ABSTRACT
One of the most extraordinary events in British financial history, the South Sea Bubble of 1720 has many parallels with John Law, the Mississippi scheme and his remarkable attempts to create a new financial and monetary system in France. This also collapsed in 1720. Although in terms of speculative mania the two incidents are remarkably similar, the political background is quite different. In France, developments were masterminded by a Scottish adventurer in a despotic, inefficient, and corrupt state. In England, the bubble developed in a democratic and financially sophisticated society: the events had their roots in the political rivalries between whigs and tories. There is another difference, which is why the two incidents are dealt with in different parts of this book. John Law created one of the earlier attempts at inconvertible paper money: in England the monetary system, as such, was never seriously threatened. Public finance, though, was transformed. The period marked:
…the advance of stock-jobbing from a private commerce to a public menace, of corruption from an urbane traffic to a scandalous conspiracy …of company promoting from a dull industry to a fine art… Noblemen pawned their estates and booksellers endowed hospitals.
