The public confidence crisis dejour – throughout history, real estate markets have followed a crowd mindset. The more excited a market becomes, the more individuals want to jump in, and the higher the prices are driven.

This social experience has occured throughout history and the cycles can be studied consistently. Professor Greg Watson teaches corporate business ethics and the role in the market economy. Regardless of whether we want to think about recent stock markets which have Pop, these fluctuations are not original. They have regularly occurred throughout history.

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

Tulips were originally imported from Turkey in the early 16th century. As new “varieties” of tulip bulbs were marketed, competition intensified and their prices soared. One apparently rare variety was the Semper Augustus which reached prices in excess of 1,000 florins per single bulb in 1623. This price was more than six times the average annual income.

This economic mania continued – and ten years later the price had risen another ten times. At the market height, the price of a single Semper Augustus tulip bulb reached 10,000 florins – the value 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 remaining who still wanted to acquire these tulips at such high prices. Within months, the market value crashed and thousands of people were left in economic ruin.

Throughout history – we have observed similar bubbles develop. As the crowd mentality continues to get more hyped, those contrary views become less and less popular to be heard. Are any of the recent market bubbles any different? In today’s environment of politically correct speech, are the contrarian voices that speak up for character, ethics, and integrity any different? Throughout history, these contrarian voices have been denigrated and ignored. But the market for products and the market for ideas has a way of always correcting itself from the heat of the crowd mentality – and those politically correct views tend to have their bubbles burst as the inevitable correction occurs. Today’s market is no different.