely start thinking. 418 00:22:40,080 --> 00:22:42,880 Speaker 4: Okay, so that's the state of the public finances in 419 00:22:43,000 --> 00:22:46,040 Speaker 4: England and France. And that's a very rough idea. Who 420 00:22:46,080 --> 00:22:49,240 Speaker 4: they differ. So now let's get back to join law 421 00:22:49,320 --> 00:22:56,359 Speaker 4: of an escape from prison. Okay. So if this was 422 00:22:56,400 --> 00:22:59,120 Speaker 4: a film, this is the point which we break in, Yeah, 423 00:22:59,240 --> 00:23:04,480 Speaker 4: training Mont, except rather than having Rocky punching bits of meat, 424 00:23:04,880 --> 00:23:08,400 Speaker 4: we'd have John Lawd dartling about Europe with his wife Catherine, 425 00:23:08,440 --> 00:23:11,719 Speaker 4: also not his wife, his lady partner. And so between 426 00:23:11,840 --> 00:23:14,480 Speaker 4: about sixteen ninety five and seventy oh five they spend 427 00:23:14,600 --> 00:23:17,119 Speaker 4: ten years going around Europe. They spend a lot of 428 00:23:17,119 --> 00:23:19,280 Speaker 4: time in France, they spend some time in Holland, There's 429 00:23:19,320 --> 00:23:21,200 Speaker 4: various other places they may or may not have been, 430 00:23:21,720 --> 00:23:24,520 Speaker 4: And most of the time he's basically funding their lifestyle 431 00:23:25,080 --> 00:23:29,919 Speaker 4: by hosting high end society gambling games. He's very good 432 00:23:30,080 --> 00:23:35,240 Speaker 4: with statistics, he's very good with understanding probability, which I 433 00:23:35,240 --> 00:23:37,320 Speaker 4: mean he wants to be when you read some of 434 00:23:37,320 --> 00:23:39,360 Speaker 4: the things that people were getting excited about at the time. 435 00:23:39,520 --> 00:23:42,040 Speaker 4: They're talking about like he's calculating the odds of rolling 436 00:23:42,040 --> 00:23:44,400 Speaker 4: a seven with two dice, and you're kind of like thinking, 437 00:23:44,400 --> 00:23:46,120 Speaker 4: how did no one else know how to do that? 438 00:23:46,480 --> 00:23:49,280 Speaker 4: But you know, it's that sort of thing, and he also. 439 00:23:49,119 --> 00:23:52,240 Speaker 3: Wants to be able to do that instinctively. It's amazing, really, yeah, 440 00:23:52,320 --> 00:23:52,679 Speaker 3: I and. 441 00:23:53,119 --> 00:23:55,280 Speaker 4: Also taking the interest to write it down because there 442 00:23:55,320 --> 00:23:58,280 Speaker 4: are a lot of people writing about probability and gaming 443 00:23:58,320 --> 00:24:01,160 Speaker 4: in particular at this point. The other thing that's interesting 444 00:24:01,240 --> 00:24:04,600 Speaker 4: is that he twigs that in certain games, what you 445 00:24:04,640 --> 00:24:06,119 Speaker 4: need to be is the banker. So a lot of 446 00:24:06,119 --> 00:24:09,480 Speaker 4: the time he's not actually gambling so much as being 447 00:24:09,600 --> 00:24:12,160 Speaker 4: the house on the behalf of a lot of rich 448 00:24:12,200 --> 00:24:15,720 Speaker 4: people who probably not engage with probability particularly, and that's 449 00:24:15,720 --> 00:24:17,720 Speaker 4: the other way he's making his money. But at the 450 00:24:17,760 --> 00:24:20,040 Speaker 4: same time he's not just doing that. He's learning about 451 00:24:20,040 --> 00:24:23,080 Speaker 4: financial markets, so you know, in Holland, he's sort of 452 00:24:23,160 --> 00:24:26,919 Speaker 4: learning about shotting, he's learning about futures options because the 453 00:24:26,920 --> 00:24:30,240 Speaker 4: financial markets and Amsterdam are extremely sophisticated by the standards 454 00:24:30,240 --> 00:24:32,400 Speaker 4: of the time. He's also spent a lot of time 455 00:24:32,440 --> 00:24:36,360 Speaker 4: thinking about money, because obviously his goldsmith and background means 456 00:24:36,359 --> 00:24:39,879 Speaker 4: that he knows a fair bit about basic banking already. 457 00:24:40,440 --> 00:24:42,760 Speaker 4: I think something that's really importantly point out is that 458 00:24:42,960 --> 00:24:44,840 Speaker 4: none of this is coming out of the blue. The 459 00:24:44,880 --> 00:24:47,920 Speaker 4: biggest drivery all this actually and all this monetary theory 460 00:24:47,960 --> 00:24:50,320 Speaker 4: stuff is the fact that England and Frants have been 461 00:24:50,800 --> 00:24:52,639 Speaker 4: and the rest of you know, Europe has been in 462 00:24:52,720 --> 00:24:56,600 Speaker 4: war for three or four decades. So the governments are 463 00:24:56,800 --> 00:24:59,359 Speaker 4: incredibly indebted and they keep looking for schemes and ways 464 00:24:59,400 --> 00:25:02,000 Speaker 4: to raise more money. And so there's all kinds of 465 00:25:02,040 --> 00:25:04,600 Speaker 4: schemes going around, and there's all kinds of thinking about it. 466 00:25:05,200 --> 00:25:09,320 Speaker 4: So during this time John Law actually pitches Land banks 467 00:25:09,800 --> 00:25:12,160 Speaker 4: to three different countries. He pitches them England, he pitches 468 00:25:12,160 --> 00:25:14,359 Speaker 4: it to France, and he also pinches it to Scotland. 469 00:25:15,040 --> 00:25:17,680 Speaker 4: And Scotland is the place where in seventeen oh four 470 00:25:18,080 --> 00:25:21,600 Speaker 4: he ends up back there and he's actually up in 471 00:25:21,600 --> 00:25:24,440 Speaker 4: front of Parliament or sending his ideas to Parliament because 472 00:25:24,480 --> 00:25:27,240 Speaker 4: Scotland is looking for ways to raise more money because 473 00:25:27,240 --> 00:25:30,879 Speaker 4: it's gone bank up because of an ill advised colonial scheme. 474 00:25:31,680 --> 00:25:33,600 Speaker 4: Bear in mind, he can go back to Scotland, because 475 00:25:33,600 --> 00:25:36,439 Speaker 4: Scotland and England obviously are two separate countries, so the 476 00:25:36,480 --> 00:25:39,240 Speaker 4: fact he's wanted in England doesn't mean that he's a 477 00:25:39,280 --> 00:25:42,520 Speaker 4: fugitive in Scotland. But also by this point he has 478 00:25:42,560 --> 00:25:47,520 Speaker 4: actually reached an agreement with Robert Wilson, Wilson's brother that 479 00:25:47,640 --> 00:25:50,880 Speaker 4: he will scrap his appeal and he's no longer going 480 00:25:50,920 --> 00:25:51,639 Speaker 4: to pursue him for. 481 00:25:51,640 --> 00:25:52,560 Speaker 3: The death penalty. 482 00:25:52,840 --> 00:25:56,359 Speaker 4: So Lowie hasn't got a formal pardon yet and won't 483 00:25:56,359 --> 00:25:59,800 Speaker 4: receive one for quite some time. It's less of a 484 00:26:00,119 --> 00:26:03,120 Speaker 4: pressing problem for him. So back in Scotland is where 485 00:26:03,119 --> 00:26:06,800 Speaker 4: he publishes his monetary Treatise, which is Money in Trade, 486 00:26:07,080 --> 00:26:10,560 Speaker 4: which is basically his idea of how money works. So 487 00:26:10,600 --> 00:26:12,960 Speaker 4: Phelix Martin and need For Chancellor, both of whom are 488 00:26:12,960 --> 00:26:17,600 Speaker 4: respected financial historians and former guests on this podcast, make 489 00:26:17,640 --> 00:26:22,199 Speaker 4: the point the Laws thinking does advance the concept of money, 490 00:26:22,880 --> 00:26:26,920 Speaker 4: and there's one key quote that they pull out, which 491 00:26:26,960 --> 00:26:30,280 Speaker 4: is this money is not the value for which goods 492 00:26:30,320 --> 00:26:35,000 Speaker 4: are exchanged, but the value by which they are exchanged. So, 493 00:26:35,040 --> 00:26:36,919 Speaker 4: in other words, Laws making the point that money is 494 00:26:36,960 --> 00:26:40,520 Speaker 4: not a thing in itself, it's the financial technology that 495 00:26:40,600 --> 00:26:44,679 Speaker 4: makes everything else work and overall that's his view of 496 00:26:44,680 --> 00:26:47,840 Speaker 4: the world, is that it's that money is the problem 497 00:26:47,880 --> 00:26:50,240 Speaker 4: where there isn't enough of it. Money is the kind 498 00:26:50,240 --> 00:26:52,200 Speaker 4: of oil you need to make things go round. 499 00:26:53,160 --> 00:26:54,720 Speaker 3: And what do you think his driver was? I mean, 500 00:26:54,760 --> 00:26:56,680 Speaker 3: if the wave just described him, he gives died in 501 00:26:56,720 --> 00:27:00,359 Speaker 3: Amsterdam and made an absolute voatch in writing, he would 502 00:27:00,359 --> 00:27:02,359 Speaker 3: have been a phenomenal triter. He could have made a 503 00:27:02,400 --> 00:27:05,239 Speaker 3: fortune doing that. What was his driver behind doing all 504 00:27:05,240 --> 00:27:06,720 Speaker 3: those Do you think you have to state this self 505 00:27:06,800 --> 00:27:09,360 Speaker 3: to power after more money than you're going to ever 506 00:27:09,440 --> 00:27:11,960 Speaker 3: make shorting stuff on Amsterdam. 507 00:27:12,240 --> 00:27:14,800 Speaker 4: I think that's a really interesting question. But I honestly 508 00:27:14,800 --> 00:27:17,040 Speaker 4: think it's the ideas that drove him. I mean that 509 00:27:17,080 --> 00:27:19,560 Speaker 4: there is a quote a Camemera who it's from, but 510 00:27:20,040 --> 00:27:23,000 Speaker 4: one of his contemporaries points that is not the money 511 00:27:23,080 --> 00:27:25,640 Speaker 4: that he was basically interested in. It was his ideas. 512 00:27:25,800 --> 00:27:28,679 Speaker 4: He's basically a world improver. One of the problems we 513 00:27:29,240 --> 00:27:32,960 Speaker 4: tieing your currency to gold, and it was a problem, 514 00:27:33,160 --> 00:27:35,320 Speaker 4: and it would be a problem is it sometimes you 515 00:27:35,440 --> 00:27:37,200 Speaker 4: run out of gold. And I think one of the 516 00:27:37,280 --> 00:27:41,080 Speaker 4: things that we forget because we've had paper money for 517 00:27:41,080 --> 00:27:44,200 Speaker 4: a while, so we recognized paper money's foibles relative to gold, 518 00:27:44,600 --> 00:27:47,280 Speaker 4: gold and precious metal had a lot of problems too. 519 00:27:47,480 --> 00:27:52,359 Speaker 4: They were constantly being devalued and constantly having the relative 520 00:27:52,440 --> 00:27:54,760 Speaker 4: values change. One of the things that John Law does 521 00:27:54,800 --> 00:27:56,680 Speaker 4: is he goes back into the history books and looks 522 00:27:56,720 --> 00:27:59,320 Speaker 4: at how much the price of silver has changed. And 523 00:27:59,400 --> 00:28:01,720 Speaker 4: one of reasons that he talks about a land bank, 524 00:28:01,920 --> 00:28:04,080 Speaker 4: and this is the idea basically that you issue a 525 00:28:04,080 --> 00:28:07,600 Speaker 4: paper currency that is effectively a mortgage on land. It's 526 00:28:07,640 --> 00:28:09,520 Speaker 4: not very practical, which is one reason why it doesn't 527 00:28:09,520 --> 00:28:11,960 Speaker 4: take off, But the point is that the land is 528 00:28:12,000 --> 00:28:14,920 Speaker 4: almost like the kind of stones of yap. He never 529 00:28:14,960 --> 00:28:17,800 Speaker 4: would actually change hands, is just a thing that backs 530 00:28:17,840 --> 00:28:20,239 Speaker 4: the I owe you. And his idea is that, well, 531 00:28:20,280 --> 00:28:23,520 Speaker 4: actually we should use land because A that's where all 532 00:28:23,560 --> 00:28:26,439 Speaker 4: of the wealth of the economy actually comes from. And 533 00:28:26,600 --> 00:28:29,920 Speaker 4: B at that time, the price of land was much 534 00:28:30,000 --> 00:28:32,960 Speaker 4: less volatile than the price itselver, So he's actually talking 535 00:28:32,960 --> 00:28:36,000 Speaker 4: about anchoring the paper currency to an asset, which is 536 00:28:36,000 --> 00:28:39,400 Speaker 4: a much more stable background value. So basically, I think 537 00:28:39,400 --> 00:28:43,400 Speaker 4: he's very much an idealist, and he's excited by economic 538 00:28:43,480 --> 00:28:46,719 Speaker 4: ideas and excited by theory at the same time. There 539 00:28:46,720 --> 00:28:48,440 Speaker 4: are lots of people like them, you know. So Daniel 540 00:28:48,480 --> 00:28:51,960 Speaker 4: Defoe is not just you know, you know, the writer 541 00:28:52,040 --> 00:28:55,520 Speaker 4: of Robinson Crusoe. He's also a kind of political pamphleteer 542 00:28:55,520 --> 00:28:58,520 Speaker 4: and he's also they call them projectors. But you know, 543 00:28:58,560 --> 00:29:01,560 Speaker 4: this guy's coming up way mad ideas for raising money 544 00:29:01,640 --> 00:29:03,560 Speaker 4: or not so mad. I mean, that's where the Bank 545 00:29:03,600 --> 00:29:06,240 Speaker 4: of England came from. Wasn't a default idea, but it 546 00:29:06,400 --> 00:29:09,000 Speaker 4: was the idea of the guy who would actually later 547 00:29:09,120 --> 00:29:12,200 Speaker 4: go on to do Scotland's ill fated Darian scheme. 548 00:29:12,360 --> 00:29:15,800 Speaker 3: Yes from the improved is it well, absolutely so. 549 00:29:15,920 --> 00:29:19,080 Speaker 4: Yeah, it's a time of intellectual ferment. And John Law 550 00:29:19,080 --> 00:29:21,720 Speaker 4: happens to be one of the flowers that grows most 551 00:29:22,640 --> 00:29:24,880 Speaker 4: rapidly from that particular. 552 00:29:26,080 --> 00:29:27,280 Speaker 3: Flower weed weed. 553 00:29:28,000 --> 00:29:34,760 Speaker 4: Yes, and he's proposal for this Land bank money and 554 00:29:34,760 --> 00:29:38,960 Speaker 4: Trade considered. That's published anonymously by Joins aunt Agnes, who 555 00:29:39,040 --> 00:29:41,280 Speaker 4: runs a printing business which holds the local monopoly in 556 00:29:41,320 --> 00:29:44,400 Speaker 4: printing bibles as well. By the way, everyone in politics 557 00:29:44,440 --> 00:29:47,360 Speaker 4: knows who's behind it. And despite the fact that his 558 00:29:47,440 --> 00:29:51,400 Speaker 4: reputation is obviously controversial and he does have some high 559 00:29:51,400 --> 00:29:53,960 Speaker 4: profile supporters and his scheme does get a hearing in 560 00:29:54,000 --> 00:29:57,560 Speaker 4: the Scottish Parliament alongside several others. However, they cut along 561 00:29:57,600 --> 00:30:00,480 Speaker 4: and complicated story shot. It's not something ne twenty for 562 00:30:00,480 --> 00:30:03,920 Speaker 4: this podcast. Scotland doesn't go ahead when money true reform 563 00:30:03,960 --> 00:30:06,560 Speaker 4: and instead it's somewhat reluctantly agrees to you to night 564 00:30:06,600 --> 00:30:09,520 Speaker 4: with England in seventeen oh seven. And that's partly to 565 00:30:09,520 --> 00:30:12,800 Speaker 4: be like the economy and specifically the elites who'd lost 566 00:30:12,840 --> 00:30:14,440 Speaker 4: a lot of money in the Darian scheme. 567 00:30:19,880 --> 00:30:22,640 Speaker 3: Okay, so here we are. He's still in Scotland. Is 568 00:30:22,920 --> 00:30:24,640 Speaker 3: he still in Scotland for the active Union? 569 00:30:24,760 --> 00:30:27,640 Speaker 4: He's not because what happens. But obviously the active Union 570 00:30:27,680 --> 00:30:30,120 Speaker 4: is coming up, and he's still a fugitive. 571 00:30:31,240 --> 00:30:34,880 Speaker 3: He can't stay in Scotland. 572 00:30:33,880 --> 00:30:36,640 Speaker 4: Exactly because it might become part of England. And so 573 00:30:36,840 --> 00:30:39,600 Speaker 4: that's when he moves to buy looks at it. That's 574 00:30:39,640 --> 00:30:41,960 Speaker 4: when he moved to Genoa. 575 00:30:42,280 --> 00:30:45,080 Speaker 3: His descendants still calling for independence. 576 00:30:47,320 --> 00:30:52,840 Speaker 4: I would explain something. So he goes to Genoa. During 577 00:30:52,840 --> 00:30:56,000 Speaker 4: this time they had two kids, and by seventeen eleven 578 00:30:57,040 --> 00:31:00,320 Speaker 4: he's got one hundred and forty thousand lira in the bank. Now, 579 00:31:00,480 --> 00:31:02,840 Speaker 4: conn to James Buckin's book, A laborer earns one or 580 00:31:02,840 --> 00:31:06,040 Speaker 4: two lera a day, so let's call that in the 581 00:31:06,080 --> 00:31:08,880 Speaker 4: minimum wage. Now, the minimum wage in the UK's about 582 00:31:08,880 --> 00:31:10,800 Speaker 4: twelve quid an hour at the moment, I wasn't going 583 00:31:10,840 --> 00:31:12,640 Speaker 4: to multiply that to a day. But even if you 584 00:31:12,680 --> 00:31:14,920 Speaker 4: take twelve quid for an hour and you might aiply 585 00:31:15,040 --> 00:31:17,479 Speaker 4: that by one hundred and forty thousand, then you are 586 00:31:17,520 --> 00:31:20,360 Speaker 4: looking at somewhere between eight hundred and fifty grandy about 587 00:31:20,360 --> 00:31:23,720 Speaker 4: one point seven million. So he's definitely a well off guy. 588 00:31:23,800 --> 00:31:27,480 Speaker 4: He's got a lot of liquid assets and this seems 589 00:31:27,480 --> 00:31:29,360 Speaker 4: to have been built up through the same sort of thing, 590 00:31:29,400 --> 00:31:33,560 Speaker 4: so like running games. Also, I think he's probably involved 591 00:31:33,680 --> 00:31:38,440 Speaker 4: in supplying armies because again there's kind of a war 592 00:31:38,560 --> 00:31:41,760 Speaker 4: going on, and he's also making a lot of contacts, 593 00:31:42,160 --> 00:31:44,640 Speaker 4: so there's a lot of people, a lot of factions. 594 00:31:44,680 --> 00:31:47,479 Speaker 4: The Jacobites in Scotland are very fond of them, even 595 00:31:47,520 --> 00:31:50,280 Speaker 4: Tho though he doesn't really doesn't seem me have very 596 00:31:50,360 --> 00:31:54,880 Speaker 4: high convictions in terms of political stuff. It's like he's 597 00:31:55,000 --> 00:31:57,320 Speaker 4: kind of nice to the Jacobites because they're nice to him. 598 00:31:57,440 --> 00:32:01,000 Speaker 4: He's quite a loyal person, really helps him out than 599 00:32:01,040 --> 00:32:04,120 Speaker 4: he tends to do likewise, But again you don't get 600 00:32:04,120 --> 00:32:07,160 Speaker 4: the sense that he's terribly ideological in terms of party 601 00:32:07,320 --> 00:32:10,160 Speaker 4: politics or anything like that. He's kind of more obsessed 602 00:32:10,160 --> 00:32:15,160 Speaker 4: with his ideas about monetary and economic reform, because during 603 00:32:15,160 --> 00:32:17,560 Speaker 4: this time he is also trying to shop his ideas around. 604 00:32:17,640 --> 00:32:20,800 Speaker 4: So he's tried in Scotland and failed. He approaches the 605 00:32:20,880 --> 00:32:23,880 Speaker 4: Ducas Savoy with a similar idea for a kind of 606 00:32:24,040 --> 00:32:28,080 Speaker 4: central bank type organization. He nearly gets the scheme going Intourin, 607 00:32:28,320 --> 00:32:32,960 Speaker 4: but again that doesn't happen. And so as far as 608 00:32:33,000 --> 00:32:36,400 Speaker 4: we can see, France is currently engaged in the war 609 00:32:36,560 --> 00:32:41,080 Speaker 4: succession that comes to an end in seventeen thirteen, and 610 00:32:41,200 --> 00:32:44,760 Speaker 4: at this point he moves back to France, presumably because 611 00:32:44,800 --> 00:32:47,480 Speaker 4: you can get in now because they're not a war anymore. 612 00:32:48,120 --> 00:32:51,720 Speaker 4: And it's also very clear that Louie the fourteenth is 613 00:32:51,840 --> 00:32:54,440 Speaker 4: on his last legs it was going to be a succession. 614 00:32:55,080 --> 00:32:59,480 Speaker 4: France is very very very badly off. Debt is running 615 00:32:59,480 --> 00:33:02,440 Speaker 4: at something like to one hundred percent of GDP, which 616 00:33:02,480 --> 00:33:05,080 Speaker 4: reminds me of somebody else that we can them right now. 617 00:33:05,240 --> 00:33:09,320 Speaker 4: And so basically he sees the opportunity to get his 618 00:33:09,560 --> 00:33:13,000 Speaker 4: ideas maybe taken up and what is actually one of 619 00:33:13,000 --> 00:33:15,120 Speaker 4: the biggest economies in Europe at this point. 620 00:33:15,560 --> 00:33:18,920 Speaker 3: So France is kind of at again. This might sound familiar, 621 00:33:19,000 --> 00:33:22,440 Speaker 3: but reform or crisis stage. Absolutely when they decided to 622 00:33:22,480 --> 00:33:25,320 Speaker 3: go for a reform or as we will find out. 623 00:33:25,440 --> 00:33:28,120 Speaker 4: Yeah, well a bit of both. Why not both exactly? 624 00:33:30,440 --> 00:33:33,360 Speaker 4: So France is desperate for fresh ideas on how to 625 00:33:33,440 --> 00:33:37,080 Speaker 4: deal with it's lack of money, and John Law is 626 00:33:37,120 --> 00:33:41,160 Speaker 4: desperate to see his ideas put into practice. He's been 627 00:33:41,240 --> 00:33:45,200 Speaker 4: knocked back by Scotland, he's been knocked back by Savoy, 628 00:33:46,080 --> 00:33:48,600 Speaker 4: but maybe he can find a home for his thoughts 629 00:33:48,800 --> 00:33:51,840 Speaker 4: in France and we'll find out how that went in 630 00:33:51,880 --> 00:33:52,840 Speaker 4: the next episode.