When the flames of the Great Fire of London died down in 1666, it left behind a city in ashes and a blueprint for modern financial innovation. The catastrophe gave birth to the genius of Nicholas Barbon, a man whose foresight and daring transformed the realms of insurance and home financing. To understand Barbon’s legacy is to grasp the very foundations of how we protect our homes and properties today.
Nicholas Barbon, initially known by his hortatory birth name, “If-Jesus-Christ-had-not-died-for-thee-thou-hadst-been-damned,” later renamed himself in a move symbolic of his bold disposition. Born in London around 1640, the eldest son of Praise-God Barebone, a man noted for his involvement in the Fifth Monarchist movement, Barbon would grow to eclipse the eccentricity of his lineage with his groundbreaking endeavors. After receiving his Doctor of Medicine from Utrecht in 1661, and becoming an honorary fellow of the Royal College of Physicians in London three years later, Barbon shifted his focus to the burgeoning field of property development, catalyzed by London’s need for reconstruction post-Great Fire.
With London’s landscape forever altered, Barbon, dubbed by contemporaries as “the most prominent London builder of his age,” recognized an opportunity not just in rebuilding, but in protecting these new developments from future catastrophes. In 1680–81, with eleven associates, Barbon founded an “Insurance Office for Houses,” offering fire insurance for up to 5,000 households in London. This was a visionary move, considering the Great Fire had obliterated more than 13,000 homes.
But his innovations didn’t stop there. Barbon’s perception of risk and security extended into the realm of finance. In 1690, together with John Asgill, he founded the National Land Bank, Britain’s first institution issuing loans in the form of mortgages against real estate. These mortgages allowed landowners to capitalize on their largest assets in a way never before possible, posing a threat even to the mighty Bank of England. Barbon’s foresight here laid the groundwork for the mortgage systems we rely on today.
Barbon’s contributions extended beyond practical financial mechanisms; he also penned numerous works on economic theory. His writings, such as “A Discourse of Trade” (1690), influenced and drew praise from 20th-century economists such as John Maynard Keynes (in The General Theory of Employment, Interest and Money)and Joseph Schumpeter.
Yet, despite his intellectual contributions and foundational work in property development, insurance, and banking, Barbon’s career was not without controversy. His aggressive building tactics and relentless pursuit of profit led to conflicts, such as an infamous tussle with Gray’s Inn lawyers. Moreover, his ventures sometimes teetered on the edge of financial calamity, as exemplified by his failed attempt to raise a £2 million loan for the government, resulting in the dissolution of Land Bank United.
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– Nicholas Barbon