{"id":1358,"date":"2008-10-10T11:19:15","date_gmt":"2008-10-10T10:19:15","guid":{"rendered":"http:\/\/www.dianeduane.com\/outofambit\/2008\/10\/10\/the-tulip-bubble-not-so-bubbly-and-the-gods-of-the-copybook-headings\/"},"modified":"2008-10-10T11:19:15","modified_gmt":"2008-10-10T10:19:15","slug":"the-tulip-bubble-not-so-bubbly-and-the-gods-of-the-copybook-headings","status":"publish","type":"post","link":"https:\/\/www.dianeduane.com\/outofambit\/2008\/10\/10\/the-tulip-bubble-not-so-bubbly-and-the-gods-of-the-copybook-headings\/","title":{"rendered":"The &quot;tulip bubble&quot;: not so bubbly? (and, &quot;The Gods of the Copybook Headings&quot;)"},"content":{"rendered":"<p>With the world markets doing what they\u2019re doing at the moment, it\u2019s no wonder that past crashes and bubbles are being discussed a lot on the Intarwebz. The <a href=\"http:\/\/en.wikipedia.org\/wiki\/Tulip_mania\">Tulip Bubble <\/a>in particular has been getting a lot of attention, maybe because it just seems so nuts now that we\u2019re used to seeing financial madness mostly centered around the (mis)handling of various kinds of paper.<\/p>\n<p>But here\u2019s an interesting article that suggests maybe what happened with the tulips in 1636\u20137 wasn\u2019t so crazy after all:<\/p>\n<blockquote dir=\"ltr\" style=\"margin-right: 0px\"><p>[\u2026the Dutch]\u00a0were rationally responding, in finest efficient-market fashion, to overlooked changes in the rules of tulip investing.<\/p>\n<p>As European prices for the dramatic flowers rose in the 1630s, many burgomasters\u2014local mayors\u2014started to invest in the bulbs. But in the fall of 1636, the European tulip market suddenly wilted because of a crisis in Germany. German nobles were big fans of tulips and had taken to planting bulbs. But in October 1636, the Germans lost a battle to the Swedes at <a href=\"http:\/\/www.fact-index.com\/b\/ba\/battle_of_wittstock.html\" target=\"_blank\">Wittstock<\/a>. Then German peasants began to revolt. The German demand for tulips sagged, and princes began digging up their own bulbs and selling them\u2026.<\/p>\n<p>The sudden glut caused prices to fall, and Dutch burgomasters began losing money. They were in a bind. Trade in tulip bulbs was conducted through futures contracts: Buyers agreed to pay a fixed price for tulip bulbs at some point in the future. With prices having fallen in the fall, leveraged burgomasters were tied into paying above-market prices for bulbs to be delivered in the spring.<\/p>\n<p>Rather than take their lumps, these politically connected investors tried to change the market rules\u2014and they succeeded.<\/p><\/blockquote>\n<p>At which point the thoughtful reader says,\u00a0<em>uh oh!!<\/em><\/p>\n<p>\u201cThe present regulations suck? Oh, okay,\u00a0we\u2019ll just change the rules \/ deregulate!\u201d Does this sound at all familiar?\u2026 And why am I not surprised to hear\u00a0Kipling muttering in the background?<\/p>\n<blockquote dir=\"ltr\" style=\"margin-right: 0px\"><p><em>Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew<br \/>\nAnd the hearts of the meanest were humbled and began to believe it was true<br \/>\nThat All is not Gold that Glitters, and Two and Two make Four\u2026<\/em><\/p><\/blockquote>\n<p dir=\"ltr\">To my great delight, one of the columnists at the International Herald Tribune\u00a0this week <a href=\"http:\/\/www.iht.com\/articles\/2008\/10\/05\/opinion\/edcohen.php\">heard him too. <\/a>He was writing more in the political mode\u2026 but whatever. (A couple of <a href=\"http:\/\/www.dallasnews.com\/sharedcontent\/dws\/dn\/opinion\/points\/stories\/DN-dreher_28edi.ART0.State.Edition1.26c070f.html\">other<\/a> <a href=\"http:\/\/www.atimes.com\/atimes\/Global_Economy\/JJ08Dj02.html\">commentators<\/a> have picked up on <a href=\"http:\/\/www.olimu.com\/readings\/GodsOfTheCopybookHeadings.htm\">\u201cThe Gods of the Copybook Headings\u201d<\/a>\u00a0as well, excerpting one verse or another.)\u00a0 For those curious about the poem\u2019s title: \u201ccopybook headings\u201d were proverbs, quotations or mottoes printed in perfect handwriting\u00a0at the top of each page of an exercise book \/ notebook. You were meant to copy them down the page to perfect your own handwriting.<\/p>\n<p>This is the whole from which the excerpts come, from one of the English language\u2019s great masters of meter\u2026and concept.<\/p>\n<blockquote dir=\"ltr\" style=\"margin-right: 0px\">\n<p dir=\"ltr\" style=\"margin-right: 0px\"><span lang=\"en-us\">As I pass through my incarnations in every age and race,<br \/>\nI make my proper prostrations to the Gods of the Market Place.<br \/>\nPeering through reverent fingers I watch them flourish and fall,<br \/>\nAnd the Gods of the Copybook Headings, I notice, outlast them all.<\/span><\/p>\n<p>We were living in trees when they met us. They showed us each in turn<br \/>\nThat Water would certainly wet us, as Fire would certainly burn:<br \/>\nBut we found them lacking in Uplift, Vision and Breadth of Mind,<br \/>\nSo we left them to teach the Gorillas while we followed the March of Mankind.<\/p>\n<p>We moved as the Spirit listed. <em>They <\/em>never altered their pace,<br \/>\nBeing neither cloud nor wind-borne like the Gods of the Market Place;<br \/>\nBut they always caught up with our progress, and presently word would come<br \/>\nThat a tribe had been wiped off its icefield, or the lights had gone out in Rome.<\/p>\n<p>With the Hopes that our World is built on they were utterly out of touch,<br \/>\nThey denied that the Moon was Stilton; they denied she was even Dutch;<br \/>\nThey denied that Wishes were Horses; they denied that a Pig had Wings;<br \/>\nSo we worshipped the Gods of the Market Who promised these beautiful things.<\/p>\n<p>When the Cambrian measures were forming, They promised perpetual peace.<br \/>\nThey swore, if we gave them our weapons, that the wars of the tribes would cease.<br \/>\nBut when we disarmed They sold us and delivered us bound to our foe,<br \/>\nAnd the Gods of the Copybook Headings said: &#8220;<em>Stick to the Devil you know.<\/em>&#8221;<\/p>\n<p>On the first Feminian Sandstones we were promised the Fuller Life<br \/>\n(Which started by loving our neighbour and ended by loving his wife)<br \/>\nTill our women had no more children and the men lost reason and faith,<br \/>\nAnd the Gods of the Copybook Headings said: &#8220;<em>The Wages of Sin is Death<\/em>.&#8221;<\/p>\n<p>In the Carboniferous Epoch we were promised abundance for all,<br \/>\nBy robbing selected Peter to pay for collective Paul;<br \/>\nBut, though we had plenty of money, there was nothing our money could buy,<br \/>\nAnd the Gods of the Copybook Headings said: &#8220;<em>If you don&#8217;t work you die<\/em>.&#8221;<\/p>\n<p>Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew<br \/>\nAnd the hearts of the meanest were humbled and began to believe it was true<br \/>\nThat All is not Gold that Glitters, and Two and Two make Four\u2014<br \/>\nAnd the Gods of the Copybook Headings limped up to explain it once more.<\/p>\n<p dir=\"ltr\" style=\"margin-right: 0px\"><span lang=\"en-us\">.\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .\u00a0\u00a0\u00a0\u00a0 .<\/span><\/p>\n<p>As it will be in the future, it was at the birth of Man\u2014<br \/>\nThere are only four things certain since Social Progress began:\u2014<br \/>\nThat the Dog returns to his Vomit and the Sow returns to her Mire,<br \/>\nAnd the burnt Fool&#8217;s bandaged finger goes wabbling back to the Fire;<\/p>\n<p>And that after this is accomplished, and the brave new world begins<br \/>\nWhen all men are paid for existing and no man must pay for his sins,<br \/>\nAs surely as Water will wet us, as surely as Fire will bum,<br \/>\nThe Gods of the Copybook Headings with terror and slaughter return!<\/p><\/blockquote>\n<p dir=\"ltr\" style=\"margin-right: 0px\"><span lang=\"en-us\">\u2026A footnote to this in passing: Kipling himself was no stranger to\u00a0market-based financial trouble, <a href=\"http:\/\/books.google.com\/books?id=_2JvT3sJKYEC&amp;pg=PA64&amp;vq=bought+from+Steve&amp;dq=%22Something+of+Myself%22+Kipling&amp;source=gbs_search_s&amp;sig=ACfU3U2p4GPsWE3saT_VNL2R85biJ_1aeQ\">bad investments <\/a>and bank crashes. Chapter V of his\u00a0autobiography <a href=\"http:\/\/gutenberg.net.au\/ebooks04\/0400691.txt\"><em>Something of Myself <\/em><\/a>tells how, on his honeymoon, halfway around the world in Japan, he suddenly discovered that his own bank had crashed, and that at the height of his (early) success he was\u00a0regardless now completely broke:<\/span><\/p>\n<blockquote dir=\"ltr\" style=\"margin-right: 0px\">\n<p dir=\"ltr\" style=\"margin-right: 0px\"><a href=\"http:\/\/books.google.com\/books?id=_2JvT3sJKYEC&amp;pg=PA64&amp;vq=prophetic+as+it+turned+out&amp;dq=%22Something+of+Myself%22+Kipling&amp;source=gbs_search_s&amp;sig=ACfU3U2p4GPsWE3saT_VNL2R85biJ_1aeQ\">Here an earthquake <\/a>(prophetic as it turned out) overtook us one hot break of dawn, and we fled out into the garden, where a tall cryptomeria waggled its insane head back and forth with an &#8216;I told you so&#8217; expression; though not a breath was stirring. A little later I went to the Yokohama branch of my Bank on a wet forenoon to draw some of my solid wealth. Said the Manager to me: &#8216;Why not take more? It will be just as easy.&#8217; I answered that I did not care to have too much cash at one time in my careless keeping, but that when I had looked over my accounts I might come again in the afternoon. I did so; but in that little space my Bank, the notice on its shut door explained, had suspended payment. (Yes, I should have done better to have invested my &#8216;capital&#8217; as its London Manager had hinted.)<\/p>\n<p dir=\"ltr\" style=\"margin-right: 0px\">I returned with my news to my bride of three months and a child to be born. Except for what I had drawn that morning&#8211;the Manager had sailed as near to the wind as loyalty permitted&#8211;and the unexpended Cook vouchers, and our personal possessions in our trunks, we had nothing whatever. There was an instant Committee of Ways and Means [convened], which advanced our understanding of each other more than a cycle of solvent matrimony. Retreat&#8211;flight, if you like&#8211;was indicated. What would Cook return for the tickets, not including the price of lost dreams? &#8216;Every pound you&#8217;ve paid, of course,&#8217; said Cook of Yokohama. &#8216;These things are all luck and&#8211;here&#8217;s your refund.&#8217;<\/p>\n<\/blockquote>\n<p dir=\"ltr\" style=\"margin-right: 0px\"><font face=\"Times New Roman\"><em>Whew\u2026<br \/>\n<\/em><\/font><\/p>\n","protected":false},"excerpt":{"rendered":"<p>With the world markets doing what they\u2019re doing at the moment, it\u2019s no wonder that past crashes and bubbles are being discussed a lot on the Intarwebz. The Tulip Bubble&hellip;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","activitypub_content_warning":"","activitypub_content_visibility":"","activitypub_max_image_attachments":4,"activitypub_interaction_policy_quote":"anyone","activitypub_status":"","footnotes":""},"categories":[18,26,30,54],"tags":[128,168,201,250,299,318,339,344,368,510],"class_list":["post-1358","post","type-post","status-publish","format-standard","hentry","category-current-events","category-europe","category-finance","category-politics","tag-bubble","tag-copybook-headings","tag-dutch","tag-gods","tag-investments","tag-kipling","tag-mania","tag-markets","tag-netherlands","tag-tulip"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The &quot;tulip bubble&quot;: not so bubbly? (and, &quot;The Gods of the Copybook Headings&quot;) - Out of Ambit<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.dianeduane.com\/outofambit\/2008\/10\/10\/the-tulip-bubble-not-so-bubbly-and-the-gods-of-the-copybook-headings\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The &quot;tulip bubble&quot;: not so bubbly? (and, &quot;The Gods of the Copybook Headings&quot;) - Out of Ambit\" \/>\n<meta property=\"og:description\" content=\"With the world markets doing what they\u2019re doing at the moment, it\u2019s no wonder that past crashes and bubbles are being discussed a lot on the Intarwebz. 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