Visitors on Sunday were clicking selfies with the tulips that had bloomed in the heart of the national capital and survived the small burst of rain the other day. People had gathered on either side of the roads in Delhi’s Chanakyapuri area which houses a number of embassies and high commissions, for the Tulip Festival organised by the New Delhi Municipal Council’s horticulture department.
Nearly three lakh tulips have been planted in shades of white, pink, yellow, orange, purple and black for this year's festival. (Photo: Manvender Vashist Lav/PTI)
Importing tulip bulbs from Holland, nurturing them in laboratory conditions and later planting them out has worked, though at a heavy cost. Some Delhiites feel now we don’t have to go to Holland for a date with tulips. Admiration for tulips and the efforts of the horticulture department’s footsoldiers apart, there is some criticism coming in. Pradeep Krishnan, the author of Trees of Delhi, remarked: “Even if it were possible to nurture a polar bear in Delhi, the question is do we need to?”
But tulips, too, have a story to tell. In 17th century Holland, a prosperous trading country at the time, a craze developed around the tulip. And, this tulip fever spread to the rest of Europe, too. But, like all bubbles, tulipmania ended, just as abruptly as it started.
Charles Mackay says in Popular Delusions that the price of tulip bulbs reached such heights that the Viceroy bulbs’ price shot up to almost 40 times the annual wages of a skilled labourer in the country. As per accounts, at the height of tulipmania, a fanciful Semper Augustus sold for more than the cost of a fashionable Amsterdam mansion! Unaware of the rise in the price of tulips, a botanist put his hands on a tulip bulb only to be taken to court and was imprisoned till compensation was paid. Plots in Europe started being diverted towards facilitating the cultivation of these bulbs, which used to be imported from Constantinople till then. The flower even entered the array of marriage transactions.
Economists have since studied tulipmania to understand irrational and unusual human behaviour. This Dutch bubble has become a part of many works on financial history, especially in the works of Charles P Kindleberger and John Kenneth Galbraith. Historians have dug deep into the archives of the past to unravel the story of tulip prices. However, Harvard historian Anne Goldgar does not find any irrationality in the tulipmania of the 17th century. She attributes the same to be the logical outcome of the rise of Dutch cosmopolitanism and the new-found love for whatever was exotic in nature.
When there is a speculative frenzy in the markets for commodities or stocks, news anchors keep reminding us about tulipmania. The problem, Keynes said, was not with speculation per se, but with enterprise becoming a bubble in the whirlpool of speculation. The lovely tulip came back to the limelight during the Great Depression and crashed in October I929 — the world was reminded of tulipmania again as land prices soared high in Japan in the 1980s. When the dot com bubble burst in 2000, again tulipmania was brought back into the spotlight. We did this again, during the financial crisis in the United States in 2007-08. That crash troubled even the global banks far away in Europe.
Yes, we continue to see this 17th-century phenomenon in the crypto world — in Bitcoin as well as in the soaring prices of tech stocks on Nasdaq. And, now with Nvidia reaching a market capitalisation of $2 trillion, riding the AI wave and Elon Musk riding the electric vehicle (EV) tide, is it time to recall tulipmania? Perhaps the tulips are here in Delhi to call our attention to the same.
S Krishnakumar teaches economics at Sri Venkateswara College, Delhi University. The views expressed are personal
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