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Tulip mania: when a single flower was worth more than a house (2025)

dutchreview.com

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Re: Tulip mania: when a single flower was worth more than a house (2025)

#11

Post by tardedmeme »

somenameforme wrote: post #9
shiandow wrote: post #4

Earlier quoted context omitted.

Are you asking because you think the LSAT is at odds with the article's description of the mania? Because it is not.

The article suggests people genuinely believed a tulip was, implicitly for the foreseeable future, worth more than e.g. a house. That suggests it was some sort of mania over rationality. The NFT thing is comparable. I think most of everybody investing understood that they were worthless and that it was a bubble, but there was a remote chance that it wasn't a bubble and even if it was a bubble then you'd still a reaso…

That's how pyramid schemes work. Everyone "rationally" thinks they can find a downline, but most of them are wrong.

Re: Tulip mania: when a single flower was worth more than a house (2025)

#13

Post by irishcoffee »

ACV001 wrote: post #12

Similar articles in the future. "Bitcoin mania: when a single bitcoin was worth more than a house"

It feels so much worse to me. You could at least hold a tulip bulb, plant it, look at it, smell it, and it was a real thing.

The closest you can get to that with bitcoin would be what? Print out your keypair? Maybe write it down on fancy stationary using fancy calligraphy? (Never do these things)

Re: Tulip mania: when a single flower was worth more than a house (2025)

#15

Post by zulux »

irishcoffee wrote: post #13
ACV001 wrote: post #12

Similar articles in the future. "Bitcoin mania: when a single bitcoin was worth more than a house"

It feels so much worse to me. You could at least hold a tulip bulb, plant it, look at it, smell it, and it was a real thing. The closest you can get to that with bitcoin would be what? Print out your keypair? Maybe write it down on fancy stationary using fancy calligraphy? (Never do these things)

Convert it to drugs. With the right combination, you can talk to Mr. Bitcoin.

Re: Tulip mania: when a single flower was worth more than a house (2025)

#17

Post by toenail »

jansan wrote: post #6
graeme wrote: post #3

I teach the LSAT and one of the passages is famously about this mania and contends that it was actually rational. You paid a high price for a tulip bulb, planted it, and then sold the descendants which paid off the original price. The narrative from this article seems to be largely based on Thackeray's book from 1841. Wikipedia suggests the LSAT passage is modern scholarly received wisdom at least in some quarters, b…

By that definition every pyramid scheme is rational (of course only until you run out of greater fools).

What's the pyramid scheme here? The Netherlands are the top producers of tulips today, seems like a sustainable business. A temporary inefficiency in markets does not make a pyramid scheme.

Re: Tulip mania: when a single flower was worth more than a house (2025)

#18

Post by watwut »

somenameforme wrote: post #9
shiandow wrote: post #4

Earlier quoted context omitted.

Are you asking because you think the LSAT is at odds with the article's description of the mania? Because it is not.

The article suggests people genuinely believed a tulip was, implicitly for the foreseeable future, worth more than e.g. a house. That suggests it was some sort of mania over rationality. The NFT thing is comparable. I think most of everybody investing understood that they were worthless and that it was a bubble, but there was a remote chance that it wasn't a bubble and even if it was a bubble then you'd still a reaso…

People in the bubble typically know they are in the bubble. They do not know when to get out. The "even if you didn't make a profit then you'd stand an even more reasonable chance of getting out with fairly minimal losses" is the thing people are wrong about - once bubble is popping, only fastest few can react fast enough.

Re: Tulip mania: when a single flower was worth more than a house (2025)

#20

Post by gbear605 »

toenail wrote: post #17
jansan wrote: post #6

Earlier quoted context omitted.

By that definition every pyramid scheme is rational (of course only until you run out of greater fools).

What's the pyramid scheme here? The Netherlands are the top producers of tulips today, seems like a sustainable business. A temporary inefficiency in markets does not make a pyramid scheme.

Pyramid schemes are defined by the price and structure. A business that sells knives is a fine business. A business that sells overpriced knives by promising that you can then find someone else to sell more knives for you at an even higher price is a pyramid scheme.

Selling tulips is a fine business. Selling tulips at an insanely high price by promising that the market for tulips will keep on expanding and increasing the price of tulips is a pyramid scheme. (Well, maybe not quite a pyramid scheme, the structure isn't right. But it certainly wasn't a sustainable business model.)

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