William Potter, however, proved to be only preparation for the
locus classicus of inflationism, the prince of proto-Keynesian money cranks, both theorist and activist, John Law of Lauriston (1671-1729). Son of James Law, a wealthy Scottish goldsmith and banker, John was born and grew up in Edinburgh, proceeding to squander his father's substantial inheritance on gambling and fast living. Convicted of killing a love rival in a duel in London in 1694, Law bribed his way out of prison and escaped to the Continent. After a decade in Europe pondering monetary problems, Law returned in 1703 to Scotland, where he was not subject to arrest. There, Law concentrated on developing and publishing his monetary theory
cum scheme, which he presented to the Scottish Parliament in 1705, publishing the memorandum the same year in his famous or infamous tract,
Money and Trade Considered, with a Proposal for Supplying the Nation with Money (Edinburgh, 1705). The Scottish Parliament considered but turned down his scheme; the following year, the advent of the union of Scotland with England forced Law to flee to the Continent once more, since he was still wanted by English law under the old murder charge.
Karl Marx, in a sense, should have been proud of the way John Law 'unified theory and practice' in his proposal. On the one hand, Law was the theorist, arguing for a central land bank to issue inconvertible paper money, or rather, paper money 'backed' mystically by the land of the nation. As a crucial part of his proposal, the grateful nation - in this case Scotland - was supposed to appoint Law himself, the expert and theoretician, in charge of putting this inflationist central bank scheme into effect.
--Murray N. Rothbard,
Economic Thought Before Adam Smith, vol. 1 of
An Austrian Perspective on the History of Economic Thought (Auburn, AL: Ludwig von Mises Institute, 2006), 328-329.
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