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HISTORIAS                    Manuel Espejo

The Rage for Tulips

The first tulips arrived in Europe in 1554, specifically in Vienna, and their origin can be traced back to the Ottoman Empire. These tulip bulbs quickly spread across the continent from the Austrian capital. By the late 16th century, tulips were being cultivated in the Netherlands, where they thrived despite the Dutch cold climate. Soon, these plants became a symbol of prestige among the wealthy classes throughout Europe, especially in prosperous Dutch households. But what was the particular allure of tulips for the Dutch during this period?

The Dutch affinity for tulips can be attributed to a combination of factors. Firstly, the tulip is a remarkably beautiful flower, and the Dutch of that era were a joyful people who appreciated beauty and vibrant colo
urs, making tulips a natural fit. Secondly, Holland was experiencing significant economic growth during the 17th century, with wealth flowing throughout the country. Dutch merchants, often funded by capitalist partners, were amassing fortunes through lucrative East Indian trade, thanks in part to the firepower of their galleons.

With disposable income at their disposal, tulips became fashionable collectibles. They symbolized exclusivity, and many Dutch citizens, now flush with funds, became enamored with these stunning flowers.

The happy Dutch populace noticed that as more tulip varieties emerged, the prices of bulbs skyrocketed. It's no surprise that tulips rapidly evolved into a coveted luxury item. The growing array of tulip varieties fueled their popularity, and professional growers were willing to pay exorbitant sums for bulbs. The production of tulips struggled to keep up with demand, further driving up both prices and cultivation.

All of this unfolded around 1630, attracting not only those who grew tulips and created new varieties but also speculators who only bought and sold tulips and bulbs. This influx of speculators caused the tulip business to expand exponentially, leading to the creation of a public market specifically for tulip bulbs. Since tulips had a long growth period, they were considered durable goods, and their prices continued to surge.

The tulip business started to defy reason, pushing prices to unprecedented heights. By 1633, it was reported that even a modest tulip bulb could command a price that exceeded the annual income of a skilled worker, and some blossoms were worth more than entire houses.

The tulip market's soaring prices were primarily due to speculation, and many investors never even possessed the physical bulbs. Fortunes were amassed overnight, and people appeared to have lost their senses in the tulip frenzy.

Tulip mania reached its zenith during the winter of 1636–37. Then, in February 1637, operations suddenly came to a halt. Tulip bulb prices plummeted, and tulip trading ground to a halt. The speculative bubble had burst, resulting in significant financial losses for many participants. Some would later come to realize that tulip mania was merely a speculative frenzy.

This episode is among the earliest recorded economic bubbles, but it certainly wouldn't be the last, as greed has driven the existence of many more throughout history.

 

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