Born in London, the son a James Foe, a tallow-chandler, he changed his name to the more genteel Defoe. His childhood years saw the Great Plague 1665 and the Great Fire 1666. These traumatizing events may have helped shape his fascination with catastrophes and survival in his later writing. Defoe attended a respected school in Dorking, where he was an excellent student, but as a Presbyterian, he was forbidden to attend Oxford or Cambridge. Instead, he entered a dissenting institution called Morton's Academy for Dissenters and for some time entertained the idea of becoming a Presbyterian minister. Though he abandoned this plan, his Protestant values endured throughout his life despite discrimination and persecution, and these values are powerfully expressed in Robinson Crusoe. In 1683, Defoe became a traveling hosiery salesman. Visiting Holland, France, and Spain on business, Defoe developed a taste for travel that lasted throughout his life. His fiction reflects his interest in travel as well, as his characters Moll Flanders and Robinson Crusoe both change their lives by voyaging far from their native England.
Defoe quickly became successful as a merchant, establishing his headquarters in a high-class neighborhood of London. A year after starting up his business, he married an heiress named Mary Tuffley, who brought him the sizeable fortune of 3,700 pounds as dowry. A fervent critic of King James II, Defoe became affiliated with the supporters of the duke of Monmouth, who led a rebellion against the king in 1685. When the rebellion failed, Defoe was essentially forced out of England, and he spent three years in Europe writing tracts against James II. When the king was deposed in the Glorious Revolution of 1688 and replaced by William of Orange, Defoe was able to return to England and to his business.
Unfortunately, Defoe did not have the same financial success as he did earlier in his career, and by 1692 he was bankrupt, having accumulated the huge sum of 17,000 pounds in debts. Though he eventually paid off most of the total, he was never again entirely free from debt, and the theme of financial vicissitudes—the wild ups and downs in one's pocketbook—became a prominent theme in his later novels. Robinson Crusoe in particular, contains many reflections about the value of money.
Around this time, Defoe began to write, partly as a moneymaking venture. One of his first creations was a poem written in 1701, entitled “The True-Born Englishman,” which became very popular and earned Defoe some celebrity. He also wrote political pamphlets such as An Essay Upon Projects (1697). The Shortest Way with Dissenters (1702) was a satire on persecutors of dissenters and an ironical criticism of High Church, which was trying to stop “Occasional Conformity” by which Dissenters of flexible conscience could qualify for public office by occasionally taking sacrament according to the Established Church. It sold very well among the ruling Anglican elite until they realized that it was mocking their own practices. As a result, Defoe was publicly pilloried—his hands and wrists locked in a wooden device—in 1703, and then jailed in Newgate Prison.
During this time his business failed. Released through the intervention of Robert Harley, a Tory minister and Speaker of Parliament, Defoe began working as a publicist, political journalist, and pamphleteer for Harley and other politicians, changing sides politically. He also worked as a secret agent, reveling in aliases and disguises, perhaps reflecting his own variable identity as merchant, poet, journalist, and prisoner. This theme of changeable identity would later be expressed in the life of Robinson Crusoe, who becomes merchant, slave, plantation owner, and even unofficial king. Defoe kept Harvey closely in touch with Scottish public opinion at the time of the Act of Union in 1707.