History: Tulip Mania and the Dutch East India Company

I watched the wonderful movie "Tulip Fever" which is a romantic drama film set in the 17th century Amsterdem. The plot follows a 17th-century painter in Amsterdam who falls in love with a married woman whose portrait he has been commissioned to paint. You can read more about it here on Wikipedia. This movie shows an interesting episode from history, called "Tulip Mania". Following is an extract from Wikipedia about it: 

"Tulip mania (Dutch: tulpenmanie) was a period in the Dutch Golden Age during which contract prices for some bulbs of the recently introduced and fashionable tulip reached extraordinarily high levels and then dramatically collapsed in February 1637. It is generally considered the first recorded speculative bubble. In many ways, the tulip mania was more of a hitherto unknown socio-economic phenomenon than a significant economic crisis. Historically, it had no critical influence on the prosperity of the Dutch Republic, the world's leading economic and financial power in the 17th century. Also, from about 1600 to 1720 the Dutch had the highest per capita income in the world. The term "tulip mania" is now often used metaphorically to refer to any large economic bubble when asset prices deviate from intrinsic values." 

The collapse of Tuplip Mania is explained in following para:

"Tulip mania reached its peak during the winter of 1636–37, when some bulbs were reportedly changing hands ten times in a day. No deliveries were ever made to fulfil any of these contracts, because in February 1637, tulip bulb contract prices collapsed abruptly and the trade of tulips ground to a halt. The collapse began in Haarlem, when, for the first time, buyers apparently refused to show up at a routine bulb auction. This may have been because Haarlem was then suffering from an outbreak of bubonic plague. The existence of the plague may have helped to create a culture of fatalistic risk-taking that allowed the speculation to skyrocket in the first place; this outbreak might also have helped to burst the bubble."

Along with this interesting phenomenon, the movie also spoke about "East Indies". In this context we are talking about expeditions of the Dutch to India and Asian countries of those times. Amsterdam merchants were at the center of the lucrative East Indies trade, where one voyage could yield profits of 400%.

From Wikipedia article: 

"The Dutch East India Company (Dutch: Vereenigde Oostindische Compagnie; VOC) was an early megacorporation founded by a government-directed amalgamation of several rival Dutch trading companies (voorcompagnieën) in the early 17th century.[1][2] It was established on March 20, 1602, as a chartered company to trade with India and Indianised Southeast Asian countries when the Dutch government granted it a 21-year monopoly on the Dutch spice trade."

"United East India Company (VOC) was a successful early pioneer at the dawn of modern capitalism. It was the first corporation to be listed on an official stock exchange. It was influential in the rise of corporate-led globalisation in the early modern period."

Both are very interesting subjects in themselves.

-      Rahul Tiwary