VIRUS - The Tulip Inflation

 

I want to talk about the human propensity for greed, by first discussing a small family of viruses which ignore humans completely -  the Potyviridae. These five related parasites, each 100^th the size of a bacteria, do not infect humans, but they do infect and quickly kill lilies – after all,  the word virus is Latin for poison. 

In response, lilies evolved the tulip,  resistant enough to the Potyviridae that they could reproduce for perhaps a dozen generations before succumbing to these miniature succubus. And that's when humans come into the picture, because long before humans knew there was such thing as a virus, they found a way to ruin their lives, and the lives of thousands of their fellow humans, by investing in Potyviridae - which they did not know even existed.

See, tulips evolved from lilies where Europe blends into Asia, in the Ferghana Basin, north of Afghanistan, east of the Caspian Sea and west of Lake Balkhash - what is today Uzbekistan. The basin is surrounded by mountains, and in this isolated test tube 36 different varieties of wild tulips developed over a few thousand years. 

Some had multiple stalks and blooms, some only one. The blooms could be white, red, yellow or orange. 

But when infected with Potyviridae the blooms would be wildly stained as if a child had asymmetrically dripped paint over them. This was the normal interaction between a species and a virus which preyed on it. But then the unexpected happened. 

In the  8^th century, humans living in the Ferghana Basin converted to Islam, and tulip bulbs were transported westward to Islamic population centers, as a beautiful curiosity, the more so because of the fanciful patterns they displayed when infected by Potyviridea, which traveled with its host bulb. And because the bulbs could be transported thousands of miles, because they were purely ornamental, and because they had to be replaced every decade or so,  to own and grow the infected tulips became a display of extreme wealth, conspicuous consumption, restricted to the ruling caliphs in Baghdad and later Istanbul.

A century after Christopher Columbus – in 1593 - tulip bulbs were first planted in the Netherlands, by the botanist Carolus Clusius (above). He was one of the first true botanists, and "The father of all beautiful gardens in this country", that country being the Spanish Netherlands. But change was coming, and Clusius' wealthy patrons eventually were,  for the first time in history, not blue-blood royalty but the local capitalists burgomasters of the the town of Leiden.

The Dutch Revolt of 1581 freed the local merchants from paying protection money to Spanish Catholic royalty. Left to their own devices, the Protestant capitalists were interested in just two things, making money, and showing everybody how much money they were making. 

The “Nouveau riche” adopted all the accouterments of their noble predecessors, including fine clothes, large homes, fancy carriages, personal portraits, and within ten years, ownership of the exotic tulip, so named because its bloom resembled a Turkish turban (above). And it was now that human greed is unleashed in our story, when rare infected tulips pass from being a de rigueur symbol of wealth, to a means of  measuring and displaying that wealth.

The Lord, it seemed, had designed the tulip to make humans rich, and more than a few Calvinist ministers in Holland pointed this out. The plant blooms for only a week or two in the spring. And having proven its colors, after the leaves have died back, the bulb may be dug up and sold and traded, and stored almost indefinitely in a cool dry place before being returned to the soil where it would sprout and bloom again.  

So the tulip market was set by the plant itself, each fall. The rest of the year traders would buy and sell future contracts on the bulbs in storage or in the ground, gambling on their future vitality, which, considering their most desirable pattern variations were being determined by an invisible virus that was slowly killing the plant, was never a sure thing. 

The futures market in tulips began to drive the price of tulips upward, until, within twenty years of Clusius' first experiments with bulbs in 1610,  the burgomasters felt required to make it illegal to sell tulip futures “short”, meaning to gamble that the price for bulbs in the ground would drop before the next spring bloom.

A disaster in the tulip trade was predictable as far back as the summer of 1623, when a bulb of the rarest variety (only 10 existed), Semper Augusttus (above), was sold for a thousand guilders. The most skilled carpenters earned only 250 guilders a year, and Carolus Clusius, the man responsible for all of this, had earned a mere 750 guilders a year.  But when the bulb of the Semper Augusttus (above)  was pulled from the ground by it's wealthy owner, Adriaan Pauw,  he found it had produced two “daughter” bulbs, meaning the value of each of Adriaan's Semper Augusttus bulbs had just been reduced by 15%.  So he stopped digging them up.

The law against selling tulip futures short had been reaffirmed in 1621, and again in 1630, and yet again in 1636. So it seems the practice was continuing and getting more popular. And clearly many burgomasters saw the practice of betting on a catastrophe as dangerous. At the same time no penalties were ever attached to a violation of these laws, so traders kept making money with their bets. 

The general feeling in Holland seems to have been (as it is in America today about big banks and hedge funds, and corporate geniuses and bit coins ) that everybody could continue making money as long as everybody stayed greedy but smart. Except, that has never happened in all of human history. 

And it did not happen in 17th Century Holland - first because the traders were not trading in what they thought they were trading in, which was not tulips, but in a virus which infected tulips. And second, since they were assuming they could stay greedy and smart,  they were doomed to fail since in all cases and all the time,  greed makes you stupid. 

Adriaan Pauw (above) was smart. He kept the value of his Semper Augusttus high by the simple expedient of not digging up his bulbs to sell them, which prevented anybody from noticing that they got weaker with each generation. 

But he did go to considerable expense of constructing a gazebo in the garden of his estate at Heemstede (above) , "... a weird contrivance of wood and cunningly angled mirrors that stood in the middle of the tulip bed...From a distance...Pauw’s single tulip bed looked densely planted with hundreds of brilliant flowers. It was only ...an optical illusion. The mirrors of the wooden cabinet had turned the few dozen tulips in Pauw’s collection into a spectacular profusion." Thus more than doubling the impression of his wealth. Which made it easier for Pauw to borrow money. Which he did,  a lot.

In 1624 Pauw's 12 prized  Augusttus were valued at 1,200 guilders each. The next year that went up to 2,000 guilders each, and in 1626 up to 3,000 guilders for a single bulb. That was never sold. Inflation spread like a virus to all varieties of virus infected tulips. 

During one two year period the price for a “General of Generals” Tulip (above) bulb increased from 100 guilders to 750 guilders. On 5 February, 1637 at an auction held in the lake side fortress village of Alkmarr, where 70 rare bulbs sold for 53,000 guilders, an all time high - several hundred million American dollars today. Who could resist such temptation? 

Not  Pauw.  He finally sold a single bulb of Augusttus (above) for 5,500 guilders. But the bloom was about to fall off this rose.

Just two days earlier and 20 miles to the south, in the village of Harrlem, a tulip investor club – called a college – decided to see how deep the demand for tulips really was. They held an auction of a huge quantity of common tulip bulbs.

Only one buyer showed up. Realizing he was the market, he demanded a 35 % discount. And he got it. And when word of this investment disaster reached Alkmarr prices of tulips collapsed like the price of baseball trading cards in 2007 or crypto currencies in 2022.  That year of 1637 many varieties of tulips would quickly lose 95% of their value.

Families went bankrupt -  heads of households and sons committed suicide - how many has become a subject for much debate in modern economic circles. Many victims sought a new start in the New World. Said one Calvinist, it was “ God’s Just Plague-Punishment, for the attention of the well-to-do Netherlanders in this bold, rotten century.”  It was the usual, "Heads, God wins; tails human lose" philosophy. But why should God get involved when there are so many lawyers around? 

There were endless lawsuits. And because every buyer wanted out of their futures contracts and every seller wanted them enforced, the politicians did nothing.   Most futures contracts were quietly closed out for 10-15% of their paper value.

A lot of people have tried to claim the Tulip Mania  was not a “market bubble”, like all the other market bubbles since. But the best description of what went wrong that I have found was written by A Maurits van der Veen, from the Virginia college of William and Mary. (BUBBLE)   

He wrote in 2009, “...it became increasingly difficult to distinguish those with solid private knowledge from those who were simply following the crowd... these constituted a new kind of trade, no longer linked to individual bulbs.” In other words, greed driven investors were betting not on tulips, but on other tulip investors - call it the tulip derivatives market. That was where the tulip market had first blown up. Sounds like a market bubble to me. And when Tulip mania died, so did some of the most valuable tulips, because their viruses were not passed on. There has not been a real Semper Augusttus bloom since the middle of the 17^th century.

There are many who still insist the Semper Augusttus (above) was the most beautiful tulip that ever existed, as there are many who insist an unregulated “free market” is morally and functionally superior to regulated markets. And people are still buying Crypto coins because greed always makes people stupid. 

But Semper Augusttus was not a true species, but the by-product of a Potyviridae (above)  devouring the tulip from the inside, consuming its genetic code, and eventually killing and devouring the bulb. 

The infected bulbs (above) lived no longer than the rich man who had the fortunes to maintain their artificial existence.  Modern tulips are far stronger,  their colors stronger and their genes more resistant than the frail infected flowers that so entranced the “Nouveau riche” of 1637. 

And because of that, billions of people today enjoy tulips  Some day, perhaps, the nouveau riche of a new age will come to admit that like the Potyviridea infected tulip, an unregulated  “free market”, is merely a splash of color which distracts your attention from the parasite devouring capitalism from the inside - unrestricted uninhibited greed.

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A DEATH IN WARTIME - Mata Harji.

 

I admit, she was a sinner, and an experienced one at that. But in six short months of 1917 the arrogant and inept commander of the French armies General Robert Nivelle was responsible for throwing away the lives of 33,000 Frenchmen, and the wounding at least 182,000 more, while driving the French army to mutiny. During that same spring Margaretha Zelle seduced officers of the French, German and Russian Army, one man at a time. If anything she improved morale. But she was the one they shot.

They came for her in the dark, before five on the morning of Wednesday, 15 October, 1917. They hoped to find her awake when they opened the door of cell number 12, but a nun had to touch her shoulder to wake Margaretha. 

The martinet who had prosecuted her, Captain Pierre Bouchardon (above), informed the startled woman, “Have courage! Your request for clemency has been rejected by the President of the Republic. The time for atonement has come.” 

Her first reaction was panic. She cried out, "It's not possible! It's not possible!” Then, luckily for her executioners, Margaretha got herself under control, whispering to a nun, “Don't be afraid, Sister, I shall know how to die.”

It took her thirty years, but Margaretha Zella (above) eventually learned how to live. Adam Zelle's “little princess” was the only daughter in a Fisian speaking Dutch family with four sons. When she was 13 her doting father lost his hat shop and went bankrupt . Over the next three years her parents divorced, her mother Antje died and her father remarried. The siblings from the first marriage were scattered to relatives and Margaretha was eventually shuffled off to an uncle. 

Three years later Margaretha answered an ad in a lonely hearts magazine and married Rudolf MacLeod (above, right), a mustached Dutch Colonial Army captain, more than twice her age. 

A year later she gave birth to a son, Norman. The following year Rudolf was posted back to the Dutch East Indies. 

In 1898, now in Indonesia, the 21 year old Margaretha gave birth to a daughter, named Jeanne. That same year Margaretha began studying local culture, and in her native dance class she adopted the Malay name meaning “Eye of the Day.”: Mata Harji.

She dressed quickly in the cold cell, in the few threads of respectability nine months of imprisonment had left her - a gray suit, a blouse and stockings, with a blue coat slung over her shoulders, and topped by a jaunty tri-cornered hat to hide her gray hair. In the courtyard of the Prison de Saint-Lazare (above), they hustled her into an automobile, with the windows blocked out. Before five thirty that morning they drove her southward in the cold dark empty streets, past the palace of Palace of  Versailles. 

Turning right on the Avenue de la Pipinere, and then right again onto the Avenue Mufs du Pare, the car passed through the stone gates of a cavalry barracks (above).

A year after their arrival in Indonesia , both children fell ill. Two year old Norman died, and the marriage drowned in recrimination. Randolf wrote his family that Margaretha was "scum of the lowest kind, a woman without heart, who cares nothing for anything". Margaretha told her family, “I prefer to die before he touches me again. My children caught a disease from him.” She dreamed of living “like a colorful butterfly in the sun.” Rudolf resigned from the army, and the family returned to Holland in 1901. In 1903, leaving her daughter with Rudolf, Margaretha moved to Paris, but the 5'10” olive skinned woman could only find work riding horseback in a circus, and as an artists' model. In desperation, she sought work as an exotic dancer.

As the car pulled to a stop, an officer shouted out, “Sabremain! Presentez-armes!” and the twelve khaki uniformed Zouave Sergeants snapped to attention. None of them knew their intended target was to be a woman until Margaretha stepped out of the car. It is unlikely any of them knew who the 41 year old woman was even then, since her trial had been secret, and the peak of her fame was a decade passed. 

Quickly, efficiently, Margaretha was led to the chosen spot in front of an eight foot berm, which was to act as a backstop for the firing squad. Her coat was removed, while a Captain quickly droned through her death sentence, and a sergeant looped a rope around her waist, binding her to the execution post. He started to bind her wrists as well, but Margaretha told him, “That will not be necessary.”

The 30 year old Margaretha, with little grace or training, fashioned her image after the bohemian artist dancer, Isadora Duncan. One historian has written, “There can have been no more ludicrous spectacle...than the bogus temple dance with which ''Lady MacLeod, Mata Hari'' rounded off the dinner parties of Parisian high society. Audiences in evening dress peered approvingly... while ''Lady MacLeod''...gyrated to allegedly Oriental strains on the violin, removed a series of veils....and finally collapsed into the sacred, though clearly carnal, embrace of the invisible (god) Siva.” '

She was famous, featured in post cards, and lurid magazine stories. But within five years “anyone who was anyone in Europe had seen her dance at least once”, and she was competing with dozens of more talented and younger imitators of herself.. By 1908 her career had begun to fade, and she had become a professional courtesan , the mistress to millionaire industrialist Émile Guimet, who was followed by numerous other wealthy men.

A priest whispered a passage from the bible, while an officer offered Margaretha a blindfold. She asked, “Must I wear it?” The officer replied, “If Madame prefers not, it makes no difference.”  He turned on his heel and he and the priest strode away, leaving the lady alone, facing the twelve combat veterans (above). The young sub-lieutenant raised his saber, and shouted “Joue!”, or prepare! Twelve rifles were raised to twelve shoulders. It was just after six in the morning, Wednesday, 15 October, 1917, and through the damp cold clouds, the sun was struggling to rise over the horizon.

At the outbreak of the war in August of 1914, Margaretha was caught in Germany. Two days later, she tried to leave. German custom officials seized her fur coat. 

Once in Switzerland, the neutral bureaucrats were suspicious of her Dutch passport (above), and she was returned to Germany. There an army officer offered her 20,000 francs if she would be a spy  Margaretha saw the funds as reimbursement for her stolen property. The Germans assigned her the code name H-21.

Margaretha met the eyes of the young sub-lieutenant and loudly thanked him, but for what was unclear. Perhaps she saw pity in his eyes. Then she blew a kiss to her lawyer, 74 year old Edouard Clunet, and then did the same to the twelve men staring at her over their rifles. Witnesses saw her turn her head away from the guns and nervously smile. The officer's saber flashed down in the gray light. The twelve rifles fired as one. Eleven bullets slammed into her chest. Margaretha Zelle crumpled against the rope binding her to the post.  Then, wrote British reporter Henry Wales, “...she seemed to collapse...slowly, inertly...her head up always, and without the slightest change of expression on her face...gazing directly at those who had taken her life...and did not move”.

Margaretha contacted German intelligence only once, and then only at the request of Capt. Georges Ladoux, of French Intelligence. Then British Intelligence intercepted a German radio message about information obtained in Belgium from agent H-21. Shortly after, in February 1917,  Margaretha returned to Paris - while General Nivelle was planning his disastrous April offensive - and Ladolux ordered her arrest. Margaretha was charged with spying, but not tried until July - as British armies were suffering during the bloody muddy Passchendaele offensives (above), launched to distract the Germans from the French army's mutiny.

Prosecutor Bouchardon said that hanging on the post, Margaretha “ looked like a heap of skirts.” He then strode up to the body, drew his pistol, and held it's barrel an inch from Margaretha's right ear. He pulled the trigger, and with a bang! a lead pellet plowed into her brain, demolishing forever whatever was left of the “little princess” and Mati Hari, and everything in between those two images.

At her trial (above) Prosecutor Bourchard had blamed her for the failure of the Nivelle offensive. Her ex-lover Clunet had argued, “Mata Hari has been a courtesan, but never a spy.” But he was allowed to call only one witness in her defense.  

After forty minutes of consideration, the six man military jury  sentenced Margaretha to die.  The transcripts of her trial were ordered sealed, and will not be released to the public before October, 2017.  But that has now been extended again, and it is unclear when, if ever, they will ever be released. 

But thirty years after her death, Bourchard, the man who had prosecuted her and delivered the coup de grace,  would admit of the case against her, “there wasn't enough evidence to flog a cat”

Four days after Margaretha's death  in 1917, the man who had ordered her arrest, Captain Ladoux, was himself arrested, and charged with spying for Germany. He was not tried until after the war, when cooler heads acquitted him. The transcripts from his trial were also ordered sealed for one hundred years.

When Margaretha's ex-husband, Rudolf MacLeod, heard of her execution, he told the reporter, “Whatever she has done in life, she did not deserve that.” The same could have been said of every one, soldier and civilian, who has died in any war. Mata Hari: she died for our sins, as well as her own.

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