The crisis dejour – throughout time, markets have followed a crowd mindset. The more excited a market gets, the more people want to jump in, and the higher the prices are pushed up.

This social experience has occured throughout history and the cycles can be studied consistently. Professor G. Watson teaches economics and the role in the market economy. Regardless of whether we want to think about recent real estate markets which have Pop, these scenarios are not original. They have regularly occurred throughout history.

One of the most well known historical markets that burst was Amsterdam’s Tuplip market. We can study the Tulipmania of the tulip market that burst in 1637 as a popularly documented historical account of a economy that overheated.

Tulips were originally introduced from Turkey in the early 16th century. As new “varieties” of tulip bulbs were discovered, competition intensified and their prices soared. One legitimately rare variety was the Semper Augustus which reached values in excess of 1,000 florins per single bulb in 1623. This price exceeded more than six times the average annual wage.

This industry mania continued – and 10 years later the price had risen another ten times. At the market height, the price of a single Semper Augustus bulb reached 10,000 florins – the value of what it cost to purchase a house in central Amsterdam at the time.

With time the market peaked and there was no-one remaining who still wanted to buy these tulips at such high prices. Within weeks, the market value crashed and thousands of people were left in financial ruin.

Throughout history – we have seen similar bubbles develop. As the crowd mentality continues to get more excited, those contrary views become less and less popular to be heard. Are any of the recent market bubbles any different? In modern environment of PC speech, are the contrarian voices that speak up for character, ethics, and honesty any different? Throughout time, these contrarian voices have been demeaned and ignored. But the market for products and the market for principles has a way of eventually correcting itself from the heat of the crowd mentality – and those polar views tend to have their bubbles burst as the inevitable correction occurs. Today’s market is no different.