I've not read the Alchian and Allen book, but the story is very similar to the 1945 paper "The Economic Organisation of a P.O.W. Camp" by R. A. Radford, Economica, New Series, Vol. 12, No. 48. (Nov., 1945), pp. 189-201. Radford was a POW in a German camp, and describes the development of markets within the camps--you can access it from my web page
Radford was a POW, and recounts the development of the market:
"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."
He goes on the discuss the development of a commodity money--cigarettes--and some sociological aspects of how people felt about a "just price."
It's a great read. Radford worked as an IMF economist for many years poet-WWII.
Your post made me think about Henry Hazlitt. He wrote a dystopian novel Time Will Run Back. The Marxist win but a new leader comes to power and rediscovers capitalism.
I'd be prouder of our species if we didn't need competition to be our best. It would be sweet. But evidence points to all the good stuff resulting from competition.
Beautiful post. When I was doing my PhD and teaching history of economic ideas, I’d always make sure to talk about market as a process and some Austrian economics. Always trying to make students realise the limits of all the equilibrium analysis they were doing in other courses (not that many of them cared…). I’ll still talk about this to anybody who will listen.
I've not read the Alchian and Allen book, but the story is very similar to the 1945 paper "The Economic Organisation of a P.O.W. Camp" by R. A. Radford, Economica, New Series, Vol. 12, No. 48. (Nov., 1945), pp. 189-201. Radford was a POW in a German camp, and describes the development of markets within the camps--you can access it from my web page
https://my.vanderbilt.edu/robertdriskill/econ-2260-international-trade-florence-italy/
Look for "POW Camp Radford."
Radford was a POW, and recounts the development of the market:
"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."
He goes on the discuss the development of a commodity money--cigarettes--and some sociological aspects of how people felt about a "just price."
It's a great read. Radford worked as an IMF economist for many years poet-WWII.
That’s explicitly about how a medium of exchange emerges but there are lots of parallels. Absolutely.
ICYMI? No time for typing? I have no time for deciphering.
Joe, I just want to say, never change. I always wonder what you're going to hate each week :)
Me, too. I ALWAYS hate being flummoxed (it happens to me a LOT).
I must need more edjakayshun.
Your post made me think about Henry Hazlitt. He wrote a dystopian novel Time Will Run Back. The Marxist win but a new leader comes to power and rediscovers capitalism.
https://a.co/d/amej2Aj
It is loosely based on how POWs used cigarettes as the medium of exchange.
I'd be prouder of our species if we didn't need competition to be our best. It would be sweet. But evidence points to all the good stuff resulting from competition.
Beautiful post. When I was doing my PhD and teaching history of economic ideas, I’d always make sure to talk about market as a process and some Austrian economics. Always trying to make students realise the limits of all the equilibrium analysis they were doing in other courses (not that many of them cared…). I’ll still talk about this to anybody who will listen.