Voltaire’s Luck

It was once said of Voltaire, by his friend the Marquis d’Argenson, that “our great poet forever has one foot on Mount Parnassus and the other in the rue Quincampoix.” The rue Quincampoix was the Wall Street of eighteenth-century Paris; the country’s most celebrated writer of epic and dramatic verse had a keen eye for investment opportunities. By the time d’Argenson made his remark, in 1751, Voltaire had amassed a fortune. He owed it all to a lottery win. Or, to be more precise, to several wins.

Lotteries were all the rage in eighteenth-century Paris. There had been a financial crisis in 1719, and France had nearly gone bankrupt. The bankers were to blame, having devised financial instruments that magicked debt away, only for it to return multiplied once it was discovered that the collateral wasn’t there. With the ensuing austerity came the lottery and the blandishments of la bonne chance. Why tax a weary and resistant populace when luck might seduce them?

The lottery craze began in 1694 (the year of Voltaire’s birth) when the English Parliament established a lottery in order to raise one million pounds for the country’s treasury. Once the first winners were announced, the craze started to spread around Europe. “We’d never heard so much talk of lotteries,” wrote Swiss theologian Jean Leclerc in a book on lotteries published in Amsterdam in 1696, “before they created one in England two years ago.” Leclerc’s work records how the English lottery had already achieved two-fifths of its target and the model had been adopted in Holland. The lottery, as he noted, was a way “to extract money from people who would not otherwise readily part with it, no matter how worthy its intended use.”

The Protestant Leclerc decided to write his book after being struck by the way people refer to lottery winners and losers as either heureux or malheureux—“lucky” or “unlucky.” It was nonsense, he argued, to believe that certain individuals are inherently lucky or unlucky; it was positively “pagan,” he protested, to think that God’s hand is to be seen in the lottery’s outcome. Leclerc told his readers to look to the motivations of lottery players; they are to be condemned if personal gain is all they care about, to be congratulated if they are helping to raise money for some noble, charitable object. Thirty years later, Voltaire would have read Leclerc with a wry smile.

Lotteries came in essentially two forms. The older type, dating from earliest times and akin to what we now call a raffle, was the “blank” lottery. From a central office or other licensed seller, participants purchased numbered tickets on which they entered their name or a “device,” which might variously be a proverb, a religious appeal for assistance, or some other luck-inducing invocation. These tickets were then officially registered and placed in a container (a leather sack, a metal urn), while another container held an equivalent number of slips of paper that were either blank or else stated an amount of money or other prize. The draw itself was usually carried out by a child (as an advertisement of innocence), who was sometimes blindfolded like Fortuna. After the child drew a ticket and a corresponding slip of paper, an official would read out the number and the device on the ticket and announce whether it had been matched with a prize or merely a blank. It could be a lengthy process: one such draw in Hamburg in 1612 took over eight weeks to complete.

The other type of lottery had originated in Genoa, where it was the practice to elect five of the city’s ninety councillors by lot every six months. From the custom of betting on the outcome of these elections there evolved a purely numerical lotto, first devised by Benedetto Gentile in 1610. This brought one great advantage: it could be played more frequently. Here, too, a child was employed, this time to draw five numbered balls from among ninety that had been sent tumbling in a so-called wheel of fortune. Players could bet amounts on individual numbers being drawn, on combinations of numbers, or even on the sequence in which they were drawn.

The first official lottery to be held in France, in 1539, was the idea of King François I, who had learned of such things during his military campaigns in Italy. But his experiment was not a success. Louis XIV held a royal lottery as part of his wedding celebrations in 1660 and another in 1661 to mark the birth of his heir. But during his reign, public lotteries were banned, and these royal ones were seen merely as one-off festive entertainments. Gradually, pious opposition to the lottery faded as proponents, including men of the church, argued for it as a way to fund charitable purposes. A number of religious buildings and communities were among the beneficiaries, including several hospitals and the foundling home known as the Hôpital des Enfants Trouvés, created by St. Vincent de Paul in 1638. The idea of offering fixed-term or lifelong annuities as prizes was imported from England, and the French decree by which a state lottery was eventually established in 1700 reflected the new mood:
His Majesty has observed the natural inclination of the majority of his subjects to participate in private lotteries, as well as in the authorized lotteries organized by religious communities for the relief and support of the poor, and even in foreign lotteries, and who desire to obtain for themselves a pleasant and convenient means of securing a reliable and substantial income for the remainder of their lives, and even to enrich their families, by hazarding sundry sums of money so modest that no harm can thereby come to themselves.
When Louis XIV died on September 1, 1715, French finances were in a perilous state. There had been too many wars, most recently the War of the Spanish Succession. Ten years later, thanks to Scottish financier John Law, these finances were in an even worse state. As a convicted murderer (in 1694 he had killed a man in a duel over a woman) Law was ill-named, and, having escaped from prison in London, he was on the run, first in Amsterdam, then Paris. Nevertheless, his exceptional charm and arrestingly original thinking soon brought him to the attention of the regent, Philippe d’Orléans. At the heart of Law’s new system was the use of paper money, welcome at a time when metal shortages were inhibiting the minting of new coins. But paper money was also essential to Law’s object of stimulating the economy by creating a new instrument of credit. In 1716 he was permitted to set up a private bank (with offices on the rue Quincampoix) called the Banque Générale (approvingly renamed the Banque Royale in 1718) through which banknotes, convertible into coin, were issued. The ancestor of quantitative easing had been born, and the economy responded well to the tonic of new money. Following this highly successful innovation, Law was given leave to intervene in colonial commerce, consolidating French trading companies across North America into a single monopoly called the Mississippi Company and, from 1719, selling shares therein. The value of the shares quickly increased. But the bubble burst when Law found himself obliged to deflate the value of banknotes and to cut the share price. There was a run on the bank as investors sought to convert paper into silver and gold; the shares became virtually worthless. Having been appointed controller general of finance at the beginning of the year, Law was sacked at the end of it. There was considerable civil unrest, and the magician fled Paris.

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