Tiptoe Through the TulipsPosted: December 14, 2012
People generally have a love of shiny things (see Kardashian, Kim). This is particularly true of the Dutch. If you’ve ever been to Amsterdam, you know that while it’s often grey, or perhaps precisely because it’s grey, the people there are abundantly colorful and take particular pleasure in the shinier things in life.
While this can make for a fabulous visit you’ll never forget (except for the parts you want to or can’t remember), it also can cause problems. In the seventeenth century the Dutch went mad for tulips. Blinded by beauty, lust and a love of shortcuts not unique to them, their infatuations nearly brought about their ruin.
I think there’s a lot to be learned here.
Coming from the East, tulips were exotically beautiful. As demand exceeded supply, they became the ‘it’ thing for the Dutch across the socio-economic spectrum. At the high point, bulbs were going for more than the average annual income of the working Dutchman. Their bulbs were as sought after as diamonds.
While certain laws fail to apply in Amsterdam, the laws of supply and demand have always existed. People went all-in on tulip speculation, banking that demand would always outstrip supply and these fragile bulbs were a sound and sturdy investment.
Then one day, as quickly as the craze came, it went. In the same way that the Dutch were swept up in a tulip frenzy seemingly overnight, they seemed to equally sober up in unison. Tulip traders were greeted by nothing more than the sounds of crickets when only the day prior they were in the eye of a buying hurricane.
What happened? On the Buy side of the equation, sometimes our heart and loins trump our heads, and rational thought gets drowned out (see Petraeus, David). As Woody Allen famously said in response to the question of how he could marry a much, much younger woman who also happened to be his common-law daughter, “The heart wants what it wants.” While we can debate the legitimacy of the “passion” defense in terms of flowers or frauleins, what we cannot deny is the fact that blind lust in all its forms is as old as dirt.
We also have to recognize that while The Tulip Tumult pre-dates baseball by centuries, this was definitely a swing for the fences. Buying tulips for a few guilders and selling them for hundreds or even thousands sounded a whole hell of a lot better than farming, tending to sheep, banging nails or dealing with rude and unreasonable customers as a merchant. It was hard not to think of bedazzled clogs and cruising down the canals in a sweet new pimped-out boat. No doubt they knew that there was risk but suspended disbelief as their heart whispered for them to do.
Hmm. I feel as though I’ve heard about this recently in the financial pages.
Now on the Demand side, I think two things probably conspired to bring a frost to the tulips. First, eventually someone came to their senses and recognized that their behavior had been unwise if not downright wrong. They told someone and it spread quickly. You see, people deep down knew they were being foolish, knew their speculation was based on their hearts and not their heads. They just needed a bit of a slap, not an anvil intervention. Then they were driven to make amends with incredible speed. Think of Ferris Bueller tearing up the stairs to jump in bed before his parents discover he was ever gone.
Second, THE Plague was in their midst. When people start dropping all around you in hideous and grotesque ways and you don’t know why, things get serious pretty quickly. You put aside foolish things.
I said you put aside foolish things.
Like tulips. And other things that glitter but aren’t gold.
Do we need a financial plague or a political one for us to turn away from gimmicks and shortcuts and go back to what made us great– daring vision, practical skills and an incredible commitment to doing things the hard way?
I hope not.
So smell the tulips, but just smell them. Bring some home after a hard day’s work and you’ll enjoy them even more.