50 Things That Made the Modern Economy · BBC World Service

Tulips

January 27, 2020·10 min·1 clip

A sailor accidentally ate a tulip bulb worth over a million dollars today, thinking it was an onion for his herring.

The episode opens with the anecdote of a Dutch sailor who unknowingly stole a rare Semper Augustus tulip bulb worth over a million dollars in modern terms, believing it to be an onion. This story comes from Charles Mackay's 1841 book Extraordinary Popular Delusions and the Madness of Crowds, which has shaped popular understanding of tulip mania for nearly two centuries. The host signals early that Mackay's colourful tales are probably false, and that the true history is both more mundane and more interesting. Tulips arrived in Europe in the 16th century among a wave of new plants and quickly became status objects for the newly wealthy Dutch merchant class. Some tulips, infected by a mosaic virus, developed intricate multi-coloured patterns on their petals and were especially prized. The botanist Carolus Clusius, who had generously shared his specimens, suffered repeated theft of rare bulbs from his gardens, including plants later discovered in a Viennese aristocrat's garden. By the early 1600s, tulip prices were rising steadily, driven partly by genuine aesthetic appreciation and partly by speculative demand. At peak mania, a single bulb of Semper Augustus fetched 5,200 guilders — more than three times what Rembrandt charged for the Night Watch and twenty times a skilled worker's annual income. The host uses the concept of the racehorse analogy: rare bulbs produced valuable offset bulbs, so the price reflected not just the flower itself but its reproductive potential. Dutch statesman Adriaan Pau, the closest equivalent to a prime minister, built a garden of mirrors to make his few rare tulips appear more numerous, because even he could not afford to fill the space. In February 1637, prices collapsed suddenly. The greater fool theory holds that bubbles burst when there are no longer enough optimists willing to buy at ever-higher prices. However, the host presents an alternative hypothesis: February is when tulip shoots emerge in Haarlem, and traders inspecting gardens may simply have seen that the crop would be abundant, reducing the perceived scarcity of rare varieties. The fallout was real but limited — many contracts were promises to pay for bulbs in future, and there was confusion about who owed what, but the overall Dutch economy remained prosperous. The episode then reframes tulip mania in a longer history of bubbles, noting that later ones were far more damaging. Charles Mackay's account is turned back on itself when the host reveals that Mackay himself publicly encouraged investment in British railway stocks during the railway mania, which the host describes as perhaps the greatest boom and crash in history. When that bubble burst and a new edition of his book was published, Mackay said very little about his own role. The episode ends by noting the difficulty of recognising a bubble from inside one.

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