With the help of his economics teacher, Mr. Pandolfini, and his history teacher, Mr. Risley, senior Jack Yoon recently had a paper accepted for publication in The Concord Review, a quarterly journal that publishes the academic work of secondary school students worldwide. Below is the abstract of Jack’s paper, titled “John Law: Murderer, Economist, Statesman” and set to be published in June 2016 in the summer issue of The Concord Review. Congratulations, Jack!
Following the War of Spanish Succession (1701-1714), the economy of France was nearing collapse. Government debts soared to unprecedented heights, and measures to control such debt had limited success. However, at this time, a Scotch economist named John Law (1671-1729) arrived in France, proposing a dramatic overhaul of the nation’s economic system that would liquidate the national debt and increase the money supply through a two-pronged system consisting of a central bank with the power to issue paper money and a private monopoly on international commerce and tax collection. The implementation of Law’s system led to a brief, explosive expansion in the French economy that dissipated with the collapse of a bubble in the market for stock in Law’s private monopoly. This paper explores how the rise and fall of Law’s system suggests lessons for the economic policies of modern nations, and how Law’s conception of money as a unit of confidence continues to define that concept in the modern-day economy.