During the early eighteenth century Europe was rattled by a series of financial shocks, stemming from the impropriety of government and economic actors who grew increasingly interdependent as governments relied on private lenders for imperial expansion. New institutional arrangements redefined the relationship between class and power and led to original notions of political justice, inconceivable in the pre-modern economic era. Political thinkers increasingly placed emphasis on how existing notions of freedom could be squared with bringing unwieldy and chaotic economic situations under political control. Some concerned themselves with how commerce stifled the civic character, while others held a more optimistic view, suggesting commerce was a source of political stability that engendered certain forms of virtue commensurate with eighteenth-century political exigencies. Montesquieu sought to reconcile these two positions throughout his political works.

This chapter builds on the existing literature which considers how the failure of John Law's System and its reverberations shaped Montesquieu's political thought. Its primary aim is to trace the tangible roots of Montesquieu's ambiguity over the relationship between commerce and liberty – a principal theme in this book's subsequent chapters.

The first part reconstructs the context of John Law's System. Here, I explain how the confluence of France's existing monetary and fiscal regime and its experimentation with new modes of high finance during the War of the Spanish Succession, ripened the conditions for Law to introduce his System to the Regency following Louis XIV's death in 1715. The second part examines Montesquieu's and Law's competing conceptions of political moderation, highlighting the former's abiding preoccupation with France's titled nobility. Here, readers will discover why Law had become such a worrisome figure. The Scottish financier's System undermined France's remnant honour-yielding institutions, which, in Montesquieu's view, were indispensable for counteracting the Bourbon Crown's despotic tendencies.