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CHAPTER 2 The Bank of England and the Scottish Enlightenment

Under the rule of English monarchs, before the seventeenth century British civil war, anyone who sought to open finance and interfere with the ability of the crown to fund its whims faced the possibility of horrific punishment and death. It was treason to undermine supreme rulers. In England, treason could be punished by public hanging, disembowelment, decapitation, and just about every other torture conceived by man.

Then came the Glorious Revolution and the Scottish Enlightenment.

By a confluence of unusual events, as the middle of the eighteenth century approached, a small group of gifted thinkers in the Scottish capital of Edinburgh (theretofore a rather dreary regional capital dominated by a hilltop castle) was suddenly allowed to say just about anything that was well-reasoned in regard to the rule of recently crowned Hanoverian kings in London.

In the seventeenth century, Charles I, a Stuart and a Scot, became the king of England. His assassination led to a civil war. After the dictatorial rule of Oliver Cromwell, Charles II was for a time the king of England, Scotland, and Ireland. Then came the Glorious Revolution. In 1688, William of Orange and his wife, Mary (both Stuarts, descended from Charles I), came to England from Holland. William deposed James II and became King William III of England.

Parliament refused to tax citizens to allow William to make war with France. In 1694, however, it borrowed a concept ...