Conclusion
Law’s legacy is an enduring one. As a macroeconomic choreographer, he produced some outstanding ideas - demand and supply theory, the conceptualisation of inflation analysis in a money demand/money supply framework, the law of one price for internationally traded goods, the analysis of the circular flow of income, the definition of money freed from the anchor of intrinsically valuable metals, and the emphasis on money having a real impact on economic activity.
His theory led him to a policy recommendation that paper money and credit be used to replace specie and that the governments of the time, faced with depressed economic activity should increase the money supply and reduce the rate of interest. The overhang of a sizeable public sector debt made it difficult to lower the rate of interest and so he introduced a debt management policy enabling the substitution of equity for government debt in an effort to alleviate this problem. Ultimately, some economists will say that he failed and economists do not like to be associated with failures.From his grave, Law might say that he tried and for a period, as Du Tot testified, he produced some stunning successes. There is therefore a case for Law to be regarded as the spiritual father of quantitative easing, a monetary policy that recently helped re-balance the global economy after the financial crash of 2008. As an addendum, Law, with all the accumulated wisdom of his experience from the collapse of the Mississippi System, might advise a policy of “hasten slowly” to governments and central banks applying quantitative easing.