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Summary. The economy of territory that became the United States evolved dramatically from ca. 1000 ce to 1776. Before Europeans arrived, the spread of maize agriculture shifted economic practices in Indigenous communities. The arrival of Europeans, starting with the Spanish in the West Indies in 1492, brought wide-ranging change, including the ...
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Long Term Economic Growth – 1860–1965: A Statistical Compendium. Business Booms and Depressions since 1775, a chart of the past trend of price inflation, federal debt, business, national income, stocks and bond yields for the United States from 1775 to 1943. Budget of the United States Government.
- Overview
- Tulips as Prized Items
- Tulip Mania's Limited Impact
The speculative frenzy over tulips in 17th-century Holland spawned outrageous prices for exotic flower bulbs. But accounts of the subsequent crash may be more fiction than fact.
In 1636, according to an 1841 account by Scottish author Charles MacKay, the entirety of Dutch society went crazy over exotic tulips. As Mackay wrote in his wildly popular, Memoirs of Extraordinary Popular Delusions and the Madness of Crowds, as prices rose, people got swept up in a speculative fever, spending a year’s salary on rare bulbs in hopes of reselling them for a profit.
Mackay dubbed the phenomenon “The Tulipomania.”
“A golden bait hung temptingly out before the people, and one after the other, they rushed to the tulip-marts, like flies around a honey-pot,” wrote Mackay. “Nobles, citizens, farmers, mechanics, sea-men, footmen, maid-servants, even chimney-sweeps and old clothes-women, dabbled in tulips.”
When the tulip bubble suddenly burst in 1637, Mackay claimed that it wreaked havoc on the Dutch economy.
“Many who, for a brief season, had emerged from the humbler walks of life, were cast back into their original obscurity,” wrote Mackay. “Substantial merchants were reduced almost to beggary, and many a representative of a noble line saw the fortunes of his house ruined beyond redemption.”
In the mid-1600s, the Dutch enjoyed a period of unmatched wealth and prosperity. Newly independent from Spain, Dutch merchants grew rich on trade through the Dutch East India Company. With money to spend, art and exotica became fashionable collectors items. That’s how the Dutch became fascinated with rare “broken” tulips, bulbs that produced striped and speckled flowers.
First these prized tulips were bought as showy display pieces, but it didn’t take long for tulip trading to become a market of its own.
“I found six examples of companies that were set up to sell tulips,” says Goldgar, “so people were quickly jumping on the bandwagon to take advantage of something which was a desired commodity.”
Tulip prices spiked from December 1636 to February 1637 with some of the most prized bulbs, like the coveted Switzer, experiencing a 12-fold price jump. The most expensive tulip receipts that Goldgar found were for 5,000 guilders, the going rate for a nice house in 1637. But those exorbitant prices were outliers. She only found 37 people who paid more than 300 guilders for a tulip bulb, the equivalent of what a skilled craftsman earned in a year.
But even if a form of tulip mania did strike Holland in 1636, did it reach every rung of society, from landed gentry to chimney-sweeps? Goldgar says no. Most of the buyers were the sort you would expect to be speculating in luxury goods—people who could afford it. They were successful merchants and artisans, not chambermaids and peasants.
A Satire of Tulip Mania, painted by Jan Brueghel the Younger circa 1640.
“I only identified about 350 people who were involved in the trade, although I’m sure that number is on the low side because I didn't look at every town,” says Goldgar. “Those people were very often connected with each other in various ways, through a profession, family or religion.”
What really surprised Goldgar, given Mackay’s tales of financial ruin, was that she wasn’t able to find a single case of an individual who went bankrupt after the tulip market crashed. Even the Dutch painter Jan van Goyen, who allegedly lost everything in the tulip crash, appears to have been done in by land speculation. The real economic fallout, in Goldgar’s assessment, was far more contained and manageable.
“The people who stood to lose the most money in the tulip market were wealthy enough that losing 1,000 guilders wasn’t going to cause them great problems,” says Goldgar. “It’s distressing and annoying, but it didn’t have any real effect on production.”
While tulip mania and the ensuing crash didn’t flatline the Dutch economy as Mackay asserted, there was still some collateral damage. From court records, Goldgar found evidence of reputations lost and relationships broken when buyers who promised to pay 100 or 1,000 guilders for a tulip refused to pay up. Goldgar says that those defaults caused a certain level of “cultural shock” in an economy based on trade and elaborate credit relationships.
- Dave Roos
Mar 23, 2015 · All of this checked the growth of colony-wide per capita income after a seventeenth-century boom. The American colonies led Great Britain in purchasing power per capita from 1700, and possibly from 1650, until 1774, even counting slaves in the population. That is, average purchasing power in America led Britain early, when Americans were British.
- Peter H. Lindert, Jeffrey G. Williamson
- 2015
6 days ago · Small-government advocates claim that the idea of limited government is foundational to the United States. But the Founding Fathers – including the ones who appear on today’s US$1 and $10 ...
Oct 1, 2008 · The global crisis. A list of the major revolts and revolutions around the world between 1635 and 1666 (see facing page) demonstrates that, although Western Europe and East Asia formed the heartland of the “General Crisis,” the Mughal, Russian, and Ottoman empires, like the European colonies in America, also experienced episodes of severe political disruption.
