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Sir Isaac Newton (1642 – 1727)

Sir Isaac Newton (1642 – 1727). “I CAN CALCULATE THE MOTION OF HEAVENLY BODIES, BUT NOT THE MADNESS OF PEOPLE.”. DUTCH GOLDEN AGE. 17 th Century – Through a merging of events, the Dutch reached a Golden Age Creation of a Middle Class Artists: Rembrandt, Vermeer. ECONOMICS.

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Sir Isaac Newton (1642 – 1727)

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  1. Sir Isaac Newton (1642 – 1727) “I CAN CALCULATE THE MOTION OF HEAVENLY BODIES, BUT NOT THE MADNESS OF PEOPLE.”

  2. DUTCH GOLDEN AGE • 17th Century – Through a merging of events, the Dutch reached a Golden Age • Creation of a Middle Class Artists: Rembrandt, Vermeer

  3. ECONOMICS • VOC – Dutch East India Company • First ever multinational company (1602) • First modern stock exchange • Monopoly on trade • Tulip Mania

  4. REASONS FOR THE GOLDEN AGE … • Cheap Energy from: • Invention of Windmills • Use of Peat (energy) • Sawmills led to: • Boat building economy • Ships for Trade & Navy • Tolerant Society • Exploration of Science • Religious and Intellectual safety

  5. How much would you pay for a Tulip? Goods allegedly exchanged for a single bulb of the Viceroy Two lasts of wheat 448ƒ Four lasts of rye 558ƒ Four fat oxen 480ƒ Eight fat swine 240ƒ Twelve fat sheep 120ƒ Two hogsheads of wine 70ƒ Four tunsof beer 32ƒ Two tons of butter 192ƒ 1,000 lb. of cheese 120ƒ A complete bed 100ƒ A suit of clothes 80ƒ A silver drinking cup 60ƒ Total 2500ƒ

  6. The Mosaic Virus Normal Tulip vs. Tulip with Mosaic Virus • Mosaic Virus caused ‘Broken Tulip coloration’ • Rarity created demand • Demand could not be met • Rare tulips take time to grow and are fragile • Valued tulips now extinct

  7. WHAT IS ECONOMICS ?= Study of Commerce • Definition 1 = The buying and selling of stuff • Definition 2 = The study of the production, distribution and consumption of goods and services • Supply & Demand

  8. SUPPLY & DEMAND

  9. STOCKS/SHARES = SHARED RISK Return on investment of 25% More than 5x what a bank would give you!

  10. STOCK EXCHANGE (video) • Allows individuals to buy shares or stock in a company • “Shared ownership” • Bull Market (prices go up) • Bear Market (prices go down)

  11. MONOPOLY • When one person or enterprise is the only source of a good or service • Dutch had a monopoly on spices from Asia

  12. TULIP BUBBLE aka TULIP MANIA • Definition: when asset prices deviate from intrinsic value (prices are out of whack) • Inflated expectations = inflated prices • A trigger collapses the artificial prices (Bubble Bursts) = economic destruction

  13. What is ‘Black Friday’ ???

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