When Bitcoin came screaming back into the public consciousness in late 2017, there was a lot of talk about whether or not Bitcoin is an economic bubble. The crypto currency flew under the radar for several years and then all of a sudden it skyrocketed in market value. But what goes up must come down and nowhere was this more evident than the Tulip Mania which inflamed Europe in the 1630s.
Seventeenth Century Amsterdam became a booming international port thanks to the Asian spice trade. Wealthy merchants made their home there and lived in grand mansions surrounded by beautiful flowers to demonstrate their wealth, and naturally they constantly wanted to one up each other. The favored flower became the tulip which came from the East and was considered incredibly exotic by contemporary standards. Their favor among the wealthy built up their worth until they were bought and sold at prices so astronomically above their intrinsic value they were as valuable as diamonds. When everyone finally got their head screwed on straight and realized this was absurd the tulip bubble burst and the rest is history.
At One Point A Tulip Was Worth The Equivalent Of $25,000
In 1636, at the height of tulip mania, a single Semper Augustus tulip bulb was worth 150 florins. This is the equivalent of $25,000. This was 10 times the annual salary of a skilled craftsman and could feed, clothe, and house a lower class family for a lifetime. Bulbs would pass from hand to hand, each owner hoping they could make a profit. Few would ever see the tulip actually blossom.
A Virus Made Tulips More Valuable
One of the catalysts for the tulip suddenly increasing in monetary value was a new strain of multi-colored flowers. The petals had streaks of contrasting colors that made them look all the more exotic. Years after the fact scientists would discover the change in the tulips appearance was due to a “Tulip Breaking Virus.” The tulip bulbs had become infected and their pigmentation was therefore damaged. People weren’t going crazy for just any tulip - they were going crazy for diseased tulips.
- Photo: Jan Brueghel the Younger, Satire on Tulip Mania / Wikimedia
Tulips Nearly Ruined Holland’s Economy - And They’re Not Even Dutch
Today tulips are iconically Dutch, rivaled only by clogs and windmills. Holland is still a major player in the international flower game and you can’t walk down a street in Amsterdam without some sort of tulip imagery; however, the tulip isn’t even Dutch in origin. The tulip is thought to have originated in what is now Kazakhstan. Dutch traders brought bulbs home from their travels, never guessing they would eventually make and break its economy.
People Literally Traded Their Houses For Less Than A Dozen Tulip Bulbs
One of the favored diseased bulbs was white petals with red stripes, not unlike a candy cane. This bulb was considered so exotic and valuable that one merchant traded his house on the spot for 10 bulbs. When the bubble popped a year later he became homeless. Many families were ruined financially by the Tulip Mania, and the phenomenon is now something deeply rooted in the Dutch moral consciousness. There is a saying that was coined after the Mania that’s translated to “do not seek inconsistent wealth before honor.” The bulb being inconsistent wealth, and trading something like your house for it being very dishonorable.
Bulbs Were Worth Far More Than Bloomed Flowers
Tulip bulbs were considered “durable goods” and this helped their monetary value sky rocket. Although they took years to grow, bulbs were fairly sturdy and would not be damaged if they were passed around. If traders had to deal with the delicate flowers themselves it would have no doubt slowed down the mania, but a bulb was rather like a baseball. With the rate bulbs changed hands - sometimes as much as 10 times a day - one can easily imagine traders literally throwing them to one another.
Dutch Botanists Were In Vicious Competition With Each Other
Tulip mania was all about uniqueness; the more rare and unfamiliar the color combination, the more value the flower had. Botanists were quick to start experimenting and cross-breeding the flower, each hoping their variety would get caught up in the mania. Competition between botanists often got fierce and gambling often played a role; unfortunately, for the botanists it was a slow game. Tulip seeds take anywhere from seven to 12 years to turn into a bulb and by that time the bubble had long since burst.