Who Was John Locke?

The 17th-century philosopher wrote about finance and monetary systems

John Locke was a leading philosopher and political theorist. His ideas helped lay the foundation for both the Enlightenment and the birth of liberalism in the 17th century. Locke is credited with bringing a scientist’s eye to the field of philosophy, using empirical evidence to support his ideas. He is best known for his "Essay Concerning Human Understanding,” which advanced the view of the mind as a tabula rasa, or blank slate, where sensory experiences dictate how one views the world. That work, his most famous, also touches on Locke’s emerging views on wealth and money: “All wealth is the product of labor,” he wrote.  

Locke wrote extensively about finance and economic policy. His 1691 essay, “Some Considerations of the Consequences of the Lowering of Interest and the Raising of the Value of Money,” argued that governments should not regulate interest rates. He believed that labor was a key source of wealth creation, and that property was a natural right resulting from work. Locke balanced both capitalist and socialist ideas in his work and advanced a supply-and-demand perspective on the value of money. 

Key Takeaways

  • John Locke was a 17th-century English philosopher and political theorist whose ideas helped lay the foundation for the Enlightenment.
  • Locke studied at Oxford and pursued medicine as a fellow at the Royal Society in London.
  • Lord Ashley, first Earl of Shaftesbury, was one of Locke's primary patrons, naming him to key positions in government, which influenced his theories on politics and economics.
  • Locke wrote extensively about finance and economic policy, balancing both capitalist and socialist ideas in his work.
John Locke

Investopedia / Julie Bang

Early Life and Education

Locke was born in England on Aug. 29, 1632. His father John, an attorney, and mother Agnes baptized him the morning of his birth and raised him as a Puritan. Locke’s father was a distinguished military captain for the government during the English Civil War. His service ended up benefiting Locke, who gained entry into London’s storied Westminster School because of his father’s connections in Parliament. While there, Locke’s prodigious intellect earned him the distinction of being named a King’s Scholar.

In 1652, at the age of 20, Locke enrolled at the University of Oxford’s Christ Church college for undergraduate studies. He graduated four years later, took two years off, and returned to the university for his master’s degree. Locke went on to pursue medicine as a fellow at the Royal Society in London. Through his medical studies, Locke met the famed Lord Ashley, first Earl of Shaftesbury, founder of the Whig party. Over time Lord Ashley would prove to be one of Locke’s biggest patrons, first appointing him as his personal physician and later naming him to key political positions. In addition to being a patron, Lord Ashley also had an outsized influence on Locke’s theories about politics, the economy, and the relationship of the government to its people. In fact, in 1682, the two were briefly forced into exile together after Lord Ashley lost a political battle with the man who would eventually become King James II.

Notable Accomplishments

Locke’s positions in government under Lord Ashley, which included serving as secretary of the Board of Trade and Plantations, helped shape the philosopher’s economic policy views. Though Locke is best known for his work on the natural rights of man, the social contract, and the acquisition of knowledge, his economic writings were equally influential. Locke fought against lowering interest rates, for instance, arguing that artificially reducing the money supply could lead to a collapse in trade.

In his famous work, Two Treatises of Government, Locke advanced a traditional labor theory of value philosophy, wherein the amount of work that goes into producing a good determines how much that good is worth. In that same book, Locke argues that whatever a worker produces is justly and rightfully owned by that worker, a theory that went against the views of other prominent philosophers of the time, most notably Thomas Hobbes. He took that view even further, though, developing a labor theory of property which held that ownership of property, by which he meant material goods, is created by the actions of labor. He famously wrote that man has three natural rights: life, liberty, and property. 

But Locke was by no means a socialist. Despite strongly supporting the rights of labor, he did not oppose a person’s right to get rich. Scholars of the philosopher note that Locke reconciled these two seemingly incongruous positions by claiming that the introduction of money into society created a “fair unequal distribution of wealth.” Because money always has a use—unlike, for instance, commodities that spoil—people can accumulate more than they need without violating natural law. Moreover, when people agreed to use money as a form of exchange they implicitly agreed to a certain level of inequality. Or, as Locke wrote, “And thus came in the use of money, some lasting thing that men might keep without spoiling, and that by mutual consent men would take in exchange for the truly useful, but perishable supports of life.”

Contained in Locke’s writings throughout his career are views on the value of money, supply-and-demand theory, and the importance of balanced trade to a country, among others. Separate from his writings, the philosopher-turned-statesman also played an instrumental role in helping England rebalance its gold and silver resources to avoid a currency crisis in the mid-1690s.


Because of his close ties to Lord Ashley, Locke was suspected of being involved in the famed Rye House Plot, the alleged conspiracy led by Lord Ashely’s Whig party to assassinate King Charles II. Though he was never formally accused or linked to the plot, Locke fled to the Netherlands in 1683 and remained there for five years before returning to England. 


Locke died on Oct. 28, 1704, at the age of 72.

How Did John Locke Influence Economics?

Locke’s primary contribution to economics can be found in his views on the relationship between labor and property and on the creation of money and its impact on wealth accumulation and inequality. His writings on these two topics helped inform not only capitalism but also socialism. 

What Is Locke’s Theory of Money?

As evidenced by his writings on interest rates and his role in the English currency crisis, Locke opposed artificially devaluing money. He believed the demand for money was constant and that its value was directly related to how much of it was available. Locke also believed that as money came to dominate economic systems, more inequality would result.

Did John Locke Believe in Capitalism?

Some scholars of Locke point to his writings on the social contract, value of labor, and a person’s natural rights to life, liberty, and property as evidence that he was anti-capitalist. Other Locke scholars point to his defense of wealth accumulation and acceptance of inequality resulting from the transition to an economic system based on the exchange of money to argue for his support of capitalism. 

The Bottom Line 

As one of the most prominent thinkers of the 17th century, Locke’s views on politics and economics have influenced government financial and monetary policies over the past 350-plus years. His writings on interest rates, the value of labor, and inequality, among other economic issues, are as relevant today as they were in the late 1600s. 

Article Sources
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  1. Liberty Fund Network. "The Works, vol. 1 An Essay concerning Human Understanding Part 1."

  2. Stanford Encyclopedia of Philosophy. "John Locke."

  3. The University of Texas. "Some Considerations of the Consequences of the Lowering of Interest and the Raising the Value of Money."

  4. Biography. "John Locke."

  5. National Library of Medicine. "John Locke and the case of Anthony Ashley Cooper."

  6. York University. "Two Treatises of Government."

  7. University of Chicago Press, Books Division. "Chapter 16, Document 3: Property."

  8. University of Chicago Press, Books Division. "Chapter 16, Document 3: Property, No. 47."

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