Super Fitness Health BlogIndustry Bubbles should Break – Is anything original Today?
The financial crisis dejour – historically, markets have followed a crowd mindset. The more excited a market gets, the more individuals want to buy in, and the higher the prices are driven.
This bubble has occured throughout history and the cycles can be studied consistently. Professor Watson teaches ethics and entrepreneurship and the role of the market economy. Regardless of whether we want to analyze recent banking markets which have Burst, these scenarios are not new. They have regularly occurred throughout history.
One of the most discussed historical markets that broke was Amsterdam’s Tuplip market. We can analyzie the Tulipmania of the tulip market that burst in 1637 as a popularly known historical account of a economy that overheated.
Tulips were originally brought from Turkey in the early 16th century. As new “varieties” of tulip bulbs were introduced, competition intensified and their value soared. One legitimately rare variety was the Semper Augustus which reached prices 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 value had increased another ten times. At the market height, the value of a single Semper Augustus bulb reached 10,000 florins – the equivalent of what it cost to acquire a house in the middle of Amsterdam at the time.
With time the market peaked and there was no-one left who still wanted to buy these tulips at such high prices. Within months, the market value crashed and thousands of people were left in financial ruin.
Throughout time – we have witnessed similar bubbles develop. As the crowd mentality continues to get more hyped, 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 morality, ethics, and integrity any different? Throughout history, 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 – and those polar views tend to have their bubbles burst as the inevitable correction occurs. Today’s market is no different.
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