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The later part of the 20th century saw its share of odd financial bubbles. There was the real-estate bubble, the stock market bubbles, and the dot com bubble, just to name a few. In each instance of price inflation people paid exorbitant amounts for things that shouldn't have been worth anything like the going price. And each time people stood around afterwards and said “What were we thinking?”
One has to believe that the same thought occurred to the Dutch in the 17th century when they settled down after their bout with tulipomania, wherein the humble tulip bulb began to sell for prices to make New York Realtors blanch.
As much as the tulip is associated with Holland, it is not native there. Rather it was introduced in 1593 by a botanist named Carolus Clusius, who brought it from Constantinople. He planted a small garden, intending to research the plant for medicinal purposes. Had Clusius's neighbors been morally upright, the tulip might still be a rare exotic in the gardening world. Instead they broke into his garden and stole some of his bulbs in order to make some quick money, and in the process started the Dutch bulb trade.
Over the next several decades tulips became a fad among the rich of Holland, and prices began to mount. Soon even ordinary bulbs were selling for extraordinary prices, and the actually rare bulbs were astronomical. A single Viceroy tulip bulb would sell for 2500 florins a value roughly equivalent to $1,250 in current American dollars, while a rarer Semper Augustus bulb could easily go for twice that. One particularly amusing exchange showed the goods traded for one bulb – the lengthy list includes among other things: a bed, a complete suit of clothes, and a thousand pounds of cheese. At the height of the mania, in what seems a complete loss of sanity, the bulbs were deemed too valuable to risk planting by their (formerly) wealthy purchasers, and it became popular to display the plain ungrown bulbs. In at least one instance the plan for safety backfired when a visiting sailor mistook a tulip bulb for an onion, and proceeded to eat it for breakfast.
The height of the bubble was reached in the winter of 1636-37. Tulip traders were making (and losing) fortunes regularly. A good trader could earn up to 60,000 florins in a month– approximately $61,710 adjusted to current U.S. dollars. With profits like those to be had, nothing local governments could do stopped the frenzy of trading. Then one day in Haarlem a buyer failed to show up and pay for his bulb purchase. The ensuing panic spread across Holland, and within days tulip bulbs were worth only a hundredth of their former prices. The tulip bubble had burst.
Looking back through time it’s easy to laugh at the foolish Dutch, paying such prices for simple tulip bulbs, but an economic bubble was nothing new even then. We’re still doing the same sorts of things today. Human beings have always been prone to want things that are difficult to get, especially if everyone else seems to be doing it. Nutty behavior becomes commonplace when enough people are following along. It’s only afterwards that we stand back and shake our heads and wonder what came over us.
Further reading:
History House: Tulipomania
The same thing happened with cocaine in the 1980s. Umm… uh… at least that's what I heard… Ah, yeah. I read that… somewhere.
If only we could throw all our money in the ground, water it, fertilize it, nuture it and then watch it blossom. For now, we'll have to stick with tulips and other bulb type horticultural decorations. Tis sad indeed.
im not sure about anyone else, but these things always remind me of gasoline. unfourtunately, the bubble doesnt seem ready to pop for quite a while still.
and to mudpuppy, they will legalize cannabis when they criminalize tobacco. so right around the time of the rapture.
Morons.
And why does it say 2500 florins are worth 1250 dollars, then 60,000 florins are worth 61,000 dollars?
Secret Ninja said: "And why does it say 2500 florins are worth 1250 dollars, then 60,000 florins are worth 61,000 dollars?"
It appears that two sources have conflicting information on how 17th century florins translate into current US dollars, and we forgot to check the math. Sorry about that…
Secret Ninja said: "Morons.
And why does it say 2500 florins are worth 1250 dollars, then 60,000 florins are worth 61,000 dollars?"
"Morons"? Geez… somebody's crabby.
It's nice to see that the Tickle Me Elmo wasn't the beginning, but just another chapter in the annals of human stupidity.
Internet bubble, turn of this century. NASDAQ (or was it NYSE?) went over 10,000 points. What were we thinking?
indra c said: "Internet bubble, turn of this century. NASDAQ (or was it NYSE?) went over 10,000 points. What were we thinking?"
The Dow Jones Industrials broke the psychological barrier of 10,000 points, and later 11,000,of which it is trading back above now (for the time being, IMHO). The NASDAQ was briefly over 5,000 points and still has not regained half of that value. The NYSE is the New York Stock Exchange, simply a place where they trade stocks.
I think Greenspan still nailed it on the head with the "irrational exuberance" comments.
Secret Ninja said: "And why does it say 2500 florins are worth 1250 dollars, then 60,000 florins are worth 61,000 dollars?"
Maybe because the value of the florin fluctuated like any other currency? The F60K = $61.71K rate was just before the bubble burst in 1637. The F2500 = $1250 figure was not dated but could have been any time between 1593 and 1636. Even one year was plenty of time for the value of the florin to drop that far.
mudpuppy555 said: "When are we going to legalize pot already?????"
There are is a minister in Holland still not wanting to legalize softdrugs until most weed plantations have been found and the owners caught.
I'm sure it will happen someday… I hope…
No I'm not a madman, there are perfectly good reasons to legalize the growing of weed in the Netherlands.
Yeah, beanie babies. I know someone who sold one for $1600. I'll bet the owner just sits and glares at that thing.
There was no city called Constantinople then. Constantinople which was the capital of the Byzantium Empire was conquered by the Ottoman Empire in 1453 and is called Istanbul since that date. wanted to get your attention on that while reading…
From Wikipedia…
"The Ottoman Turks called the city Stamboul or İstanbul, adopting a usage in Greek "eis tin Poli" (to or at the City). But they still used "Konstantiniyye" ("Constantine's City", or Constantinople) as the official name. When the Republic of Turkey was founded in 1923, the capital was moved to Ankara. Constantinople was officially renamed İstanbul by the Republic of Turkey on March 28, 1930."
I bet the Dutch and everybody else in the 17th century told friends they were going to Constantinople, if they were going.
No matter how you cut it….two lips are still better than one!
Oax said: "Yeah, beanie babies. I know someone who sold one for $1600. I'll bet the owner just sits and glares at that thing."
That sentence is so funny for a reason I can't put my finger on.
I can beat your two word fad with a one word fad, Gaia. People post day and night on that thing for, what is basically, pixels.
NeonCat said: "From Wikipedia…
"The Ottoman Turks called the city Stamboul or İstanbul, adopting a usage in Greek "eis tin Poli" (to or at the City). But they still used "Konstantiniyye" ("Constantine's City", or Constantinople) as the official name. When the Republic of Turkey was founded in 1923, the capital was moved to Ankara. Constantinople was officially renamed İstanbul by the Republic of Turkey on March 28, 1930."
I bet the Dutch and everybody else in the 17th century told friends they were going to Constantinople, if they were going."
There's a song about this you know?
Istanbul was Constantinople
Now it's Istanbul, not Constantinople
Been a long time gone, Constantinople
Now it's Turkish delight on a moonlit night
Every gal in Constantinople
Lives in Istanbul, not Constantinople
So if you've a date in Constantinople
She'll be waiting in Istanbul
Even old New York was once New Amsterdam
Why they changed it I can't say
People just liked it better that way
So take me back to Constantinople
No, you can't go back to Constantinople
Been a long time gone, Constantinople
Why did Constantinople get the works?
That's nobody's business but the Turks
Istanbul (Istanbul)
Istanbul (Istanbul)
Even old New York was once New Amsterdam
Why they changed it I can't say
People just liked it better that way
Istanbul was Constantinople
Now it's Istanbul, not Constantinople
Been a long time gone, Constantinople
Why did Constantinople get the works?
That's nobody's business but the Turks
So take me back to Constantinople
No, you can't go back to Constantinople
Been a long time gone, Constantinople
Why did Constantinople get the works?
That's nobody's business but the Turks
another viewpoint said: "No matter how you cut it….two lips are still better than one!"
Yep, most guys will probably agree that tulips on an organ are much nicer than roses on a piano. ;)
mixedupconfusion said: "Two words: Beanie Babies"
I was thinking this exact thing while I read this article!! People were selling those meaningless toys for sooo much money when they first came out. I never really understood it, sure they were cute but not that cute.
BoPRoX said: "There are is a minister in Holland still not wanting to legalize softdrugs until most weed plantations have been found and the owners caught.
I'm sure it will happen someday… I hope…
No I'm not a madman, there are perfectly good reasons to legalize the growing of weed in the Netherlands."
There are perfectly good reasons for legallizing it in the U.S. too. You can use Hemp for so much stuff. We could completely stop cutting down trees and just using cannabis for paper, ropes, the list goes on. The plants grow far faster than any tree and as far as I know there aren't any animals living in the plants so it's not like we're taking away a habitat for any living creatures (besides maybe bugs). I could be wrong but I think that the lumber companies just don't want to legalize it for fear of losing money and going out of business.
Not to mention selling it to smoke. I used to smoke my fair share back in the day and as far as I'm concerned weed is far less dangerous to smoke than alcohol is to drink. Sure it delays your reaction time and you suck at remembering things but it's not like you become overly violent and then the next day you don't remember what happened and why your significant other left you. A big down side would be the munchies and being as obesity is already such a big problem in the US we don't really need a drug that increases our want for food.
I.E. Xbox 360 at Christmas when the base system was easily going for $1,000 on eBay.