The marketing trauma dejour – throughout history, real estate markets have followed a crowd mindset. The more excited a market gets, the more people want to invest, and the higher the prices are driven.

This bubble has occured throughout history and the cycles can be analyzed consistently. Professor Greg Watson teaches corporate business ethics and the role in the market economy. Regardless of whether we want to think about recent banking markets which have Pop, these events are not new. They have routinely occurred throughout time.

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

Tulips were originally imported from Turkey in the early 16th century. As new “varieties” of tulip bulbs were sold, competition intensified and their value 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 was more than six times the average annual wage.

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

Eventually the market peaked and there was no-one left who still wanted to buy these tulips at such high valuations. Within weeks, the market value crashed and many of people were left in economic ruin.

Throughout time – we have seen similar bubbles reoccur. As the crowd mentality continues to get more hyped, those contrary voices become less and less popular to be heard. Are any of the recent market bubbles any different? In modern environment of politically correct speech, are the contrarian voices that speak up for character, ethics, and honesty any different? Throughout history, these contrarian voices have been ridiculed 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 politically correct views tend to have their bubbles burst as the neccessary correction occurs. Today’s market is no different.

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