The South Sea Bubble of 1720 was Britain’s first modern financial crisis. This chapter uses digital tools to study the development, during the early eighteenth century, of a conceptual framework describing bubbles in the financial market. It traces the emergence of the phrase ‘South Sea Bubble’ in the months and years after the crisis, alongside the more complicated patterns of evolution in what that phrase describes, ultimately arguing that there is little resemblance between the ‘South Sea Bubble’ of the 1720s and that of the present-day historical imagination. The chapter’s final claim is that the conceptual framework underpinning how we understand present-day financial crises has its origins in the latency of the words used, at the time, to describe the emerging and interlinked crises of 1720.

The year 1720 witnessed the world’s first international financial crisis. Instead of retelling the standard narrative that focuses on John Law and his System, this chapter uses the records of the stock speculator James Brydges during the Mississippi and South Sea Bubbles to illustrate the different capacity for impunity in the 1720 crisis. Changes in impunity were due to the expansion in the complexity of finance, and the fraught process of trying to establish central banks as the main institutional form of immune actors in that new complex financial world. The financial bubbles of 1720 were connected by flows of capital, information, and personnel, which were beyond the capacity of either the French or the British government to regulate. For the first time, financial instruments and techniques existed, which were beyond the understanding of the educated amateur and were powerful enough to provoke wide-ranging economic disorder.

The subject of Chapter 7 is the impact on the book of the South Sea Bubble, as the Tour draws on its author’s long involvement in debates surrounding the Company. A full account is given of Defoe’s attitudes to the South Sea Company, from the time that it was founded by his patron Lord Oxford in 1711. In the following years he observed the changing fortunes of the Company, as it became more closely involved with the monarchy and the government, In 1719 he wrote a trenchant pamphlet, The Anatomy of Exchange-Alley, warning against the cheats of stock jobbers, as well as the nefarious operations of men like Sir John Blunt who were at the head of its activities. He continued to rail in the press against these things after the Bubble burst in 1720. In line with these views, key passages in the Tour express sympathy with the directors and lament the fate of other wealthy merchants whose fortunes were destroyed in the collapse, a pervasive theme of the book.