|Requires||Separation of Powers|
|Building Needed||Classical University|
The idea that a state can, like an individual, borrow money against future (tax) income.
Kings have always run up debts, borrowing money (sometimes at sword's point) from subjects and great banking houses. The debt, however, was the personal responsibility of the king. Eventually, his credit would run out. The concept of national debt allows a nation to borrow to finance expansion and conquest. Wars can be financed by issuing bills and bonds, and to be repaid - probably - from taxation.
Scottish economist, gambler and rake John Law (1671-1729) made several advances in his field, his most notable being the introduction of the French national bank. He also proposed state control over national finances and trade. As a result, the state used all national profits to pay off national debt. Eventually, his schemes collapsed but in the process he gave the Western world bank notes and the word "millionaire".
National debt could also be a dangerous thing, for government officials. When the share trading of the "South Sea Bubble" spectacularly failed in 1720, government creditors were out of pocket because they had been paid off in shares. The Chancellor of the Exchequer, John Aislabie, was imprisoned in the Tower of London for his incompetence.