Financial Revolution

Hello, Rosemary.

And we're going to watch as the city becomes a centre of financial revolution, which grows out of a network of coffee houses, where a new flow of caffeinated enterprises create political debate, financial chaos from time to time, the exchange of news and gossip, the first daily newspapers, reviews, advice columns.

the ever-emerging voice of public opinion.

Luckily for us, we have one of the great writers of London, Daniel Defoe, and we're going to start with an extract from his novel, Mel Flanders, published in 1722.

Quite often they don't go so well.

So I think, yeah, we're very familiar with this idea of the city and the crown having an essentially transactional relationship.

So the way that was solved in the 1790s, which is the origin of the so-called financial revolution, was that a banker, a Scottish banker called William Paterson, came up with the idea that the state would borrow from a bank which would be formed.

A new bank would be founded, which he proposed to call the Bank of England, with the government to pay interest on the loan from future tax revenue.