Fermat’s Library | The Economic Organization of a P.O.W. Camp annotated/explained version.

Fermat's Library | The Economic Organization of a P.O.W. Camp annotated/explained version.



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


commonplace in 1943, and the price fell. In hot weather the demand

for cocoa fell, and that for soap rose.


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



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


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.


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


great success. Food was bought at

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