Tulips are on of my favorite flowers and have been for a long time. From the elegant French tulips that gracefully flow over the side of the vase to more the more frilly parrot tulips that enchant with their unique petals. While living in Seattle, my husband and I would make the pilgrimage to the Tulip Festival in Mount Vernon, Washington each year. We would walk through the rows of tulips, numbering in the thousands (pictured here). We would be delighted by the rainbow of colors that unfolded before us and enjoy some of the more unique varieties planted in well manicured beds surrounding picturesque windmills and garden paths. But as someone who also loves history and has found herself writing more and more about this history of money recently, I thought I would share some economic history on the Netherlands National Tulip Day.

Tulips were introduced to the Netherlands from the Ottoman Empire around 1593 and their popularity grew rapidly, of which I can definitely understand. And, because of the mercantile system that was sweeping Europe at the time in addition to looser banking policies, the elite class grew larger. Consequently, tulips quickly became a status symbol among the Dutch elite. The flowers were rare and their unique patterns, caused by a virus, made them highly sought after. This was scarcity in action!

However, by the 1630s, the market for tulips had expanded beyond the wealthy to include all classes of society, including the middle and lower classes. This broad interest fueled a speculative frenzy. People began trading tulips for much higher prices than their actual value, based on the expectation that their prices would continue to rise. The tulip trade was not just in the physical bulbs but also in futures contracts. These contracts allowed people to buy tulips at a certain price at a future date. As prices soared, more people, including those outside the traditional merchant class, began to participate in tulip trading, speculating on higher prices due to a future demand.

The peak of the market occurred in the winter of 1636-37 when prices reached extraordinarily high levels. The prices were so high that a single bulb could be traded for the equivalent of what today might be thousands of dollars. However, this peak was followed by a sharp decline. Confidence in the market faltered, leading to a decrease in demand. Prices plummeted, leaving many with bulbs that were worth a fraction of what they had paid, and many contracts were left unfulfilled. The collapse of the tulip market had significant financial consequences for many people across the spectrum of class and wealth. Although it did not cause a major economic crisis for the Dutch economy as a whole, which was robust due to trade and other industries, it did result in financial ruin for many individuals involved in the tulip trade. In more recent history, this could be compared to the 1990s and early 2000s Dot-com bubble where speculation on internet-based companies led to a market crash.

Tulip Mania is often cited as a cautionary tale of the dangers of speculation and market greed, and it has parallels in other historical and modern economic bubbles. Today, the tulip market is flourishing and is forecasted to be worth around USD 8.61 billion by the year 2029. In addition the flowers themselves. tulip bulbs for planting, whether commercial or for personal use, provides part of that forecasted value.Even though tulips are not traded like other agricultural products like

wheat or corn, they are a significant product in the floriculture market. They are primarily sold through flower markets, growers, and distributors, and their pricing is influenced by factors like quality, variety, and seasonality rather than being set in a standardized exchange.

So, next time you need to purchase some flowers or plant something to spruce up your space, maybe pay homage to the tulip and take the opportunity to share this history with those who enjoy their beauty, for they can serve as an entry point to share a little economic lesson to those you know!