John Law was the French financier associated with the 1720 Mississippi Bubble crash. A Scottish economist and gambler, Law argued that a well-managed paper-money system could expand commerce and help governments manage debt.
After becoming influential in France, he founded the Banque Générale, later transformed into the Banque Royale, and directed the Mississippi Company. The company received a monopoly over French trade and absorbed substantial government debt. Its shares became the focus of intense speculation, especially in Paris.
The scheme depended on confidence in both the company and Law’s paper currency. As investors demanded conversion and doubts spread about the company’s profits, the share price and the value of banknotes fell sharply in 1720. Law lost political support and fled France.
The Mississippi Bubble is frequently paired with Britain’s South Sea Bubble because both peaked and collapsed in 1720. Law’s experiment also remains important in monetary history because it combined a state-backed bank, paper money, debt restructuring, and a trading monopoly.