a contrarian view of the Dutch tulip bubble

[eub]

A Slate article summarizes an argument (PDF, graphs all black) that the Dutch tulip bubble wasn't a bubble -- it was an efficient market response to a legislative intervention, when the Dutch legislature essentially converted outstanding tulip futures into options, at the behest of certain burgomasters who had gotten themselves into a hole.

Comments

[eub.livejournal.com]

This "Mississippi System" is interesting, and something I'd never heard of. The best description I came across is pages 13-16 of The History of Banks: To Which Is Added, a Demonstration of the Advantages and Necessity of Free Competition In the Business of Banking (PDF), by a Richard Hildreth.

And then in illustration there's the Frontispiece of Arlequin Actionist (Amsterdam, 1720), reprinted in Antoine Murphy, John Law (Oxford, 1997). ("You're looking at a contemporary scatological rendering of John Law making fiat money. You can see him up on the platform there being fed hard money and then passing paper money out the other end.")