Pre-Classical Economists Volume III: John Law (1671–1729) and Bernard Mandeville (1660–1733)

John Law was one of those extraordinary personalities in which the 18th century seemed to abound. He held a demand-and-supply theory of value and treated the value of money or the determination of the average level of prices as only a special case of a general theory of value. Law eventually became Minister of Finance in France and was responsible for the greatest speculative frenzy in her history known as the Mississippi Bubble. When the boom collapsed in the closing months of 1720, Law was forced to flee France, permanently discredited, and spent his declining years as a professional gambler in Venice.

In The Fable of the Bees: Private Vices, Public Benefits Bernard Mandeville argued that self-interest was a moral vice. Mandeville’s satire was deliberately designed to give offence as if to encourage the re-examination of traditional beliefs : conspicuous consumption of luxury goods, the fashionable display of foreign imports, crime, and even natural disasters like the Fire of London all promote the ‘division of labour’ (Mandeville’s term) and contribute to a brisk trade and fall in unemployment, whereas such supposed virtues as thrift and charity contribute to poverty and stagnation. The Fable of the Bees was widely read in the 18th century and criticized by all the leading thinkers of the day.