Most people have heard of James Surowiecki’s book The Wisdom of Crowds, but I wonder how many have heard of Scottish journalist Charles Mackay’s Extraordinary Popular Delusions and the Madness of Crowds.
It was published in 1841 and in it Mackay references tulip mania in Holland some 200 years before his time as an example of the irrational behaviour that can take hold of normally sane and sensible people.
When rampant tulip speculation was at its height bulbs could change hands up to 10 times a day. Mackay notes one sale in which just 40 bulbs were sold at a cost 100,000 florins – at a time when a skilled labourer might be earning 150 florins a year.
Inevitably boom was followed by bust and many speculators were ruined.
At the Skagit Valley Tulip Festival 60 miles north of Seattle bunches are a much more reasonable $5 each and a walk around the fields where they grow will imprint itself on the memory long after the flowers have faded.