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Nicholas Barbon ( 1640 – 1698) was an English
economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...
, physician, and
financial speculator In finance, speculation is the purchase of an asset (a commodity, good (economics), goods, or real estate) with the hope that it will become more valuable shortly. (It can also refer to short sales in which the speculator hopes for a decline i ...
. Historians of
mercantilism Mercantilism is an economic policy that is designed to maximize the exports and minimize the imports for an economy. It promotes imperialism, colonialism, tariffs and subsidies on traded goods to achieve that goal. The policy aims to reduce ...
consider him to be one of the first proponents of the
free market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any ot ...
. In the aftermath of the
Great Fire of London The Great Fire of London was a major conflagration that swept through central London from Sunday 2 September to Thursday 6 September 1666, gutting the medieval City of London inside the old Roman city wall, while also extending past th ...
, he became an active London
property developer Real estate development, or property development, is a business process, encompassing activities that range from the renovation and re-lease of existing buildings to the purchase of raw land and the sale of developed land or parcels to others. R ...
and helped to pioneer
fire insurance Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, or ...
and mortgages as a means of financing such developments.


Early life

Nicholas Barbon was born in London in either 1637 or 1640. and was the eldest son of Praise-God Barebone (or Barbon), after whom Barebone's Parliament of 1653—the predecessor of
Oliver Cromwell Oliver Cromwell (25 April 15993 September 1658) was an English politician and military officer who is widely regarded as one of the most important statesmen in English history. He came to prominence during the 1639 to 1651 Wars of the Three ...
's
Protectorate A protectorate, in the context of international relations, is a state that is under protection by another state for defence against aggression and other violations of law. It is a dependent territory that enjoys autonomy over most of its in ...
—was named. Nicholas's purported baptismal name–"If-Jesus-Christ-had-not-died-for-thee-thou-hadst-been-damned"–was given to him by his Fifth Monarchist father and is an example of a
hortatory In linguistics, hortative modalities (; abbreviated ) are verbal expressions used by the speaker to encourage or discourage an action. Different hortatives can be used to express greater or lesser intensity, or the speaker's attitude, for or a ...
name: religious "slogan names" were sometimes given in Dissenting families in 17th-century England. Conflicting sources claim the name "Unless-Jesus-Christ-Had-Died-For-Thee-Thou-Hadst-Been-Damned" was given to Nicholas' father, or to his uncle and Nicholas' hortatory name was supposedly a variant on this name. He became a religious
separatist Separatism is the advocacy of cultural, ethnic, tribal, religious, racial, governmental or gender separation from the larger group. As with secession, separatism conventionally refers to full political separation. Groups simply seeking greate ...
with
Millenarianist Millenarianism or millenarism (from Latin , "containing a thousand") is the belief by a religious, social, or political group or movement in a coming fundamental transformation of society, after which "all things will be changed". Millenaria ...
beliefs, with fervent views in favour of
infant baptism Infant baptism is the practice of baptising infants or young children. Infant baptism is also called christening by some faith traditions. Most Christians belong to denominations that practice infant baptism. Branches of Christianity that ...
in particular. He studied medicine at the Universities of
Leiden Leiden (; in English and archaic Dutch also Leyden) is a city and municipality in the province of South Holland, Netherlands. The municipality of Leiden has a population of 119,713, but the city forms one densely connected agglomeration w ...
and
Utrecht Utrecht ( , , ) is the fourth-largest city and a municipality of the Netherlands, capital and most populous city of the province of Utrecht. It is located in the eastern corner of the Randstad conurbation, in the very centre of mainland Net ...
in the
Netherlands ) , anthem = ( en, "William of Nassau") , image_map = , map_caption = , subdivision_type = Sovereign state , subdivision_name = Kingdom of the Netherlands , established_title = Before independence , established_date = Spanish Netherl ...
, and received his
Doctor of Medicine Doctor of Medicine (abbreviated M.D., from the Latin ''Medicinae Doctor'') is a medical degree, the meaning of which varies between different jurisdictions. In the United States, and some other countries, the M.D. denotes a professional degree. ...
qualification from the latter in 1661. Three years later, he became an honorary fellow of the
Royal College of Physicians The Royal College of Physicians (RCP) is a British professional membership body dedicated to improving the practice of medicine, chiefly through the accreditation of physicians by examination. Founded by royal charter from King Henry VIII in 1 ...
in London.


Property development

He soon turned from the medical profession to the building trade, which suddenly became important in 1666 when the
Great Fire of London The Great Fire of London was a major conflagration that swept through central London from Sunday 2 September to Thursday 6 September 1666, gutting the medieval City of London inside the old Roman city wall, while also extending past th ...
devastated most of the
City of London The City of London is a city, ceremonial county and local government district that contains the historic centre and constitutes, alongside Canary Wharf, the primary central business district (CBD) of London. It constituted most of London f ...
which at the time was separated from
Westminster Westminster is an area of Central London, part of the wider City of Westminster. The area, which extends from the River Thames to Oxford Street, has many visitor attractions and historic landmarks, including the Palace of Westminster, B ...
, the seat of Britain's government, by two miles of countryside, dotted with grand mansions. Within a few years he was "the most prominent London builder of his age". He built houses streets at a time, often around squares, and his developments were mostly to the west of the City of London, where land was plentiful. Barbon was responsible for joining the city to the seat of government at Westminster for the first time as a result of developments along the
Strand Strand may refer to: Topography *The flat area of land bordering a body of water, a: ** Beach ** Shoreline * Strand swamp, a type of swamp habitat in Florida Places Africa * Strand, Western Cape, a seaside town in South Africa * Strand Street ...
,
Bloomsbury Bloomsbury is a district in the West End of London. It is considered a fashionable residential area, and is the location of numerous cultural, intellectual, and educational institutions. Bloomsbury is home of the British Museum, the largest ...
,
St Giles Saint Giles (, la, Aegidius, french: Gilles), also known as Giles the Hermit, was a hermit or monk active in the lower Rhône most likely in the 6th century. Revered as a saint, his cult became widely diffused but his hagiography is mostly lege ...
and
Holborn Holborn ( or ) is a district in central London, which covers the south-eastern part of the London Borough of Camden and a part ( St Andrew Holborn Below the Bars) of the Ward of Farringdon Without in the City of London. The area has its ro ...
. Barbon did this despite long-established restrictions on new buildings associated with various
Acts of Parliament Acts of Parliament, sometimes referred to as primary legislation, are texts of law passed by the legislative body of a jurisdiction (often a parliament or council). In most countries with a parliamentary system of government, acts of parliament be ...
and royal declarations in the late 16th century: he often simply disregarded legal and local objections, demolished existing buildings without permission and rebuilt speculatively in search of a quick profit. On 11 June 1684, Barbon's expansionary speculation brought him and his building tradesmen into conflict with lawyers based at
Gray's Inn The Honourable Society of Gray's Inn, commonly known as Gray's Inn, is one of the four Inns of Court (professional associations for barristers and judges) in London. To be called to the bar in order to practise as a barrister in England and W ...
. Barbon started his largest project yet, the redevelopment of
Red Lion Square Red Lion Square is a small square in Holborn, London. The square was laid out in 1684 by Nicholas Barbon, taking its name from the Red Lion Inn. According to some sources, the bodies of three regicides—Oliver Cromwell, John Bradshaw and Hen ...
, and environs in Holborn without being authorised to do so. The Gray's Inn lawyers,
Inns of Court The Inns of Court in London are the professional associations for barristers in England and Wales. There are four Inns of Court – Gray's Inn, Lincoln's Inn, Inner Temple and Middle Temple. All barristers must belong to one of them. They have ...
adjacent saw their rural outlooks jeopardised, and started physical fist fights with Barbon's workmen, but the developer and his men fought back. The lawyers subsequently obtained warrants for his arrest but Barbon had these set aside and the development scheme was completed. Another setback came when houses he had built at Mincing Lane collapsed because of inadequate foundations. "He was unique in the unscrupulousness and brazenness of his business tactics" and his contemporary Roger North, who studied his dealings and interviewed him on the subject, called him "an exquisite mob master" in recognition of his ability to manipulate people to carry out his schemes.


Insurance and mortgages

At the same time, Barbon took an interest in the development of insurance and the banking industry, and helped to pioneer both. In 1680–81, with 11 associates, he founded an "Insurance Office for Houses" which offered fire insurance for up to 5,000 households in London. Fires were a major danger in London at the time: the Great Fire destroyed more than 13,000 houses and displaced about 100,000 people, and another conflagration in 1678 damaged the
Middle Temple The Honourable Society of the Middle Temple, commonly known simply as Middle Temple, is one of the four Inns of Court exclusively entitled to call their members to the English Bar as barristers, the others being the Inner Temple, Gray's I ...
, one of the Inns of Court. In 1690, together with
John Asgill John Asgill (25 March 1659 – 10 November 1738) was an eccentric English writer and politician. Life Asgill attended Nonconformist (Protestantism) services in his youth. He studied law at the Middle Temple, 1686, and was called to the bar in ...
, he founded the National Land Bank. This was Britain's first land bank—a financial institution which issued loans in the form of
mortgages A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any ...
against real estate. These were popular with landowners because they could now raise money against the value of their main asset. The bank was moderately successful, and even threatened to usurp the
Bank of England The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government o ...
in 1696. The government budget deficit had grown to an unsustainable level; Barbon merged the National Land Bank with another institution (founded by John Briscoe) to form Land Bank United, and offered the government a £2 million loan (£ as of ). The scheme foundered when Barbon and Briscoe could not raise enough money, and Land Bank United was demerged. Barbon was also active in other fields during the 1690s. Largely in order to take advantage of
Parliamentary privilege Parliamentary privilege is a legal immunity enjoyed by members of certain legislatures, in which legislators are granted protection against civil or criminal liability for actions done or statements made in the course of their legislative duties ...
and thus gain immunity from prosecution by his creditors he bought a number of burgages in the
rotten borough A rotten or pocket borough, also known as a nomination borough or proprietorial borough, was a parliamentary borough or constituency in England, Great Britain, or the United Kingdom before the Reform Act 1832, which had a very small electorate ...
of
Bramber Bramber is a former manor, village and civil parish in the Horsham District of West Sussex, England. It has a ruined mediaeval castle which was the ''caput'' of a large feudal barony. Bramber is located on the northern edge of the South Down ...
in Sussex, which enabled him to be elected one of its
Members of Parliament A member of parliament (MP) is the representative in parliament of the people who live in their electoral district. In many countries with bicameral parliaments, this term refers only to members of the lower house since upper house members of ...
in 1690 and 1695. Another project involved trying to pump drinking water from the
River Thames The River Thames ( ), known alternatively in parts as the The Isis, River Isis, is a river that flows through southern England including London. At , it is the longest river entirely in England and the Longest rivers of the United Kingdom, se ...
, to be piped to his new building developments. He patented a design in 1694, and tried to sell pumping rights alongside fire insurance contracts.


Economic theory

During the later part of his life, Nicholas Barbon wrote extensively on
economic theory Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics analyze ...
. His pamphlets and books on
political economy Political economy is the study of how economic systems (e.g. markets and national economies) and political systems (e.g. law, institutions, government) are linked. Widely studied phenomena within the discipline are systems such as labour ...
are considered important because of their innovative views on money, trade (especially
free trade Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold econ ...
) and
supply and demand In microeconomics, supply and demand is an economic model of price determination in a Market (economics), market. It postulates that, Ceteris paribus, holding all else equal, in a perfect competition, competitive market, the unit price for a ...
. His works, especially ''A Discourse of Trade'' (written in 1690), influenced and drew praise from 20th-century economists such as
John Maynard Keynes John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in ...
(in '' The General Theory of Employment, Interest and Money'') and
Joseph Schumpeter Joseph Alois Schumpeter (; February 8, 1883 – January 8, 1950) was an Austrian-born political economist. He served briefly as Finance Minister of German-Austria in 1919. In 1932, he emigrated to the United States to become a professor at H ...
. Karl Marx cites his work, notably A Discourse on Coining the New Money Lighter (1696) in Capital. eg pp 125-7 in the 1970 Penguin edition. He was one of several late 17th-century economic, social and political theorists with a medical education background; contemporaries included
Benjamin Worsley Benjamin Worsley (1618–1673) was an English physician, Surveyor-General of Ireland, experimental scientist, civil servant and intellectual figure of Commonwealth England. He studied at Trinity College, Dublin, but may not have graduated.Newman an ...
, Hugh Chamberlen, William Petty and
John Locke John Locke (; 29 August 1632 – 28 October 1704) was an English philosopher and physician, widely regarded as one of the most influential of Enlightenment thinkers and commonly known as the "father of liberalism". Considered one of ...
. His early writings sought to explain and advertise his insurance and mortgage schemes and his building developments; for example, in his ''Apology for the Builder: or a Discourse showing the Cause and Effects of the Increase of Building'' of 1685—written in the aftermath of his fight with the lawyers of Gray's Inn—Barbon justified (anonymously) his expansionary building policy by describing the benefits it would bring to London and Britain as a whole. His ''A Discourse of Trade'', written five years later, was much more significant, however. As a broad explanation of his economic and political views, it brought together all of his ideas and became the basis for his reputation as an economic theorist. Barbon observed the power of fashion and luxury goods to enhance trade. Fashion demanded the replacement of goods before they had worn out; he believed this directed people towards the continuous purchasing of goods, which therefore created constant demand. These views were contrary to standard moral values of the time, influenced by the government and the
church Church may refer to: Religion * Church (building), a building for Christian religious activities * Church (congregation), a local congregation of a Christian denomination * Church service, a formalized period of Christian communal worship * Chri ...
. He was one of the earliest writers to draw this distinction between the moral and economic aspects of purchasing. His views on
interest In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distin ...
were praised by
Joseph Schumpeter Joseph Alois Schumpeter (; February 8, 1883 – January 8, 1950) was an Austrian-born political economist. He served briefly as Finance Minister of German-Austria in 1919. In 1932, he emigrated to the United States to become a professor at H ...
. Barbon described as a "mistake" the standard view that interest is a monetary value, arguing that because money is typically borrowed to buy assets (goods and stock), the interest that is charged on the loan is a type of
rent Rent may refer to: Economics *Renting, an agreement where a payment is made for the temporary use of a good, service or property *Economic rent, any payment in excess of the cost of production *Rent-seeking, attempting to increase one's share of e ...
—"a payment for the use of goods". From this, Schumpeter extrapolated the argument that just as rent is the price paid for the use of what he called "unwrought stock, or the ''natural agents'' of conomicproduction", interest is the price paid for "wrought stock—the ''produced''
means of production The means of production is a term which describes land, labor and capital that can be used to produce products (such as goods or services); however, the term can also refer to anything that is used to produce products. It can also be used as a ...
". One of the main arguments in ''A Discourse of Trade'' was that money did not have enough intrinsic value to justify a government's hoarding of it; policies intended to help accumulate supposedly "valuable" commodities such as silver and gold were not appropriate, because the laws of
supply and demand In microeconomics, supply and demand is an economic model of price determination in a Market (economics), market. It postulates that, Ceteris paribus, holding all else equal, in a perfect competition, competitive market, the unit price for a ...
were the main determiner of their value. Such criticism of
mercantilism Mercantilism is an economic policy that is designed to maximize the exports and minimize the imports for an economy. It promotes imperialism, colonialism, tariffs and subsidies on traded goods to achieve that goal. The policy aims to reduce ...
—the view that a country's prosperity can be measured by its stock of
bullion Bullion is non-ferrous metal that has been refined to a high standard of elemental purity. The term is ordinarily applied to bulk metal used in the production of coins and especially to precious metals such as gold and silver. It comes fro ...
—helped to lay the foundation for
classical economics Classical economics, classical political economy, or Smithian economics is a school of thought in political economy that flourished, primarily in Britain, in the late 18th and early-to-mid 19th century. Its main thinkers are held to be Adam S ...
, and was unusual at the time. Along with John Locke, with whom he debated his theories, Barbon was one of the first theorists to argue that money's value was principally symbolic and that its main function was to assist trade. These views were expanded upon in his 1696 pamphlet, ''A Discourse Concerning Coining the New Money Lighter''. Barbon was influenced by populationism; he identified a country's wealth with its population. He also advocated the use of
paper Paper is a thin sheet material produced by mechanically or chemically processing cellulose fibres derived from wood, rags, grasses or other vegetable sources in water, draining the water through fine mesh leaving the fibre evenly distribu ...
and credit money, and postulated the reduction of
interest rates An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, th ...
, which he thought impeded the growth in manufacturing and trade. He discussed these issues in his 1696 pamphlet, which also considered the effects of the Recoinage of that year, in which the
Royal Mint The Royal Mint is the United Kingdom's oldest company and the official maker of British coins. Operating under the legal name The Royal Mint Limited, it is a limited company that is wholly owned by HM Treasury, His Majesty's Treasury and is un ...
recalled large quantities of silver coins, melted them down and reminted them, resulting in a temporary fall in the supply of money. Despite the importance of some of his theories, Barbon's work (especially ''A Discourse of Trade'') has been criticised for an excess of "definition and classification" instead of analysis and a disjointed style which lacked rigour. This has been attributed to the early period in which he wrote, when economic thought was not yet fully developed.


Later life and death

Barbon built a house for himself and his business interests in Crane Court, off
Fleet Street Fleet Street is a major street mostly in the City of London. It runs west to east from Temple Bar at the boundary with the City of Westminster to Ludgate Circus at the site of the London Wall and the River Fleet from which the street was n ...
, but later moved to Osterley House, a large 16th-century
mansion A mansion is a large dwelling house. The word itself derives through Old French from the Latin word ''mansio'' "dwelling", an abstract noun derived from the verb ''manere'' "to dwell". The English word '' manse'' originally defined a property l ...
west of London. By the time of his death, Barbon had built or financed developments to the value of £200,000 (£ as of ) according to Sir John Lowther, 1st Viscount Lonsdale. He died at Osterley in 1698 or 1699. His will was written in May 1698 and his executors received
probate Probate is the judicial process whereby a will is "proved" in a court of law and accepted as a valid public document that is the true last testament of the deceased, or whereby the estate is settled according to the laws of intestacy in the st ...
on 6 February 1699.


Memorial

Barbon Close, opposite
Great Ormond Street Children's Hospital Great Ormond Street Hospital (informally GOSH or Great Ormond Street, formerly the Hospital for Sick Children) is a children's hospital located in the Bloomsbury area of the London Borough of Camden, and a part of Great Ormond Street Hospita ...
in central London, is named after him.


Works

*
A Discourse Shewing the Great Advantages that New-buildings and the Enlarging of Towns and Cities do Bring to a Nation
' (1678) *
A Letter to a Gentleman in the Country, Giving an Account of the Two Insurance - Offices; the Fire-Office & Friendly-Society
' (1684) *
Apology for the Builder; or a Discourse showing the Cause and Effects of the Increase of Building
' (1685) *

' (1690) *

' (1694) *'' ttp://quod.lib.umich.edu/e/eebo/A30882.0001.001?view=toc A Discourse Concerning Coining the New Money Lighter' (1696)


Notes


References

* * * *


External links

{{DEFAULTSORT:Barbon, Nicholas 1640s births 1690s deaths 17th-century English economists Medical doctors from London Utrecht University alumni 17th-century English medical doctors 17th-century English politicians Businesspeople from London