Tulip Mania: Bitcoins of the 17th century?

Essays | Ilkin Bayramli | 12-02-2018, 13:55

Tulip Mania: Bitcoins of the 17th century?In an auction in Alkmaar, a city in the Northern Netherlands, an aggregate of 90,000‎ guilders (ƒ‎‎) was generated from sales of tulips and other exotic flowers. A tulip sample named Viceroy was sold for ƒ4,203 while another tulip, Admirael van Enchuysen, was offered ƒ5,200.  To put into context, during much of the 17th century, an average outdoor laborer earned about ƒ300 in a year, and a master carpenter made about ƒ450. For 4,000 guilders, one could purchase a luxurious villa with a lavish garden in the center of Amsterdam. This auction was one of the most notable episodes of the so-called Dutch “Tulip Mania”— supposedly, the first recorded economic bubble in history. During this astounding phenomena, the prices of tulips skyrocketed to record levels over course of years before suddenly crashing into an all-time-low overnight. The incident had many ramifications for the Dutch society, some of which have endured to our days. Yet, the causes of the economic anomaly are still a subject of debate among scholarly circles. Some theorists argue that tulip speculation was indeed a financial bubble while others deem it a normal market response to the changing economic climate. This essay aims to analyze different aspects of the Tulip phenomenon and tries to explain its potential causes and subsequent effects. As the phenomenon is highly complex, demanding joint consideration of historical and economic factors, I decided to break this essay into 7 major parts where different environmental, historical, and economic factors and theories would be comparatively analyzed.


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Ilkin Bayramli

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