Key Takeaways

  1. The Absurdity of Value: The high price of tulips, such as the Viceroy, was so astonishing that contemporaries created lists of goods (wheat, oxen, wine) of equivalent value, putting all existing economic certainties into disarray.
  2. The Legend is Propaganda: The enduring narrative of pervasive stupidity and madness is drawn almost entirely from satirical pamphlets and moralistic propaganda published immediately after the crash, rather than objective financial records.
  3. A "Sickness of the Head": Contemporaries, including the priest Jodocus Cats, described the mania as a "sickness" or "craziness" driven not by love of flowers, but by the "odious" pursuit of private, quick profit over honest toil.
  4. The Futures Mechanism: The market allowed prices to surge twentyfold in a single month because the entire trade was essentially a futures market conducted entirely "on paper," delaying delivery and payment until the summer.

Whenever financial instability flares up, particularly concerning highly speculative assets, the Dutch Tulipmania of the 17th century is invoked almost ritually as a warning against speculative excess. The image that has become legendary a story of huge fortunes won and lost is focused on the most improbable of all financial objects: the tulip bulb. The enduring power of this historical pattern lies in the sheer, bewildering absurdity of the object being valued.

For many contemporaries, this speculation disrupted all certainties about what was valuable and what was real. This conflict is best embodied in the reputed cost of a single bulb of the ‘Viceroy’ variety. This transaction, often cited as fact in later histories, involved a reputed payment equivalent to an astonishing list of actual goods. The list included two lasts of wheat, four fat oxen, eight fat pigs, twelve oxheads of wine, four tuns of beer, and even the ship required to carry these goods, all equaling the price paid for a single flower bulb. This dramatic comparison of value, whether an actual payment or merely a rhetorical device, established the Tulipmania as a definitive historical template for irrationality a powerful tale of “stupidity, greed, and madness”. The high prices associated with new and rare varieties were considered a “standard feature” of the market, preceding the dramatic decline.

Infographic comparing the value of one Viceroy tulip bulb (c. 4,200) to the list of goods it reputedly equaled: Wheat (2 lasts), Rye (4 lasts), Fat Oxen (4), Fat Pigs (8), Wine (12 oxheads), Beer (4 tuns), Butter (4 loads), Cheese (1000 lbs), Bed, Clothes, and a Ship.

The Legend is Propaganda

The popular image we have inherited of unsuspecting sailors mistakenly eating fortunes and of farmers abandoning their land for a single bulb is not objective history, but rather a carefully cultivated financial legend. In fact, later influential accounts, such as Charles Mackay’s Extraordinary Popular Delusions and the Madness of Crowds (1841), plagiarized their descriptions primarily from earlier writers like Beckmann (18th c.). Beckmann, in turn, relied heavily on Abraham Munting and the notorious propagandistic pamphlet Samen-spraeck tusschen Waermondt ende Gaergoedt (G&W) from 1637.

This is a critical displacement effect: the widely accepted story is based almost solely on propaganda that was intended to ridicule the “idiocies of the tulip trade”. The G&W pamphlets, which listed numerous prices that modern historians have often cited, were fundamentally moralistic attacks against speculation, rather than objective financial reports. Since this history originated as an anti-speculative argument, readers must acknowledge that the traditional narrative is heavily skewed toward emphasizing irrationality, moral failure, and the ensuing chaos.

Flowchart titled “The Propagation of Financial Legend” showing the path of the core Tulipmania narrative: G&W Pamphlets (1637) -> Munting (1672) -> Beckmann (1846) -> Mackay (1852) -> Modern Accounts/Financial Rhetoric.

The Futures Mechanism

Focusing on the market data, the consequences of this mania became acutely visible in a frantic surge for common varieties. While rare tulips had commanded high prices for years, the final speculative frenzy was concentrated on these less exotic “pound goods”. This brief, final phenomenon of financial madness lasted only about one month, beginning on January 2, 1637, and collapsing immediately after February 5, 1637.

Prices for these common bulbs became completely unmoored from reality in a matter of weeks. The price surge for common bulbs in January 1637 saw values increase up to twentyfold. For example, the price of Witte Croonen bulbs saw an astonishing twenty-six-fold increase in that single month. This incredible velocity was possible because the price movements fed upon themselves in a short-term increase in demand. Simultaneously, outside the tulip collegi n, an even greater social consequence was unfolding: the bubonic plague ravaged the Netherlands from 1635 to 1637. Contemporaries connected the plague which killed 14% of Haarlem’s population in late 1636 to the speculation, viewing it as yet “another sickness… the sickness of the blommisten”.

Line graph showing the exponential price movement of a common variety, Witte Croonen (Guilders/Aas), from January 2, 1637, to February 5, 1637, illustrating the sharp, final vertical spike.

The underlying structural flaw that permitted this spectacular surge was the mechanics of the trade itself. The tulip market operated as an active futures market. Since bulbs were harvested in the summer, any trade conducted from mid-September onwards was essentially “on paper” for future delivery and payment. The contracts typically stipulated that payment would not be made until the “dry bulb time” in the summer, meaning that in the sharp price rise of January 1637, almost no money had actually been exchanged.

This futures system trading in promises relied entirely upon trust and honor. The social structure tried to formalize this through the creation of the collegie or comparatie (committee/gathering), groups of experts who convened in inns to arbitrate disputes and establish practice. However, the price collapse in February 1637 exposed the ultimate system flaw: when prices plummeted, the crisis became one of wholesale breaking of promises and the “destruction of trust”. Buyers, suddenly faced with paying thousands of florins for a now-worthless bulb, simply refused to receive and pay for the promised goods.

System diagram showing the flow of the Tulip Futures Cycle: (1) Contract Made [Winter/Spring] -> (2) Price Volatility Occurs -> (3) Dry Bulb Time Arrives [Summer] -> (4) Payment Due. Highlight the central role of “Trust and Honor” linking (1) and (4).

What's Next?

The crash of the tulip market did not cause widespread financial or economic distress; in fact, little economic consequence was associated with the end of the mania, according to most evidence. Instead, the real destruction was social and cultural: a crisis of value, the breakdown of honor, and the profound destruction of trust that held early modern society together. The disorder was not imagined "That was real". Understanding the full cost of this betrayal requires examining not just the prices, but the moral arguments critics made against the new spirit of commerce.

In the next post, we excavate the moral arguments underpinning the crisis of value: How did the pursuit of ‘green gold’ threaten the religious and social foundation of the Golden Age?

Continue to: The Poisoned Tulip: Why Do Rational Investors Trade Economic Fundamentals for a Flower?

Within this Blog

External Sources

  • Mackay, Charles. Extraordinary Popular Delusions and the Madness of Crowds (1841).
  • Garber, Peter M. Famous First Bubbles: The Fundamentals of Early Manias (2000).
  • Goldgar, Anne. Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age (2007).
  • Roman, Adriaen. Samen-spraeck tusschen Waermondt ende Gaergoedt (1637).
  • Posthumus, N. W. Articles on the Tulip Mania in the Economisch-Historisch Jaarboek (1926-1934).