Friday, 26 July 2013

"Yet the really interesting thing about the tulip boom is that it did not end in universal disaster..

From Andrew Marr's A History Of The World (not the best book ever but well worth £4 if you can plough through it quickly enough so as not to get confused by the fine detail):

... or even in the widespread bankruptcy of Dutch speculators. The Estates General which ran the republic refused to take special measures, and passed the problem back to the civic authorities.

Many towns, in their turn, refused to process or hear any court actions involving the tulip trade, carrying on as if none of it had really happened and allowing the paper losses and the paper gains to wipe each other out.

If the dreams of sudden enrichment were snatched away, so were the nightmares of destitution.

This concept is of much wider application of course and I have alluded to it often enough.


Lola said...

That made me chuckle thinking about the convolutions present day politicains and their bureaucratic fellow travellers would have to go through to justify the bailing out of tulip speculators. Mind you the current FCA/FSCS/FoS would work out a way to ensure the continuation of their own pointless sinecures and fat entitlements.

DBC Reed said...

Have never understood why the Tulip episode has been described as a mania. Surely they were buying the bulbs/corms ( or whatever) in order to breed on from the single one purchased to get a whole lot more: the precise opposite of the British Property mania where the aim is to restrict supply of objects which are not capable of reproducing themselves.

Kj said...

DBC: the search for rent-bearing assets, and their subsequent bubbles and busts, aren't limited to property, but bulbs and other fads will eventually crash before some people realize that they can be replicated and competed down, and we'll always come back to land. Compare with "dotcom", where it was discovered that even with IP, there wasn't that much rents to be had with individual websites.