Today's deep economic and social difficulties of Haiti, a country whose history is written in suffering and struggle, are often viewed through the prism of the glorious, yet bloody revolution of the late 18th century. However, to truly understand the roots of the current situation, it is necessary to delve deeper into the past, to a time when the foundations of Haiti's economic destiny were cemented, long before the slaves rose up in rebellion. The story takes us to Paris at the beginning of the 18th century, a time of financial bubbles and colonial expansion, and at its center are the debt-ridden French crown and a controversial Scottish financier named John Law.

This period, which MIT historian Malick Ghachem has explored in detail in his new book "The Colony and the Company: Haiti after the Mississippi Bubble", is key to understanding how Haiti, then known as Saint-Domingue, became inextricably entangled in a web of debt-creditor relationships from which, it seems, it has never managed to fully escape. It was precisely the 1720s, Ghachem argues, that was the period in which these relationships crystallized, setting the stage for the centuries that would follow.

France in Debt and a Scottish Visionary

After the death of Louis XIV in 1715, France found itself on the brink of bankruptcy. The decades of expensive wars waged by the "Sun King" had left the state treasury completely empty, and the debts were astronomical. In such a desperate situation, the regent, Philippe II, Duke of Orléans, was willing to listen to even the most radical proposals. Enter John Law, a charismatic Scot, mathematician, gambler, and convicted murderer who had escaped from prison. Law had a vision that was revolutionary for its time: he proposed replacing metallic money (gold and silver) with paper money, arguing that this would stimulate trade and revive the ailing French economy.

His system, known as the "Law System," consisted of two key pillars. The first was the establishment of the Banque Générale (later the Banque Royale), France's first central bank, which issued paper banknotes. The second, even more important pillar, was the Company of the West, better known as the Mississippi Company. This private company was granted a complete monopoly by the crown on the trade and development of the vast French territory of Louisiana in North America. The idea was simple: the state's debts were to be converted into shares of this promising overseas company, thereby shifting the burden of debt onto private investors and relieving the state.

The Mississippi Bubble

Law was a master of marketing. He began to spread incredible stories about the riches of Louisiana, describing it as a land full of gold, silver, and precious stones, although in reality it was a largely undeveloped and swampy wilderness. But in an atmosphere of economic depression, people were hungry for good news and quick profits. An unprecedented craze for Mississippi Company shares began. The share price skyrocketed. Paris's Rue Quincampoix became the epicenter of a speculative fever, where people from all social classes – from nobles to servants – bought and sold shares, and some got rich overnight. It is said that the term "millionaire" was coined during this period.

However, the entire system was based on trust and promises, not on real value. When the first, wiser investors realized that the company was not generating nearly as much profit as promised, they began to sell their shares and demand payment in gold. This started an avalanche. Panic spread, everyone wanted to exchange their paper banknotes and shares for real money, which the bank, of course, did not have enough of. In the period from 1719 to 1720, the "Mississippi Bubble" spectacularly burst. Thousands of people lost their savings, Law lost his fortune and was forced to flee France, and the French economy was in chaos. But although the financial experiment in Paris failed, its consequences were felt thousands of kilometers away, on the Caribbean island of Hispaniola.

The Transformation of Saint-Domingue: From a Forgotten Colony to a Sugar Factory

While the speculative madness was raging in Paris, the Mississippi Company, in a desperate search for any source of income to justify the value of its shares, turned its gaze towards its Caribbean possessions. Haiti, then the French colony of Saint-Domingue, had been a relatively neglected place until the late 17th century, a haven for pirates and buccaneers, with sparse settlements and an uncertain future. However, Law's system and the need for profit acted as a catalyst for what is called the "sugar revolution".

The island's potential for growing sugar cane, an extremely sought-after and expensive commodity in Europe, was recognized as the key to making a profit. The company, together with the French crown, began to massively encourage and finance the establishment of sugar plantations. This transformation required vast amounts of labor. The solution was found in the brutal transatlantic slave trade. Tens, and then hundreds of thousands of Africans, abducted from their homes, were forcibly brought to Saint-Domingue to work in inhumane conditions on the plantations. In just a few decades, the colony became a global center for sugar production, and later coffee. It became the most profitable colony in the world, known as the "Pearl of the Antilles", bringing unimaginable wealth to the French elite and the crown. This "success" was, as Ghachem points out, inseparable from the system of extreme exploitation and violence that laid the foundation for future problems.

A Complex Society and Internal Resistance

The society that emerged in Saint-Domingue was extremely complex and fraught with tension. At the top were the grands blancs, wealthy white plantation owners and high officials, who lived in luxury. Interestingly, it was these local planters who initially resisted the direct control of Law's company, but, as Ghachem writes, they "internalized and privatized the financial and economic logic of the System they had rebelled against, turning it into a script for managing planter society." Below them were the petits blancs, poorer whites – artisans, overseers, and soldiers. There was also a growing population of free people of African descent (affranchis), some of whom became slave owners themselves, creating an additional layer of social complexity.

At the very bottom, making up the vast majority of the population, were the enslaved Africans. Life on the plantations was synonymous with indescribable cruelty, hard labor, and a high mortality rate. Yet, resistance was constant. One of the most significant forms of resistance was the formation of Maroon communities. These were settlements founded by runaway slaves in the inaccessible mountainous parts of the island, creating their own communities and culture and occasionally carrying out raids on plantations. Jesuit missionaries also operated in this complex and violent environment, and European women were settled in an attempt to stabilize the colony. Nevertheless, life was defined by violence, civil instability, and an almost complete lack of economic alternatives outside the plantation system.

The Roots of the Problem Go Deeper Than the Revolution

In contemporary discussions about Haiti, the Haitian Revolution itself (1789–1804) is often cited as the main cause of its poverty, political dysfunction, and violence. This theory suggests that the destruction of the plantation system and the violent acquisition of independence doomed the state to failure. Malick Ghachem strongly opposes this view. He argues that such thinking is flawed because it ignores a deeper, structural problem that existed long before the revolution. "It's an older problem that goes back to Haiti's relationship with France in the late 17th and early 18th centuries," Ghachem says. "The terms of Haiti's subordination were already set."

The economic model established during the "sugar revolution" was exclusively extractive – designed to squeeze maximum wealth from the land and enslaved people for the benefit of a distant metropole. The entire infrastructure, social relations, and Haiti's place in the global economy were defined by this logic. The revolution, according to Ghachem, broke the political shackles of slavery, but it did not change these fundamental economic conditions. In fact, the problem was further complicated by the reaction of France and the rest of the world. The famous indemnity of 1825, which independent Haiti was forced to pay to France for "loss of property" (including former slaves), is only the most famous example of how this economic subordination continued even after independence. This indemnity choked the Haitian economy for decades. Therefore, the story of the "Mississippi Bubble" is not just a footnote in the history of finance; it is a key part of the story of how, centuries before today's crises, the foundations of an economic structure that still burdens Haiti today were laid.