Did you know that before the stock market bubble of 1929, before the dot.com bubble of the late 20th century, before the housing bubble of 2008, there was the Tulip Bubble of 1634-37?
Yes, indeed!
"Tulipmania," as it is known, occurred during the Dutch Golden Age, when a rare tulip bulb went for the cost of 12 acres of land.
How did Tulipmania happen to be, you might ask?
Well, Scottish writer, Charles Mackay in his classic work, "Extraordinary Popular Delusions and the Madness of Crowds" relayed what he learned of this financial bubble from "A History of Inventions, Discoveries, and Origins" by Johannes Beckmann, 1797.
Essentially, this is how the story goes.
Tulips were introduced to Europe from Turkey and The Middle East in the mid 1500s. In 1602, the Dutch government established The Dutch East India Company that would eventually control the spice trade, by government sanctioned monopoly. The Dutch East India Company became so large and powerful through this domination of the market that it would possess quasi-governmental powers. It is considered the first multinational corporation and issued stock. The wealth generated by the Dutch East India Company created an extremely well off strata of Amsterdam society. (There was the 1% back then, too!)
Mackay writes that from the turn of the 17th century "until the year 1634 the tulip annually increased in reputation, until it was deemed a proof of bad taste in any man of fortune to be without a collection of them." By this point, tulip speculation led to the neglect of popular industries, and a year later, "many persons were known to invest a fortune of 100,000 florins in the purchase of forty roots."
Tulips. Sketch. Graphite, paper, 2013. M. Lamery
The exotic flower depicting status became more coveted. The bulbs were traded by an exclusive group to its wealthy patrons. Speculators got in on the action were buying and selling futures contracts on the crops. Some individual bulbs traded hands 10 times, increasing up to tenfold in price during these frenzied transactions. After the bubble popped, panic gripped speculators across the country as they struggled in vain to unload their bulbs. Prices declined by 95% within weeks.
“At no time was this truer than during the Tulipmania that swept Amsterdam between 1634 and 1637, when a single bulb of the most prized tulips fetched a price greater than the grandest canal houses in the city. This brief paroxysm of aesthetic zeal and financial speculation brought the nation’s economy to its knees, wiping out the fortunes of many and, for a time, making the flower into a national villain.” -- The Botany of Desire: A Plant’s-Eye View of the World.”
"Tulipmania" is generally considered the first recorded speculative bubble. The term "tulip mania" is now often used metaphorically to refer to any large economic bubble when asset prices deviate from intrinsic values.
The tulips make me want to paint,
Something about the way they drop
Their petals on the tabletop
And do not wilt so much as faint,
Something about their burnt-out hearts,
Something about their pallid stems
Wearing decay like diadems,
Parading finishes like starts,
Something about the way they twist
As if to catch the last applause,
And drink the moment through long straws,
And how, tomorrow, they’ll be missed.
The way they’re somehow getting clearer,
The tulips make me want to see—
The tulips make the other me
(The backwards one who’s in the mirror,
The one who can’t tell left from right),
Glance now over the wrong shoulder
To watch them get a little older
And give themselves up to the light.
A.E. Stallings
Mary Lamery is a lifelong resident and native of the Pacific Northwest. Lamery paints regional landscape in a manner that leans towards 19th century French Impressionism. Through her project, "Washington Americana," she will create original landscape paintings from her journeys through Washington for the creation of an art book of painted landscape of Washington State.
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