My lovely sister enabled me to achieve a long-held wish to see the Keukenhof Gardens this spring. I love tulips. I like many flowers, but tulips are special because they vary so much, and every variation has its own beauty. They can be cup-shaped, star-shaped, narrow, full or fluffy at the edges. They vary in height and color or multicolors, in fact there are thousands of types of cultivated tulip.
Wild tulips grow east of the Mediterranean and in Central Asia, on the plains or in the mountains where there is moderate warmth and rain. They were cultivated in Persia and Turkey from the 10th century, and in the 16th century, they caught the attention of a European diplomat who sent some bulbs to Vienna. In Holland, some years later, botanists were setting up experimental gardens, and they discovered that the tulip could tolerate the Dutch climate. Holland has been the biggest producer of tulips ever since. Easy access to tulips is one of the best cultural legacies that we owe to the first Dutch Republic.
But their love for the vibrant color of tulips, particularly those with variegated colors, was developing at the same time as the rich, mercantile Dutch Republic was laying the foundations for financial markets, such as forward markets. This meant growers could order bulbs for the following season, before they were ready for physical exchange.
There was just one problem. The right to a batch of tulip bulbs could be sold on, again and again, without any product changing hands. During the winter of 1636-37 some contracts were sold on several times with prices rising dramatically. One bulb might be sold for ten times the annual wage of a craftsman.
In February 1637, the tulip price collapsed. I am not quite sure why it took until February to discover the disparity between the value of contracts and the value of actual tulip bulbs. Growers should have been planting bulbs in November and December. That’s when I did it, when I had a garden. But of course, the speculators were not necessarily gardeners! Tulip Mania has since been categorised as the first speculative bubble of modern financial history. The Dutch government stepped in and voided many contracts that could not be fulfilled, as judges regarded them as the equivalent of gambling – a very reasonable perception. Nevertheless, many traders still lost a lot of money. Why did people go so mad?
Of course, history repeated itself – in the 18th century, 19th century, 20th century and let’s not forget the debacle of 2007-2008 when banks were selling each other “securities” which were very insecure.
There’s a concept in business called mimetic isomorphism, loosely translated as following the crowd. From time to time, the crowd gets it horribly wrong. Which is why companies should be trying to differentiate themselves from the crowd, and we should all be skeptical about what “everyone is thinking”.
So, tulips are beautiful for their own individuality and variety, and for their reminder to us to be individual, value our differentness and to think for ourselves!
Photo: Tulips at the Keukenhof Gardens, Lisse, The Netherlands.
