When economists need to summon an age of unchecked speculation and financial fecklessness—usually as an analog to our own—the Dutch tulip mania is at the top of the list. If you’re not familiar with the story, it’s an early and especially hysterical example of the vagaries of the stock market: In the mid-1630s, the Dutch fell rapturously in love with tulips, whose vivid petals made them the envy of every Hendrik and Veerle in the neighborhood. The flower became a status symbol, and the Dutch were all but tripping over one another’s clogs in a race to conspicuously consume. To satisfy burgeoning demand, speculators began to trade in what were essentially tulip futures; these grew outlandishly complicated and expensive, and on the third of February, 1637, the tulip market collapsed.
The Scottish journalist Charles Mackay gave currency to the incident. He offers a trenchant, if dubious, account of the whole debacle in his 1841 book, Extraordinary Popular Delusions and the Madness of Crowds, which takes, as its title suggests, a pretty dim view of group dynamics. In his chapter on “the tulipomania,” Mackay presents a cautionary tale rife with tulip jobbers, tulip marts, tulip notaries, and tulip parties: