What happened
John Law's intertwined banking and company system, built on paper credit and speculative investment, spiraled into inflation, panic, and loss of confidence. The crash discredited one of the most dramatic attempts to solve the French monarchy's fiscal and debt problems through financial innovation.
Why it matters
This event matters less because it directly caused the Revolution than because it exposed a recurring problem of the ancien regime: the monarchy needed credit and reform, but efforts to repair public finance could trigger new crises of trust and legitimacy.
Notes
Use this as an anchor for the longer financial prehistory of 1789 rather than for the immediate revolutionary sequence.