Economics Greed - Part 2: The Poisoned Tulip: Why Do Rational Investors Trade Economic Fundamentals for a Flower?
Economics Greed: The Dark Side of Human Motivation ← Series Home Key Takeaways The Crisis of Reality: The astonishing valuation of tulip bulbs disrupted all previous economic and cultural certainties, creating fundamental confusion over **what was valuable, worthy, and real**. The Rise of the 'Goldist': The mania was fundamentally driven by **avarice**, leading critics to label speculators not as flower enthusiasts but as **"goldists"** who sought "odious" gain over honest, traditional toil. Social Inversion: Pamphleteers condemned the sudden acquisition of quick wealth, which blurred class lines and led to the terrifying spectacle of artisans and "foul rabble" becoming "schijn-heeren," or **"seeming-gentlemen,"** thereby dominating society and reversing the proper order of things. Betrayal of Trust: The collapse did little financial damage initially; the true crisis was a **social and cultural shock** resulting from the wholesale breaking of promises and the resulting destruction of the **honor and credit** necessary for society to function. The legendary prices paid for tulip bulbs, such as the Viceroy (reputedly worth a long list of actual commodities), immediately established the speculative phenomenon as a moral problem, not just a financial one. The value system of the Dutch Golden Age was suddenly thrown into disarray: what was valuable, what was worthy, and what was real. Critics were incredulous, unable to conceive why a tulip—a transient flower—should be valued so highly. The flower was not noticeably better than any other and was considerably less tangibly valuable than standard commodities or treasures. ...
