John Law (economist), Date of Birth, Place of Birth, Date of Death

    

John Law (economist)

Scottish economist

Date of Birth: 21-Apr-1671

Place of Birth: Edinburgh, Scotland, United Kingdom

Date of Death: 21-Mar-1729

Profession: economist, banker, statistician

Nationality: France

Zodiac Sign: Taurus


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About John Law (economist)

  • John Law (baptised 21 April 1671 – 21 March 1729) was a Scottish economist who believed that money was only a means of exchange which did not constitute wealth in itself and that national wealth depended on trade.
  • He was appointed Controller General of Finances of France under the Duke of Orleans, who served as regent for the youthful king, Louis XV. In 1716 Law established the Banque Générale, a private bank, in France and which, one year later, was nationalised at his request to become the Banque Royale, the first Central Bank of France.
  • The original private bank was substantially funded by John Law and Louis XV and three-quarters of its capital consisted of government bills and government-accepted notes, effectively making it the first central bank of the nation and was only partially backed by silver making it a fractional reserve bank.
  • He set up and was director of the Mississippi Company, which was funded by the Banque royale.
  • Its eventual chaotic collapse in France has been compared to the early-17th century tulip mania in Holland.
  • The Mississippi Bubble was contemporaneous with the South Sea Company bubble of England which allegedly borrowed ideas from the Mississippi Company design. Law was a gambler and a brilliant mental calculator.
  • He was known to win card games by mentally calculating the odds.
  • He originated economic ideas such as the scarcity theory of value and the real bills doctrine.
  • Law held that money creation will stimulate the economy, that paper money is preferable to metallic money, and that shares are a superior form of money since they pay dividends.The term "millionaire" was coined specifically to describe the beneficiaries of Law’s scheme.

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