Tulipomania and other bubbles

 There really was a tulip craze - in Holland, from 1634 to 1637, when it all came crashing down, ruining the lives of greedy investors who converted houses, property and possessions into cash to invest in flowers. The story's told in the musical Tulipomania, playing at the Arden Theatre on Second Street till July 1. It's an interesting, energetic show, one made more meaningful by a discussion beforehand about "bubbles through the ages."

Kevin Gillen of Econsult described lots of other "bubbles" - railway mania in the 1840s, Florida speculation in 1926, the stock market runup in the 1920s, the Asian financial crisis in 1997, the dot-com bubble from 1995-2000 and, of course, the real estate bubble we're slogging our way out of right now. (Gillen says there's been a real estate bubble going on in Spain and concern that there might also be one in China. Imagine.)

rsz_tulip

But tulips? The trading got so frenzied back in the 1630s that a single tulip was selling for 3,000 to 4,000 guilders (all of this on ultimately worthless paper), enough to buy a house in Amsterdam, Gillen said. This, at a time when skilled crafstmen were earning 300 guilders a year.

The show explores the - very - dark side of obsession and greed, including the pain it causes not just to family fortunes but to families. On the light side, it sure was fun to hear the cast singing lines like "Never underestimate the power of a flower!" Amen!

Continue Reading