The Economic Organization of a P.O.W Camp.

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This article is about social, economic and political organization of the Prisoner of War Camp. Like the outside world, this society P.O.W camps have social institutions, ideas and habits. This organization is of great importance to their present and future existence. Prisoners engage in exchange of goods and services to enhance their material comfort. Prisoners carry out this through small transactions and simple expression of comfort and wants in terms of cigarettes and jam, razor blades and writing paper. Although they carry out this in small scale, it is very important to them (p2).The article also emphasizes on the importance of trade in ensuring that individuals’ preferences are given expressions and comfort increased. P.O.W camp is described as a simple economy. According to Radford, similarity between P.O.W camp economy and outside organization arises from similar stimuli that evoke similar responses. The article reports of trading for food against cigarettes or other food stuff and how cigarettes are used as currency in this P.O.W camps economy trade. In these camps, supplies mainly consisted of rations provided by the detaining power and food parcels donated by the Red Cross. The prisoners also received private parcels such as clothing, toilet requisites and cigarettes. These supplies were equal and regular to all individuals. It is on these commodities that the prisoners traded on. (p3)

A non smoker could give a smoker friend his cigarettes in exchange of a chocolate ration, and other commodities preferred. This trend soon became an accepted custom. Prisoner could go around the camp carrying what he wished to exchange for other goods he needed most. This trend continued to increase and volume of trade grew and rough scales of exchange came into existence e.g. a cigarettes issue was worth several chocolates issues. Eventually lively trade in all commodities was on progress. Relative values of all commodities had also been known. Cigarettes also became the standard of value. Every commodity was then to be measured in term of cigarettes. In the permanent camps, Exchange and Mart notice boards were established where information about goods available for exchange, price (in terms of cigarettes), and room number could be posted. The result of this progress was that cigarettes became a normal currency. (p 4)

However a transit camp was more chaotic and consisted of many markets since prisoners did not have information about goods available for exchange and the room number of the owners. Prices also varied in different camps. Trade secrecy as well as offering reasonable prices was also emphasized by prisoners from various countries. In a permanent camp in Germany, prisoners could leave their surplus goods in shop organized as a public utility to be sold at a price fixed in terms of cigarettes (p5). Eventually prices were fixed by the operations of demand and supply. Some prisoners could also offer services in exchange of cigarettes. This was a labor market at work. Entrepreneurial skills were also present-coffee stall owners who sold tea, coffee at two cigarettes a cup (p6).

Prisoners who traded in food and cigarettes also made some savings in terms of cigarettes. Speculation motives were also evident. The traders could ration cigarettes available and offer them near the next issue where prices were high. Credit was also part of this big trade. This article also reports about how price movements were dependent on cigarettes and food deliveries in the camps. Influx of new prisoners also raised prices. News about war, optimism and pessimism waves also affected prices. The article also report of price fixing activities by medical Officer to control sale of food due to fear that some prisoners may sell too much to detriment of their health. (p8). Public opinion was also evident in this P.O.W camps. Some condemned the trade citing cases of malnutrition to devoted smokers, and frauds and so on. Traders opposed this and termed it as hostility. Generally many felt that just price which was determined by supply and demand for cigarettes and food existed. (p12)

(2). Prisoners in P.O.W camps traded to get rid of surplus commodities of which they did not need in exchange of goods and services which they had a deficit and important for their welfare. Those did not smoke could exchange for food with the smokers.  Comparable to international trade where trade is based on comparative advantage, surplus goods in POW camps was traded in to meet the deficit.

(3). Yes. The Exchange and Mart notice boards and shop which was organized as a public utility offered a market where forces of demand and supply could meet. Through such organization, operations of demand and supply were in operation. Thus market equilibrium was achieved.

(4). The role of cigarette in P.O.W camps.

Cigarette acted as a medium of exchange, unit of account, standard of deferred payment, and also as a store of value. This commodity was homogenous, reasonably durable and portable since it was of convenient size. (P7). According to this article, the value of all commodities available for sale was measured in terms of cigarettes e.g. two cigarettes were comparable to one cup of coffee or tea. In this case cigarettes were used as unit of account.  Prisoners also exchanged their surplus for cigarettes. In this sense cigarettes acted as medium of exchange. In the P.O.W camps, credit facilities were also provided. A prisoner could obtain certain goods in agreement to give certain number of cigarettes in future. Thus cigarettes were used as standard of deferred payment. Finally, cigarettes played the role of store of value. Prisoners who were involved in trade could save part of their income in terms of cigarettes.

(5). Despite cigarettes acting as currency in P.O.W camps, there existed some differences between it and world economy money.  First, the cigarettes had no particular authority of issue.  World economy currencies are usually issued by a certain authority. Cigarettes are a good that can be consumed- by the smoker. The world economy money is usually in form of paper and coins which cannot be consumed in any way.

(6). Supply of cigarettes greatly affected the P.O.W camps economy. When cigarettes supply was low, prices fell and trading declined in volume and vice versa. When supply of cigarettes was high trade volume was also high, prisoner could exchange more goods and services. (p8)

(7). Market is usually formed as various economic agents seek to further their own interests. Economic agents with surpluses exchanges goods and services with economic agents with deficits.  This naturally occurs since economic agents have to meet their needs so as to live. Economic agents will also need to acquire goods and services that will enhance their life and make them more comfortable. Thus market in P.O.W camps economy naturally arises as the prisoners seeks to further their own interests. Non smokers’ interest was to exchange cigarettes for food while smokers’ interest was to exchange food for cigarettes.

P.O.W camps economy is fairly a good organization of the economy. It ensured exchanges of goods and services in this economy. However, this economy organization is not the best way. Using cigarettes as currency was not a good option. Cigarettes are not durable, and are consumer good which threatens its supply. A more durable commodity with a token value could be appropriate.  A coin currency could have been provided by the prison management.