In the summer of 2011, a group of eminent economists, including Eugene Fama, Charles Goodhart, and William Sharpe, wrote a letter to the Financial Times condemning Alan Greenspan’s remarks equating the late financial crisis to a natural disaster (Financial Times, 2 Aug. 2011).

Why does the former chief of the Federal Reserve adopt the view that financial crises are unavoidable and devoid of responsible authors? Impunity and Capitalism offers a provocative and insightful answer to this question. Jackson’s book presents a convincing history of impunity across two centuries of financial crises. In telling this story, the author engages with different areas of study such as the role of empires, real or imaginary, the rise of the modern state, and the development of central banking in Britain and France.

The book opens with the 1709 collapse of Samuel Bernard, the richest man in Europe at the time. Bernard, a key financier of the French Crown, was granted legal immunity because his role of financier was deemed too crucial for the kingdom’s finances during the War of the Spanish Succession. However, with the return of peace, the French controller general called for a Chambre de Justice where financiers and bankers were publicly indicted and forced to settle with severe fines or fled the country. This judicial outcome cleared the way for the arrival of new players such as John Law who eagerly occupied the vacuum left by Bernard and his indicted peers. The long-term consequences of Law’s Bubble and the collapse of the South Sea Company in Britain were significant. These events created a flexible boundary between finance and other economic activities, portraying finance as a dangerous but necessary space (pp. 102–103). The other heritage of Law’s System was the impossibility to create in France an independent central banking system that could regulate the market and ensure liquidity in case of financial crises.

The second part of the book focuses on the epochal changes that the French Revolution brought to financial capitalism. The 1780s were marked by scandals within the system of separate independent funds (caisses) that formed the fragile backbone of French finances. Meanwhile, the Parisian stock market became a battleground for rival groups of speculators, some of whom, such as Clavière and Mirabeau, shorted stocks such as the Compagnie des Indes, which was directly supported by the controller-general of finances, Calonne. Jackson brilliantly frames the revolutionary decade as a triptych: the failure of the constitutional monarchy to reintegrate finance within the framework of the new constitution; the Terror, which eliminated extralegal jurisdictions, thereby ending financial autonomy; and the establishment of the Bank of France, whose primary aim was to support credit and facilitate government payments. In Britain, the passage of the 1797 Bank Restriction Act suspended the conversion of bank notes into gold. Although conceived as a temporary measure, this new monetary regime would last until 1821.

The final part of the book examines the 1825 crisis, a period when thousands of businesses and hundreds of banks failed in Britain. The bank’s return to cash payment led to a period of deflation and GDP contraction. Moreover, British investors eagerly underwrote several loans issued by Latin American countries, many of which ultimately defaulted. The resolution of this crisis came only with the direct involvement of the Rothschilds, who provided a constant flow of gold to bolster the reserves of the Bank of England. Jackson argues that the 1825 crisis sanctioned the modern conception of financial crisis “as contingent, ahistorical, iterative, and inevitable” (255). He convincingly shows that, starting with the 1825 Panic, financial crises were no longer tied to questions of moral responsibility, as they had been in the eighteenth century. Both Britain and France embraced the model of a central bank with the duty of protecting finance from government while ensuring that the financial sector would not grow unchecked. The crisis of 1825 showed all the limits of this model. Rather than reforming it, the prevailing assumption became that “financial crises could not be solved” (p. 267).

While Jackson offers a compelling narrative, some of his arguments twist the complexities of certain aspects to support his strong thesis of the rise of impunity within modern financial capitalism. When he describes the late-eighteenth-century financial community as “a largely extralegal and alegal world autonomous from the jurisdictions of most governments,” this characterization contradicts his earlier analysis (p. 175). For example, bankrupt treasurers in France had to flee the country to avoid severe penalties or other forms of condemnation. Similarly, Jackson cites the case of Gregor MacGregor as an example of “a certain kind of impunity in the context of colonial land grabs” (p. 239). However, MacGregor fled Britain and was later arrested in France, where he served time in prison for his fraudulent dealings in the fictitious country of Poyais. Another debatable claim is Jackson’s assertion that “1720 marked an irrevocable step in separating out the economic sphere from the political or moral […] turning point in the classification of some acts of public governance as economics, rather than political” (p. 64). This division seems premature, as it was only briefly implemented during the French Revolutionary governments under the Terror.

Besides these limitations, Jackson’s work makes a significant contribution to the history of capitalism and the banking history of the eighteenth and nineteenth centuries. It offers a provocative exploration of the phenomenon, such as impunity within the financial world. This book is an enriching read for anyone interested in the evolution of modern capitalism and its moral and political consequences.