In 1634 a fairly miraculous event occurred in the Netherlands. The beginning of the first recorded economic bubble was taking place. This phenomenon occurred around a single tulip bulb known as Semper Augustus. The bulb in question produced a unique, beautifully patterned flower due to a fairly rare disease. Although the bulbs were easy to reproduce, the hoarding actions of a select few allowed for the market price of the bulbs to jump to roughly 5,500 Dutch guilders (approximately $77,000 in today’s dollars) for a single bulb by the height of the speculation.
Rapidly, funds from all around started flooding the market as individuals quickly sold off other assets to get their hands on the coveted Semper Augustus. In 1637, almost overnight, the market collapsed leaving many investors holding rare bulbs that were not even worth 10% of the prices paid, creating an elongated economic distress.
However business savvy the Dutch were at the time (think Dutch West India Company), one could almost forgive the speculators of the Semper Augustus, if for no other reason, than that the study of economics had not been fully developed at the time. Adam Smith would not even write, “The Wealth of Nations” for another 140 years.
The disconcerting notion here is not that investors in the 1630’s were spending absurd amounts of money on something that they should have known better about. It is that civilization in western society is repeatedly making the same mistake. Whether it be investing in homes and vehicles that we cannot afford, living off credit cards instead of saving for our future or voting for politicians that we know nothing about we, as a collective, are making misinformed decisions time and time again with no plausible reason besides pure ignorance.
There is no reason for us to continue the unnecessary toil of Sisyphus when Prometheus gave us the means to break rocks.