Merryn Talks Money: John Law – The Gambler Who Invented Modern Money (Part 1)

Podcast: Merryn Talks Money
Host: Bloomberg (Merryn Somerset Webb)
Episode Date: December 22, 2025

Episode Overview

This special two-part episode dives deep into the extraordinary life of John Law, a Scottish gambler, fugitive, and financier whose radical ideas became the bedrock of modern monetary systems. The hosts, with wit and irreverence, trace Law’s tumultuous journey from Edinburgh to the courts of France, exploring how his vision (and notoriety) helped invent the very foundations of money as we know it today.
Main Theme: Understanding how a risk-taking Scotsman’s schemes and insights transformed the principles of finance and central banking, and how these ideas ripple through today’s economic reality.

Key Discussion Points & Insights

1. The “Catalyst” in Monetary History [02:27–03:54]

• Period of Calm and Sudden Change:

  • The history of money is marked by slow evolution interrupted by explosive transformation—John Law embodies this shift.
  • Quote: “Quite often it seems like nothing is happening… then suddenly there’s a catalyst… and you get everything exploding.” (Co-Host, 02:27)

• Law’s Lasting Impact:

  • John Law is less renowned than Adam Smith but arguably foundational to the monetary system we use today.
  • Quote: “You could arguably say that his thinking is more important than a lot of that academic muck.” (Co-Host, 03:26)

2. Early Life: Wealth, Risk, and Rebellion [04:40–08:55]

• Family & Upbringing:

  • Born 1671, Edinburgh; raised among merchant-class goldsmiths who straddled the worlds of jewelry and early banking.
  • Lived amid credit creation—goldsmiths were already lending (early shadow of fractional reserve banking).
  • Notable Moment: Differentiating between gold as a physical object and gold as “moneyness.”
    • Quote: “He appreciates that there’s a difference between the gold object and gold as Money.” (Narrator, 07:20)

• Formative Habits:

  • Law was a risk-taker from youth, attracted to gambling, nightlife, and breaking convention—much to his mother’s frustration.
  • Quote: “He’s just a naughty boy and she’s kind of fed up.” (Narrator, 08:15)

3. London: Gambler, Dandy, and a Fatal Duel [10:06–18:07]

• Move to London:

  • Law heads to London at 21, mixes in high society, earns the nickname “Beau Law”.

• The Duel:

  • 1694: Law kills Edward “Bo” Wilson in a duel at Bloomsbury Square (circumstances unclear—possibly over a landlady’s honor, not the salacious rumors of the time).
  • Legal technicalities were crucial; premeditated duels were classified as murder, spontaneous fights as manslaughter.
  • Law is found guilty of murder under the former.

• Imprisonment and Escape:

  • Law’s affluent connections afford him better prison conditions, and the Scottish elite plead for his pardon.
  • Eventually, with tacit consent from King William and help from Johnston (Scottish Secretary of State), Law escapes and becomes a fugitive.
  • Quote: “This is a major turning point in his life… it’s his fugitive status that will eventually drive him to France, which is where he will create monetary history.” (Narrator, 18:07)

4. Exile and European Education [21:41–28:39]

• Love and Partnership:

  • During imprisonment, Law meets long-time partner Katherine Knowles—descended from nobility, like Law himself.
  • Law never marries, a rarity for the era; shifts religious affiliation for opportunism, not conviction.

• Financial Intellectualism on the Run:

  • Travels from Genoa to Amsterdam, supporting himself through high-stakes gambling.
  • Absorbs advanced financial market concepts while mingling with top traders in Amsterdam—learns about shorting, futures, busts, and the power of being “the banker.”

• Wider Historical Context:

  • England and France are both financially crippled by decades of war.
  • 1694: Founding of the Bank of England—a critical prototype for central banking, designed to institutionalize public debt and raise funds independent of the monarchy.
  • Quote: “You’re getting your institution… whereas in France you’ve still got this very old system.” (Narrator, 26:27)

5. Law’s Theories and Attempts at Reform [28:39–35:09]

• Land-Bank and Money Theory:

  • Publishes “Money and Trade Considered” in Scotland—one of the first explicit treatises recognizing money’s abstract, non-commodity role.

  • Key Quote: “Money is not the value for which goods are exchanged, but the value by which they are exchanged.” (Cited by Felix Martin and Edward Chancellor, 30:20)

  • Law’s innovation: Suggests a currency secured by land, not gold or silver.

  • Motivated by intellectual passion; more “world improver” than profit-seeker, though he lived richly.

• Failed Efforts in Britain and Savoy:

  • Law’s ideas gain some high-profile support but are ultimately rejected; Scotland chooses union with England over monetary reform.

6. France—A Nation (and a Man) on the Brink [35:30–38:43]

• Relocating as the Political Landscape Shifts:

  • Law, now wealthy and widely connected from years on the continent, moves to France after the War of Spanish Succession.
  • France’s finances are in dire straits: Debt exceeds 100% of GDP, reminiscent of modern fiscal crises.
  • Quote: “France is desperate for fresh ideas on how to deal with its lack of money, and John Law is desperate to see his ideas put into practice.” (Narrator, 38:15)

• Setting Up for the Big Bet:

  • Both Law and France are at a crossroads—ripe for the monetary “Big Bang” Law will soon unleash.

Notable Quotes & Memorable Moments

| Timestamp | Quote | Speaker |
|-----------|-------|---------|
| 02:27 | “Quite often it seems like nothing is happening… then suddenly there’s a catalyst… and you get everything exploding.” | Co-Host |
| 03:26 | “You could arguably say that (Law’s) thinking is more important than a lot of that academic muck.” | Co-Host |
| 07:20 | “There’s this thing called moneyness somewhere that is a kind of abstract property of the gold and he appreciates that there’s a difference between the gold object and gold as Money.” | Narrator |
| 08:15 | “He’s just a naughty boy and she’s kind of fed up.” | Narrator |
| 18:07 | “This is a major turning point in his life… it’s his fugitive status that will eventually drive him to France, which is where he will create monetary history.” | Narrator |
| 30:20 | “Money is not the value for which goods are exchanged, but the value by which they are exchanged.” | (Citing financial historians on Law’s writing) |
| 38:15 | “France is desperate for fresh ideas on how to deal with its lack of money, and John Law is desperate to see his ideas put into practice.” | Narrator |

Engaging and Noteworthy Moments

• Law’s duality: Extreme risk-taking in personal life matches his radical financial ideas.
• Irreverent analogies: Training montage scene with Law “darting around Europe with his not-wife Catherine” (27:29) adds levity and pace.
• Modern Parallels:
  • References to fiscal crises and institutional innovation resonate strongly with listeners aware of present-day economic debates.
  • Quote: “France’s debt is running at something like 100% of GDP, which reminds me of somewhere else that we can name right now.” (Narrator, 37:40)
• Humanizing Law: The show balances Law’s notoriety (gambler, murderer, fugitive) with his lasting intellectual impact and personal charm—“calls for charisma every time.” (Co-Host, 04:22)

Timestamps of Key Segments

• 02:27 – Introduction to monetary history catalysts and Law’s place
• 04:40 – Law’s childhood and family business (early goldsmith banking)
• 10:06 – Move to London, high-society life, and the infamous Bloomsbury duel
• 13:29 – Duel aftermath and Law’s prison/escape drama
• 21:41 – Law’s exile, relationship, and survival across Europe
• 23:52 – Broader financial context: England and France’s fiscal dilemmas
• 28:39 – Law’s time in Amsterdam, gambling, and exposure to modern finance
• 31:42 – Law’s treatises and attempt to reform Scotland’s money system
• 35:30 – Flight to Genoa, further schemes, and move back to France
• 38:05 – France at the edge of reform or crisis; stage set for Law’s next act

Tone

The podcast is conversational, witty, and accessible—mixing deep, thorough research with lively, playful asides. The irreverence towards history’s “great men” gives the narrative freshness while maintaining enormous respect for the intellectual revolutions of the period.

Summary for Non-Listeners

If you missed this episode, you’d learn that John Law’s life was more adventurous than most fiction, mixing gambling and murder with seminal theorizing that still shapes our financial system. This first part covers his Scottish roots, scandalous early life, brush with execution, and fugitive wanderings—set against a backdrop of European warfare and financial innovation. The stage is now set for his entry into France, the mother of all monetary experiments, to be explored in Part 2.