In Tulipomania Mike Dash details the spread of the tulip from Central
Asia, through Turkic and later Islamic culture, and then into Europe. Dash then examines the dispersal of the
tulip in the Netherlands, especially focusing on academic horticulturists. From here the interest in new varietals
and unusual patterns takes off.
Dash shows a growing interest in the tulip, which drives up prices, but
attributes some of this to investors who have minimal interest in the flower
itself. Dash mentions many factors
in the rising prices for tulips, including the impact of the plague on the willingness
to take risks and the evolution of what Dash considers a futures market.
The key question concerning Tulipomania is whether or not the tulip
is a commodity. The demand for
tulip bulbs is overwhelmingly in favor of bulbs that produce unusual flowers,
and because the vicissitudes of a virus produced some of the most spectacular colorations, there was little assurance that the bulb would sprout into the pattern
claimed by the grower. This is a
stark contrast with most of the other commodities we have studied this
semester, in which a hand of Cavendish bananas is the same whether it comes
from Vietnam or Honduras. This characteristic
is called fungibility, and I contend that it is the fundamental distinction of
commodities. This is not the same
as arguing that all forms of a commodity must be exactly the same, but rather
to say that there are different standards, and a commodity must meet one of
those many standard in order to be exchanged. For example light sweet crude is the same whether the oil comes
from Nigeria or Texas, but in order to meet that designation the oil must have
a certain sulfur content and specific gravity. Some tulips, sold by the bed, might meet this standard, but
the overwhelming majority of blubs that achieve high prices in Tulipomania are idiosyncratic and thus not
fungible, and are therefore not commodities. This seems to tend towards the position that the tulip mania
was a fad for a luxury good, rather than a commodity bubble.
Joe you have expressed something that has been bothering me for awhile, and that is the issue of standardization. As you mentioned the bananas that we saw in Jon Soluri's book were held to a market standard. This seems to be a more important aspect of the more 'modern' commodities. Is it this ability to produce a desirable result more effectively that allows for fungibility? Or is fungibility a product of the commodity itself regardless of standardization. I guess what I'm trying to say is that I'm struggling to come to terms with the ways people impose/demand standards on things and the ways things impose standards on people. People tried to turn tulips into commodities, and in turn tulips transformed the lives of people.
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