Neal Auch— Terrifying but Devoid of Greatness

The art of the Dutch Golden Age is my primary source of inspiration. This period also gave birth to several key developments in the history of capitalism: the first publicly traded company, the first stock exchange, and the first speculative market bubble.

Dutch Tulip Mania is often held up as a kind of ur-bubble: an example of the phenomenon that is alien enough for the absurdity of the fiasco to be self-evident, while simultaneously being relatable enough to encapsulate the psychological/economic factors that have characterized every subsequent market bubble.

I have already written about Tulip Mania in some detail in a previous post. The basic story is this: In 17th-century Netherlands, tulips were perceived as a status symbol and became a hot commodity. As demand grew and bulb prices soared, the tulips lost their intrinsic meaning as decorative flowers and became, for all practical purposes, a speculative financial asset for rich people to gamble on. At the peak of the mania, a single tulip bulb was worth more than 10 times the annual income of a skilled craftsman. Eventually, the bubble burst. In February of 1637, prices for tulip bulbs collapsed precipitously, leaving many speculators in financial ruin.

Tulip Mania was a popular subject for artists at the time. Still life was particularly well-suited to the subject, because those paintings were already a vehicle for moralizing about the meaningless vanity of wealth and status. A masterful example is a 1625 Balthasar van der Ast painting depicting a single ultra-valuable “broken” tulip in a glass vase, accompanied by a butterfly (a symbol of Christ and piety) and a houseful (a symbol of death and evil).

My previous project about Tulip Mania followed in the footsteps of the Dutch masters, taking the tulip as a stand-in for any highly speculative asset that might be traded in the hope of future riches. Although the basic messaging works for any economic bubble, it was probably not lost on many readers that I was really talking about NFTs.

For the unfamiliar, a Non-Fungible Token (NFT) is a verifiable certificate of ownership that is associated to a digital artwork, such as a JPG file. Essentially it’s a digital receipt whose purpose is to assert that—even though some JPG image of a cartoon monkey wearing sunglasses might be readily available on the internet for any and all to download—the guy paying hundreds of thousands of dollars to purchase the associated token is somehow the “true” owner of the work. (NFTs generally do not transfer copyright or anything else of tangible value.) The myth-making around NFTs asserts that they are digital collectibles; however, in practice their primary use is as a speculative asset. In this sense, NFTs aren’t much different from the crypto on which they are built. In spite the rhetoric, Bitcoin/Ether/etc don’t really operate like a currency in any meaningful way—they’re far too volatile and transactions are much too slow and expensive for that to be practical. Instead, the main use for crypto “currencies” is the same as NFTs or tulip futures: they are something to gamble on. None of these assets has much (if any) intrinsic value: they’re all things people buy entirely based on the hope that the price will rise and it can later be resold for profit in the form of some real currency.

When I wrote my previous post NFTs were all the rage in the online art world. Since then, the bubble has burst and, as of the time of writing, the market has dropped to a fraction of its peak value. My reason for revisiting this subject is neither to say “I told you so,” nor to revel in schadenfreude; instead, I want to rectify an important omission from my original essay.

Classical art about Tulip Mania tends to view the subject from a lens of personal responsibility. Fundamentally, the critique is this: there are more noble things to do with your time than chase after meaningless status symbols. This perspective is clearly demonstrated in a popular book of emblems published in the 1600s by Visscher, which included a picture of tulips accompanied by the slogan “a fool and his money are soon parted.”

To my mind, viewing a financial bubble entirely through this “personal responsibility” lens misses the broader picture: the overwhelming majority of people who lose money on these gambles are victims—regular folks driven by brutal economic conditions or outright fraud to participate in a system that was rigged against them from the outset. These are real people who have lost real money, and they are as deserving of empathy and kindness as anyone. Setting aside the fetishistic tech jargon and the ugly ape cartoons, there is a real human tragedy at the heart of the recent crypto crash. In the last few months I have read dozens of headlines attributing the suicide of some crypto investor to the crash. (Apparently, a popular crypto subreddit has been censoring posts linking to suicide hotline numbers; it’s impossible to know how moderators justify that decision, but it’s tempting to guess that they want to suppress any negative sentiment that could drive the value of their investments even lower.)

It’s easy to be distracted by the cringe AI monkey cartoons and forget what is at the heart of this story: death. The poet Federico Garcia Lorca, on witnessing Wall Street Crash of 1929, summarized the truth of the situation aptly. “Never as then, amid suicides, hysteria, and groups of fainting people, have I felt the sensation of real death, death without hope, death that is nothing but rottenness,” he said. “For the spectacle was terrifying but devoid of greatness.”

Interestingly, it’s not difficult to draw a line between the recent NFT bubble and a previous bubble involving subprime mortgages, which lead to the 2008 financial collapse. The crypto movement was driven in part by rage and rose to prominence in the wake of that financial meltdown. And indeed, anger about the 2008 collapse is understandable: almost none of the bad actors responsible were punished in any meaningful way and, in fact, many banking executives used taxpayer-funded bailout money to give themselves huge bonuses on their way out. Unfortunately, the crypto community’s response to 2008 seems not to have offered any meaningful solution whatsoever to the problems with the conventional financial system. Instead, the core problems seem somewhat exacerbated: speculative ventures are even more volatile; wealth inequality is even more pronounced; market manipulation, fraud, and theft are even more endemic. Indeed, it seems like the best case scenario would have been to replace one set of ultra-wealthy magnates with a different set of (slightly more tech-savvy) ultra-wealthy magnates.

In 17th-century still life, tulips were a symbol of the vain pursuit of wealth in the face of certain death. Tulip Mania was the first economic bubble and, at the time, it would have been reasonable to view the crash as an aberration—the outcome of a few investors behaving irrationally. That same basic boom-and-bust cycle has since repeated countless times; without fail, the cost is of a bubble bursting is measured not just in currency, but also in human life. In this context, the tulip is not just a symbol of personal greed—it also invokes a sense of repetition, of inevitability, of the grim cost of maintaining a machine whose primary purpose is to concentrate wealth without regard to human wellbeing.

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Terrifying but Devoid of Greatness