Last week, 376 years ago, the Dutch government gathered to resolve a pressing issue: it's tulip sector was melting down.
If a tulip sector sounds absurd now, you may be surprised to learn it was viewed with equal curiosity and disdain then.
"I don't know what kind of angry spirit was called up from hell," a contemporary wrote in 1648. "Our descendants doubtless will laugh at the human insanity of our age, that in our times the tulip flowers have been so revered."
Dutch tulips were the modern world's first speculative asset to see prices scream higher, then melt down in almost nuclear fashion.
But they weren't the last. And that's why the incident has persisted in modern memory.
Using historian Anne Goldgar's 2007 "Tulipmania" as our guide, we bring you this curious but most instructive story.
According to lore, Tulipmania had its roots in the Ottoman Empire.
An ambassador working at the court of Suleiman the Magnificent noticed the flower, which is native to Central Asia, was all over Constantinople. In the late 1500s, he decided to send some to a Botanist friend in Leiden, Clusius.
Source: Anne Goldgar, "Tulipmania"
But collecting stuff in general — from art to sea shells — was already big when Tulips began popping up in Europe.
Clusius told his sea merchant friends to pick up odd fish for him on their travels, and would exchange rare plants for "medals or unusual man-made objects."
Source: Anne Goldgar, "Tulipmania"
And there was also already a robust futures trade in Amsterdam.
The Amsterdam stock exchange opened in 1602. The Baltic grain trade, which had helped lead to the creation of the Dutch East India Company, had been operating as an informal futures exchange for decades.
Source: Anne Goldgar, "Tulipmania"
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