
Tulipmania: More Boring Than You Thought - wslh
http://www.smithsonianmag.com/history/there-never-was-real-tulip-fever-180964915/#cZtyAgAvv2FlrssY.99?no-ist
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fyrerise
The title is a little misleading. The article itself acknowledges that there
_was_ a tulip fever:

> _That’s not to say that everything about the story is wrong; merchants
> really did engage in a frantic tulip trade, and they paid incredibly high
> prices for some bulbs. And when a number of buyers announced they couldn’t
> pay the high price previously agreed upon, the market did fall apart and
> cause a small crisis—but only because it undermined social expectations._

But it implies that it's not all that notable because it didn't collapse the
entire economy:

> _But the trade didn’t affect all levels of society, and it didn’t cause the
> collapse of industry in Amsterdam and elsewhere._

Personally, I don't think I'd ever made the assumption that it had. Likewise,
if Bitcoin were to implode, it would be similar — some people would suffer,
but it wouldn't be all that widespread of an effect.

Tulipmania still makes a great historical anecdote on speculation, and I for
one, will keep using it as one.

~~~
KGIII
The title is now changed but it reminds me of a tangentially related pet
peeve.

I really dislike titles like this. Why do they presume to know what I think?
An example from yesterday was that consciousness goes deeper than I thought.
On reading the article, it did no such thing. Again, why would they presume to
know what I think?

I'm not sure why it rubs me wrong. It certainly biases my perception of the
article before I've even read it. I even know that it is prejudicing my
reading but I can't seem to get over it.

To me, they seem like click-bait. No, the answer may not surprise me and no,
the author actually had no idea what I was thinking. It really does bias me
against the article. It's just a small thing but I can see my own biases when
I see headlines that include similar statements.

No big deal, just a pet peeve.

~~~
kryptiskt
My problem is that it's a cliche, first time it was fine, Nth time it's
utterly, irredeemably trite. If they can't bother to come up with a less tired
headline, it's probably not good enough for me to bother to read it.

Same with "X considered harmful", just give me a break.

~~~
Coincoin
Maybe it's akin to nigerian scams. They don't want to waste their bandwidth on
someone who's not going to click on their numerous articles with similar title
and generate more ad revenue.

However if you are gullible enough to click on "7 awesome things Miley Cirus
did, number 4 will shock you!", you are ripe to click on all the click bait
they will show you.

The problem arises when good quality content uses clickbait. It's the same as
naming your bank "The Nigerian Prince Bank of America".

------
runeks
As someone on HN pointed out recently, there’s a much better explanation for
the tulip bubble than “speculators went crazy all of the sudden”.

In a 2007 paper, Earl Thompson argues that the extreme tulip bubble was formed
because the Dutch government, in coalition with insolvent tulip speculators,
allowed speculators to nullify tulip futures contracts, thus inadvertently
enabling close-to-risk-free speculation in tulip futures (which, after the
regulation, resembled options contracts to a much higher degree).

Here’s an Economist article on the subject:
[https://www.economist.com/blogs/freeexchange/2013/10/economi...](https://www.economist.com/blogs/freeexchange/2013/10/economic-
history)

And Wikipedia has a summary here:
[https://en.wikipedia.org/wiki/Tulip_mania#Legal_changes](https://en.wikipedia.org/wiki/Tulip_mania#Legal_changes)

~~~
jmh530
I just posted about this without checking to see if anyone else had said
anything...

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forkLding
I guess the paper is trying to help with the misconception that a lot of what
occurred in Tulipmania is relatable to modern-day financial bubble crashes
where a lot of the general public suddenly lose jobs and money or how a lot of
perception was influenced by Calvinists condemning materialistic pursuits,
whereas in the actual event of the Tulip fever, it likely only affected the
rich and not your ordinary 1600s general public.

~~~
djsumdog
So if anything, what we faced in the 2008 crisis and what many are experience
now is on orders of magnitude worse than Tulipmania...

~~~
wallace_f
Absolutely. Also an example of how the financial system has evolved to tie the
fates of some of the large, institutional (too big to fail) speculative
investors to that of the common working man in the most unjust way possible.
It is impressive how remarkarble they've evolved the finacial sector (for
themselves).

------
TwoNineFive
This is an advertisement for the movie Tulip Fever that just came out. I
noticed a lot of similar posts on other social media sites in the last six
months.

~~~
mirimir
Arguably it's more criticism than advertising.

------
gmiller123456
My first thought was "It couldn't possibly be more boring than I think", then
in the article I see it's the more accurate title for the book I read that
convinced me of that.

tl;dr. Even though Tulipmania might have been an exciting and fascinating
event, the actual details of what/why it happened have been lost to history.
There are ledgers and letters mentioning tulip prices and do definitely show a
bubble. But there's not really any information on why people thought tulips
were worth the price they were promising. As with investors today, they
generally don't make their motives public, and when they do, you can't
necessarily trust them to be honest.

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jmh530
This is a frustrating article, but perhaps the book is better.

The key work here is really Earl Thompson's "The tulipmania: Fact or
artifact?" in Public Choice. The article at least does not make any mention of
Thompson or his argument. In particular, his argument is that there was a
legal change in how the tulip contracts worked and so it didn't make sense to
compare the previous price history with the history after that change.

------
jondubois
If the environment is stable enough, a bubble doesn't necessarily have to pop.

I think that chronic sustained wealth inequality can create lasting economic
bubbles that never pop.

If we lived in a world where everyone had near infinite resources, everything
would be a bubble because markets would be driven entirely by status value.

If you think about it, the rich today have practically unlimited wealth thanks
to dividends, rent payments and/or interest; they can afford to lose large
portions of their income and still become richer.

Now thanks in part to social media, the rich live in a separate world from
others; one which has near unlimited resources. So long as money flows into
their world faster than it leaks out, bubbles are completely sustainable.

~~~
danmaz74
Isn't a bubble defined as a price increase that at some point pops?

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mmonihan
Here's a perspective from the Austrian school:
[https://mises.org/library/truth-about-
tulipmania](https://mises.org/library/truth-about-tulipmania)

~~~
mdpopescu
You learn quickly not to mention favorably certain taboo subjects here on HN,
like Austrian economics or free markets being better than regulated one. (I'll
refrain from pointing out others, I want to limit the number of downvotes I
get. Self-censorship or, in other words, learned helplessness.)

~~~
stephen_g
Look, as much as I dislike the Austrian school (it all hangs on certain
premises that I don't believe are necessarily true, so I don't think it
contributes much to being able to understand the economy), the main problem
with the comment above was that it wasn't very useful in just dropping a link
with little context... With a bit of commentary or a brief summary of the
article, people would have engaged with it instead of just downvoting.

~~~
neilwilson
So does mainstream economics. They are both wrong.

At least the Austrian school admits they made the whole thing up in a
religious fashion and never submit their ideas to actual science.

Mainstream economics just pretends it's scientific when really the whole
belief structure is a house of cards in the same way

~~~
stephen_g
I don't disagree, I think that certain ideas from the post-Keynesian and
modern monetary theory are probably the closest to actual evidence based
Economics at the moment.

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_Codemonkeyism
Click bait pattern 101: Claim something is completely different than everybody
thought then write that it mainly was as everyone thought with some minor
variations.

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justin66
The real bubble comes when you watch Smithsonian's webpage use close to two
gigabytes of RAM in a very short time.

~~~
eadmund
Hey, didn't you know? It's 2017, and we can't display pictures and text
without a sandboxed virtual machine running thousands of dynamics queries.

~~~
tpeo
I feel so glad that we finally live in the future. Such a shame how terrible
it is, though.

~~~
djsumdog
Do you remember the Palm Treo? I remember the Palm Treo. I had the SDK. Every
app had direct memory access, no threads and it was easy to crash the phone.

I mean, they didn't serve us tons of ads either but...things aren't _that_
bad...

~~~
bhaak
You make it sound as if it were bad back then? Was it on the Treo? Because I
had the previous non smartphone Palms and there that was not an issue.

It was even an advantage IMHO. Apps were fast and good easily exchange data or
even better you good use a better app than the standard app for a given data
collection. You didn't have the walled data containers we have today.

Granted, with an internet capable device this opens up lots of security
problems but I also feel that I was more productive with my handheld back then
than I am now with my iPhone.

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aaron695
At some stage it'd be interesting to collate 'dumb things HN believes'

TulipMania would join Split Sleep, Drones hitting/near misses planes, X just
discovered Y happened Z years previous to what was thought. This Voynich
manuscript article adds to the discussion. The Valley has a unique problem
with Y.

~~~
dang
'HN' is a statistical distribution; it doesn't believe anything. Some people
here might believe some of those things but I doubt they're the same people,
or close to a majority.

It's popular to diss one's fellow community members, but kind of in bad taste.
If you're commenting here, you're as much 'HN' as the next person.

~~~
aaron695
HN has emergent behaviour.

Like an ants nest or a physical human community or a corporation the behaviour
doesn't reflex individuals or even necessarily the majority of individuals.

Shrug, I wasn't even saying the dumb things were common.

But I do think these emergent memes bleed across to real world issues.

While people think it's ok to think hundreds of years ago people were stupid
and paid 'really' ridiculous amounts of money for tulips, they will also be
susceptible to allow war propaganda like what's coming out of North Korea or
Iraq. People are people, do we really think the North Korean's are that dumb
they think their leader doesn't poop or see the whole Iraq 'Latif Yahia' saga.

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coldtea
> _For decades, economists have pointed to 17th-century tulipmania as a
> warning about the perils of the free market. Writers and historians have
> reveled in the absurdity of the event. The incident even provides the
> backdrop for the new film Tulip Fever, based on a novel of the same name by
> Deborah Moggach. The only problem: none of these stories are true._

Well, speaking of economists' historical-based arguments that weren't, there
never was much truth about the keyboard wars either:
[https://www.utdallas.edu/~liebowit/keys1.html](https://www.utdallas.edu/~liebowit/keys1.html)

