Two institutional developments in late seventeenth-century England – the beginning of the permanent national debt and the rapid spread of the corporate form of enterprise – caused the volume of English securities transactions to become large enough to give rise to an organized securities market. This new market in turn led almost immediately to other institutional innovations. It took little time for practitioners of a brand new occupation – securities trading, or “stock-jobbing” as it was often called – to invent and routinize new kinds of transactions. By 1720, the year of the South Sea Bubble, the market and its participants were established London institutions.

All institutional change occurs in a preexisting climate of thought, which influences not only the course of institutional change but the way that change is perceived by contemporaries. To begin to understand contemporary attitudes toward the new securities market, therefore, the first part of this chapter will examine earlier English attitudes toward speculation generally. Section II will provide an account of the new market, with an emphasis on those features contemporaries found most striking. In section III, we will then be able to make sense of the various calls for, and opposition to, regulation of the securities market in its earliest years.

Long before the invention of securities trading, English attitudes toward speculation were marked by a deep ambivalence, vestiges of which still remain in American thought today.