Talk:Tulip mania/Archive 1

This is an archive of past discussions. Do not edit the contents of this page. If you wish to start a new discussion or revive an old one, please do so on the current talk page.

Archive 1

Archive 2

older comments

A rough article based entirely on Charles Mackay's book (referenced at the bottom). Lots of room for improvement, both in terms of facts and readability. -- S

MacKay's book is generally reckoned to be factually inaccurate unfortunately (although it is a good story!). I will look around for other sources. Justinc 10:25, 7 Apr 2005 (UTC)

I added the "competing view" section; it's been mentioned in the press but I don't know how prevalent it is among scholars. Feel free to change the title (or any other part, for that matter.) Korny O'Near 02:47, 17 July 2005 (UTC)

I feel there are a couple of contradictions within the article. If Mackay is taken as the main source, then the actual speculative bubble burst in November 1636 instead of February 1637, and that is reflected by some figures in Garber's article (for instance, the fall of Gouda tulip prices ca. november 1636) even though Garber focuses only on the early 1637 boom and crash of the futures market. TAs for other sources, quite a few are quoted in Garber's article (from trader diaries to Posthumus and even Mackay). Thompson and Treussard mention both crashes. --ToohrVyk 18:44, 14 March 2006 (UTC)

This page is absurt even everyone knows in Turkey that between 15th-17th centuries tulips were forbidden to export by any means, an act would be sentenced to death. tulip was a very honorable plant for Turkish hearts the first Turkish botanic book was writen on Tulip centuries before Mendel. The fact is that Tulip was smuggled as onion by some dutch merchants in 16th or 17th century inside a sarık(turban) where its name comes from because turks never used word "tulip" for "lale" and the tulips which were smuggled were not wild ones but engineered by palace and private lalezars (tulip cultivators) and where is the patent rights of developed europe for those cultivations... ops i forgot when it comes to them patent doesnt work( look for thermos)

Is it time to turn this article around?

It looks to me like the "standard view" and the "competeing view" have now switched places. McKay seems to have extremely overstated the cases for a bubble and caused an "extraordinary popular delusion" of his own - according to the modern scholarship presented here. Is it time to put the "overstatement" view as the standard and the bubble view as the alternative? Smallbones 14:49, 14 May 2007 (UTC)

Someone's changed "competing views" to "dissenting views." As stated immediately above I think that's now a backward viewpoint. Smallbones (talk) 02:00, 5 March 2008 (UTC)

GA Review

This review is transcluded from Talk:Tulip mania/GA1. The edit link for this section can be used to add comments to the review.

Protonk Comments

Sources. References cited are authoritative. I would add Ch. 11 of The Origins of Value, but that is just a quibble.

Lead the lead is too long. the MOS gives rough guideline for length and with the article as short as it is, the lead should be shorter. I'm looking mainly at the third paragraph.

Images Image copyright tags check out.

Wording overall very good. some adjectives and adverbs are unnecessary, but good overall.

Information This is an exceptional article. Well sources, clear, and informative. the article does a good job placing the subject in context and does an excellent job of presenting the subject itself.

Room for improvement There is a probably a little too much weight placed on specific modern explanations for the bubble. I don't mean those explanations are wrong or unimportant. I mean that in the context of the whole article, large chunks are devoted to individual explanations authored very recently. It probably behooves us to edit those sections down somewhat.

Asking for Second Opinion In my view, this article meets all the criteria, but I'm going to ask for a second look in order to be sure. Protonk (talk) 04:47, 24 July 2008 (UTC)

Thanks Protonk for jumping on this so quickly! I will work on trimming that lead down. Regarding too much weight: This is an astute observation, but I'm not sure how to get around it. I've already worked very hard to keep this article short, it's less than 25k of readable prose (not easy that--three of these sources are book length!) and these are complicated explanations. Much of the length is not from repeating Goldgar, Garber and Thompson's arguments, but from explaining rather complex economic concepts. I could shorten this by removing the explanations, but this would only serve to make an already short article inaccessible to people unfamiliar with the subject matter. I don't think that would be a good strategy. That's actually something of a wrong impression, however, that they're devoted to explanations authored recently. The three recent authors summarize all the past scholarship as well. So it's actually not as simple as three recent explanations, but collations of all sorts of information throughout history, by three different authors studying the subject recently. I think that's a relevant distinction. --JayHenry (talk) 05:33, 24 July 2008 (UTC)

Yes, I mentioned the length and "weight" but didn't elaborate because I don't have a very good method to do so without eliminating accesibility or giving too much weight to Mackay. Upon some further reflections I have three suggestions:

Break off the "Social mania and legacy" subheader into an H2 header entitled something like "the legacy of social mania" or some such. This section could be expanded slightly.
Subsections (rational and legal explanations) should probably be retitled. Portions of the rational explanations subsection can better serve the article above in the "modern views" introduction. It seems to me that the rational explanations section is advancing a few different positions: gains/losses weren't necessarily realized, scope of speculation was narrow, and comparisons of similar products. Only some of these are "rational explanations for the bubble". Some of them are serious, important claims on the subject in general but probably belong outside a section entitled "rational expectations.
Perhaps (following on the above suggestion) we should follow the layout of the "modern views" more organically. The quote discusses concerns about importance and extent of the mania, perhaps we should order the section along thosse lines (or something like it). Many of Garber's claims speak to the limited extent of the phenomena, but all of Thompson's claims appear to be about the mania's importance as an anomaly.

Just some thoughts. Protonk (talk) 06:39, 24 July 2008 (UTC)

P.S. The MOS guideline is Wikipedia:LEAD#Length, and I'm okay per MOS. I am happy to trim this, but I don't think I've actually run afoul of MOS here. --JayHenry (talk) 05:37, 24 July 2008 (UTC)

Great recent changes and very useful GA review.

Some minor stuff:

The 3rd and the last pix are purely decorative, but don't really detract much. I haven't read any Shiller lately, but I find it hard to believe that (approx) "It's generally considered to be the 1st speculative bubble." Ida thunk that as long as there were markets, that after the fact some market movements were viewed as "irrational." Maybe better "one of the first documented bubbles", but...

The suggestions on the headings are good, but it will take some work to find better ones. I like the word "Legacy" for the last subsection. The legacy here may be more important than the event.

I think perhaps that some bow to the greatness of Mackay should be made, if only to placate those editors who might think that this is too strong a "debunking." The Tulip bubble is an article of faith to some!

The table from Garber - Is he really saying that these exact goods were exchanged, or only that money of the value of these goods was paid (a basket of goods reflecting inflation). The footnote suggests, as my memory suggests, that it is the later.

Florins should be used consistently throughout, with a single reference to guilders made (I've made this change). Both are/were used but florin is the older term and I think Mackay uses it. "Guilder" refers to "golden" florins. The modern currency abbev. DFL refers to "Dutch FLorins."

Excellent work.

BTW, I do not consider myself to be an uninvolved reviewer.

Smallbones (talk) 20:45, 24 July 2008 (UTC)

As far as the "first" speculative bubble is concerned, it probably is that in the European world. Check out the web available text from Origins of Value (linked above). I'm guessing (really, this is speculation) that if there were a bubble in financial markets previous to this of great significance, it would have been noted. And I think that--supporting the notion that this is the first "speculative bubble"--the use of futures contracts as financial instruments was practically non-existent in the west prior to the dutch markets. I say practically because a number of interesting futures-like instruments existed in piecemeal fashions, but nothing resembling a working market. And the introduction of futures is partially (IMO) what raised the hackles of many observers. That's all conjecture on my part, so take it for what it is worth. Protonk (talk) 21:09, 24 July 2008 (UTC)

I like that reorganization suggestion Protonk. I've started it just now and will mull a bit and do more. For some reason I can't find my copy of Shiller, but he actually makes an argument along the lines that bubbles can't really form without a media in which they can be disseminated. A bubble without documentary evidence would basically be near impossible, he says. I'm not sure I buy that, and Shiller himself does provide some other examples of events that have features of bubbles (but I can't remember what they were... I'll find the book eventually). But actually, the point I wanted to make is more limited: that it's generally the first event studied in the speculative bubble literature... just need to think of a way to phrase it. Agree about bowing a little deeper to Mackay. The table (of pigs, sheep, wine, etc.) is originally from Mackay who claims those goods were actually exchanged for a bulb. This fix is correct, btw. Good catch! Agree about florins too, thanks! --JayHenry (talk) 23:16, 24 July 2008 (UTC)

I will try to flesh out some more about tulips in the appropriate section, but it is a hellish few days coming so it will be sporadic. Cheers, Casliber (talk · contribs) 15:00, 25 July 2008 (UTC)

I've unexpectedly been called away from town. If it's necessary to put this on hold, please be aware that I won't be able to respond to anything for a few days. --JayHenry (talk) 23:43, 25 July 2008 (UTC)

Second Opinion

I think this article is ready for GA status. But with one caveat.

I would like to note that not all economists are convinced that Tulip mania did not constitute a bubble. There is no consensus on this issue. Given the sparse data, showing that it is possible for actors to be rational, and still have prices follow their historical trajectory, is not the same as proving that the actors were rational. Further, certain types of bubbles can exist even with rational actors. Lets not be so quick as to completely rule out the interpretation of historical contemporaries, based on a few studies done nearly 400 years later.

I've edited the article somewhat to reflect the continuing uncertainty, but I think it could use another going over to make sure that it does not state definitively that there was no bubble.

lk (talk) 07:48, 1 August 2008 (UTC)

I will work on these points. I think the sparsity of the data is especially important to note. I did not intend to write this article as stating definitively that no bubble whatsoever occurred and I will give it another pass, as that is not an intentional impression. As a note, the dueling interpretations are 250 years later and 400 years later. No historical contemporaries wrote accounts of the Dutch economy being ruined, nor did the concept of a speculative bubble exist. They wrote that prices rose very high (to them unimaginably high) and then fell rapidly. Nobody disputes that. --JayHenry (talk) 19:20, 1 August 2008 (UTC)

I've learned that newer editions of Kindelberger apparently have a chapter devoted to Tulip Mania, and so I can use this to flesh out the other perspective. I have ordered it off Amazon and it should be here in a few days. --JayHenry (talk) 22:47, 2 August 2008 (UTC)

I think the recent edits more than address my reservations. JayHenry has done an excellent job here, and I fully support this article for GA status. lk (talk) 15:58, 5 August 2008 (UTC)

Third Opinion

The article does lean too heavily on a single analysis to "disprove" (or rather, dispute) the mainstream opinion of Tulip mania. The analysis argues that the original account was a "morality tale" designed to argue against the excesses of capitalism. But the new analysis, which attributes the bubble (or whatever we can call it) to government intervention, simply offers a new morality tale by substituting one enemy for another. Crucially, while the analysis points to the government intervention as a reason prices were driven up, I found no information to explain what caused the subsequent decline.

It's important to offer both views, but I find it rather odd that a single analysis borne out of the era of Reaganomics should suddenly upend centuries of previous views on the matter. My two cents.

--32.137.115.120 (talk) 18:55, 1 August 2008 (UTC)

How are Dash, Garber, Goldgar and Thompson a single analysis? I'm afraid I can't really address your concern because none of these four analyses are borne out of Reaganomics. (And please point me to the modern refutation of the recent economics on the topic. I'm not willfully ignoring something and I have no ulterior motive in presenting the article this way. I'm honestly unaware of any modern scholarship you seem to be saying I've omitted.) Thompson's point is not about government intervention, nor a normative judgment that this legal change should not have happened. He's just saying that growing certitude of a legal change from a futures contract to an options contract would have this effect on price. Thompson argues that prices collapsed when the change occurred (February) and it became obvious that no contracts were going to be honored. If someone points to this as supporting evidence for deregulation (the only plank of Reaganomics that's conceivably relevant), then they have completely and utterly misunderstood Thompson. --JayHenry (talk) 19:12, 1 August 2008 (UTC)

You correctly guessed that I am referring to Thompson's analysis. The section that describes it has been greatly improved, but I do think closing the article by citing a Slate columnist's musing about the status of the Tulip craze as an analogy lacks encyclopedic weight and greatly overreaches beyond the current academic debate. Thompson's analysis was narrowly focused on market efficiency and can't be said to undo the moral implications of, for example, the elites' decision to have the government intervene on the basis of their own fears. By all means cite modern research, but please remove the opinion of a columnist — one who admits he doesn't know enough to be able to tell whether Thompson's assessment is accurate at that. --32.137.115.120 (talk) 21:06, 1 August 2008 (UTC)

It's interesting you read it that way. I included Daniel Gross for two reasons, 1) because the term is of particular interest because of its widespread use in financial journalism, and Gross speaks directly to this issue and 2) I included it as a skeptical voice. Gross isn't saying they are correct, only if they are correct and his uncertainty was the reason I concluded with a quote from him (as a Reliable Source voicing the exact reservations that you're voicing!). Again, I'm not here as an advocate of the efficient market hypothesis nor to spread an anti-regulation/intervention POV. I'd be willing to move Gross from, I guess "having the final word", but see no reason to remove him entirely. --JayHenry (talk) 22:47, 2 August 2008 (UTC)

As a note, I think that several columnists have earned the right to 'peer into the walled garden' of economic arcana. We can't reject the views of non-specialists on the basis that they don't share the same qualifications. there is an ongoing argument about this in the legal profession (regarding the competence of reporters on the court beats) and the answer (at least in that case) is resoundingly in favor of the journalists. Good, smart journalists can look at the economic world and draw interesting conclusions (or better, explicate and summarize the conclusions of the experts properly). Granted, most journalists aren't smart or good, but there are a few who jump right to mind. Protonk (talk) 00:13, 5 August 2008 (UTC)

Passing

I've promoted this article as the 2nd opinion was satisified with the changes made. I think that the layout changes can be made at the leisure of the editors and that once those changes are made we can start pointing this article toward the path of FAC. Great job to jay henry. Protonk (talk) 17:23, 5 August 2008 (UTC)

Headache

I was looking to expand the tulip bit from the Dash book and its account of tulips coming to holland is a little different, however I note the Goldgar and I wonder who has the more reliability. Dash reports that in 1562 a ship brought a cargo of eastern fabrics to a Merchant in antwerp, and in the cargo was a selection of bulbs, possibly a gift from a turkish merchant. The Antwerp merchant didn't recognise the bulbs, tohught they were a variety of onion and ate a few and planted the rest. Then in spring 1563, they flowered and were seen by Joris Rye of Mechelen, who dug up the flowers and placed them in his own gardne as he collected rare plants, and it was he who corresponded with Carolus Clusius. Clusius later came to live in Mechelen and probably saw tulips for the first time in 1568, before taking up a position in Vienna in 1573 (i.e. next to Ottoman territiory) where he received material from Ogier de Busbecq. He then moved to Leiden and took up a post on october 19 1593 and brought his bulbs with him. He then planted the bulbs in a hortus academicus at the university.

Too detailed? How does it gel with the other refs? More when I scan a bit more. Cheers, Casliber (talk · contribs) 00:07, 5 August 2008 (UTC)

(From memory as I don't have it with me) Goldgar makes the point that Europeans had traveled to regions with tulips since the crusades and it's unlikely that nobody ever brought them back before the 1500s. That's the reason I started with cultivation, because it's really the widespread cultivation that's important for the Tulip mania portion of history. If you think there's a short paragraph or so of good material on the introduction of the tulip I'd say go for it, but in my estimation too much more than that and we'll be steering off topic. My personal preference would be to keep this fairly close to 30K. --JayHenry (talk) 01:15, 5 August 2008 (UTC)

I wouldn't give Dash an extremely high level of reliability - higher than a newspaper report, lower than a scholarly paper. In other words Goldgar is probably better. Smallbones (talk) 14:52, 6 August 2008 (UTC)

OK, after reading, i just embellished a bit about the tulips...hope dash is right there....Cheers, Casliber (talk · contribs) 21:53, 6 August 2008 (UTC)

Brilliant article

With a little more work, this would have a good shot at FA. Savidan 04:28, 9 August 2008 (UTC)

Yep; I am sure that's where it's headed...Cheers, Casliber (talk · contribs) 06:12, 9 August 2008

(UTC)

Done with Garber (2000)

I'm done with adding material from Garber 2000. Perhaps I've put too much weight on it - I'll let others be the judge - but I consider this to be the best single source.

minor point. I wrote "At least six editions are currently in print." without referencing it (intentionally). I consider that a book, written in 1842, with 9 currently listings at Amazon, several apparently out of print listings, as well as at least 4 electronic versions(Lib of Economics, Guttenburg, Kindle, and AndrewTobias.com), to be absolutely incredible.

Nevertheless - it would seem like spamming to include all in-print editions (publishers Three Rivers, Harriman House, Dover, BN Publishing, NuVision, Dodo Press, Farrar Straus, IndyPublishing, and Kessinger) or maybe its OR. I'm not married to the sentence.

I'm done for the time being and would appreciate comments on and changes to my contributions. I tried, in the spirit of Mackay, to spice it up a bit, make the prose a bit more punchy than the usual fairly dreary encyclopedic text (within the rules of course). I think I didn't fully suceed, but would others please try?

Smallbones (talk) 16:45, 11 August 2008 (UTC)

'Legal' or 'contractual' changes?

Don't want to quibble here, but 'legal explanation' seems to imply a legal judgment or settlement reached in the courts. Although it was enacted as a law, Thompson's explanation appears to me better described as a change in contractual obligations.

Also, it also falls under 'rational' behaviour. As the previous subsection is named 'Rational explanations', I think the sections and/or headings should be reorganized.

Lastly, there is a criticisms section embedded into the end of the 'Rational explanations' subsection. It should probably be expanded and pulled out into it's own subsection. It should also include some criticism of Thompson's thesis (that is, if any currently exists).

lk (talk) 06:38, 12 August 2008 (UTC)

No, that's not a quibble, that's a good point, especially since getting the subheaders right is important. I agree that "Change in contractual obligations" is clearer, but reluctant to make something that lengthy into a subheader... I will mull over ways to tweak this section. To my knowledge, nobody has really responded to Thompson's or Goldgar's writings (of last year), and they were contemporaneous enough that they don't appear to address each other either. I will search into this a bit more though. --JayHenry (talk) 00:06, 13 August 2008 (UTC)

formatting, "curly quotes" Viceroy group

There's a comment on the FA review about curly quotes that I tried to respond to, but self reverted after I saw the results.

I think the problem is the use of "{{cquote|" rather than blockquote or "{{quote|". I'd earlier changed to cquote from blockquote because the blockquote didn't show up (on my screen) as a quote, since it was between a picture and the table. I think both the viceroy pix and the viceroy table need to "go together" near that quote, but I can't get it to look right at all (see the self reverted version). Any help appreciated. Smallbones (talk) 15:21, 13 August 2008 (UTC)

It looks like the only solution is to use {{quote}}, but not have any left aligned images. The current layout works on my monitor. --JayHenry (talk) 01:29, 14 August 2008 (UTC)

What about Kindleberger?

The present article tells at least as much about fashions and passions in modern economics as it does about tulips. It is obvious that some of the co-authors of this text are deeply intrigued by the element of economic irrationality involved in tulip mania (and other speculative bubbles). The original sources might be "anti-speclative" and biased (pamphlets in the aftermath of crashes usually are), but the neoliberal tendency to explain away the phenomenon of collective hysteria and irrationality is equally biased, if in the opposite way.

Some decades ago a highly respected economist like Charles P. Kindleberger had no qualms about using tulip mania as an example for this kind of irrational behavior - alongside with many others, like the stock market crashes of 1873 and of 1929. Today Kindleberger's name is hardly mentioned any more and the absurd credo of rational expectations does not tolerate any notion of speculative hysteria.

I just wonder how long this is going to last. Economic recession usually brings along a certain amount of additional realism and I presume Kindleberger's book might soon become fashionable again - just as it did in 2000.

Robert Schediwy (Vienna, Austria) 86.33.220.91 (talk) 20:49, 16 August 2008 (UTC). 86.33.220.91 (talk) 20:58, 16 August 2008 (UTC)

Actually, the article does cite Kindleberger. Why does it not cite him more? The answer is quite simple and has nothing to do with anyone's "neoliberal" tendencies. Kindleberger writes but two pages on the tulip mania. (Also Malkiel and Shiller, respected economists no doubt, touch on it only briefly.) I believe this article to be a faithful summary of the academic literature about tulip mania. If rebuttals of Thompson and Goldgar are written (Thompson and Goldgar both wrote in 2007), I give you my personal assurance that these rebuttals will be included in this article. As for rational expectations, it's important to bear one thing in mind: that Tulip Mania may not have been the bubble some believed says nothing about any mania or panic since. --JayHenry (talk) 21:21, 16 August 2008 (UTC)

Good to hear from you so soon. I just wanted to emphasize the point that there are deeply ideological questions involved in this topic, which maybe should be brought out more openly in the article. Manias and panics are obviously disturbing to scholars who want to believe in the profound rationality of individuals and markets and they tend to explain them away, looking for outside culprits, downplaying the scope of the crisis etc. (These kinds of attempts have been undertaken even for the crash of 1929, as we all know)

Authors of this kind may have their point, and it is evident that anti-speculative literature tends to be somewhat moralizing and is usually written (and re-edited) in the hangover period after the bubble has burst.

The question is what kind of model of man we subscribe to. The basic model of neoliberal economics treats man as a rational, individual being and while this may be quite useful in a limited way manias and crashes bring out the emotional and collective side of people and markets. In keeping with Wikipedia's NPOV guideline this ideological problem should be faced as squarely as possible inside the articles concerned. Robert Schediwy 86.33.220.91 (talk) 05:28, 17 August 2008 (UTC) .

"Deeply ideological questions" are difficult to address in an encyclopedia. If you could give us a lead on who has addressed this as an ideological issue, we can quote them (from a reliable source). Otherwise, we are limited to facts - in this case essentially "who said what." Actually, I think most people have addressed this on a factual basis, but many of the "facts" have turned out to be wrong. Mackay etc have said that something extraordinary happened here. I'd think most people would want to see the facts behind this claim. Smallbones (talk)

The argument can be made that Garber's work on the subject was more based in ideology than 'hard economics.' His 'facts' and Mackay's 'facts' are conflicting, but that does not necessarily prove Garber right and Mackay wrong. Garber presents 'facts' about stock market bubbles (in 'Speculative bubbles, speculative attacks, and policy switching', written in 1994 with Robert Flood) not entirely in line with the facts as they have been presented by others. That does not necessarily make him right and them wrong. Perhaps most importantly, in the same work in which he 'debunks' Mackay, Garber also writes in detail about the Mississippi and South Sea bubbles. Both of these events are /extremely/ well documented by the journalists of the day and succeeding historians. Does Garber's presentation of 'facts' that disagree with the journalists and economists who saw these events unfold make his 'facts' right and the original sources wrong? It is theoretically possible that Garber's 'facts' about the tulip bubble are more reliable than Mackay's 'facts', because of the scarcity of reliable sources at the time. Yet the context must be considered, and the when one considers that Garber has attempted to 'debunk' far better documented economic crises then one has to accept (at the very least) that is questionable whether Garber's facts are /more/ reliable than Mackay's even if Mackay is entirely wrong. 76.7.147.142 (talk) 18:59, 19 June 2010 (UTC)

Tulip price in caption

As a passing note (sorry about fiddling with the alignment!), why does the caption for the Viceroy list the price as between 3000-4200 florin but the table below list an example as totaling to 2500 florin? I see the footnote and the in-text claim that Mackay's basket of goods might not have been representative but I'm missing where the average Viceroy price is in the rest of the article. Also, as an aside, it is interesting that the average price listed was more than Mackay's estimate. :) Protonk (talk) 17:43, 17 August 2008 (UTC)

Well, they don't purport to be the same sale. Mackay claims that basket was exchanged at one point. The other price is the price listed in a catalog. Several explanations are possible: Mackay's anecdote was simply incorrect; the price in the catalog was wishfully higher; Mackay's lower price occurred earlier in the mania when prices were somewhat lower; Mackay's price occurred for an even smaller bulb; I'm sure there are other explanations. As for an average Viceroy price, there was a Dutch economist named N.W. Posthumus, who compiled extensive price data in the 1920s. It's possible his work would have this information, but I don't have access to it and can't read Dutch! Citation below, if you're interested. --JayHenry (talk) 18:08, 17 August 2008 (UTC)

"Die speculatie in tulpen in de jaren 1636 en 1637." Parts 1-3. Economisch-historisch jaarboek 12 (1926): 3-19; 13 (1927): 1-85; 18 (1934): 229-40.
- I'm marveling that his name is "Posthumus". I'm afraid that I wouldn't be able to make heads or tails of if I COULD read dutch. But I think I'll see if I can get it on interlibrary loan. Protonk (talk) 16:07, 18 August 2008 (UTC)
- Done. The internet archive also has volumes 1-8 online here. Protonk (talk) 16:24, 18 August 2008 (UTC)

And now he has a wikipedia article Nicolaas Wilhelmus Posthumus. Protonk (talk) 19:18, 18 August 2008 (UTC)

Posthumus and questions about how the article convey's Thompson's timeline

Ok. Just finished reading one of Posthumus's english documents on the mania (full cite: Posthumus, N.W. (May 1929). "Notes and Documents:The Tulip Mania in Holland in the years 1636 and 1637". Journal of Economic and Business History. 1 (3). Harvard University Press.). It is nothing really new. Posthumus denounces the outright moralizing of early historical and economic treatments but asserts throughout that the rise and collapse was a speculative bubble. Where I'm seeing a question is the ordering of events. Thompson argues that contracts protecting buyers were known (at least in pockets) over the winter and that the realization of those contracts (along with the February overall contract changes) caused the drop in prices from the winter high. Posthumus notes a meeting of the governors of Haarlem on Martch 7th, 1637 and a meeting of florists from many towns on February 7th and 24th. all three meetings were meant to discuss methods to protect sellers and buyers from financial ruin. Posthumus (p. 445, "Their aim was to find a common regulation to prevent the ruin of the bulbgrowers") notes explicitly that the Feb. 7th and 24th meetings were to protect the sellers. The march 7th meeting meant to annull sales past October of 1636 (p. 443, 453, 454). Posthumus goes on to discuss the tortured process of arriving on a binding annulment of the contracts. While the Haarlem governor's agreed to do so, they apparently did not hold the authority. That Authority rested with the "States of Holland". Not until the 11th of April did the States ask a convening court about the matter. On the 27th of April, a provisional ruling was made and the resulting price drop was noted on the first of May (p. 446, "This was, practically speaking, a moratorium for Haarlem...The results can be judged from a declaration of one of the Haarlem solicitors, Van Bosvelt, that honest people met their contract by paying 4 or 5 per cent at the most; many paid nothing at all.").

It seems to me from reading this article that the regulations were a response to a collapsing market. Perhaps they also caused the collapse, if information about changes in regulations propagated over the winter (as Thompson suggests). I'm not sure if I'm misreading this (and perhaps Posthumus is misreading things) but it seems the article (and Thompson) assert that the rules were changed in february on trading--changed to allow low risk speculation. Then the rules were later changed to disallow this speculation and futures (now option) prices collapsed. I don't think that is a correct reading of the events at the time.

Thoughts? Protonk (talk) 22:34, 20 August 2008 (UTC)

I've always had a few questions on timing in Thompson, starting with:

" Short selling was banned by an edict of 1610, which was reiterated or strengthened in 1621 and 1630, and again in 1636. Short sellers were not prosecuted under these edicts, but their contracts were deemed unenforceable.[19]" (from Garber via our history section)

If short sales (probably all sales in the "colleges") couldn't be enforced, then how could there be said to be a market at all? Garber suggests this (but doesn't push it too far) when he says it was just a "drinking game." I'm sure that's a controversial conclusion however. And how could a legal change then be invoked, when it was illegal to begin with?

This is probably OR, but let me speculate on how the timeline might work. Everything's a bit crazy in the spot and notarized futures markets, and Holland in general, in early 1636. In the summer/fall the new colleges open as a boiler room/psuedomarket/drinking game. In the late fall it becomes obvious that there's no "bankruptcy constraints" (Garber's term) in the colleges, and it's clear (to some) that no price is too high under the current law (maybe some fool will actually come up with the cash and take delivery!). And in February 1637 the "cops" decide to clean the whole thing up by closing down the colleges. The only problem with this summary (and in our article) is that it makes everything too neat, and leaves out all the confusion Most people probably didn't have any idea what was going on, legally, financially or otherwise.

How does this align with Posthumus and Goldgar? It's hard to put the idea of confusion into an article like this. Maybe quote Posthumus on his timeline.

BTW, have you read the Dutch WP article? - no I don't read Dutch either, but since 1/10th of the words are about the same, it's pretty easy to see that they have a pretty good article, at least one that has gone beyond Mackay. Maybe I'll drop them a line to see if they have any suggestions. Also they have a good (but badly formatted pix), and read Dutch! Smallbones (talk) 03:03, 21 August 2008 (UTC)

PS - Thompson's price index series - and thus his options calculations - are ok if you understand the data limitations and don't take them too seriously! Smallbones (talk) 03:08, 21 August 2008 (UTC)

I agree with your assessment that there was a lot of confusion. Posthumus doesn't outright say it, but I get the idea that uncertainty about future rules and uncertanty among florists in general played a large role. That's my best guess as to how Thompson could be right about the cause and "wrong" (or right for the wrong reasons) about the timing. Protonk (talk) 03:28, 21 August 2008 (UTC)

On the timing: Thompson's argument, I believe, is that prices rose because investors anticipated the change in regulation. As prices soared out of control it became increasingly obvious that the Dutch government would never enforce these contracts. He argues that the idea that contracts wouldn't be enforced started circulating in November. So much the way markets might anticipate government approval of a merger by gradually raising prices as more and more statements come out that a merger is likely to be approved. By the time the merger is actually announced, most of the price movement might be over. The short-selling issue is an interesting one, but it's not covered in Garber's older papers. I might have to order the Garber book after all. It would seem that a prohibition on short-selling would contribute to an upward rise in stocks, right? Do we know if there were puts in the tulip trade? On the chaos and confusion: I agree we can do a better job getting that in the article. --JayHenry (talk) 03:29, 21 August 2008 (UTC)

Garber 2000, pp. 33–36 - it's only 3 pages. A ban on short-selling wouldn't really cause a rise in prices, it would probably cause any futures market to close (as a legitimate enterprise), i.e. it was/became a scam/drinking game. BTW Garber, Goldgar, Thompson don't have to agree - we just need to report what they say, and if possible report what a reliable source says on the differences (is there one?)Smallbones (talk) 04:05, 21 August 2008 (UTC)

If shorting was legal, surely some people would have been shorting this market, recognizing prices would have to drop. Wouldn't a ban on shorting prevent these people from entering the market thus biasing it upward? Or is that what you're already saying, that it creates an untenable situation, a futures market that can only go up, and thus will have to be shut down? I've never really thought through the implications of this. As for a reliable source reporting on the differences, I don't think there is one yet. --JayHenry (talk) 04:12, 21 August 2008 (UTC)

Both, but mostly with no bankruptcy constraint, no real market anything goes, but it has nothing to do with economics, just a few people (how few?) being duped or drinking too much. You are right about Thompson's argument, it was about an anticipation in legal changes. I just don't get exactly why then. My "best case" for Thompson is that he in effect argues - If you don't accept Garber's argument that it wasn't really a market, and if you do accept that the quoted prices were "real," then there must have been an anticipated legal change in the late fall, and thus these "real" prices can be examined. From the available data they appear efficient. Some nice icing on the cake - if it's not too distracting. Smallbones (talk) 16:04, 21 August 2008 (UTC)

That's the thing about the timing though, Posthumus (and he isn't the authority, Goldgar dings him for a few errors on the subject) doesn't indicate that these regulations were discussed in the winter. The first time he says they were discussed was Feb, and nothing was finalized until after the market was liquidated. Protonk (talk) 03:33, 21 August 2008 (UTC)

Unless Thompson (I have to reread it) is suggesting that investors anticipated regulation absent some signal from the growers. Protonk (talk) 03:34, 21 August 2008 (UTC)

Thompson identifies a smaller rise and fall in Tulip prices that occurred in October. Following this rough October, he says public officials began to discuss the problem in November. News of these deliberations entered the market in November, and prices started to rise to reflect the expectation that futures contracts would become options, as indeed they did. This is his section 4.2. So he says the signals were from public officials all along. --JayHenry (talk) 03:43, 21 August 2008 (UTC)

What seems odd to me is that Thompson makes that claim but Posthumus doesn't talk about (have to reread it tomorrow, stupid bound volume doesn't circulate) those discussions in the winter. He talks about decisions in february that were to be made retroactively to October (and then november). Protonk (talk) 03:47, 21 August 2008 (UTC)

Yeah, I think you've found an interesting gap in his paper. He states that the discussion happened. And offers a plausible reason (the October mini-crash) that it might have happened. And offers a compelling argument that prices would have moved this direction if the market knew of these deliberations. But it doesn't appear to me that his paper offers evidence of any meetings or missives in which these deliberations are actually documented to have occurred. --JayHenry (talk) 03:53, 21 August 2008 (UTC)

Tuplic Price Index Caption

The text accompanying the graph is both redundant and confusing. If there was more data to graph, one would assume that it would be in the graph. It's also not clear why the end is highlighted for data density when there are larger areas with a lower density. The slope of the graph on the end also illustrates that the fall was fairly precipitous regardless of the exact path taken. If the issue of sample quantity and quality is really that interesting, it should be expounded on in the text and referred to in the figure. Or possbily explained better in the figure.Aprock (talk) 02:56, 6 September 2008 (UTC)

I'm gonna chime in here. I sort of agree with Aprock here. The text in the graph needs to be refactored but we also have to ensure that the text reflects the uncertainty about prices between Feb and May (and for that matter, Nov and Feb). I reverted him because I wanted to see the opinions of the "regulars" on this article. You guys may have a very good reason for that phrasing to be in there (versus somewhere else). Also, that grapht leaves something to be desired. We should be looking at something like Thompson's second graph (the one showing the first spike and drop and possibly showing both speculation price and the price of executed trades). Protonk (talk) 03:16, 6 September 2008 (UTC)
- As indicated in the caption, it's just taken from Thompson's data with Thompson's caveat. I'm not sure exactly where you're going with density. The significance is that there's several data points showing a run-up, and there aren't data points for the fall. Thompson felt the data contained in the graph was significant, and I simply agree with Thompson. I opted for 1 because it's extremely straightforward and intuitive, whereas Fig. 2 requires significantly more explanation, and will be confusing to some readers. Further, if you want to paraphrase Thompson's Appendix 1 differently, I have no objection. I suspect some of the concern is a desire for better data and better graphs. I certainly desire that as well. But we simply have to work with what we have. --JayHenry (talk) 04:26, 6 September 2008 (UTC)
  - I agree that the data is significant. But that's what the figure is for. It's a very good representation of the data. If figure 1 is staightforward (and this is figure one) then it's not clear why the expository text is needed. My concern is that the current caption sort of splits the middle between innuendo and not enough information. If there's something interesting about the data it probably should be in the article. If not, then the extended text in the figure doesn't serve the data.Aprock (talk) 05:20, 6 September 2008 (UTC)

Looking at this graph more closely, part of my problem is that the x-axis is totally messed up. Can we get that fixed? Aprock (talk) 22:16, 7 September 2008 (UTC)

Just came here to say the same thing. The chronological axis (x-axis) is not uniform. We jump from February 9 to May 1 in about a quarter the distances it takes to move from December 12 to February 3. This exagerrates the "bursting" of the bubble significantly. It also seems to show that the growth in prices and the resultant collapse occured over six months only, since the final price is equal to the price six months earlier. Is this correct? It seems somewhat at odds with the text. Srnec (talk) 01:00, 30 September 2008 (UTC)

Thompson, Earl (2007), "The tulipmania: Fact or artifact?" (PDF), Public Choice, 130 (1–2): 99–114, doi:10.1007/s11127-006-9074-4. Retrieved on August 15, 2008.

Thompson needs a wrist-slapping at least. The graph should be revised. It would only show that Wikipedia has higher standards than Public Choice. Why would we represent this information graphically if not to show the bubble? Yet the graph distorts it. If all we want is to give information on prices, convert the graph into a table. Srnec (talk) 01:11, 30 September 2008 (UTC)

The only thing it distorts is the May 1 date and it explains in the caption it's because there's no data between Feb and May. Would you be satisfied with a dotted line there? --JayHenry (talk) 01:13, 30 September 2008 (UTC)

It distorts the whole graph. The line from February 9 to May 1 is way too steep. "No data" is not an excuse. Srnec (talk) 01:53, 30 September 2008 (UTC)

I totally agree. Standardize the x-axis, or this graphic is horribly misleading. -Oreo Priest ^talk 02:15, 30 September 2008 (UTC)

In fact, I'm going to remove the offending image until this mess gets worked out. -Oreo Priest ^talk 02:20, 30 September 2008 (UTC)

I've uploaded a new version that makes it clear we are working with a broken axis. --JayHenry (talk) 02:25, 30 September 2008 (UTC)

Much improved, thankyou. But a map with a uniform axis would be better, since I still think the current one will mislead. Srnec (talk) 03:28, 30 September 2008 (UTC)

It still hasn't been changed. I'm going to remove it again, until the x-axis is standardized. -Oreo Priest ^talk 03:21, 20 October 2008 (UTC)

I've reverted. You are incorrect. This was changed to address the concerns above. The broken axis is clearly demarcated, the index line itself is dotted and marked as broken, and this is explained further in the caption. Furthermore this is supported by the academic paper in which the tulip price index is created. The use of a broken axis is perfectly acceptable to incorporate a single outlier. In fact, the downward line you are proposing (a straight line from Feb. 9 to May 1, to scale) is more misleading, in that it is further away from what the curve would actually look like could it be reproduced. Economists know (read the papers, you don't have to take my word for it) that prices plummeted abrubtly. --JayHenry (talk) 03:36, 20 October 2008 (UTC)

Cumbersome Intro

I made some edits in an attempt to create a less cumbersome introduction. As it is written it comes across as combative with it's own brand of scepticism/revisionist agenda. I certainly think emphasizing the poor quality of sourcing of the "Madness" text and the current debate about the issue is important, but saying the same thing over and over in the introduction doesn't serve the article very well. I think it really needs to be cleaned up to present the current understanding -- both historically and culturally. Aprock (talk) 05:28, 6 September 2008 (UTC)

There's no tulip-manic-skeptic-revisionist agenda here. The very moment a modern scholar writes a rebuttal to Garber, Goldgar, Thompson, etc., I will add it to the article. For now, this article simply uses the extant body of scholarship. The modern scholarship has been skeptical (please read Goldgar for yourself, it's quite detailed), and this article reflects modern scholarship. --JayHenry (talk) 05:40, 6 September 2008 (UTC)

I'm not suggesting that there's an agenda. I'm saying that the intro reads like there is one. Aprock (talk) 17:40, 6 September 2008 (UTC)

Always good to review WP:LEAD for the general wisdom here, especially WP:LEADCITE. I'm actually willing to add the redundant citations to the lead if anyone truly feels it necessary. I'd prefer not to. If you read the sources, I think you'll find the statements in the lead are not controversial at all. --JayHenry (talk) 04:39, 6 September 2008 (UTC)

One of the big problems with the introduciton is the relative weight assigned to the sourcing issues of the Mackay's book. The relativly long introduction spends two paragraphs dealing with Mackay's book and issues related to sourcing. This is far too much discussion on sources in an article which is supposed to be about the Tulip Mania. Aprock (talk) 17:19, 7 September 2008 (UTC)
- Aprock, I don't mean to be dismissive of your concerns, but I'm having trouble understanding them. Only a single sentence (paragraph 3, sentence 1) discusses the sourcing, and it does so for all research about tulip mania, not just Mackay. A single sentence noting an extreme lack of data is too much? I disagree--it's critical information for anyone interested in Tulip mania. The rest of the third paragraph is about modern economic interpretations of Tulip Mania. Any event about history should surely give such weight to the views of modern scholars, no? Also, as for the length of the introduction which you feel is long, I again ask you to review WP:LEAD. We are just following general Wikipedia guidelines for length here. --JayHenry (talk) 17:37, 7 September 2008 (UTC)
  - The entire second and third paragraphs are a discussion of sourcing. The first sentence of paragraph two isn't about the tulip mania, it's about the Mackay source. I'm not saying this stuff shouldn't be in the introduction. I'm saying that having two out of three paragraphs for the introduction being about sourcing makes the introduction more about the source of information for the tulip mania than the actual mania itself. I am not at all suggesting that modern scholars be given no weight. I'm suggesting that the introduction to the article should be more about the subject than about sources of information about the subject. Aprock (talk) 21:24, 7 September 2008 (UTC)
    - I guess we're using sourcing in slightly different senses. I don't see discussion of sourcing and discussion of tulip mania as being somehow mutually exclusive. All we know of history comes from sources. This is especially the case the farther back we look. So: Historian Y described X. In this case, Mackay describing tulip mania. Paragraph 2 mentions Mackay, because it's critically important to understand that it's his views, he popularized it, and it was his version that once prevailed, but it's his views about Tulip mania. It's not about Mackay himself. Only about Mackay's Tulip Mania. Same with paragraph 3. It is the interpretations of modern scholars about tulip mania. It's critically important to recognize it's their views, but it's still about tulip mania. All three paragraphs are about the subject. They are contextualized with information about the sources of the subject. I don't know why you would interpret paragraphs 2 and 3 as not being about Tulip Mania. --JayHenry (talk) 22:25, 7 September 2008 (UTC)
      - Paragraphs two and three aren't about the tulip mania. The second sentence of paragraph two discusses the tulip mania, but the rest of it doesn't. There doesn't seem to be any reason to include details about hyacinth pricing in an introduction about the tulip mania. I'm not suggesting that the information in paragraphs two and three shouldn't be in the article. I'm suggesting that an editor rewrite these two introductory paragraphs to be more consise, less rambling, and less redundant. For example, the last two sentences of paragraph two say almost exactly the same thing. Aprock (talk) 22:40, 7 September 2008 (UTC)
        I respectfully disagree here. Significant economic distress and an economically meaningful bubble are two wholly distinct concepts. One has to do with the market price of something becoming unhinged from fundamentals of supply and demand, the other is about the sort of things you associate with recession, like falling incomes, rising unemployment, credit shortage, any number of indicators of economic distress. The relevance of hyacinth prices is clearly stated. Perhaps you could help me understand, per the guidance of WP:LEAD, what sort of information from the body of the article is not adequately summarized in the lead. --JayHenry (talk) 22:59, 7 September 2008 (UTC)
        I would argue that an "economically meaningfull bubble" is subset of "significant economic distress". If a bubble were economically meaningful, one might suppose that that would cause some distress. Aprock (talk) 01:28, 8 September 2008 (UTC)
        Okay, I can understand that. Would you be opposed to figuring out a way to combine the two thoughts? I've seen people mention the price of Beanie babies as an example of a genuine financial bubble that did not cause economic distress, for example. There's lots of examples of economic distress not blamed on bubbles, such as in the United States in 1981&82. I think it's important to mention both, but as they're related here, I think they could be combined. Is that reasonable? --JayHenry (talk) 03:00, 8 September 2008 (UTC)
        I think the overstated economic impact of the tulip mania in today's popular press is certainly something that needs to be debunked. It's pretty clear that Mackay's original monograph is light on fact, and heavy on drama. But I also think it's important to not fall into the trap that other more recent authors have fallen into and puffing up his account even more. My original concern is that the introduction reads as if this is an article about debunking Mackay, as opposed to an article about the tulip mania, wherin Mackay (and hopefully in the future other more modern authors) are debunked with respect to the prominance placed on the mania. Historically, it looks like the primary significance of the mania is that it is the first speculative bubble that is documented in any verifiable form, not that it was large and brought the Dutch to their knees. Aprock (talk) 04:06, 8 September 2008 (UTC)
        But a lot of recent scholarship is about debunking Mackay. If mackay had never existed, we would not have this long lasting popular image of the tulip bubble as a craze and would not have the ready metaphor of the tulip bubble to describe other seeming bubbles. It would have just been like other price fluctuations in the 1600's, largely unrecognized. Modern scholarship on the subject mostly came about from people saying "Hey, this bubble nonsense I keep hearing about, I wonder if the original example, the ne plus ultra of bubbles, was REALLY a bubble" and discovering that it wasn't, then telling the historically interesting story of how we came to believe that it was a "craze" rather than a response to market fundamentals. Telling the modern story of tulip mania is near impossible without making it about mackay and the meme in the financial literature. Protonk (talk) 16:18, 8 September 2008 (UTC)
        I think you're overstating your point here. The scholarship seems to indicate that the national economic impact of the tulip mania was minor, not that it didn't happen. Aprock (talk) 16:34, 8 September 2008 (UTC)
        Fine, but that is a very small portion of the general point I was making. the general point is that it is still appropriate to discuss mackay in the proportion that the article does given the motivations and composition of scholarship on the subject. I don't actually know precisely or care deeply about how significant the impact of the bubble was to the people at the time, so I can't really comment further there. Protonk (talk) 17:14, 8 September 2008 (UTC)
        The Mackay section and the Modern views section make up 57% of the article (if you exclude the introduction and notes/ref/etc). The second two paragraphs make up 68% of the introduction (even after the pruning I did). Aprock (talk) 18:07, 8 September 2008 (UTC)
        And I repeat that I don't see the problem with that. Most of the recent history on the subject has to do more with the depictions of the period rather than the rather hazy and disputed series of events. I know where you are going, but it really isn't possible or appropriate to turn this article into a mainly historical depiction of the "mania" in question with views of it relegated to the sidelines. Protonk (talk) 18:14, 8 September 2008 (UTC)
        You're reading far more into what I've written that what is there. I never once suggested regulating modern views to the sidelines. I've suggested that the length of the introduction is too long, and that the prime place for clean up is the final two paragraphs. In support of that I pointed out that they still comprise an outsized share of the introduction with respect to their weight in the article. Aprock (talk) 18:30, 8 September 2008 (UTC)
        oh, I see. I still think that 57~68 for our purposes. Protonk (talk) 18:37, 8 September 2008 (UTC)
        I don't have any particular problems with the proportion. It's issues with the length of the introduction, and previously the tone that I've brought up as concerns. I've cleaned up much of the language that made it a kind of he-said-she-said tit for tat presentation of the controversy, but the introduction still seems quite long. I've been keeping an eye on introductions of other articles over the last few days, and this introduction is definatly long in comparison to other articles of this length and longer. Looking at WP:LEAD, the length suggesetion points toward an introduction of two paragraphs. I think you could probably eliminate the entire third paragraph, putting the second sentence of that paragraph into paragraph two. Aprock (talk) 20:35, 9 September 2008 (UTC)
        
        Not at all. Two distinct things. Mackay (and originally the pamphleteers) argued that the tulip bubble and subsequent collapse caused the ruin of Holland--meaning that the tulip mania causes people to lose money and land (in the fallout from the collapse). Later research showed 1. that the losses were small and limited (that there was no "significant economic distress") and 2. that there was no "bubble" (Thompson's explanation about contract conversion and others). 1 and 2 aren't necessarily connected. Prices went up and down during the fall and winter of 1636-1637. that fluctuation (even if it was NOT caused by a market departing the fundamentals) could have ruined lives and livelihoods. OR, it could have been a bubble (meaning that Thompson and Golgar were wrong) but it didn't have to cause a significant impact--it could have just impacted growers and dealers. Neither condition is significant or necessary for the other to occur. Protonk (talk) 03:03, 8 September 2008 (UTC)
        Do you have a cite for the ruin of Holland? I have the book here [for reference, as far as I can tell it matches the text at http://www.usagold.com/gildedopinion/mackay-tulip-mania.html]. I don't have Goldgar's book from the library yet, but reviews of her book indicate that she concluded there was a speculative bubble. Aprock (talk) 04:00, 8 September 2008 (UTC)
        that wasn't my main point. My main point was that the existence or non-existence of a bubble (as it is defined by the literature) is disconnected from the existence or non-existence of economic distress resulting from the fluctuations in tulip prices. as for the source on the existence or non-existence of economic distress, check Goldgar or the article by Posthumus in 1929. Protonk (talk) 16:13, 8 September 2008 (UTC)
        I certainly agree with that. I was talking about "economically meaningful" bubbles, not bubbles in general. Aprock (talk) 16:21, 8 September 2008 (UTC)

Paragraph 2

Perhaps it will help a little to look at this sentence by sentence:

The event was popularized by the book Extraordinary Popular Delusions and the Madness of Crowds, written by British journalist Charles Mackay in 1841, more than two centuries after the event. -- critical information. This states how Tulip Mania became a much-discussed economic event.
According to Mackay, at one point a speculator paid as much as 12 acres of land for a single bulb. -- clearly about Tulpip mania, citing Mackay as the source and providing an example of the sort of claims he made
Mackay claims that many such investors were ruined by the fall in prices, and the Dutch economy fell into depression. -- about the fall out from tulip mania.
Although Mackay's book is a classic of popular journalism that is widely reprinted today, his account is controversial. --the source that popularized tulip mania is controversial. Many readers will still come to tulip mania from this source, therefore it's critical information.
Some modern scholars believe that the bubble was not as extraordinary as Mackay described, or even that no economically meaningful bubble occurred. --This is what economists believe about the bubble. Tulip mania, remember, is purportedly a bubble.
There is also little evidence of significant economic distress after tulip mania. --You can have significant economic distress in the case of no bubble. As it happens, there's little evidence of either around tulip mania

In my opinion 2, 3, 5, and 6 are primarily about the historical event. 1 and 4 are about the sources for the event, but they are critically important points. 1 and 4 could perhaps be combined though? --JayHenry (talk) 23:06, 7 September 2008 (UTC)

Sentence two and three are about Mackay as a source. The information isn't presented as historical facts about the tuplip mania, but rather as commentary on the mania by Mackay. Sentence five is in turn presented as commentary on the commentary. And sentence six is, as you suggest, doesn't really relate to economic bubbles, and seems to be tacked on to the lend sentence five more gravitas.

Going back and reading Mackay, it's also clear that the actual sourcing of Mackay here is bad, and will also need to be cleaned up. Regarding sentence two, Mackay doesn't say someone paid 12 acres, he says that 12 acres were offered. I'm also having a gread deal of trouble finding the reference for the Dutch economy falling into depression. He does say "the commerce of the country suffered a severe shock, from which it was many years ere it recovered." Aprock (talk) 23:43, 7 September 2008 (UTC)

I fear that we're largely talking past each other and I fear it's not been productive. Whence these "historical facts" if not from sources? There's not some ledger of incontrovertible truth from which we can draw here. I don't mean to go into theories of historiography too deeply, but I don't understand what you're getting at. Do you dispute that "the commerce of the country suffered a severe shock, from which it was many years ere it recovered" is a reference to what in the 21st century is called depression? I honestly did not think this was a controversial paraphrase, as it is echoed in many sources. Sentence six doesn't relate to bubbles but it very directly relates to this period of history, so again I don't understand what you're getting at. --JayHenry (talk) 00:01, 8 September 2008 (UTC)

Pictures plus

I finally changed the pictures around. I like the wind wagon pix because it refers to so many of the issues discussed in the article. But I liked the other pix as well, so i put it down in the references. I didn't like the word "drinker" and changed it to "tippler" but... I'll bow to the judgement of others on the pix.

I welcome the arrival of Aprock as an editor here. It's always difficult to get the right amount of emphasis without going overboard. Nevertheless i think John Henry is more correct on the intro so far.

The text and caption with the graph has been a difficult point. I'd thought the graph should be referred to in the text, but a reviewer said that the text just summarized the caption so suggested removal. It's reasonably important in that it is the only data summary available and is important to Thompson's arguement. But my feeling is that he tries to take the data further than it should be stretched, so (while it must be included if Thompson is included) we shouldn't over-empahsize it.

Happy editing.

Smallbones (talk) 14:26, 6 September 2008 (UTC)

Maybe I'm just nostalgic, but I liked the tulip better. It's meaning is obvious, and impact is immediate. When I first saw the wagon, I thought the page had been vandalized. It's not obvious what wagons have to do with tulip mania. I'm going to rearrange the pictures, but I'll of course defer to the majority on this. lk (talk) 06:03, 7 September 2008 (UTC)

Just a small comment: the caption for the last picture, which reads "a modern-day field of tulips in Hillegom, Netherlands—tulips have remained popular despite their colorful history" is wonderfully punny, given the use of the word "colorful." SupermanML (talk) 21:27, 30 September 2008 (UTC)

Well Done

This is a nicely researched, well-written and informative article. Well done to all the editors who made this into an FA! Eusebeus (talk) 14:43, 30 September 2008 (UTC)

JayHenry should certainly be given credit as the main driver. Protonk was a major force, as well as Casliber. Lawrencekhoo and Aprock, and several others were important. I got to watch and snipe and "supervize." Smallbones (talk) 18:08, 30 September 2008 (UTC)

Hey, I just tidied and offered suggestions. I should be way down on that list. :0 Protonk (talk) 22:34, 30 September 2008 (UTC)

Example proving "No price bubble"?

"For example, other flowers, such as the hyacinth, have also had high prices on the flower's introduction"

The fact that other flowers have had a price bubble doesn't negate the occurance of a price bubble for tulips, so what is the point?

I don't like it when biased arguments are repeated in these articles and false logic is an indication of bias.

So if the example is meant to be an argument against the existance of a price bubble, it does not make any sense. On the other hand, if the point is that price bubbles do not occur for no reason, demonstrating that they tend to occur at the introdution of a new product may make sense. The bubble analogy is based on the fact that bubbles burst in an instant, so a price bubble is not defined by how the price rises, but by how quickly it falls back to market equilibrium. Of course the implication is that the price had risen above true market value, but a human subjective valuation of price is always a part of the market, not outside of the market.

My point is you can't avoid wrestling with questions such as how you define a "price bubble" in order to write a wikepedia article that makes sense, no matter how subjective that may seem.

Stephen

The argument is Garber's. See the section "Modern Views" for more on this. But I'll try to clarify. Goods that reproduce themselves (e.g. flowers, crops, pets) can be very popular when first introduced for very good reasons, or just have a "fashion value," but these should lead to high prices that are rational - not "bubble prices." Once the goods reproduce themselves exponentially, the price should rationally decrease drastically. Smallbones (talk) 18:17, 30 September 2008 (UTC)

"...some suggesting that no economically meaningful bubble occurred." I'll bet the investors would have had a different opinion! Stephen Charles Thompson (talk) 19:30, 30 September 2008 (UTC)

Actually the "investors" never had to pay anything (perhaps a couple of percent, but even this isn't entirely clear). That's the amazing thing here. Markets without either money or the possiblity of going bankrupt. Many people argue with this viewpoint, but since Garber is a recognized scholar in this area, I think that we MUST include the arguement. From the article 'Peter Garber states that the bubble "was no more than a meaningless winter drinking game, played by a plague-ridden population that made use of the vibrant tulip market."[32]' Wouldn't it be a mistake not including this? Smallbones (talk) 20:19, 30 September 2008 (UTC)

Stephen Here "but these should lead to high prices that are rational - not "bubble prices"

Again, this hinges on how "price bubble" is defined. What if a sudden rise in price seems irrational at first, but later on we come to a rational understanding of why the price rose so suddenly. I think prices alway rise and fall for ratinal reasons. That is why I define a price bubble as prices falling so fast it leaves investor "holding the bag". The price bursting like a bubble in one instant.

"Actually the "investors" never had to pay anything (perhaps a couple of percent, but even this isn't entirely clear). "

If one accepts my definition, then this second point is still relevant. If the investors didn't loose anything, if there were very few people in it for the full price and the investors were only buying a percentage, then it wasn't really a price bubble after all. Unless you want to define a bubble by that very thing: when many investors getting in by only a percentage "artificially" raise the price.

Stephen

Interesting timing

Funny that this was made an FA now, of all times... Brutannica (talk) 15:19, 30 September 2008 (UTC)

"Interesting"? More like "genuis" imho —Preceding unsigned comment added by 24.213.40.34 (talk) 16:08, 30 September 2008 (UTC)

The article was promoted to FA a month+ ago. It usually takes a long time to become a TFA after promotion, but I put in the Today's Featured Article request (See WP:TFAR) a week ago, knowing that there would be some currency to the topic, though thinking that it might be "late" as far as any "news value." Frankly I could have done without yesterday's market action. I'll accept "genius" (humbly), but "semi-serindipity" is probably better. Hope you enjoyed the article. Smallbones (talk) 16:36, 30 September 2008 (UTC)

I lollered. I was wondering whose idea it was :D now i know! And thanks to Ceiling_Cat as well. Lucifer (Talk) 21:03, 30 September 2008 (UTC)

That was pretty much EXACTLY what I thought as soon as I saw it was a featured article, but then again, there have been featured articles of the day that had relevant timing. (to tired at the moment to remember a specific example) --Alphamone (talk) 21:54, 30 September 2008 (UTC)

And to think that if yesterday had not been the anniversary of Assata Shakur committing a robbery, we might have had it on the Main Page then. We would have looked like psychics to have this up while the Dow nosedived. --JayHenry (talk) 23:35, 30 September 2008 (UTC)

Hyacinth

Good morning/afternoon/evening you all. Garber compared the available price data on tulips to hyacinth prices at the beginning of the 19th century— : Does anyone know if the date is corrrect ? Hyacinthus orientalis was first introduced in the Netherlands in the early 17th century, and the article on hyacinth says it became very fashionable in the early 18th century. If it took two centuries for the hyacinth to beat the tulip, it means tulips were still quite fashionable after 1637. Thanks --Anne97432 (talk) 15:09, 13 November 2008 (UTC)

Wages

In Amsterdam a skilled worker, a carpenter or a bricklayer, could make 1,30 guilders a day. Because he did not work each day - there were religion days (sunday, eastern, x-mas, funfairs, etc.) - his year salary cannot be 365 x 1,30. Also in Winter he was making less hours and his wage was lower. A good salary was a guilder a day. For unskilled people it is hardly known how much they earned, but it could have been as low as 150 guilder a year, the data are hard to collect or do not exist. A servant living with the family was sometimes paid only 25 guilders a year. Servants did not stay long with the families, and not hard to understand. The German Wikipedia mentions 250 guilders a year, which seems realistic, because the wages outside Amsterdam were probably lower, but the data for other cities are scarse or not available. Taksen (talk) 15:22, 30 January 2009 (UTC)

Addition from J. Israel, The Dutch Republic, p. 352: Municipal labourers and bricklayers during the second quarter of the seventeenth century earned ... at Leiden, Delft, or Alkmaar 22 to 24 stuivers per day. That means 1,10 to 1,20 guilders a day. Taksen (talk) 21:38, 30 January 2009 (UTC)

Tulip Market Stratification

I haven't read a lot of the more detailed analysis, but I'm reading "Demon of our own Design" right now, and there's a discussion about the tulip mania. Specifically, it suggests that the mania was not for the rare and prized bulbs, but rather that it developed in the "subprime" bulb market, and that the "prime" market for bulbs was less affected. If that is in fact the case, a discussion of how the mania affected different markets should be included. Aprock (talk) 17:26, 12 March 2009 (UTC)

This shows up in the literature somewhat. We would probably be remiss in calling them "prime" and "sub-prime", but there was some shift between the buying frenzy around the best of the best and the rest. Part of this had to do with the fact that there weren't enough top-shelf bulbs to go around. Another part (depending on who you ask) had to do with the commodification of the bulbs themselves. All of my books on this subject are now back at the library...so I can't help directly. :( Protonk (talk) 20:33, 12 March 2009 (UTC)

Fundamentals

I don't particularly care about whether we say "no bubble" or "driven by fundamentals" as I think both get to the same idea. But I don't see why we'd say "one scholar" believes it. For one thing, Garber, not Thompson, is the most prominent advocate of that view (as even a cursory review of the literature would show). Goldgar, as I recall, was also sympathetic to that view. One thing I notice is that some people seem to read this article and mistakenly believe it is some sort of argument against bubbles in general. Not the case at all. The view of many economists is that bubbles are very real, but that Tulip mania just isn't actually as good an example of one as Mackay would have had us believe; ie that it's more par with the Beanie Baby bubble than with the Dot-com bubble. --JayHenry (talk) 05:15, 31 July 2009 (UTC)

The only issue I had is the awful wording. Jargon like "economically meaningful" or "economic bubble" are awkward and clumsy especially for the intro. Aprock (talk) 05:20, 31 July 2009 (UTC)

Yeah, I think that's a fair point. I'm a bit worried that even fundamentals might be a bit jargonistic, so I'd be open to further suggestions. --JayHenry (talk) 05:22, 31 July 2009 (UTC)

The previous paragraph already talks about 'economic bubble's. It's the idea most linked with Tulip mania, and what makes it notable today. Bringing in words like 'driven by fundamentals' is likely to confuse and obscure, not clarify. I tend to believe that a bubble occurred, but the main point that should be conveyed is that some economists don't think so, they argue that no bubble occurred. LK (talk) 05:56, 31 July 2009 (UTC)

I will say one thing. Jay, you are right that the article may present the gist of our authors' views on bubbles incorrectly. However, I don't think we can lump Garber and Goldgar (or maybe Neal to a lesser extent) in with Thompson. Thompson, at least if we take his article to be representative of his views, really believed that the change in prices was an efficient response to a change in contracts (from forward to options...basically). So to some extent it is true that one scholar really believes the price fluctuations were driven by 'fundamentals'. Protonk (talk) 07:37, 31 July 2009 (UTC)

I agree we can't present their views as identical; though Thompson and Garber both argue that it wasn't really a bubble, but they reach this conclusion for completely different reasons. I think we deal with this well in the body, but it's trickier in the lead. The current lead is good to me: "Many modern scholars believe bubble was not as extraordinary, with some arguing no bubble occurred." Perhaps we should say "with some offering various explanations why no bubble occurred" or something? To suggest that their are different reasons to believe it? It might actually be worth mentioning the difference between the special and common bulbs (the "prime" and "subprime"). --JayHenry (talk) 13:16, 31 July 2009 (UTC)

I think the basic issue is that parts of the lede are a bit too cumbersome. I personally prefer "speculative bubble" to "economic bubble" even though the title of the article in question is the later. The original wording that I was trying to fix -- "no economically meaningful bubble occurred" -- seems overly jargon filled and mealy mouthed. I would much prefer "no bubble occurred", but that doesn't seem to be borne out by the references. Maybe something indicating that the bubble was isolated to a small group (like the beanie baby example) or something else which more clearly summarizes the sentiments of the current research without sounding like the language is hedging. Aprock (talk) 20:17, 31 July 2009 (UTC)

The lede is supposed to summarize the rest of the article. In the Modern Views section we have: "In her 2007 scholarly analysis Tulipmania, Anne Goldgar states that the phenomenon was limited to "a fairly small group", and that most accounts from the period "are based on one or two contemporary pieces of propaganda and a prodigious amount of plagiarism".[7] Peter Garber argues that the bubble "was no more than a meaningless winter drinking game, played by a plague-ridden population that made use of the vibrant tulip market." " Given that Goldgar and Garber are the only economists working today who have studied the actual mechanics of the trading and gathered the data (which Thompson used) and done the hard work of actually checking out the history, primary sources, etc., I think it is fair to say that "some (plural) economists say that no bubble occurred" (without the "even," as in "some even say") or perhaps "no meaningful bubble occurred" or "no economically meaningful bubble occurrred." Isn't that a fair representation of what the top people in this (narrow) field have said? Others disagree - fine - they have their space too. Some may want us to take on faith that a bubble occurred and object to Goldgar and Garber having their say - that is not fine. Smallbones (talk) 17:44, 31 July 2009 (UTC)

I think their views should be well summarized in the lede. But the two quotes you have here indicate there was some sort of speculative phenomenon, so saying "no bubble" seems more like original research than summary. Aprock (talk) 20:20, 31 July 2009 (UTC)

"No bubble" might be slightly simplistic - but that would bring us back to "no economically meaningful bubble." BTW I'm not against adding something short like "or ... fundamentals" Smallbones (talk) 21:27, 31 July 2009 (UTC)

maybe "only a localized bubble", or "was confined to the tulip market", or "did not affect broader society", or ....? Aprock (talk) 22:46, 31 July 2009 (UTC)

Arbitrary break

It's close enough now that ... Certainly no reason to get as close to an edit war as this seemed headed for. BTW, while there is material on modern views of journalists, commentators, etc. There aren't any (did I miss them?) views opposing Garber, Goldgar from academic economists. My feeling is that there are quite a few, but they are not specifically focused on Tulip mania, but manias in general, or that with the fog of time, they don't make strong claims about TM. But if a good "anti-iconoclast" academic could be found, they should be included. Smallbones (talk) 01:58, 1 August 2009 (UTC)

For whatever reason, some editors didn't feel the need to come to the talk page. It's not at all clear what their issue was, but the clumsy sentence does read much better now. There is other modern work which discusses other aspects of the bubble which are missing from the article, that should probably be included in the body at some point. I mentioned some of that work above in "Tulip Market Stratification", but haven't had time to distill the information for inclusion yet. Aprock (talk) 20:42, 2 August 2009 (UTC)

Calendar dates

The calendar dates given in the article are in reference to what calendar? Was "Feb. 3, 1637" a Tuesday or a Friday? —Preceding unsigned comment added by 75.39.122.65 (talk) 13:22, 8 December 2010 (UTC)

Windhandel

In its first sentence, the article gives several dutch translations of Tulip mania, but it misses the term "Windhandel". In Dutch I've never seen references to this period other than "Windhandel". 88.159.64.210 (talk) 17:27, 21 April 2011 (UTC)

A new image to use

The Walters Art Museum just donated a photo of a painting related to the tulip mania to Commons. It depicts a nobleman guarding an exceptional bloom as soldiers trample flowerbeds in a vain attempt to stabilize the tulip market by limiting the supply. Thought it might be useful for the article. Kaldari (talk) 19:34, 24 March 2012 (UTC)

The lead

I have removed the following 3 sentences from the lead paragraph, even though they were cited: "By 1636 the tulip bulb became the fourth leading export product of the Netherlands—after gin, herring and cheese. The price of tulips skyrocketed because of speculation in tulip futures among people who never saw the bulbs. Many men made and lost fortunes overnight, to the consternation of Calvinist elites who abhorred this artificial frenzy that denied the virtues of moderation, discretion and genuine work".

I did this because WP:LEAD says that the lead should summarise the article, and "Apart from trivial basic facts, significant information should not appear in the lead if it is not covered in the remainder of the article.", and "The first paragraph should define the topic with a neutral point of view, but without being overly specific". The deleted sentences fail all these criteria.

The 3rd of the 3 sentences is too POV for the article at all, except as part of a quote, in my opinion. For instance, calling it an "artificial frenzy" and attributing attitudes to unnamed "Calvinist elites". Adpete (talk) 04:55, 21 March 2013 (UTC)

"Unlikely" anecdotes

From the article,

The increasing mania contributed several amusing, but unlikely[citation needed], anecdotes that Mackay recounted, such as a sailor who mistook the valuable tulip bulb of a merchant for an onion and grabbed it to eat.

I inserted "citation needed" because this is speculation. It needs backup. Keep in mind that even now, people eat a lot of funny tasting and spoiled food. It isn't at all a stretch that a not so bright sailor might think they were chowing down on a funky onion instead of a far pricier tulip bulb. Especially, if they were really hungry. Since this was supposed to have gone to court, perhaps there's a reference that can show absence of such court records. Then you would have a basis for the "unlikely" claim. -- KarlHallowell (talk) 23:00, 10 April 2013 (UTC)

I've removed the "citation needed" template. Surely anybody would agree that somebody accidentally eating a "million dollar" tulip bulb by mistaking it for an onion is unlikely. It's just a 1+1=2 matter. Nobody would just leave a million dollar bulb laying around, but would take steps to secure it. And nobody would continue eating a semi-poisonous bulb that tastes nothing like an onion. Please do not mistake MacKay for a reliable source - he is nothing of the sort. It's just a tall tale told by an acknowledged tall tale teller. Have you read anything from the rest of the book? Smallbones_(smalltalk) 00:58, 23 May 2013 (UTC)

I disagree. One of the common features of such market bubbles is an absurd ignoring of risks by some of the participants looking to get rich quick. For a recent example, there's the sloppy paperwork on real estate loans just prior to the real estate crisis where a fair number of people later legally defaulted on the loans because it can't be shown that the loans on their homes are owned by anyone. That was a lot more than a million dollars and the people setting up those loans were supposedly professionals. -- KarlHallowell (talk) 20:37, 23 October 2013 (UTC)

NPOV problems again

This article has gone from supporting the theory to the point of quoting more on the doubt of it than its existence. Either the article needs to be pared down, or the argument needs to be dealt with.

The current article compares the slow tapering off of prices in modern specialized plants to the crash in 1637 - which is a logical fallacy, as neither have the same timespan. It distracts from the article's facts. 174.62.68.53 (talk) 00:28, 18 October 2013 (UTC)

I agree: this article is highly one-sided, and too long. The "Efficient Markets Hypothesis" is highly controversial. Only some "Modern economists" have disputed the reality of the bubble and offered "rational explanation": ie those whose economic philosophy finds the reality of speculative episodes to be inconvenient. Others, like John Kenneth Galbraith for example, have felt no need to challenge the validity of the basic facts as reported by Mackay, because these facts conform to a pattern repeated in other, much better documented, cases, such as John Law's Compagnie d'Occident (Mississippi Company), or the South Sea Bubble. Sasha (talk) 12:03, 15 February 2014 (UTC)

You don't see the same comments about the dot-com bubble or the United States housing bubble, because they're so well documented there is little to contest. 76.120.164.90 (talk) 21:28, 27 February 2015 (UTC)

terrible article

Its equally amazing and shameful that an article like this is rated FA.

- Rather than an article about something, its an economic debate around the actual topic. - This article is not about "tulip mania", its a debate about the efficient-market hypothesis in history. - The article is rather clearly being used to "soapbox" on political topics. - Anyone actually looking to answer the question of "what" Tulip Mania was will be lost in what is presented. - The introduction is far, far too long and covers matters that have little to do with anything in a proper introduction. - The body of the article is even worse. It takes seven paragraphs of history and flower biology to get anywhere near coverage of the subject itself. - Speculation i.e. "This may have been" seems to allowed in the article. - The section on "Madness of Crowds" should be presenting what the source said and what it made those claims on. It should not be a running modern critique with sentences such as "His popular but flawed description of tulip mania as a speculative bubble remains prominent, even though since the 1980s economists have debunked many aspects of his account". - There are currently five separate sections making economic cases against the book. That is excessive and unencyclopedic. As well, rather than critiques of "Madness of Crowds", they should presenting their own narrative of what happened. There is no question that tulip mania at least as a perceived cultural event did happen. - I'm not sure what all the arguing over if it was or was not a bubble is even useful. What matters is what actually happened in terms of prices, the personal fortunes of individuals and the cultural perceptions that were created afterward.

The article in its current state is terrible. Even harmful in that so much of the content is nothing more than a political soapbox for groups of people with clear agendas. There are NPOV problems throughout. The best way to fix it would be to junk about 80% of it. At the very least, this should be dropped several steps down in terms of "class". This is certainly not "Definitive. Outstanding, thorough article; a great source for encyclopedic information." 12.12.144.130 (talk) 19:33, 2 April 2015 (UTC)

If you don't want economics or "history and flower biology" I'm not too clear what you do want. The lead is not a very good summary I agree. Johnbod (talk) 03:39, 3 April 2015 (UTC)