James Watson was born in Scotland in 1766. Little is known of his early life but it is believed that he had medical training in Edinburgh. As a young man Watson moved to London where he worked as a apothecary. At this time Watson developed radical political views and became a follower of Thomas Spence.

After the death of Spence in 1814 James Watson and Arthur Thistlewood helped form the Society of Spencean Philanthropists. The government became very concerned about this group that they employed a spy, John Castle, to join the Spenceans and report on their activities. In October 1816 Castle reported to John Stafford, supervisor of Home Office spies, that Watson and a small group of Spenceans were planning to overthrow the British government.

On 2nd December 1816 the Spencean group organised a mass meeting at Spa Fields, Islington. The speakers at the meeting included Henry 'Orator' Hunt and James Watson. The magistrates decided to disperse the meeting and while Stafford and eighty police officers were doing this, one of the men, Joseph Rhodes was stabbed. The four leaders of the Spenceans, James Watson, Arthur Thistlewood, Thomas Preston and John Hopper were arrested and charged with high treason.

James Watson was the first to be tried. However, the main prosecution witness was the government spy, John Castle. The defence council was able to show that John Castle had a criminal record and that his testimony was unreliable. The jury concluded that Castle was an agent provocateur (a person employed to incite suspected people to some open action that will make them liable to punishment) and refused to convict Watson. As the case against Watson had failed, it was decided to release the other three men who were due to be tried for the same offence.

The Spenceans continued to meet in 1817. Arthur Thistlewood was still convinced a successful violent revolution was still possible. James Watson now doubted the wisdom of this strategy and although he still attended meetings, he gradually lost control of the group to the more militant ideas of Thistlewood.

In 1818 James Watson proposed a plan to develop a parliament for non-represented people. He wrote pamphlets about his ideas and they were distributed throughout the industrial areas of Britain. Watson urged the formation of Unions of Non-Represented People and by November 1818, he was claiming that forty-four of these groups had been established. Watson hoped that members would pay a penny-per-week subscription to pay for the distribution of leaflets. This failed to materialise and in December 1818 Watson was imprisoned for debt.

James Watson was released in 1819 and after the Peterloo Massacre there was a renewed interest in Watson's political ideas. However, he was unable to finance the organisation and he was once again imprisoned for debt. He was still in prison when Arthur Thistlewood and other members of the Spenceans were arrested and executed for their part in the Cato Street Conspiracy.

After his release from prison Watson emigrated to the United States where he lived until his death as a pauper in New York City on 12th February 1838.