Preface to all three parts: I’ve written dozens of books, but the only history book I’ve ever written was Panic Prosperity and Progress. This weekend, I’m sharing one of the chapters from the book in three parts, since it offers interesting lessons about what can happen when governments decide to experiment with finance and economics.

It seems hard to believe that an obscure Scotsman born over 350 years ago would have profound effects that persist in the financial world to this day, but it is true, and that man’s name was John Law. The events surrounding Law’s actions in the 18th century are the stuff of legend, and Law is considered by some economists to be the world’s first Keynesian—that is, a person who supports the notion that flooding an economy with government spending is the best way to address a weak economy. Even the everyday English word “millionaire” was coined during the mania of Law and his so-called Mississippi Scheme. In this section, we will explore what led up to the scheme, its construction, and the devastation it wrought.