Tulipomania was a brief period of wild financial speculation which occurred in the Netherlands. It is also referred to as tulipmania or tulip mania. The extent of tulipomania has been somewhat exaggerated by later historians, although it was more certainly widespread, and some people did end up losing their fortunes over tulips. While tulipomania might seem crazy today, some economists point out that there is a sobering lesson hidden in the history of tulipomania, and people would do well to remember it.
Tulips were introduced to Europe around the late 1500s from the Ottoman Empire, and they were an almost immediate hit, as indeed they still are. Many members of the upper classes vied for especially beautiful or rare varieties, and tulips became a must-have accessory for the garden. In the United Provinces, now known as the Netherlands, tulips first appeared in the 1590s, and they soon become highly coveted items.
People who cultivated tulips began to be offered fabulous prices for them, especially if the variety was rare or particularly striking, and by the 1630s, full-blown tulipomania had set in, with individual bulbs fetching stratospherically high prices. One record-setting bulb, the Semper Augustus, sold for 6,000 florins: 40 times the average income for Dutch people of the time. While this price was a bit unusual, prices of 1,000 florins for a single bulb were not unheard of.
As demand for tulips grew, driving up prices, speculation also started to run rampant. Tulips were bought and sold at high prices on the market, sometimes even before they had been planted, with people trading contracts in tulip futures. While tulipomania was probably not as widespread in the Netherlands as some historians make it out to be, it certainly caught up a sector of the population, and when the market crashed in 1637, some people lost their livelihoods as a result.
Tulipomania occurred to a lesser extent in other parts of Europe as well, with isolated pockets of very high tulip prices in regions where the bulbs became scarce. When the bubble burst, prices quickly stabilized; today, only the rarest of tulips are extremely expensive, and most gardeners can afford to plant these graceful and attractive bulbs, should they so desire.
When a bout of mad spending over a single item attracts public attention, it is often compared to tulipomania in the news. People caught up in such trends may struggle to accept it, but they stand to lose substantial sums of money when the craze for the item subsides.
