Tulip Fever: Love Amidst a Speculative Bubble

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17th Century Netherlands, Alicia Vikander, Christoph Waltz, Dane DeHaan, Early Modern Europe, Justin Chadwick, Tulip Fever, Tulipmania

Tulip Fever  (2017, dir. Justin Chadwick, based on the novel of the same name by Deborah Moggach) is a modest little movie set in Amsterdam (I think) in 1637. It tells the story of Sophia (Alicia Vikander), a young orphan married to Cornelis (Cristoph Waltz), a wealthy merchant. As usually happens when Hollywood presents May-December marriages, Sophia has an affair with a man closer to her own age, Jan (Dane DeHaan), a painter that Cornelis has hired to do a portrait of the two of them. What sets the film apart from every other iteration of this film are two things, the attempted resolution to the adultery and the fact that history’s first economic bubble, Tulip Mania, was happening at the time.

Spoiler Alert: If you’re thinking about watching this film, you might want to stop reading, since I give away a couple of big plot points.

 

The Plot

The set-up is, as I’ve already said, pretty familiar. You’ve probably seen a dozen films with that Spring-Winter love triangle. Sophia is Cornelis’ second wife, his first wife having died in childbirth along with the baby. After three years of marriage, Sophia has not produced a child and Cornelis is beginning to talk about divorcing her (which he could have, although realistically Dutch religious authorities only granted divorce in cases of adultery). When Sophia meets Jan, the two of them quickly begin an affair, with a little help from Maria (Holliday Granger), Sophia’s servant and confidante. But then Maria’s boyfriend gets her pregnant and disappears, leaving her staring down the barrel of social ruin. The two of them, aided by an unscrupulous physician, hatch a plot to solve all three problems at once. Sophia will pretend to be pregnant while they hide Maria’s condition from Cornelis. When Maria gives birth, the baby will be presented to Cornelis as his, but they will claim that Sophia died in childbirth, allowing her to run off with Jan. Needless to say, things don’t work out as planned.

The film offers a nice look at how all of those portraits that you see in museums were painted. Jan spends some time making sketches of the couple, and paints their faces onto canvas, but then uses stand-ins and manikins dressed in the subjects’ clothes to paint most of the rest of the painting. He makes multiple studies of their faces and other details before finally executing the commissioned painting. He also talks about the symbolism of the various objects included in the painting: a globe to hint at Cornelis’ occupation as a spice merchant, a pair of scales to indicate an awareness of God’s judgment, and a skull to demonstrate an awareness of mortality. 17^thcentury Dutch Calvinists were expected to show off both their economic success and their godliness, so an expensive painting could do both simultaneously. The portrait is intended as a way of saying “Look at me, bitches, I’ve got money, but I know it’s really just a temporary blessing from God.”

Unfortunately, the paintings that Jan does in the film look a lot more like an mid-20^thcentury portraits than 17th century ones. But let’s not quibble.

Jan deciding how to pose Sophia

 

Putting the Tulips in Tulip Fever

A key part of the story is the wild speculation into tulip futures that today is known as Tulipmania. Both Maria’s boyfriend and Jan get involved in speculating in the tulip market. Jan borrows heavily to purchase a rare bulb that he plans on selling to finance his intended life with Sophia. So let’s look at Tulipmania.

The Tulip was introduced into Europe from the Ottoman Empire in the mid-16^thcentury, and it became extremely popular in the Netherlands in the 1590s, owing to its deeply-saturated color. By this point the Netherlands was rapidly rising in wealth due to the strength of its maritime trade; in the 17^thcentury, the Dutch enjoyed the highest per capita income of any people in the world (one reason for all those Dutch paintings). The Dutch had a lot of money to spend, just like Americans in the 1980s, and the result was a thriving market for luxury goods like flowers. The most highly-prized were the ‘Breakers’, tulips that had a primary color broken with stripes of a different color, caused by the Mosaic Virus. The most highly-prized were the ‘Bizarres’, which had yellow or white stripes on red, purple, or brown backgrounds. (The film gets this wrong, claiming that the most coveted were white tulips with red streaks. I think they decided that red on white was either more striking on the screen or else that red on white had a nice symbolism for Sophia’s lost moral purity.)

Man with a wife and a tulip

 

In the 17^thcentury, the Dutch had perhaps the most sophisticated financial sector in the world, with a thriving futures market. By the early 1630s, a market developed for speculation in tulip bulb futures, in which prices for the more unusual Breaker bulbs rose rapidly, and by 1636, the market for unbroken bulbs also heated up, and tulip bulbs became the fourth-most important export of the Netherlands. In 1635, one sale of 40 bulbs netted 100,000 guilders; for comparison, a skilled labor might earn between 150 and 350 guilders a year. So these bulbs were pretty much worth their weight in gold.

At that point, the market got quite complex. Investors bought contracts for future bulbs and then turned around and sold them immediately. What was changing hands was not the tulip bulbs themselves (which were still in the ground), but the contracts for ownership of those bulbs when they came out of the ground in the summer. Most of the people who bought the contracts never saw the bulbs they technically owned. Trading was done in taverns, with a small fee charged on each sale going to pay for wine, and one can easily imagine that some degree of inebriation played a role in the rising prices.

But then, in February of 1637, the market abruptly crashed. A group of buyers refused to show up to a sale in Haarlem because of an outbreak of bubonic plague in the city. The government declared that anyone could void a purchase contract by paying a 10% penalty, and as lawsuits occurred, judges concluded that these contracts were a form of gambling and thus unenforceable. And later in the month the Florists’ Guild decreed that those who held the futures contracts were not obligated to purchase the bulbs; in effect the futures contract became an option contract.

The Semper Augustus Breaker tulip

 

In 1841, the first modern account of Tulipmania was published by the Scottish author Charles Mackay. In Extraordinary Popular Delusions and the Madness of Crowds, Mackay reported stories of mass irrationalities, lumping together the Crusades, dueling, fortune telling, and (most importantly for our purposes) economic bubbles. He identified Tulipmania as one of three major examples of speculative bubbles. An economic bubble arises when the trade price of something irrationally exceeds its intrinsic value. People buy the asset expecting the price to continue rising and then turn around and sell it, pocketing the difference between the purchase price and the sale price as profit. Eventually, however, the bubble bursts. People realize that the asset is over-valued and stop buying. That causes the prices to start coming down, and there’s a sudden scramble to unload the asset, generally at a loss. (The 1929 Stock Market Crash and the Housing Crash of 2008 are both examples of speculative bubbles.)

Mackay’s description of Tulip Mania presented it as a madness that caught a hold of the general Dutch population, with everyone from nobles down to chambermaids and chimney sweeps getting into the market. He reports a story in which a sailor mistakenly ate a rare bulb, thinking it was an onion. (The story is probably false because while tulip petals are edible, tulip bulbs are both unpleasant-tasting and poisonous to humans unless carefully prepared.) Contracts supposedly changed hands hundreds of times. When the bubble burst, thousands were left destitute and some supposedly committed suicide by throwing themselves into the canals.

Tulip Fever definitely presents this view. Maria’s boyfriend buys a batch of plain white bulbs, hoping to make a small profit, but gets lucky when one bulb turns out to be a red-on-white Breaker. He pays 18 guilders for the lot and sells the Breaker for 920 guilders, but then gets robbed. The Breaker’s buyer then donates the bulb back to the convent that grew it, enabling the abbess (an underused Judi Dench) to sell it to Jan, who goes deeply in debt to buy it. Buying it for 1200 guilders, he sells it for 8000. But his creditors refuse to let him leave to fetch the bulb, so he sends his drunkard servant (played by the always-annoying Zach Galifianikis) to pick up the bulb from the abbess, who jokingly tells him it’s an onion. On the way back, he eats the bulb, thus ruining Jan. The market inexplicably collapses the same day.

If you’re a fan of big ruffs, this is the movie for you

 

The film mis-presents what’s going on. Instead of futures contracts, it shows the actual bulbs changing hands. The buyer gets a contract that is redeemed with the grower, who hands over the bulbs. I suspect the decision to show it this way was made because futures sales are a fairly abstract concept that is likely to confuse many viewers. But it’s hard to understand how a bubble could develop the way the film shows, since bulbs obviously take time to grow, which would probably act as a brake on the market. It was the very intangeability of the bulbs as an asset that allowed the market to get overheated. Also, if the bulbs themselves don’t change hands, that key moment of Jan’s bulb getting eaten can’t happen.

Nor does the film connect Tulipmania to the growing prosperity the Dutch were enjoying in the 1630s. As in 2008, there was too much money chasing too few investments and people felt flush with cash. Detached from its economic setting the whole Tulip Mania element of the film just feels a bit silly.

 

More Importantly…

Mackay’s story of Tulip Mania is wildly exaggerated. Mackay was a great story-teller, but he wasn’t an historian. In the 1980s, economists began digging into the facts behind his narrative, and much of the story collapsed, its own kind of narrative bubble. Mackay drew on a number of pamphlets written by religious authors who were hostile to the idea of a futures market in tulips because they saw it as immoral. These pamphlets argued that the crash was due to an improper concentration on material things rather than salvation. There isn’t a whole lot of evidence for the movement of tulip prices; the vast majority of evidence comes from 1637, making it hard to say for certain that the prices were actually in a bubble. Contracts did not in fact change hands hundreds of times; the most-traded contracts changed hands five times, and usually much less than that. No one committed suicide over the crash.

More importantly, in contrast to Mackay’s claims, most of the evidence suggests that the people who were investing in tulip futures were wealthy merchants with excess cash to play with, not poor laborers hoping to get rich. Only 37 people are known to have spent more than 300 guilders on a purchase. Whereas Mackay claims that thousands were financially ruined, in actuality, it was probably more like 5 or 6 men who lost their shirts. In fact, most sales didn’t involve actual money changing hands (that wouldn’t happen until the final buyer actually picked up the bulbs in May or June), so unless someone had bought a contract on credit, they wouldn’t have lost much when the market crashed. The only people seriously at risk were those who were expecting to get paid for their bulbs. They still had their assets, but if they had borrowed money on the expectation of the sale, they could have been in serious trouble.

So while the price of tulips did suddenly crash in February of 1637, the scenario that the film presents is basically untrue, though not entirely without foundation. Overall, Tulip Fever is not a bad little film but it’s not exactly a great movie either, and it’s easy to see why it came and went last year without attracting much attention. Maria starts blackmailing Sophia, Jan doesn’t seem like a man likely to inspire adulterous passion, and Cornelis becomes quite sympathetic as the film goes on, leaving the viewer unsure who to root for by the film’s denouement. For a romantic drama, it has a surprising amount of humor, although Cornelis’ repeated struggles to get his “little soldier to stand up” get kind of creepy.

If you have a film or tv show you would like me to review, please make a donation to my PayPal account and request one.

 

Want to Know More?

Tulip Fever is available on Amazon. Deborah Moggach’s novel Tulip Fever is also available.

If you want to know more about Tulipmania, Mackay’s Extraordinary Popular Delusions and the Madness of Crowds is still in print, and gets updated periodically. Or you could get Anne Goldgar’s scholarly study of Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age, which debunks much of Mackay’s narrative.

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A Royal Affair: Enlightenment and Adultery in 18th Century Denmark

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18th Century Europe, A Royal Affair, Alicia Vikander, Caroline Matilda of Denmark, Christian VII of Denmark, Johann Struensee, Kings and Queens, Mads Mikkelsen, The Enlightenment

The Enlightenment

The 18^th century is a critically important period in the history of modern Western civilization. Politically, it was characterized by absolute monarchy almost everywhere except England and the Netherlands. To summarize a complex political system, absolute monarchy was based on the principle that all legitimate political power came from the king, who recognized only God as the limit to his political powers. In theory, the king had the power to run the state at his will, legislate as he saw fit, and enforce or waive laws as suited him.

The reality, of course, was more complex. While kings were supposed to rule in person, they typically depended on royal councils and bureaucracies to manage the state for them, and this meant that they had to compromise with the various other powers in their states, particularly the clergy and the nobility. Kings were more absolute in theory than they were in practice, and in some situations it took a truly determined absolute monarch to overcome resistance to the changes he wished to enact.

The 18^th century was also the Age of the Enlightenment. The Scientific Revolution, which had gotten going in the previous century or so, had encouraged the growth of rationalism and a demand for scientific evidence for ideas about how the world worked. As Western society began to accept the existence of the laws of physics, it naturally began to occur to intellectuals that rationalism could be applied to human society. Intellectuals, often called philosophes, began to develop a rational critique of Western society in a movement that they saw as paralleling the Scientific Revolution. These men and a few women began searching for the laws of human society, the principles upon which society ought to be based. Broadly speaking, philosophes opposed anything they saw as irrational or arbitrary, such as laws that give the nobility legal privileges simply for being nobles. Many, such as the great thinker Voltaire, accused the Catholic Church of teaching not religion but superstition, while Montesquieu called for legal reforms and a more rational balance of powers in which executive, legislative, and judicial branches enjoyed separate spheres of power that mutually limited each other branch’s powers. Sound familiar? It should; this is the period that gave birth to American democracy.

Denmark in the late 18^th Century

From 1766 to 1808, Denmark was ruled by Christian VII, at least in name. The Danish kings were, like all other kings except the English ones, absolute monarchs. But Christian VII was a rather poor monarch. He was a smart and sensitive man and seemingly quite talented, but he was the victim of a personal tutor who physically and emotionally terrorized him while growing up, and of a group of courtiers who provided him with a steady string of prostitutes and mistresses. The result was an emotionally unstable man who may have suffered from some form of schizophrenia. He was given to sudden outbursts of emotion and fits of anger, moments of paranoia, and perhaps even self-mutilation.

Christian VII

As a result, instead of Christian ruling personally, control of the government was in the hands of the nobles who controlled the royal council. Public opinion also had a remarkably strong role in Danish politics in this period, such that one historian has declared it “absolutism driven by opinion”. The details of government bored the young king, and he often ignored his responsibilities for days on end, which only strengthened the control of the royal council.

In 1766, in addition to becoming king, Christian married his cousin Caroline Matilda, the younger sister of George III of Great Britain. However it was a very poor match. Christian publicly declared that it was “unfashionable to love one’s wife”, and instead continued carrying on with a string of mistresses and prostitutes. They consummated the marriage long enough to have a child, the future Frederick VI, and then apparently stopped sleeping together.

Caroline Matilda was an intelligent and well-educated woman, by the standards of her day; she spoke four languages. But whether she might be considered an intellectual is by no means clear; it is unlikely that she was deeply exposed to the ideas of the Enlightenment. She may also have had a taste for men’s clothing and riding astride rather than side-saddle, although this might be political slander from later in her life.

Caroline Matilda

In 1770, Christian went on a tour of Europe, and when he returned home he brought with him a new German physician, Johann Struensee, who proved remarkably adept at managing Christian’s erratic mood swings. This gave him a great deal of control over the young king. Struensee was a man deeply sympathetic to the Enlightenment critique of government and society.

As a result of his influence over the king, Struensee was able to displace the royal council and essentially took over the running of the kingdom. Initially he had the king sign documents, but eventually the king signed off on a law allowing Struensee’s signature to count as his own. For three years, from 1770 to 1772, he produced an explosion of new legislation, averaging three new decrees a day. In accordance with Enlightenment principles, he centralized the government in a cabinet with himself at the center; replaced the senior officials (who mostly represented the land-owning nobility) with bourgeois bureaucrats; abolished censorship, torture, noble privileges, and the compulsory labor of the lower classes; restructured the state’s finances to the disadvantage of the landowners; reformed the university and the army; found a way to keep grain prices stable; and banned the slave trade, among other things. He also introduced vaccinations for small-pox, persuading the king and queen to permit their infant son to be vaccinated.

Johann Frederich Struensee

Struensee also reputedly began an affair with Caroline Matilda. I’m not an expert on 18^th century Denmark, so I don’t know what the actual evidence for the affair is. None of the information I could find online seems conclusive to me; Caroline Matilda became a more powerful figure at court during Struensee’s period, he had a bedroom in the royal palace, and in 1771 Caroline Matilda gave birth to her second child, Louise Augusta (who was acknowledged by the king as his child).

Regardless of whether Struensee had an actual affair with the queen, in January of 1772, Christian’s step-mother Dowager Queen Julaine-Marie organized a coup against Struensee with the help of various disaffected nobles. She appears to have been seeking to promote the position of her own son, Christian’s half-brother. The king was persuaded to sign an arrest warrant, and in the middle of the night, Struensee, an associate Enevold Brandt, and Caroline Matilda were all arrested. Struensee was accused of usurping the royal authority (which, to be fair, he had), and of adultery with the queen. The fact that the adultery charge was so perfectly convenient politically leads me to be suspicious of it. But it was treated as serious at the time, and Struensee, after considerable torture, confessed to the charge.

Struensee and Brandt were both publicly executed, an action Christian later regretted. Caroline Matilda was divorced and imprisoned. After a while, pressure from George III led to her being shipped off to Hanover, George’s continental state, and she lived under loose house arrest in Celle, since George was reluctant to allow his sister to return home. She died suddenly in 1775, of scarlet fever, while she was in the middle of a conspiracy to overthrow her ex-husband in favor of her son.

However, while the Dowager Queen and her faction were able to return to power, they were unable to roll the clock back on the fundamental shift that had occurred away from the power of noble landowners. Danish agriculture underwent drastic reforms over the next two decades that modernized it and permitted small Danish farms to begin farming not just for subsistence but for the export market. That in turn increased their influence in society and prevented a return to a pre-Enlightenment status quo.

In 1784, a young Prince Frederick and a group of more liberal-minded nobles forced the Queen Dowager’s faction out of power and rather than governing by decree, found ways to incentivize the liberalization of the both the economy and the political system. In some ways, this was the beginning of modern Denmark’s social evolution.

So Is There A Movie Involved, or Was This Just an Excuse to Prattle on about 18^th century Danish Politics?

Yes there is. A while ago, I was looking for movies about Scandinavian history on Netflix, and I stumbled across A Royal Affair (2012, dir. Nikolaj Arcel, Danish with subtitles). I’d never heard of it, but I knew just a little bit about its subject matter, so I watched it. It turns out to be a romance, but one with a rather strong interest in the politics and intellectual currents of the period, and far from the worst film I’ve seen on Early Modern Europe.

A Royal Affair

The film is told from the point of view of Caroline Matilda (Alicia Vikander). It opens with a framing device, a letter she supposedly wrote to Frederick and Louise Augusta as she was dying of scarlet fever. This letter establishes that she is not being allowed to see her children, and then the movie turns into a straight-forward narrative of the events mostly from her perspective. The film gets all the major facts right, and assumes that Struensee (Mads Mikkelsen) and the queen did have an affair.

Struensee and Caroline Matilda

The film does a reasonable job of trying to depict Struensee’s reforms and the complexity involved. Having revoked the censorship law, he is eventually shocked to learn that the press can be used against him, and he reluctantly has to re-instate it. His economic changes require financing, and once he starts paring back the government subsidies to the nobility, they begin to resist his changes. Indeed, the film claims that Struensee was betrayed by a noble who had previous been a friend that he refused to help out of debt. Juliane-Marie successful subverts the palace guard by pointing out to their captain how the reforms are negatively affecting the Danish army. So the film spends a fair amount of time exploring both the business of running an 18^th century kingdom and the extraordinary challenge of introducing major changes to an established system.

What the film gets wrong is that it combines the story of the affair with the story of Struensee’s political reforms. The film asserts that Caroline Matilda was intellectually interested in the Enlightenment and political reforms; indeed that is one of the things that draws her to Struensee in the first place. The film also claims that Christian (Mikkel Folsgaard) was interested in reform but was too emotionally weak to act on those desires until Struensee helped him find his strength of will. While Christian and Caroline Matilda feel no attraction to each other, they become friends through a shared interest in Struensee’s projects and the three of them form the nucleus of a group of reform-minded people at court.

This is unlikely. There doesn’t seem to be any actual evidence that Caroline Matilda was part of Struensee’s intellectual circle, nor does there seem to be much evidence that Christian was truly interested in political reforms. But linking the two major issues of Christian’s reign is an intelligent decision, because by getting the viewer to care about the relationship, it also gets the viewer to care about the politics.

What dooms both the affair and the political reforms is Struensee’s inability to keep a hold over the king. His relationship with Caroline Matilda and the enormous effort of running and reforming the government lead him to neglect his friendship with the king, which creates the opening that allows Juliane-Marie to drive a wedge between them and ultimately sink her hooks into the king. Thus the film extends the linkage between the romance and the political reforms by showing how the one essentially doomed the other.

Overall, the film does a nice job of presenting what is probably to most English-speakers a fairly obscure period, both culturally and intellectually. Given that there aren’t many films about the Enlightenment, I’d have to recommend it as an easy way to learn a little about it.

Incidentally, Caroline Matilda seems to have become the focus of a number of romance novels.

This one looks particularly…interesting

Update: Caroline Matilda was the sister of George III, who is the subject of The Madness of King George

Want to Know More?

A Royal Affair (English Subtitled)is available on Amazon.

Sadly, there’s a dearth of serious works on Carolina Matilda or Christian VII, and the only things I’ve found on Struensee are in German.