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I have reorganized some of the Adam Smith's view on him here:
https://bitcointalk.org/index.php?topic=263267.0I can imagine that the whole scheme is well planned, at some point on the way, people thought that he created the financial miracle of France and there were booms around Paris area
There are different reasons for his failure, but I think the main reason is that there were silver/gold coins in circulation, so when there was a panic, people would run for silver/gold coins and create a bank run for his central bank. He is the first one bring out the idea of fiat money, people don't trust it enough. But today, fiat money is the only medium of transaction in any country (until we have bitcoin), so the possibility of that kind of bank run on central bank is permemantly eliminated
The problem is today bank runs still happen, and trust in bitcoin is represented by its fluctuating price.
Today's bank run is caused by FRB, but that is more or less a management of reserve ratio thing, a 50% reserve ratio will avoid all bank runs. But in John Law's case, even if he had 100% reserve ratio for his paper money, people would still run for gold/silver coin
I'm probably missing the point, but had he 100% reserve ratio, the run would be meaningless (he'd have the metal to back all of his notes). And nothing short of 100% backing guarantees that bank runs will not happen, or be inconsequential if they do.
The reason for central banks -- the reason that perfectly intelligent ruling elite allow a seeming parasite to feed on them & the plebes below -- is it performs many necessary & difficult tasks. In short, that's why central banks are allowed to exist.
I'll quote wikip:"To mitigate the risks of bank runs (when a large proportion of depositors seek withdrawal of their demand deposits at the same time) or, when problems are extreme and widespread, systemic crises, the governments of most countries regulate and oversee commercial banks, provide deposit insurance and act as lender of last resort to commercial banks.[2][3] In most countries, the central bank (or other monetary authority) regulates bank credit creation, imposing reserve requirements and other capital adequacy ratios. This limits the amount of money creation that occurs in the commercial banking system, and helps ensure that banks have enough funds to meet the demand for withdrawals.[3]
Fractional-reserve banking is the current form of banking in all countries worldwide.[4]"
