By Kash Radocha 

A ship sails across the Mediterranean sea, having departed from Turkey and en route to Holland. When it arrives in a Dutch harbor, the buyer of the shipment discovers a strange plant tucked away inside his crates, most likely a gift from his Turkish vendor. Unsure of what it truly is, he plants a few in his vegetable garden, until in the spring, a wide array of colored flowers pop up and baffle him. It was through a visitor of this man’s garden that they were identified as tulips; thus, the true cultivation of the flower began, and it was studied by a man named Carolus Clusius. Native to the Middle East, the tulip was a beautiful flower unknown in Europe prior to the 1500s. When it first arrived, most did not know what to make of it; some thought it was an allium species, and promptly ate it. However, this plant would soon play a much more significant role in Dutch history. 

The 1634–1637 collapse of the Dutch tulip market has been widely characterized by historians and economists as the first speculative bubble in history, in which asset prices–in this case, the contract prices of newly introduced tulips–far exceeded their intrinsic valuation. While this assessment is undoubtedly accurate, there actually lies a deeper and evidently overlooked rationale that can be critically attributed to the collapse. This paper dives into the many circumstances using a variety of sources surrounding the tulip trade, the economic collapse of the market, and the underlying causes that ultimately led to the collapse of the Dutch economy. In doing so, it explores a separate answer that places blame not only on risky trade behaviors, but also emphasizes the flowers being traded as the main variable. In this essay, I will argue that the Dutch economy surrounding the trade of tulips collapsed not simply because of the risk of speculative market trading, rather the tulips themselves presented as a causality for the inhibition of the trade because of a virus affecting their ability to reproduce.

Judith A. Lesnaw and Said A. Ghabrial cite in their journal that the botanist credited with being the father of tulips, Carolus Clusius, began planting some of the first tulips in Holland, studying the plant and writing down his observations [1]. Clusius was reluctant in selling his findings; mainly because in addition to the normal, solid color bulbs he was growing, he was also growing an extremely strange and special variant, for the true nature of the flower’s existence was unknown. Nobody knew their genetic composition and the reasons for the captivating pattern, and only looked on to their beauty. So, because of his resistance, many resorted to breaking into his garden and stealing rare plants to reproduce for their own profit. The widespread cultivation of the flower can be attributed to this thievery. According to Mike Dash, author of the book Tulipomania: The Story of the World’s Most Coveted Flower & the Extraordinary Passions It Aroused, the spreading of the tulip gained so much momentum that “by 1630 professional flower growers could be found in almost every town in the Dutch Republic” [2]. 

However, its exotic introduction can account for its success among investors. Since it was a new, gorgeous introduction into European life, many coveted the flower. But, looking back to Clusius reveals a different answer. Many of the bulbs Clusius planted had sprung up with captivating patterns, which he described as the flowers being “broken.” To consider a flower broken, the petals of the tulip had to have strayed from a solid color and developed a pattern of streaks of an alternating color. Dash claims that the earliest observations of the phenomenon date to about 1580, but probably existed previously [3]. Much later, it was discovered that a virus was the cause for these patterns. At the time, however, his reluctance to sell this variant of the flower seemed to be because his was the only garden in Europe in which it could be found. Clusius likely had his speculations since he had studied botany for most of his adult life; he may have been reluctant to sell as he was still studying the cause for these varying patterns. Regardless, the flowers were stolen, and soon these unique flowers spread rapidly and were sold to the highest bidder. The economy took a turn for the worst for traders years later in 1637 when the entire trade eventually collapsed. Historians credit the failure to investors’ inability to pay the growers the high price originally agreed upon previously, but a major factor seems to be overlooked in terms of the trade failures. Ultimately the true failure of the entire trade rested in the tulips themselves, because the virus that caused their unique appearance had catastrophic consequences on the flowers, unbeknownst to the Dutch at the time. 

For a time the flowers sold no matter their color because of the high demand, since tulips were new to Europe and cultivated mainly in Holland. However, as the popularity of these “broken flowers” took Holland by storm, the value of tulips changed drastically, and evidently so, broken tulips came out on top for their unique and rare beauty. Economist Peter M. Garber of Brown University states that the value of solid colored bulbs was non-existent, except for the chance that they might break [4]. He also describes the flowers of the trade, and maintains that the most important varieties of tulips were in fact diseased for over two centuries of European cultivation. The Amsterdam Tulip Museum records that “at the height of Tulip Mania, it was the ‘broken’ flowers that had speculators running wild. Viceroy, Admiral Van Der Eijk, the legendary Semper Augustus… they all featured a distinct, broken pattern.” [5]. This pattern, as described by the Museum, was the result of a virus inflicted against different species of tulips. The best visual of the breakage could be found on the breed Semper Augustus, immortalized in paintings by various European artists. Its petals were coated in brilliant red and streaked with white stripes that looked similar to soft brushstrokes by a paintbrush, and each bulb was slightly different from the rest. It is understandable as to why this flower was the most coveted of them all, since it was not only rare but also uniquely gorgeous [6].

However, the existence of these broken tulips led to serious ramifications. Despite the continued cultivation of these diseased flowers over numerous generations, the virus caused serious damage to the flower’s health and spread to other plants if the tulips were grown relatively close by. The Museum notes that “spread by aphids, this tulip breaking ‘mosaic’ virus infects the bulb and causes the flower to ‘break’ its lock on a single color” [7]. Aphids are small insects that rely on plants and flowers for nutrients, just like many other insects. These aphids discussed are the facilitators of what are known to be potyviruses: “Dekker et al. characterized ‘five viruses that cause color breaking in tulips and concluded… that they are distinct potyviruses’” [8]. The authors go on to elaborate on the effects of the individual viruses and conclude that they are not solely physical. Rather than the virus exclusively affecting the pigmentation of the petals, it was also inhibiting the flower’s ability to reproduce in sufficient and healthy quantities. At the height of the Dutch tulip trade, the facts about tulip breakage were not well-known, and the only evidence of the virus was physical. Lesnaw and Ghabrial specify that in terms of the tulip’s health, the potyviruses reduced flower size, pollen production, and seed set [9]. With each generation of infected flower produced, the offspring were gradually weaker and less abundant than the parent’s generation. After many generations, this led to early withering in flowers that were bred too quickly despite their sickly state and resulted in varieties of some tulips no longer growing. This caused major issues for growers since their coveted flower could no longer be sold. Historian Anne Goldgar describes that sales of the flowers came to take the form of contracts for future deliveries [10]. If the grower was lucky, their intended buyer would have already paid for the flower, but would never actually receive a shipment because the flower was never grown. When the deliveries were never fulfilled, both parties experienced financial problems. Thus, the very virus that made a particular tulip species so valuable also caused the species to be physically vulnerable and impaired the grower’s ability to meet demand. 

Reproducing the virus to grow the much-coveted tulips was tricky for growers largely because of the lack of scientific knowledge at the time. Growers had no way of knowing how the virus spread, when it would take hold, or when the virus would cause the flower to wither away. Further, Garber notes that planting the seed of an infected flower will only result in a common flower because the virus infects only the bulb [11]. The downfall of the entire trade could be largely attributed to this inability to determine if the infection would take hold of the offspring of the infected parent. Many growers typically replanted the daughter bulb of the parent tulip, simply because it would bloom once again the following spring. Growers favored this method because seeds took multiple years to finally bloom. The Amsterdam Tulip Museum further supports the statement that every time an infected flower was replanted, its offspring were less abundant and even more sickly than the parent. Eventually, the tulip would have completely died, leaving no bulb to replant, meaning that broken tulips could no longer be reproduced quickly. It would take years to grow healthy flowers from seeds and transmit the virus to them, which would be far too long for any sustainable market focusing solely on the tulip. They reinforce this by stating: 

Over time, the virus weakens the bulb and inhibits proper reproduction. WIth each new generation, the bulb grows weaker and weaker, until it has no strength left to flower and withers away. It is for this reason that legends of old, like the Semper Augustus, have gone extinct. It is also why many growers today view the breaks not as a benefit but as a danger that must be purged. [12]

This still did not prevent growers from planting the flower seeds, so the entire tulip craze evolved into a highly speculative market viewed as gambling [13]. This worked for a short period of time at the height of tulip mania, spanning from 1634 to 1637. However, due to the economic collapse of the market in 1637, it became clear that this form of trading was simply not sustainable.

One factor to consider in the collapse of the tulip trade was the rapid growth of bulb values. Initially, prices for the bulbs began to rise slowly as more bulbs were introduced into Europe and more buyers coveted this new rarity. Regardless of the reproductive effects of the virus, buyers demanded these broken tulips simply for their beauty and offered extremely high prices for them. In Dutch currency at the time, one florin, also known as a guilder, equaled about $150 in today’s money [14]. A single bulb of the rare Semper Augustus sold for at least 3,000 guilders or $150,000 today [15]. That means that the best tulip cost upwards of $750,000. Under normal circumstances, the wealthy would have been typically the only class that could even begin to afford these high prices. However, the craze for tulips infected every class. According to Hayes, the newspaper, The Library of Economic and Liberty, wrote, “The rage among the Dutch to possess [tulip bulbs] was so great that the ordinary industry of the country was neglected, and the population, even to its lowest dregs, embarked in the tulip trade” [16]. Since tulips were so deeply integrated into Dutch life, members of the lower classes who had hopes of gaining wealth or acquiring rare beauty had no choice other than to join in on tulip mania. They viewed it as an easy access to wealth and status, as instead of the commodity being traded being an extremely rare or exquisite item, it was a plant that could be reproduced in the simplest of gardens. These members of the lower classes began making promises of economic gain for the growers, such as entering into financial contracts with no actual repercussions, in return for the exquisite flowers: “Bulbs, which have to stay in the ground for most of the year, naturally lent themselves to future trading with the demand fueled by a highly unequal society looking for rare status symbols” [17]. These promises were never fulfilled as in 1637, the entire economic bubble surrounding tulip mania burst and left growers in economic despair. The demand for tulips from every economic class further exacerbated the damage of the market crash, but the idea of a speculative future market was new at the time and no one had foreseen the consequences. 

When they bloomed in the spring at the height of tulip mania in 1637, growers were petrified because they could not meet demands even though they had already been paid. This gamble was taken by the growers. It was also not just the quantity of tulips that caused growers to not meet their demands, but also the type of tulip. As a separate form of trust within this trading, Dash claims buyers had no chance of inspecting the bulbs before they bloomed [18]. This holds true as, again, bulbs needed to remain in the ground for most of the year before they bloomed. By the time they actually bloomed, buyers would probably have no chance to actually get their hands on any as others would have already invested prior to their growth. So, the type of tulip was critical to the amount they were investing, as breeds like the Semper Augustus had an extreme value ratio compared to simple solid color breeds. This gamble was taken by the buyers. Evidently, both parties in the trade took high risks, so in a way, the people of the trade were liable to the economic collapse, but not without the tulips. 

Hayes even states that buyers informed growers that they could not pay the price previously agreed upon, which caused the market to fall apart. Even so, if this faulty trust did not occur and buyers stayed true to their words about their investment, it was only a matter of time before the blame would have been placed on the growers. In the end, the trade would have collapsed at some point because of the virus. The Amsterdam Tulip Museum reinforces the statement that every time an infected flower was replanted, its offspring were less abundant and even more sickly than the parent. Eventually, the tulip would have completely died, leaving no bulb to replant, meaning that broken tulips could no longer be reproduced quickly. It would take years to grow healthy flowers from seeds and transmit the virus to them, which would be far too long for any sustainable market focusing solely on the tulip. The Amsterdam Tulip Museum supports this by stating: 

Over time, the virus weakens the bulb and inhibits proper reproduction. WIth each new generation, the bulb grows weaker and weaker, until it has no strength left to flower and withers away. It is for this reason that legends of old, like the Semper Augustus, have gone extinct. It is also why many growers today view the breaks not as a benefit but as a danger that must be purged. 

After the collapse of the peak prices during tulip mania, it took years for the tulip economy to settle. Holland still grew and cultivated tulips in greater numbers than the rest of Europe, but not to the same extent seen during the late 1630s. Dash describes the life of professional growers after the entire ordeal: 

This steady business was of inestimable value to the florists, who certainly must have lost a good proportion of their customers to the mania, and from scattered hints it appears that the bulb growers did what could to keep supply of the most favored species low. They thus contrived to maintain prices at a decent level for years, cannily resisting the temptation to breed more tulips and risk flooding the limited market that remained.

Since the collapse, some growers were still able to produce flowers. It is fortunate for the country that many still clung to growing and selling tulips, andt today the Netherlands still relies heavily on tulips for their trade market. Additionally, the flowers of the current trade are almost all completely different from those during tulip mania times. It took centuries for historians to understand why the tulip crop had failed so catastrophically. The phenomenon of “tulip breaking” was still unknown, and probably less widespread than it had been before. The Semper Augustus, one of the most beautiful species, was probably completely extinct along with many other broken breeds, and others managed to survive long enough to be studied as technology advanced greatly. The Amsterdam Tulip Museum cites that “it was not until 1928 that scientist Dorothy Cayley discovered the cause [of breaking] to be a virus.” [19]. The virus was dubbed the “mosaic virus” for its physical effects on the tulip as well as other plants that it ended up affecting. The tulip still remains as the most prominent example of the mosaic virus, since the visuals are most clear on flower petals as opposed to the leaves of other plants. Its effects were studied further and finally, after centuries, the Dutch had their answer behind tulip breaking: Cayley, having studied the flowers intensively, revealed it to be a negatively impactful virus against the flowers, which inhibited reproductive success and caused the breaking of pigmentation in their petals, and can ultimately be attributed to the eventual extinction from overbreeding of sickly bulbs. The Tulipmania Art Journal states that since tulip cultivation is still extremely important to the Dutch economy, they promptly banned cultivation of infected bulbs to protect plantations of tulips [20]. This led to even further extinction of infected breeds, and today very few remain in private conservatories and breederies. Some botanists outside of Holland still grow and produce infected breeds, simply because of their beauty and the higher prices offered to them. Still, the severity of tulip mania was never truly reflected again in today’s society, despite some broken tulips still being grown and sold.

Ultimately, it can be concluded that although the nature of a speculative market caused the economic collapse of the Dutch tulip craze, the true fault of the entire market rested in the flowers themselves. They were infected with a beautiful yet dangerous virus that inhibited proper reproduction of the flowers, so as multiple generations were bred in a short span of time,  fewer and fewer tulips actually bloomed. This held true especially for the rarest breed, Semper Augustus, which promptly went extinct and has been immortalized in paintings. The beauty of these tulips captivated many and took Europe by storm. Growers could not know that what caused the beautiful patterns of the tulip was actually a virus and that the trade was doomed from its beginnings. 

Footnotes

[1] Lesnaw, Judith A. and Said A. Ghabrial. “Tulip Breaking: Past, Present, and Future.” Plant Disease, vol. 84, no. 10, 2000, https://apsjournals.apsnet.org/doi/pdf/10.1094/PDIS.2000.84.10.1052. 1053.

[2] Dash, Mike. “Tulipomania: The Story of the World’s Most Coveted Flower & the Extraordinary Passions It Aroused.” 84.

[3] Dash, “Tulipomania,” 61.

[4] Garber, Peter M. “Tulipmania.” The Journal of Political Economy, vol. 97, no. 3, 1989, The University of Chicago Press. https://ms.mcmaster.ca/~grasselli/Garber89.pdf. 542.

[5] Amsterdam Tulip Museum. “Broken Tulips: The Beautiful Curse.”

[6] Amsterdam Tulip Museum.

[7] Amsterdam Tulip Museum.

[8] Lesnaw and Ghabrial. “Tulip Breaking.” 1055.

[9] Lesnaw and Ghabrial. “Tulip Breaking.” 1056.

[10] Goldgar, Anne. “Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age.” University of Chicago Press, 2007. 2.

[11] Garber. “Tulipmania.” 542.

[12] Amsterdam Tulip Museum.

[13] Lesnaw and Ghabrial. “Tulip Breaking.” 1053.

[14] Hayes, Adam. “Dutch Tulip Bulb Market Bubble.” Investopedia, Dotdash, 30 Oct 2021, https://www.investopedia.com/terms/d/dutch_tulip_bulb_market_bubble.asp.

[15] Lesnaw and Ghabrial, “Tulip Breaking.” 1053.

[16] Hayes, “Dutch Tulip.”

[17] Peterson, Deborah. “A Brief History of Financial Bubbles.” Insights by Stanford Business, Stanford Graduate School of Business, 24 Nov. 2014, https://www.gsb.stanford.edu/insights/brief-history-financial-bubbles.

[18] Dash, “Tulipomania,” 114.

[19] Amsterdam Tulip Museum.

[20] Tulipmania Art. “Tulips of Tulip Mania Times are Called Broken and are Illegal in the Netherlands.” Tulipmania Art Journal, 1 Oct. 2020, https://www.tulipmania.art/broken-tulips-and-are-illegal-in-the-netherlands/.

Works Cited 

“Broken Tulips: The Beautiful Curse.” Amsterdam Tulip Museum, 5 Dec. 2017, https://amsterdamtulipmuseumonline.com/blogs/tulip-facts/broken-tulips-the-beautiful-curse. Accessed 16 Nov 2021. 

Dash, Mike. “Tulipomania: The Story of the World’s Most Coveted Flower & the Extraordinary Passions It Aroused.” Crown, 30 Jan. 2001, pp. 42-114. 

Garber, Peter M. “Tulipmania.” The Journal of Political Economy, vol. 97, no. 3, 1989, The University of Chicago Press, pp. 535-560, 

https://ms.mcmaster.ca/~grasselli/Garber89.pdf. Accessed 17 Nov. 2021. 

Goldgar, Anne. “Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age.” University of Chicago Press, 2007, pp. 1-7. 

Hayes, Adam. “Dutch Tulip Bulb Market Bubble.” Investopedia, Dotdash, 30 Oct 2021, https://www.investopedia.com/terms/d/dutch_tulip_bulb_market_bubble.asp. Accessed 16 Nov. 2021. 

Krawisz, Daniel. “How the Free Market Works.” Mises Daily Articles, 27 Oct 2009, https://mises.org/library/how-free-market-works. Accessed 17 Nov. 2021. 

Lesnaw, Judith A. and Said A. Ghabrial. “Tulip Breaking: Past, Present, and Future.” Plant Disease, vol. 84, no. 10, 2000, https://apsjournals.apsnet.org/doi/pdf/10.1094/PDIS.2000.84.10.1052. Accessed 16 Nov. 2021. 

Peterson, Deborah. “A Brief History of Financial Bubbles.” Insights by Stanford Business, Stanford Graduate School of Business, 24 Nov. 2014, https://www.gsb.stanford.edu/insights/brief-history-financial-bubbles. Accessed 17 Nov. 2021. 

Tulipmania Art. “Tulips of Tulip Mania Times are Called Broken and are Illegal in the Netherlands.” Tulipmania Art Journal, 1 Oct. 2020, 

https://www.tulipmania.art/broken-tulips-and-are-illegal-in-the-netherlands/. Accessed 8 Dec. 2021.