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Cigarette Money-Trading in a Pow Camp

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“Cigarette Money- Trading in a Prisoners-of-War-Camp” 1) Introduction This paper focuses on the analysis of the Prisoners-of-War Camp (POW Camp from now on) as depicted by R.A. Radford regarding various economical matters and behavioural aspects of its inhabitants. First of all the organisation of the POW Camp itself will be explained with a secondary focus on the extent, to which organisational structures foster a functioning market. Afterwards the emergence of cigarettes as a currency in the market of the POW camp will be examined with a detailed focus on a comparison between the properties of an ideal currency and properties of cigarettes as a currency. This examination will be followed by research on the validity of Gresham´s Law …show more content…

Every individual is willing to work for their living as long as they expect to receive a reward from it and improve their living conditions this way. This can also be observed in the POW Camp. The author says that the trade of goods is essential for the inmates of the POW Camp in order to improve their standards and fulfil their personal needs (Radford, 1945). As Radford puts it “ ”Goodwill” developed into trading as a more equitable means of maximising individual satisfaction” (Radford, 1945, p.191). An exchange of goods can be observed directly after the arrival at the POW Camp. This is caused by self-interest, the equal rations for every prisoner arriving on a regular basis and the fact, that every individual has different preferences Due to the differing preferences a maximization of an inmate´s utility is only possible by trade. At a later point a little labour market evolves where simple services such as laundry and hair cutting are offered (Radford, 1945). In the transit camp in Italy trade only consists of the simple exchange of goods against each other, so-called barter trade. Prices often vary significantly due to informational deficits of the camp inmates. After arriving in the permanent camp in Germany this circumstance changes: Informational asymmetries disappear due to the higher level of organisation. The value of a good is now expressed in terms of cigarettes. The use of cigarettes

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