Economist Hyman P. Minsky's views on boom to bust in
Stabilizing an Unstable Economy are often cited as a
roadmap for market evolution. His progression theory begins with
displacement and then moves to boom, euphoria, profit taking, and
finally, panic. For purposes of this article, I cull Minsky's
five mile markers down to a few and go back to the 17th Century as
a precursor of the digital collapse just around the corner.
In 1634, a tulip bulb was one of the most desired commodities
one could buy. Prices rose year after year and a single tulip bulb
could change hands many times in just one day. Public auctions
drove prices even higher. Speculators made fortunes.
Then suddenly in 1637, the bottom fell out of the tulip market.
Prices dropped like a stone until they hit bottom and fortunes were
lost; lives were ruined — all due to a flower bulb.
