Keaton Spiller

11/22/14
Professor McCay
Paper 2
Economic P.O.W. Camp by R.A. Radford
The economic organization of humans is amazing, and no matter how isolated we are
from the public; we will cleverly trade and sell for economic supply, and demand. In this true
story, we are shown economic trading with items such as cigarettes, jam, razor blades, writing
paper, and etc. That developed into currency because there was supply and demand for these
products, and a media of exchange as an intermediary of trade. Specifically, a cigarette was a
huge portion of trade for currency, and held value because it is something that could be smoked
as a pleasure item. Paper was also a form of currency used, which was a substitute for cigarettes
yet, there were many problems with these currencies with value, and inflections that were
unstable through the Red Cross. However, trade still made both parties better off because it held
a value that could be exchanged for goods that they want in the future.
One of the huge concepts that R.A. Radford talks about is the stability of their currency,
and their problems with inflation. They describe this as periodicity, a less elastic demand for
cigarettes than food, and prices [fluctuating] weekly, falling towards Sunday night and rising
sharply on Monday morning. This caused prices to fluctuate weekly and cause problems until
they developed credit, reserves, and individual stocks. On the other hand, deflation strongly
affected their economy as well. A fundamental instability, that came about as a problem many

times because of the sudden injection of new currency. This was explained as thousands of
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. Meaning without
constant supply of these cigarettes, stocks will run out, and there will be deflation.
Another huge topic thats talked about is markets debasement, or taking value away from
goods. This reduces money value, and scams those who expect specific monetary value. This
occurs when people chip gold, print fake money or etc. In this article cigarettes are clipped or
sweated by rolling them between the fingers so that tobacco fell out. This was a problem
because it reduced the value of their cigarette and in turn, people became more suspicious and
each cigarette was examined before it was accepted and thin ones were rejected, or extra
demanded as a make-weight. Saying if you did not check the tobacco within your cigarette you
were losing money, so everyone became accustomed to doing so.
Their market was astoundingly organized with 1,200- 2,500 people with 200 to a
building, separated between different types of people. And with these organizations there are
postings for prices of each buildings goods. These buildings can communicate back and forth
between each other, and certain buildings would speak different languages. However, people who
knew multiple languages could communicate to specific buildings and obtain better deals than
whats offered at their camp. And they could sell and buy products at monopoly prices. This
states, French trading center, 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. And because of the posted prices of an
organized market, people took advantage and made profits.

Lastly, price ceilings were one of the economic ideas in these P.O.W camps. They
believed that price fixing would help their economy; however it was a ceiling that they placed on
their economy. And this ceiling led to sluggish trade, and less supply for products than what is
demanded. What this means is they have offset their equilibrium so that prices are cheaper but
less people can afford to supply for that cheap price, and they experience deflation along with
more people buying from the black market. And because of this the volume of trade in the shop
would remain low. And we will be left with economic problems.