R. A. Radford was a British-born American economist born in 1919. I...
Nazi Germany operated around 1,000 prisoner-of-war camps during Wor...
The Atlantic Charter was a document created as a result of a meetin...
A Robinson Crusoe economy is a simple economics framework in which ...
Oflag camps were German POW camps specifically for officers. The Ge...
RMks is an abbreviation for Reichsmarks, the currency of Germany fr...
Bully beef (or simply bully) was tinned corned beef with a small am...
In economics, a perfect market is a theoretical ideal of a market i...
**B.R.C.S** is an abbreviation for *British Red Cross Society*.
Black treacle is a thick, dark molasses syrup that was popular duri...
Gresham's Law is an economic principle that states that "bad money ...
Deflation is a decrease in the price level of goods and services, t...
The prisoners would take the raisins and sugar and mash them up, pu...
The
Economic Organisation
of
a
P.O.W.
Camp
By
R.
A.
RADFORD
AFTER allowance has been made for abnormal circumstances. the
social institutions, ideas and habits of groups in the outside world are
to be found reflected in a Prisoner of War Camp. It is an unusual but
a vital society. Camp organisation and politics are matters of real
concern to the inmates, as affecting their present and perhaps their
future existences. Nor does this indicate any loss of proportion.
No one pretends that camp matters are of any but local importance
or of more than transient interest, but their importance there is great.
They bulk large in a world of narrow horizons and it is suggested that
any distortion of values lies rather in the minimisation than in the
exaggeration of their importance. Human affairs are essentially
practical matters and the measure of immediate effect on the lives of
those directly concerned in them is to a large extent the criterion of
their importance at that time and place. A prisoner can hold strong
views on such subjects as whether or not all tinned meats shall be
issued to individuals cold or be centrally cooked, without losing sight
of the significance of the Atlantic Charter.
One aspect of social organisation is to be found in economic activity,
and this, along with other manifestations of a group existence, is to be
found in any P.O.W. camp. True, a prisoner is not dependent on his
exertions for the vrovision of the necessaries. or even the luxuries of
life, but through &his economic activity, the' exchange of goods and
services, his standard of material comfort is considerably enhanced.
And this is a serious matter to the prisoner
:
he is not
"
playing at
shops
"
even though the small scale of the transactions and the simple
expression of comfort and wants in terms
of
cigarettes and jam, razor
blades and writing paper, make the urgency of those needs difficult to
appreciate, even by an ex-prisoner of some three months' standing.
Nevertheless, it cannot be too strongly emphasised that economic
activities do not bulk so large in prison society as they do in the larger
world. There can be little production
;
as has been said the prisoner
is independent of his exertions for the provision of the necessities and
ltururies of life
;
the emphasis lies in exchange and the media of
exchange. A prison camp is not to be compared with the seething
crowd of higglers in a street market, any more than it is to be com-
pared with the economic inertia of a family dinner table.
Naturally then, entertainment, academic and literary interests,
games and discussions of the
"
other world
"
bulk larger in everyday
life than they do in the life of more normal societies. But it would be
190
ECONOMICA
[NOVEMBER
wrong to underestimate the importance of economic activity.
Every-
one receives a roughly equal share of essentials
;
it is by trade that
individual preferences are given expression and comfort increased
All at some time, and most people regularly, make exchanges of one
sort or another.
Although a P.O.W. camp provides a living example of a simple
economy which might be used as an alternative to the Robinson
Crusoe economy beloved by the text-books, and its simplicity renders
the demonstration of certain economic hypotheses both amusing and
instructive, it is suggested that the principal significance is sociological.
True, there is interest in observing the growth of economic institutions
and customs in a brand new society, small and simple enough to pre-
vent detail from obscuring the basic pattern and disequilibrium from
obscuring the working of the system. But the essential interest lies
in the universality and the spontaneity of this economic life
;
it came
into existence not by conscious imitation but as a response to the
immediate needs and circumstances. Any similarity between prison
organisation and outside organisation arises from similar stimuli evoking
similar responses.
The following is as brief an account of the essential data as may
render the narrative intelligible. The camps of which the writer had
experience were Oflags and consequently the economy was not com-
plicated by payments for work by the detaining power. They consisted
normally of between
1,200
and
2,500
people, housed in a number of
separate but intercommunicating bungalows, one company of
200
or so to a building. Each company formed a group within the main
organisation and inside the company the room and the messing
syndicate, a voluntary and spontaneous group who fed together, formed
the constituent units.
Between individuals there was active trading in all consumer goods
and in some services. Most trading was for food against cigarettes or
other foodstuffs, but cigarettes rose from the status of a normal com-
modity to that of currency. RMk.s existed but had no circulation
save for gambling debts, as few articles could be purchased with them
from the canteen.
Our supplies consisted of rations provided by the detaining power
and (principally) the contents of Red Cross food parcels-tinned milk,
jam, butter, biscuits,
bully, chocolate, sugar, etc., and cigarettes.
So far the supplies to each person were equal and regular.
Private
parcels of clothing, toilet requisites and cigarettes were also received,
and here equality ceased owing to the different numbers despatched
and the vagaries of the post. All these articles were the subject of
trade and exchange.
THE DEVELOPMENT
OF
THE
AND
ORGANISATION
MARKET
Very soon after capture people realised that it was both undesirable
and unnecessary, in view of the limited size and the equality of supplies,
191
194.51
THE
ECONOMIC
ORGANISATION
OF
A
P.O.W.
CAMP
to give away or to accept gifts of cigarettes or food.
"
Goodwill"
developed into trading as a more equitable means of maximising
individual satisfaction.
We reached a transit camp in Italy about a fortnight after capture
and received
4
of a Red Cross food parcel each a week later. At
once exchanges, already established, multiplied in volume. Starting
with simple direct barter, such as a non-smoker giving a smoker friend
his cigarette issue in exchange for a chocolate ration, more complex
exchanges soon became an accepted custom. Stories circulated of a
padre who started off round the camp with a tin of cheese and five
cigarettes and returned to his bed with a complete parcel in addition
to his original cheese and cigarettes
;
the market was not yet perfect.
Within a week or two, as the volume of trade grew, rough scales of
exchange values came into existence. Sikhs, who had at first
exchanged tinned beef for practically any other foodstuff, began to
insist on jam and margarine.
It
was realised that a tin of jam was
worth
4
lb. of margarine plus something else
;
that a cigarette issue
was worth several chocolate issues: and a tin of diced carrots was
worth practically nothing.
In this camp we did not visit other bungalows very much and
prices varied from place to place
;
hence the germ of truth in the story
of the itinerant priest. By the end of a month, when we reached our
permanent camp, there was a lively trade in all commodities and their
relative values were well known, and expressed not in terms of one
another-one didn't quote bully in terms of sugar-but in terms of
cigarettes. The cigarette became the standard of value. In the
permanent camp people started by wandering through the bungalows
calling their offers-'' cheese for seven
"
(cigarettes)-and the hours
after parcel issue were Bedlam. The inconveniences of this system
soon led to its replacement by an Exchange and Mart notice board in
every bungalow, where under the headings
"
name
",
"
room number
",
"
wanted
"
and
"
offered
"
sales and wants were advertised. When
a deal went through, it was crossed off the board. The public and semi-
permanent records of transactions led to cigarette prices being well
known and thus tending to equality throughout the camp, although
there were always opportunities for an astute trader to make a profit
from arbitrage. With this development everyone, including non-
smokers, was willing to sell for cigarettes, using them to buy at another
time and place. Cigarettes became the normal currency, though, of
course, barter was never extinguished.
The unity of the market and the prevalence of a single price varied
directly with the general level of organisation and comfort in the camp.
A
transit camp was always chaotic and uncomfortable
:
people were
overcrowded, no one knew where anyone else was living, and few
took the trouble to find out. Organisation was too slender to include
an Exchange and Mart board, and private advertisements were the
most that appeared.
Consequently
a
transit camp was not one
192
ECONOMICA
[NOVEMBER
market but many. The price of a tin of salmon is known to have
varied by two cigarettes in
20
between one end of a hut and the
other. Despite a high level of organisation in Italy,
tht
market was
morcellated in this manner at the first transit camp we reached after
our removal to Germany in the autumn of
1943.
In this camp-
Stalag VIIA at Moosburg in Bavaria-there were up to 50,000 prisoners
of all nationalities. French, Russians, Italians and Jugo-Slavs were
free to move about within the camp
:
British and Americans were
confined to their compounds, although a few cigarettes given to a
sentry would always procure permission for one or two men to visit
other compounds. The people who first visited the highly
organised French trading centre, with its stalls and known prices,
found coffee extract-relatively cheap among the tea-drinking
English-commanding
a
fancy price in biscuits or cigarettes, and some
enterprising people made small fortunes that way. (Incidentally we
found out later that much of the coffee went
"
over the wire
"
and
sold for phenomenal prices at black market cafes in Munich
:
some
of the French vrisoners were said to have made substantial sums in
RMk.s. This has one of the few occasions on which our normally
closed economy came into contact with other economic worlds.)
Eventually public opinion grew hostile to these monopoly profits-
not everyone could make contact with the Ffench-and trading with
them was put on a regulated basis. Each group of beds was given a
auota of articles to offer and the transaction was carried out bv
accredited representatives from the British compound, with monopoly
rights. The same method was used for trading with sentries elsewhere,
as in this trade secrecy and reasonable prices had a peculiar importance,
but
as is ever the case with regulated companies, the interloper proved
too strong.
The permanent camps in Germany saw the highest level of com-
mercial organisation. In addition to the Exchange and Mart notice
boards, a shop was organised as a public utility, contrblled by repre-
sentatives of the Senior British Officer. on a no profit basis. People
left their surplus clothing, toilet requisites and food there until tiey
were sold at a fixed price in cigarettes. Only sales in cigarettes were
accepted-there was no barter- and there was no higgling. For
food at least there were standard prices
:
clothing is less homogeneous
and the price was decided around a norm by the seller and the shop
manager-in agreement
;
shirts would average say
80,
ranging frbm
60
to
120
according to quality and age. Of food, the shop carried
small stocks for convenience
;
the capital was provided by a loan from
the bulk store of Red Cross cigarettes and revaid bv a small commission
"
taken on the first transactions. Thus he ciiarette attained its
fullest currency status, and the market was almost completely
unified.
It
is thus to be seen that
a
market came into existence without labour
or production. The B.R.C.S. map be considered as
"
Nature
"
of the
1945]
THE
ECONOMIC
ORGANISATION
OF
A
P.O.W.
CAMP
I93
text-book, and the articles of trade-food, clothing and cigarettes-
as free gifts-land or manna. Despite this, and despite a roughly equal
distribution of resources, a market came into spontaneous operation,
and prices were fixed by the operation of supply and demand.
It
is difficult to reconcile this fact with the labour theory of
value.
Actually there was
an
embryo labour market. Even when cigarettes
were not scarce, there was usually some unlucky person willing to per-
form services for them. Laundrvmen advertised at two ciearettes a
"
garment. Battle-dress was scrubbed and pressed and a pair of
trousers lent for the interim period for twelve. A good pastel portrait
cost thirty or a tin of
"
Kam
".
Odd tailoring and other jobs similarly
had their.prices.
There were also entrepreneurial services.
There was a coffee stall
owner who sold tea, coffee or cocoa at two cigarettes a cup, buying his
raw materials at market prices and hiring labour to gather fuel and to
stoke
;
he actually enjoyed the services of a chartered accountant at
one stage. After a period of great prosperity he overreached him-
self and failed disastrously for several hundred cigarettes. Such large-
scale private enterprise was rare but several middlemen or professional
traders existed. The padre in Italy, or the men at Moosburg who
opened trading relations with the French, are examples
:
the more
subdivided the market, the less perfect the advertisement of prices,
and the less stable the prices, the greater was the scope for these
operators. One man capitalised his knowledge of Urdu by buying
meat from the Sikhs and selling butter and jam in return
:
as his
overations became better known more and more veovle entered this
L L
tiade, prices in the Indian Wing approximated more nearly to those
elsewhere, though to the end a
"
contact
"
among the Indians was
valuable, as linguistic difficulties prevented the trade from being quite
free. Some were specialists in the Indian trade, the food, clothing or
even the watch trade. Middlemen traded on their own account or on
commission. Price rings
and agreements were suspected and the traders
certainly co-operated. Nor did they welcome newcomers. Unfortun-
ately the writer knows little of the workings of these people
:
public
opinion was hostile and the professionals were usually of a retiring
disposition.
One trader
in
food and cigarettes, operating in a period of dearth,
enjoyed a high reputation.
His capital, carefully saved, was originally
about
50
cigarettes, with which he bought rations on issue days and
held them until the price rose just before the next issue. He also
picked up a little by arbitrage
;
several times a day he visited every
Exchange or Mart notice board and took advantage of every dis-
crepancy between prices of goods offered and wanted. His knowledge
of prices, markets and names of those who had received cigarette parcels
was
phenomenal. By these means he kept himself smoking steadily-
his prdts-while his capital remained intact.
'94
ECONOMICA
[NOVEMBER
Sugar was issued on Saturday.
about Tuesday two of us used to
visit Sam and make a deal
:
as old customers he would advance as
much of the price as he could spare then, and entered the transaction
in a book. On Saturday morning he left cocoa tins on our beds for the
ration, and picked them up on Saturday afternoon. We were hoping
for a calendar at Christmas, but Sam failed too. He was left holding
a big black treacle issue when the price fell, and in this weakened
state was unable to withstand an unexpected arrival of parcels and the
consequent price fluctuations. He paid in full, but from his capital.
The next Tuesday, when
I
paid my usual visit he was out of business.
Credit entered into many, perhaps into most, transactions, in one
form or another. Sam paid in advance as a rule for his purchases of
future deliveries of sugar, but many buyers asked for credit, whether
the commodity was sold spot or future. Naturally prices varied
according to the terms of sale. A treacle ration might be advertised
for four cigarettes now or five next week. And in the future market
"
bread now
"
was a vastly different thing from
"
bread Thursday
".
Bread was issued on Thursday and Monday, four and three days'
rations respectively, and by Wednesday and Sunday night it had
risen at least one cigarette per ration, from seven to eight, by supper
time. One man always saved a ration to sell then at the peak price
:
his offer of
"
bread now" stood out on the board among a number of
"
bread Monday's
"
fetching one or two less, or not selling at all-
and he always smoked on Sunday night.
Although cigarettes as currency exhibited certain peculiarities, they
performed all the functions of a metallic currency as a unit of account,
as a measure of value and as a store of value, and shared most of its
characteristics. They were homogeneous, reasonably durable, and of
convenient size for the smallest or, in packets, for the largest rrans-
actions. Incidentally, they could be clipped or sweated by rolling
them between the fingers so that tobacco fell out.
Cigarettes were also subject to the working of Gresham's Law.
Certain brands were more popular than others as smokes, but for
currency purposes a cigarette was a cigarette. Consequently buyers
used the poorer qualities and the Shop rarely saw the more popular
brands
:
cigarettes such as Churchman's No.
I
were rarely used
for trading. At one time cigarettes hand-rolled from pipe tobaccc
began to circulate. Pipe tobacco was issued in lieu of cigarettes by
the Red Cross at a rate of
25
cigarettes to the ounce and this rate was
standard
in
exchanges, but an ounce would produce
30
home-made
cigarettes. Naturally, people with machine-made cigarettes broke
them down and re-rolled the tobacco, and the real cigarette virtually
disappeared from the market. Hand-rolled cigarettes were not
homogeneous and prices could no longer be quoted in them with
safety
:
each cigarette was examined before it was accepted and thin
194~]
THE
ECONOMIC ORGANISATION
OF
A
P.O.W.
CAMP
I95
ones were rejected, or extra demanded as a make-weight. For a time
we sufired all the inconveniences of a debased currency.
Machine-made cigarettes were always universally acceptable, both
for what they would buy and for themselves.
It
was this intrinsic
value which gave rise to their principal disadvantage as currency, a dis-
advantage which exists, but to a far smaller extent, in the case of me-
tallic currency ;-that is, a strong demand for non-monetary purposes.
Consequently our economy was repeatedly subject to deflation and to
periods of monetary stringency. While the Red Cross issue of
50
or
25
cigarettes per man per week came in regularly, and while there were
fair st6cks held, the cigarette currency suited its purpose admirably.
But when the issue was interrupted, stocks soon ran out, prices fell,
trading declined in volume and became increasingly a matter of
barter. This deflationary tendency was periodically offset by the
sudden injection of new currency. Private cigarette parcels arrived in
a trickle throughout the year, but the big numbers came
in
quarterly
when the Red Cross received its allocation of transport. Several
hundred thousand cigarettes might arrive in the space of a fortnight.
Prices soared, and then began to fall, slowly at first but with increasing
rapidity as stocks ran out, until the next big delivery. Most of our
economic troubles could be attributed to this fundamental instability.
Many factors affected prices, the strongest and most noticeable
being the veriodical currencv inflation and deflation described in the
u
last para&aphs. The peri:dicity of this price cycle depended on
cigarette and, to a far lesser extent, on food deliveries. At one time
in the early days, before any private parcels had arrived and when
there were no individual stocks, the weekly issue of cigarettes and
food parcels occurred on a Monday. The non-monetary demand for
cigarettes was
great. and less elastic than the demand for food
:
con-
0
u s
sequently prices fluctuated weekly, falling towards Sunday night and
rising sharply on Monday morning. Later, when many people held
reserves, the weekly issue had no such effect, being too small a pro-
portion of the total available. Credit allowed people with no reserves
to meet their non-monetary demand over the week-end.
The general mice level was affected by other factors.
An influx of
"
new prisoners, proverbially hungry, raised it.
Heavy air raids in the
vicinity of the camp probably increased the non-monetary demand for
cigarettes and accentuated deflation. Good and bad war news certainly
Q
had its effect, and the general waves of optimism and pessimism which
swept the camp were reflected in prices. Before breakfast one morning
in March of this year, a
rumour of the arrival of parcels and cigarettes
was circulated. Within ten minutes
I
sold a treacle ration, for four
cigarettes (hitherto offered in vain for three), and many similar deals
went through. By
10
o'clock the rumour was denied, and treacle that
day
found no more buyers even at two cigarettes,
196
ECONOMICA [NOVEMBER
More interesting than changes in the general price level were changes
in the price structure. Changes in the supply of a commodity, in the
German ration scale or in the make-up of Red Cross parcels, would
raise the price of one commodity relative to others. Tins of oatmeal,
once a rare and much sought after luxury in the parcels, became
a
commonplace in 1943, and the price fell. In hot weather the demand
for cocoa fell, and that for soap rose.
A
new recipe would be reflected
in the price level: the discovery that raisins and sugar could be
turned into an alcoholic liquor of remarkable potency reacted per-
manently on the dried fruit market. The invention of electric immer-
sion heaters run off the power points made tea, a drug on the market in
Italy, a certain seller in Germany.
In August, 194.4, the supplies of parcels and cigarettes were both
halved. Since both sides of the equation were changed in the same
degree, changes in prices were not anticipated. But this was not the
case
:
the non-monetary demand for cigarettes was less elastic than the
demand for food, and food prices fell a little. More important however
were the changes in the price structure. German margarine and jam,
hitherto valueless owing to adequate supplies of Canadian butter and
marmalade, acquired a new value. Chocolate, popular and a certain
seller, and sugar, fell.
Bread rose
;
several standing contracts of
bread for cigarettes were broken, especially when the bread ration was
reduced a few weeks later.
In February, 1945, the German soldier who drove the ration waggon
was found to be willing to exchange loaves of bread at the rate of one
loaf for a bar of chocolate. Those in the know began selling bread and
buying chocolate, by then almost unsaleable in
a
period of serious
deflation. Bread, at about 40, fell slightly
;
chocolate rose from 15
;
the supply of bread was not enough for the two commodities to reach
parity, but the tendency was unmistakable.
The substitution of German margarine for Canadian butter when
parcels were halved naturally affected their relative values, margarine
appreciating at the expense of butter. Similarly, two brands of
dried milk, hitherto differing in quality and therefore in price by five
cigarettes a tin, came together in price as the wider substitution of the
cheaper raised its relative value.
Enough has been cited to show that any change in conditions affected
both the general price level and the price structure. It was this latter
phenomenon which wrecked our planned economy.
PAPER
CURRENCY-Bully Marks
Around D-Day, food and cigarettes were plentiful, business was
brisk and the camp in an optimistic mood. Consequently the Enter-
tainments Committee felt the moment opportune to launch a restaurant,
where food and hot drinks were sold while a band and variety turns
performed. Earlier experiments, both public and private, had pointed
the way, and the scheme was
a
great success. Food was bought at
194.51
THE
ECONOMIC
ORGANISATION
OF
A
P.O.W.
CAMP
'97
market prices to provide the meals and the small profits were devoted
to a reserve fund and used to bribe Germans to provide grease-paints
and other necessities for the camp theatre. Originally
meaIs were
sold for cigarettes but this meant that the whole scheme was vulnerable
to the
deflationary waves, and furthermore heavy smokers
were unlikely to attend much.
The whole success of the scheme
depended on an adequate amount of food being offered for sale in the
normal manner.
To increase and facilitate trade, and to stimulate supplies and
customers therefore. and secondarily to avoid the worst effects of defla-
tion when it should come, a paper currency was organised by the
Restaurant and the Shop. The Shop bought food on behalf of the
Restaurant with paper notes and the paper was accepted equally with
the cigarettes in the Restaurant or Shop, and passed back to the
Shop to purchase more food. The Shop acted as a bank of issue.
The paper money was backed
IOO
per cent. by food
;
hence its name,
the Bully Mark. The BMk. was backed roo per cent. by food
:
there
could be no over-issues, as is permissible with a normal bank of issue,
since the eventual dispersal of the camp and consequent redemption
of all BMk.s was anticipated in the near future.
Originally one BMk. was worth one cigarette and for a short time
both circulated freely inside and outside the Restaurant. Prices
were quoted in BMk.s and cigarettes with equal freedom-and for a
short time the BMk. showed signs of replacing the
cigarette as
currency. The BMk. was tied to food, but not to cigarettes
:
as it was
issued against food, say
45
for a tin of milk and so on, any reduction
in the BMk. prices of food would have meant that there were un-
backed BMk.s in circulation. But the price of both food and BMk.s
could and did fluctuate with the supply of cigarettes.
While the Restaurant flourished. the scheme was a success
:
the
Restaurant bought heavily, all foods were saleable and prices were
stable.
In August parckls and cigarettes were halved and the Camp was
bombed. The Restaurant closed for a short while and sales of food
became difficult. Even when the Restaurant reopened, the food and
cigarette shortage became increasingly acute and people were unwilling
to convert such valuable goods into paper and to hold them for luxuries
like snacks and tea. Less of the right kinds of food for the Restaurant
were sold, and the Shop became'glutted with dried fruit, chocolate,
sugar, etc., which the Restaurant could not buy. The price level and
the price structure changed. The BMk. fell to four-fifths of a cigarette
and eventually farther still, and it became unacceptable save in the
Restaurant. There was a flight from the
BMk., no longer convertible
into cigarettes or popular foods. The cigarette re-established itself.
But the
BMk. was sound
!
The Restaurant closed in the New Year
with a progressive food shortage and the long evenings without lights
due
to intensified Allied air raids, and BMk.s could only be spent in
198
ECONOMICA [NOVEMBER
the Coffee Bar-relict of the Restaurant-r on the few un~o~ular
I
I
foods in the Shop, the owners of which were prepared to accept them.
In the end all holders of BMk.s were paid in full, in cups of coffee or
in prunes. People who had bought BMk.s for cigarettes or valuable
jam or biscuits in their heyday were aggrieved that they should have
stood the loss involved by their restricted choice, but they suffered no
actual loss of market value.
Along with this scheme came a determined attempt at a planned
economy, at price fixing. The Medical Officer had long been anxious
to control food sales, for fear of some people selling too much, to the
detriment of their health. The deflationarv waves and their effects on
4
prices were inconvenient to all and would be dangerous to the
Restaurant which had to carry stocks. Furthermore, unless the
BMk. was convertible into cigarettes at about Dar it had little chance
"
of gaining confidence and of succeeding as a currency.
As has been
explained, the BMk. was tied to food but could not be tied to cigarettes,
which fluctuated in value. Hence, while BMk. prices of food were
fixed for all time, cigarette prices of food and BMk.s varied.
The Shop, backed by the Senior British Officer, was now in
a
position
to enforce price control both inside and outside its walls. Hitherto
a standard price had been fixed for food left for sale in the shop, and
prices outside were
roughly in conformity with this scale, which was
recommended as a
"
guide
"
to sellers, but fluctuated a good deal around
it. Sales in the Shop at recommended prices were apt to be slow
though a good price might be obtained
:
sales outside could be made
more quickly at lower prices. (If sales outside were to be at higher
prices, goods were withdrawn from the Shop until the recommended
price rose
:
but the recommended price was sluggish and could not
follow the market closely by reason of its very purpose, which was
stability.) The Exchange and Mart notice boards came under the
control of the Shop
:
advertisements which exceeded a
5
per cent.
departure from the recommended scale were liable to be crossed out by
authority
:
unauthorised sales were discouraged by authority and also
by public opinion, strongly in favour of a just and stable price. (Recom-
mended prices were fixed partly from market data, partly on the
advice of the M.O.)
At
fi~st the recommended scale was a success
:
the Restaurant- a
big buyer, kept prices stable around this level
:
opinion and the
5
per cent. tolerance helped. But when the price level fell with the
August cuts and the price structure changed, the recommended scale
was too rigid. Unchanged at first, as no deflation was expected, the
scale was tardily lowered, but the prices of goods on the new scale
remained in the same relation to one another. owing to the BMk..
"
while on the market the price structure had chaxged.
And the modi:
fying influence of the Restaurant had gone.
The scale yas moved
19451
THE
ECONOMIC ORGANISATION
OF
A
P.O.W.
CAMP
'99
up and down several times, slowly following the inflationary and
deflationary waves, but it was rarely adjusted to changes in the price
structure. More and more advertisements were crossed off the board,
and black market sales at unauthorised prices increased
:
eventually
public opinion turned against the recommended scale and authority
gave up the struggle. In the last few weeks, with unparalleled
deflation, prices fell with alarming rapidity, no scales existed, and
supply and demand, alone and unmellowed, determined prices.
Public opinion on the subject of trading was vocal if confused and
changeable, and generalisations as to its direction are difficult and
dangerous. A tiny minority held that all trading was undesirable
as it engendered an unsavoury atmosphere
;
occasional frauds and
sharp practices were cited as proof. Certain forms of trading were
more generally condemned
;
trade with the Germans was criticised by
many, Red Cross toilet articles, which were in short supply and only
issued in cases of actual need, were excluded from trade by law and
opinion working in unshakable harmony. At one time, when there
had been several cases of malnutrition reported among the more
devoted smokers, no trade in German rations was permitted, as the
victims became an additional burden on the
depleted food reserves of
the Hospital.
But while certain activities were condemned as anti-
social, trade itself was practised, and its utility appreciated, by almost
evervone in the camv.
I
More interesting was opinion on middlemen and prices.
Taken as
a whole, opinion was hostile to the middleman.
His function, and
his hard work in bringing buyer and seller together, were ignored
;
profits were not regarded as a reward for labour, but as the result of
sharp practices. Despite the fact that his very existence was proof
to the contrary, the middleman was held to be redundant in view of
the existence of an official Shop and the Exchange and Mart. Apprecia-
tion only came his way when he was willing to advance the price of a
sugar ration, or to buy goods spot and carry them against a future
sale. In these cases the element of risk was obvious to all, and the
convenience of the service was felt to merit some reward. Particularly
unpopular was the middleman with an element of monopoly, the man
who contacted the ration wagon driver, or the man who utilised his
knowledge of Urdu. And middlemen as a group were blamed for
reducing prices. Opinion notwithstanding, most people dealt with a
middleman, whether consciously or unconsciously, at some time or
another.
There was a strong feeling that everything had its "just price
"
in
cigarettes. While the assessment of the just price, which incidentally
varied between camps, was impossible of explanation, this price was
nevertheless pretty closely hnown.
It
cafi best be defined as the
price usually fetched by an article in good times when cigarettes were
ZOO
ECONOMICA
[NOVEMBER
plentiful.
The
"
just price
"
changed slowly
;
it was unaffected by
short-term variations in supply, and while opinion might be resigned
to departures from the "just price
",
a strong feeling of resentment
persisted. A more satisfactory definition of the "just price" is
impossible. Everyone knew what it was, though no one could explain
why it should be so.
As soon as prices began to fall with a cigarette shortage, a
clamour
arose, particularly against those who held reserves and who bought
at reduced prices. Sellers at cut prices were criticised and their
activities referred to as the black market. In every period of dearth
the explosive question of
"
should non-smokers receive a cigarette
ration
?
"
was discussed to profitless length. Unfortunately, it was the
non-smoker, or the light smoker with his reserves, along with the hated
middleman, who weathered the storm most easily.
The popularity of the price-fixing scheme, and such success as it
enjoyed, were undoubtedly the result of this body of opinion. On
several occasions the fall of prices was delayed by the general support
given to the recommended scale. The onset of deflation was marked
by a period of sluggish trade
;
prices stayed up but no one bought.
Then prices fell on the black market, and the volume of trade revived
in that quarter. Even when the recommended scale was revised,
the volume of trade in the Shop would remain low. Opinion was
always overruled by the hard facts of the market.
Curious arguments were advanced to justify price fixing.
The
recommended prices were in some way related to the calorific values
of the foods offered
:
hence some were overvalued and never sold at
these prices. One argument ran as follows :-not everyone has private
cigarette parcels
:
thus, when prices were high and trade good in the
summer of 1944, only the lucky rich could buy. This was unfair to
the man with few cigarettes. When prices fell
in
the following winter,
prices should be pegged high so that the rich, who had enjoyed life in
the summer, should put many cigarettes into circulation. The fact
that those who sold to the rich in the summer had also enjoyed life then,
and the fact that in the win.cer there was always someone willing to
sell at low prices were ignored. Such arguments were hotly debated
each night after the approach of Allied aircraft extinguished all lights
at
8
p.m. But prices moved with the supply of cigarettes, and refused
to stay fixed in accordance with a theory of ethics.
CONCLUSION
The economic organisation described was both elaborate and
smooth-working in the summer of 1944.
Then came the August cuts
and deflation. Prices fell, rallied with deliveries of cigarette parcels in
September and December, and fell again. In January, 1945, supplies of
Red Cross cigarettes ran out
:
and pri~es slumped still further
:
in
February the supplies of food parcels were exhausted and the depres-
sion became
a
blizzard. Food, itself scarce, was almost given away in
19451
THE
ECONOMIC ORGANISATION
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P.O.W.
CAMP
201
order to meet the non-monetary demand for cigarettes. Laundries
ceased to operate, or worked for ks or RMk.s: food and cigarettes sold
for fancy prices in ks, hitherto unheard of. The Restaurant was a
memory ad the BMk. a joke. The Shop was empty and the Exchange
and Mart notices were full of unaccepted offers for cigarettes. Barter
increased in volume, becoming a larger proportion of
a
smaller volume
of trade. This, the first serious and prolonged food shortage in the
writer's experience, caused the price structure to change again, partly
because German rations were not easily divisible. A margarine
ration gradually sank in value until it exchanged directly for a treacle
ration. Sugar slumped sadly. Only bread retained its value. Several
thousand cigarettes, the capital
of
the Shop, were distributed without
any noticeable effect. A few fractional parcel and cigarette issues,
such as one-sixth of a parcel and twelve cigarettes each, led to
momentary price recoveries and feverish trade, especially when they
coincided with good news from the Western Front, but the general
position remained unaltered.
By
April,
1945,
chaos had replaced order in the economic sphere
:
sales were difficult, prices lacked stability. Economics has been
defined as the science of distributing limited means among unlimited
and competing ends. On
12th April, with the arrival of elements of
the 30th U.S. Infantry Division, the ushering in of an age of plenty
demonstrated the hypothesis that with infinite means economic organ-
isation and activity would be redundant, as every want could be
satisfied without effort.
RMks is an abbreviation for Reichsmarks, the currency of Germany from 1924 until 1948.
Oflag camps were German POW camps specifically for officers. The Geneva Convention specified different requirements depending on the rank of the prisoner. For instance, officers were not required to work.
Black treacle is a thick, dark molasses syrup that was popular during World War II. It was used in many recipes, including cakes and puddings, as a way to add sweetness and flavor without using sugar.
**B.R.C.S** is an abbreviation for *British Red Cross Society*.
Gresham's Law is an economic principle that states that "bad money drives out good." In other words, when there are "two types" of money in circulation, the more valuable money will be hoarded, while the less valuable money will be used for transactions. This results in the less valuable money becoming the more common currency. An example of this is when tobacco leaves were used as money in early America. The leaves were often of different sizes and weights, so they were not equal in value. As a result, the smaller and lighter leaves were used for transactions, while the larger and heavier leaves were hoarded.
Deflation is a decrease in the price level of goods and services, typically associated with a contraction in the supply of money (in this case the fact that people were choosing to smoke the cigarettes instead of using them as currency). Typically during deflation, the purchasing power of currency rises over time.
R. A. Radford was a British-born American economist born in 1919. In 1939, Radford left Cambridge University to join the British Royal Army. In 1942, he was captured in Libya and would eventually be sent to Stalag VII-A, a POW camp thirty-five miles northeast of Munich. The Germans had built the camp to hold 10,000 Polish prisoners from their 1939 offensive, but when Radford arrived, it was overflowing with soldiers of many nationalities - British, French, Belgian, Dutch, Americans and Yugoslavs. At the time of liberation the camp had 76,248 prisoners.
Radford survived the war and headed back to Cambridge to complete his degree. There he used his experience in Stalag VII-A to write this article on prisoner-of-war camp economics.
Nazi Germany operated around 1,000 prisoner-of-war camps during World War II.
There were different types of camps. For example:
- Oflag or Offizier-Lager ("Officer camp") - These were POW camps for officers.
- Stalag or Stammlager ("Base camp") - These were enlisted personnel POW camps.
The POW camp that Radford stayed in was Stalag VII-A i.e. the first enlisted personnel POW camp of the 7th military district.
It's important to note that Germany had signed the [Third Geneva Convention](https://www.un.org/en/genocideprevention/documents/atrocity-crimes/Doc.32_GC-III-EN.pdf) of 1929, which defined humanitarian protections for prisoners of war. For instance article 26 specifies:
> ART. 26. — The basic daily food rations shall be sufficient in quantity, quality and variety to keep prisoners of war in good health and to prevent loss of weight or the development of nutritional deficiencies.
> [...]
> Sufficient drinking water shall be supplied to prisoners of war. The use of tobacco shall be permitted.
The Atlantic Charter was a document created as a result of a meeting between United States President Franklin D. Roosevelt and British Prime Minister Winston Churchill in August 1941. The Charter set out the goals for the two nations in regards to the war effort and postwar world.
There were eight principal clauses of the charter:
1. No territorial gains were to be sought by the United States or the United Kingdom.
2. Territorial adjustments must be in accord with the wishes of the peoples concerned.
3. All people had a right to self-determination.
4. Trade barriers were to be lowered.
5. There was to be global economic co-operation and advancement of social welfare.
6. The participants would work for a world free of want and fear.
7. The participants would work for freedom of the seas.
8. There was to be disarmament of aggressor nations and a common disarmament after the
*Atlantic Charter*
In economics, a perfect market is a theoretical ideal of a market in which buyers and sellers are fully informed about prices and product quality, and transactions are completed promptly and without friction. In a perfect market, there is perfect competition, and no single buyer or seller has the power to influence prices.
Bully beef (or simply bully) was tinned corned beef with a small amount of gelatin.
*Bully Beef*
A Robinson Crusoe economy is a simple economics framework in which there is only one consumer and one producer. The consumer is Robinson Crusoe and the producer is Crusoe's friend Friday. In this economy, Robinson Crusoe can only consume what Friday produces. This is a very simplified economy, but it illustrates some important points about economics.
The prisoners would take the raisins and sugar and mash them up, put the mixture in a container, add water and let the mixture ferment. After a few days, the mixture would turn into a crude form of alcohol.