Voltaire and F*** You Money

Voltaire is well known as one of France’s greatest writers and thinkers during the Enlightenment period. But did you know the following aspect of his life?

Long before he became famous, Voltaire met a brilliant mathematician, Charles Marie de la Condamine, who suggested a scheme to get insanely rich by exploiting an opportunity that the French government had inadvertently created.

What was that opportunity? Well, the French government of the day could offer only low rates of interest on bonds they wanted to sell. This, of course, made the bonds unattractive. So the Deputy Finance Minister came up with an idea to make the bonds more attractive:
-          Anyone who bought a bond would be eligible to buy a lottery ticket linked to the price of the bond (1/1000 of the bond value).
-          The winner of the lottery would get the value of his bond plus 500,000 livres. This was a huge amount, enough to set one up for life.
The mathematician had found the flaw in this scheme: anyone who bought lots of low value bonds could then buy more lottery tickets than others and thus have a better chance to win the lottery!

The mathematician chose to pick Voltaire as the front man for the operation. Why? Because Voltaire wasn’t too famous (yet) and had connections. And so Voltaire coordinated with wealthy people who pooled in their money to buy as many low value bonds, thereby maximizing their odds. The winnings would then be split among all participants. And the process would then be repeated.

Voltaire being Voltaire, however, mocked the government. And so eventually the government caught on to what was happening. They hauled the men to court but the men were acquitted. After all, they hadn’t violated any law: they had just played the odds better! But the government did decide to stop the bond scheme. By then though, the mathematician and Voltaire were insanely rich!

If it’s any consolation for the moralistic among you, you’d be happy to know that the mathematician used his wealth to lead a trip to the Andes to measure the circumference of the earth and thus prove the earth wasn’t a perfect sphere; and he also mapped the Amazon river. Besides, who knows? Was this the “f*** you” money that allowed Voltaire to say what he thought later in life? In case you’re wondering, here’s Nassim Nicholas Taleb description of “f*** you” money from his book, The Black Swan:
“It is a psychological buffer: the capital is not so large as to make you spoiled-rich, but large enough to give you the freedom to choose a new occupation without excessive consideration of the financial rewards. It shields you from prostituting your mind and frees you from outside authority—any outside authority.”

Comments

  1. Ramiah KumarFebruary 26, 2016 at 4:00 PM

    I didn't know about this incident (money making) about Voltaire. I dind't know that a brilliant mathematician, Charles Marie de la Condamine, existed. Not sure what his contribution to maths was. Measuring the earth's circumstance and mapping Amazon river cannot be said to be in the domain of maths. He seemed to understand probability theory pretty well to apply it in a sure way to make money - plenty of it!

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