Before the Dot.Com boom, before bitcoin, before the housing market collapsed in 2007 like a bad game of Jenga, there was…Tulip Mania.
You might laugh. But in the Dutch Golden Age, when Norwegian dudes like Rembrandt and Vermeer were sipping on oysters and wine, a venture capitalist who knew what he was doing could make up to four hundred percent profit on a single trade voyage. So what did he do to keep up with the Joneses? Buy a pontoon? Don’t count on it.
This mouth-watering trade empire made fat dollars shipping out Holland-bottled gin, red herring, and smoked Gouda cheese, but in 1637, tulips were all the rage. At the peak of this rage, a single bulb could sell anywhere between 3,000 and 4,200 florins—little Dutch coins. A fat hog ready to be turned into bacon would only cost 30 of those little dutch coins. That’s right. A man might just have been willing to trade 140 whole hogs for one of those flowers. A skilled worker would have to wager ten times his annual income to purchase some bulbs.
Gentlemen, this was the first speculative economic boom in history. And it all started, not with real estate, manufacturing, e-currency, or web domains, but a perennial herbaceous bulbiferous geophyte. A lily broke the bank.
If you paid attention in MacroEconomics, you know that a booming economy means a healthy middle class, and a healthy middle class means the average Joe such as yourself begins to have a little extra cash to drop. So in 1600s Netherlands, when a rare and vivacious family of lilies began to appear on the market, everyday businessmen found a new status symbol. It wasn’t the slashed doublet, the lace collar, or the broad-brimmed hat that made a man proud—I mean, seriously, have you seen those things? No, it was the number of tulips he had in his garden. You see, unlike other flowers, the tulip, a plant native to Persia, arrived on the scene with colors more intense than a rainbow on LSD. This floral champion had no rival.
In the days when fashion was all black and white, flowers told the color story. For the monotone-friendly, there was Violetten. Feeling a little flamboyant? Try a Colouren. Gone wild? There’s always a Bizarden. Or maybe something more regal? The Admirael will do. Want your flowerbed to be worth more than your house? May I present to you the Viceroy. But cultivating just the perfect breed took craftiness, carefulness, and patience. On top of that, tulips only bloom in the spring, and can only be moved when they’re dormant bulbs, during the summer months. But who wants to wait on a tulip?
Dutch gents were so hot for these bloomers they were willing to buy a contract to receive a bulb in the future. But again, who wants to wait for a tulip? If you’re a smart cookie, you know you can sell that same contract for a higher price than you paid. And if your neighbor is a smart cookie, he’s going to take note of that transaction, and wager that he can make even more than you can on such a deal.Tulip profusion followed. Farmers, bankers, woodworkers, sailors, cheese cutters, soldiers, pastors, nannies, chimney sweeps—Everyone rushed to the tulip mart like flies on potato salad. All of this over a plant that, for most of the year, looks like an onion.
We know the market story. Enter the speculators, then the rising prices, all underneath a shaky foundation. Traders sat around pints of alcohol and participated in what was commonly called “wind trade,” talking on about how much they’d buy later as the bulbs themselves sat in the soil.
The Dutch always had a thing for wind, anyway. All those windmills. And just like the wind, the fortunes of many a grabby Nether-dude blew away in seconds. A single bulb, or at least the contract for one, could change hands ten times in a single business day. Imagine an auction in which everyone is bidding on the notion that they’ll make money off the next bidder, but everyone loses if nobody buys.
Then came the day, one soggy morning on the Spaarne river, when traders realized nobody was buying any more. Stop the accordion. A market just collapsed! Countless little Dutch boys weren’t going to be getting any new clogs for Christmas. Some say it was just an instance of under-the-table gambling and the house finally folded. Some say it was the bubonic plague, driving desperate men to take some apocalyptic risks because the end was coming anyway. Suddenly the future wasn’t worth investing in. But what they don’t tell you is that despite this flower crash, for most families the fallout was as gentle as a petal on the water. Only a small handful of speculators suffered from the bubble’s final pop. If you were the average trader, you didn’t lose money so much as not make the money you thought was coming.
Amsterdam survived. The lowlands continued to roll on with flowers, even as the prices fell. This, my friends, is a simple tale of supply and demand. As the tulip waned in popularity, you know what product emerged as its replacement? The boisterous hyacinth. Another flower. When a market collapses, and everyone dives for the money under the mattress, one question comes knocking. What is value, anyway?
But you know the answer to that. You know the value in a pleasant look from a woman worth more than you can give, the value in showing her that no matter how silly a flower may seem to you, that flower is a miraculous, renewable symbol of undying love. Drive through the Netherlands today and you’ll see on your left and right rows and rows of bright, sturdy tulips. These suckers aren’t going away. And neither are the sturdy Dutch, who know the value in waiting for a spring stalk to climb up and bloom.
It’s time to put the man back in mania. Everyone falls on hard times. Economies come and go. But not you, Mister. You’re here to stay. Because flowers never go out of style. And true love never loses value.