I want to introduce you to the most famous Scotsman of whom you’ve probably never heard. If played by Sean Connery in a biopic he would introduce himself thus: ‘The name’s Law, Law of Lauriston.’

The 18th-century philanderer, duellist, gambler, who could have walked straight from the pages of a derring-do, swashbuckling penny dreadful, became France’s Controller General of Finance, founded the Banque de France, transformed the nation’s overwhelming national debt into fiat currency – paper being cheaper the gold – established the Paris Bourse, on which he floated the Mississippi Company, presiding over one of the most impressive bull markets in history. Not bad for a wee boy from a farm outside Edinburgh.

For a while he even mastered the art of the deal in America, effectively governing half of the French-controlled land mass, became the world’s first millionaire, acquired stately chateaux in the French countryside and a posh Parisian  mansion, hôtel particulier, rivalling the grandest nobles.

Events not entirely to France’s advantage quickly followed. The Mississippi Company imploded, taking down with it Law, the French economy and the fortunes of the nobility and middle class who had pawned their last silver candlesticks to invest.

This is the point in the Law saga when paper Bitcoin billionaires should get twitchy. Possibly we are back where Law started. The economic black hole left in the finances of the French ruling establishment paved the way for social dislocation and revolution 60 years later.

Equally arguably, Law invented modern finance. Fiat currency is today ubiquitous, as are national banks and, the last time I checked, the Bourse de Commerce is still firing on most cylinders.

For Law was that brilliant innovator whose first attempt at modern economic alchemy blew up in the lab. Of course, it’s happened since. No nation has completely mastered the balancing art of economics. They probably never will.

But with a twiddling of the knobs and the introduction of ‘failsafe’ backstops – stock market regulation, central banks with a modicum of independence and a last resort International Monetary Fund – the world has stumbled on its way, even surviving the 2008 subprime crisis, to levels of prosperity unthinkable in the 18th century.

More or less standing on the shoulders of John Law. That’s why I have a portrait of him hanging in my Scottish Borders’ study. As both encouragement – and dire warning.

What was Law’s journey from Lauriston to Paris? Fifth surviving child of 12 and eldest son of William Law, an Edinburgh goldsmith. Law, père, was immersed in more than crafting objects. In 1674 William was called on by the Scottish parliament to give a commentary on a report into the running of the Royal Mint. It was an outsider DOGE (Department of Government Efficiency) moment.

His father died when he was 12 and John was sent by his mother to an obscure boarding school near Glasgow, run by a relative, to put him beyond the reach of the temptations of Edinburgh. She had a premonition that her smart, tall, handsome boy had a developing taste for the louche life.

He dressed as a dandy, his friends dubbing him ‘Beau Law’, or ‘Jessamy (fop) John’. He was a natural mathematician, but indolent, a regular at the gaming tables and quickly gained a reputation as a womaniser. Edinburgh could not satisfy his aspirations and Law, like Boswell before him, took the high road to London. Another Scotsman ‘on the make’.

There he plunged into the Piccadilly beau monde, to his mother’s despair. She, now the doyenne of the profitable goldsmith’s business, settled his debts. It was his come-to-Jesus moment. Typically, he didn’t abandon the tables. He used his natural talent for mathematics to devise a system to reduce the odds of losing. He gambled smarter.

The success of Law’s system drew him like a magnet to economics and he watched from the sidelines as fellow Scot, William Paterson, devised a means of helping William III sort out his dodgy debt mountain: £1,200,000 would do it. Private investors signed a subscription for that amount at eight per cent interest for an 11-year term. Bank notes would be issued for the debt, underwritten by the crown.

We were off to the fiat currency races. In a limited way. John Law was fascinated by the scheme. What if all currency was fiat, underwritten by a sovereign authority? He was sidelined from playing a role. A minor inconvenience. Law was in prison, convicted of the murder of Edward Wilson.

For a time, the pair had shared a lodging house, but Wilson’s sister took umbrage over Law’s sharing his rooms with his mistress, Mrs Lawrence. Wilson tittle-tattled the scandal around the town, Law wrote angry letters of rebuke, escalating to a challenge to a duel, which took place in Bloomsbury Square on 9 April 1694. Result? Wilson skewered at the first pass, Law sent down by the notorious hanging judge, Sir Salathiel Lovell, for capital murder. He was on death row.

After crafty legal manoeuvring, Law was moved from Newgate to the less secure King’s Bench prison. Friends conspired to drug his guards – it is said with the connivance of Elizabeth Villiers, the mistress of the king – file his manacles and help him high-tail it to the coast and then a packet to France.

There followed Law’s Grand Tour of European boudoirs and betting salons: Caen, Amsterdam, Venice, Genoa and Turin. In all the centres he visited he took as keen an interest in banking and foreign exchange activities as he did in his beloved casinos.

At the Rialto in Venice, he spent all day at the exchange learning the manner of discounting bills at the bank, and the vast usefulness of paper credit.

Royal connections mattered, particularly the Duc de Vendôme and the Duke of Savoy, and after ten years of economic research and smart betting he had accumulated a fortune of £20,000 – £5m today.

When Louis XIV, the Sun King, died on 1 September 1715, he was succeeded by his great grandson Louis XV, the Dauphin, then only five years old. Phillipe II, Duc d’Orléans lost little time in having the Parlement appoint him regent to his great nephew.

Law was in Paris, and took his chance, writing a job application to the regent in December:

‘Your Royal Highness will have no difficulty in reaping success from what I have the honour of proposing, the best actor is not the one with the largest role but the one who acts the best. I know my strengths and I love pleasure too much to occupy myself in affairs I do not understand in depth.

My ideas are simple, the principles on which I have worked them out are true and the conclusions I draw from them are correct.’

Law proposed a state bank, which he would run, to take on the task of issuing fiat currency to deal with the government’s tottering debt burden, threatening the state with bankruptcy. It would rationalise the blizzard of debt instruments that plagued the system and end the state practice of debasing coinage currency.

A bank backed by the state would, claimed Law, be bound to succeed. ‘The convenience will be such that everyone will be charmed to have bank bills rather than coin because of the facility of making payments in paper and the certainty of receiving value whenever they wish.’

The Duc de Noailles, head of the Finance Council, was dead against it and the proposal was rejected. It says something for Law’s reputation that it was considered at all. But he was permitted in Spring 1716 to set up his own Banque Générale, which operated on shaky ground until, in summer 1716, the Orléans’ carriage rolled up to deposit one million livres in full public gaze. Law had secured a prominent and highly visible backer.

Confidence is everything. What was good enough for le Duc d’Orléans was good enough for less distinguished investors. There were road bumps on the route to success. Jealous private bankers tried to force Law out of business, hoarding five million livres in note and turning up together to insist on payment ‘on demand’ as the notes required – in coin.

By now even sceptic Noailles was convinced. Banque Générale had relieved the pressure on his finance ministry, and he bailed Law out by releasing coinage from the Royal Mint. Think of it in terms of today’s Clearing House Interbank Payments System, (CHIPS).

Then Law’s great American opportunity fell into his lap. A wealthy Parisian financier, Robert Crozat, owned the rights to the Mississippi concession, control over French territories in America. It stretched 3,000 miles and encompassed today’s Louisiana, Mississippi, Arkansas, Missouri, Illinois, Iowa, Wisconsin, Minnesota, and parts of Canada.

Crozat had been fiddling his tax returns and owed 6.6 million livres. The concession reverted to the crown and, cutting a long story short, Law was awarded the rights. In August 1717 The Company of the West, the Mississippi Company, was born.

The company owned sole trading rights with France in all its territories for 25 years, maintained its own military and had rights to mine and farm. Law, as managing director, now ruled half of America.

The share price of the Mississippi eventually went south – revenues were disappointing – so Law built bigger, turning the company into a conglomerate, acquiring tobacco rights, and then turning east, acquiring the French East India and China Company.

The trick of combining loss-makers to create a ‘powerhouse’ – Britain’s solution for its collapsing motor industry in the 1970s, British Leyland – led initially to a herd demand for stock, so Law went further. He bought the rights to the Royal Mint for 50 million livres, then embarked on his most daring stunt.

He offered to take on the entire national debt – 1.2 billion livres – at three per cent linked to a deal to be granted the rights to collect taxes for 52 million livres. The system of privatised tax farmers, who had been fleecing the state for centuries, was to be abolished.

A feeding frenzy engulfed Paris as shares in Law’s enterprises boomed. But on 30 December 1719 Law addressed the AGM of the Mississippi Company. The share price had been falling. The complex financial plans of the great Scottish financier had been under scrutiny.

Claude Henri de Rouvroy, comte de Saint-Simon, a ‘super-enlightenment’ economist, hit the nail on the head: ‘The chimera of the Mississippi Company, its shares, its lingo, its hocus pocus for taking money from some and giving it to others’ had been exposed. Someone had returned from the company’s possessions in America and reported finding only swamp. Law, the king of financial illusion, had no clothes.

There followed heroic attempts at ‘restructuring’ – complex equity for debt swaps, new share issues with different shareholder rights. The familiar tools of today’s consultants offering strategic rescue plans, but Law’s dam had burst.

He had to flee France, with pretty much the whole nation chasing his carriage. He ended up in Venice, where he found some refuge.

His time in the sun as France’s financial seer and an envied millionaire may have been over, but he left an enduring legacy. Not least, as a cautionary tale for today.

We have an economy becoming ever more dependent on the whims of a few billionaires. Today they want to colonise Mars, and are DOGEs – perhaps not of Venice, but US government departments.

Elon Musk’s innovative car company, Tesla, with annual operating profits of $8bn, has a market cap of $918 billion and trades at a multiple of x 114. Sustainable? Really? So far, it has been supported by government grants to the tune of $38 billion from American taxpayer Joes. Call Comte de Saint-Simon!

Law died in Venice on 21 March 1729. His tomb is to be found in the church of San Moise, a fitting resting place for the man who had so much immersed himself in the pleasures of La Serenissima.

I made a pilgrimage last week to the very spot, while in Venice for a performance of Donizetti’s Anna Bolena at La Fenice. A brief search at the west end of the nave revealed an unassuming, triangular polished ledger-stone set into the marble floor bearing Law’s essential particulars.

Cruise ship tourists trod over my hero with scant respect. I cleared the area and effected an appropriate introduction. ‘John Law of Lauriston, the world’s first millionaire, meet Elon Musk, the world’s first trillionaire. Any advice for Elon?’