As luck would have it, as world financial markets careen from crisis to bailout and back to crisis again, I have been reading Millionaire, The Philanderer, Gambler, and Duelist Who Invented Modern Finance, by Janet Gleeson. Though a bit short of being a gripping read, the story itself is fascinating, and resonates strongly these days.

Law was an ambitious Scot who developed a mastery of probability theory in the late 17th century. He put his mastery to work where any ambitious fellow would — at the gaming tables. Law won several fortunes gambling with the rich of Europe. He also put his analytical mind to work on the principal economic problem of the day: a lack of currency that was limiting economic development.
In the early 1700s, the Regent of France (during the minority of Louis XV) placed Law in charge of French government policies on economic matters, which Law developed into (i) paper currency, issued by a national bank, and (ii) an international trading company, the Mississippi Company, which was given exclusive concessions to trade with French colonial possessions.

John Law
In a few short years, Law had conjured up the capitalist economic cycle we have grown familiar with. First, prosperity as the new paper currency allows economic activity to flourish. Then, stock speculation with Mississippi Company shares rising exponentially and apparent fortunes being made. Finally, the crash comes when people lose confidence in the paper money, and the stock share. Like Tulipmania in the Netherlands one hundred years earlier, or the South Sea bubble in England at roughly the same time as the Mississippi Company crash, Law’s boom and bust are a laboratory for modern capitalism.
To clean up the mess, the government shut down the national bank, stopped the currency printing presses (there would be no paper money in France until the end of the eighteenth century), and protected the Mississippi Company. Law died in Venice, shorn of his riches, separated from his wife, and exile from Britain and his adopted land, France.
Almost three hundred years later, governments are still saving the financial geniuses from themselves.