Tulipmania

Detail from Jan Brueghel the Younger’s Satire on Tulip Mania, 1640

In 1636 tulips were all the rage and the entire population embarked in the tulip trade causing the price of tulips in the Netherlands to rise to ridiculous levels. Then, on the third of February, 1637, the Dutch tulip market suddenly collapsed.

The Paris Review cites this passage from Extraordinary Popular Delusions and the Madness of Crowds written in 1841 by Scottish journalist Charles Mackay:

"The demand for tulips of a rare species increased so much in the year 1636, that regular marts for their sale were established on the Stock Exchange of Amsterdam, in Rotterdam, Harlaem, Leyden, Alkmar, Hoorn, and other towns … The tulip-jobbers speculated in the rise and fall of the tulip stocks, and made large profits by buying when prices fell, and selling out when they rose. Many individuals grew suddenly rich. A golden bait hung temptingly out before the people, and one after the other, they rushed to the tulip-marts, like flies around a honey-pot … Nobles, citizens, farmers, mechanics, sea-men, footmen, maid-servants, even chimney-sweeps and old clothes-women, dabbled in tulips. People of all grades converted their property into cash, and invested it in flowers. Houses and lands were offered for sale at ruinously low prices, or assigned in payment of bargains made at the tulip-mart … In the smaller towns, where there was no exchange, the principal tavern was usually selected as the “show-place,” where high and low traded in tulips, and confirmed their bargains over sumptuous entertainments. These dinners were sometimes attended by two or three hundred persons, and large vases of tulips, in full bloom, were placed at regular intervals upon the tables and sideboards for their gratification during the repast."

Tulipmania is sometimes described as the first major financial bubble. The average price of a single bulb exceeded the annual income of a skilled worker. It is the ultimate example of financial folly and should act as a cautionary tale.