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Interesting read.
The cigarette had already made its appearance during the war as a currency in both the Third Reich’s massive network of concentration camps as well as in POW camps. Auschwitz survivor Stefan Kosinski commented that he didn’t smoke but always kept a stock of cigarettes for exchange: “It’s like money. With it, I could buy a little margarine, some bread, some potatoes . . . and I took with me some of these foods and [for] resale.”1 Discovery of such barter operations could mean immediate death in the camps, but survival was on the line in any case.2 POWs of Germany were safe from the death penalty, but they likewise experienced closed systems of scarcity. A young British economist, R.A. Radford, wrote a classic article right after the war describing the economy of his own camp experience in an elegant, and often very funny, account. In it, we find POWs creating a spontaneous order of exchange that started with simple barter and grew to amazing efficiency. At its most developed, prices were quoted exclusively in cigarettes, and barracks were outfitted with information boards that kept track of available goods and their prices in cigarettes. In the author’s words, “The public and semi-permanent records of transactions led to cigarette prices being well known and thus tending to equality throughout the camp, although there were always opportunities for an astute trader to make a profit from arbitrage.”3 Many POWs were smokers and smoked at least some of their currency, but the supply of cigarettes was more or less continuous since the POWs received cigarette rations in packets from the Red Cross and other organizations. Still, the cigarette reached its widest role as a commodity medium of exchange in the postwar German setting. In the wake of the Third Reich’s defeat, the collapse of German society was not total. However, for the vast majority, it was close enough to seem so. Eleven million German soldiers remained in Allied POW camps. In German cities, more than half of the dwellings had been destroyed by Allied bombing, which had also left half a million German civilians dead and many more injured.4 Hundreds of thousands of Germans who had been evacuated from their homes remained stranded in rural areas far away. Moreover, after twelve years of National Socialist inflationary and restrictive economic policies, wartime shortages, rationing, and totalitarian control, ordinary Germans had been looking at something like economic collapse before the Allies even arrived to occupy Germany. Then, things got worse.
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mises.org
To Smoke or Not to Smoke: The Cigarette Economy in Postwar Germany, 1945–48
During the three years after World War II, Germans—facing a ruined economy and wildly depreciating currency—turned to cigarettes as a medium of exchange on a massive scale. Allied occupation authorities strictly forbade this black-market currency exchange, but it literally saved the lives of many German civilians—and inadvertently made many American GIs rich.The cigarette had already made its appearance during the war as a currency in both the Third Reich’s massive network of concentration camps as well as in POW camps. Auschwitz survivor Stefan Kosinski commented that he didn’t smoke but always kept a stock of cigarettes for exchange: “It’s like money. With it, I could buy a little margarine, some bread, some potatoes . . . and I took with me some of these foods and [for] resale.”1 Discovery of such barter operations could mean immediate death in the camps, but survival was on the line in any case.2 POWs of Germany were safe from the death penalty, but they likewise experienced closed systems of scarcity. A young British economist, R.A. Radford, wrote a classic article right after the war describing the economy of his own camp experience in an elegant, and often very funny, account. In it, we find POWs creating a spontaneous order of exchange that started with simple barter and grew to amazing efficiency. At its most developed, prices were quoted exclusively in cigarettes, and barracks were outfitted with information boards that kept track of available goods and their prices in cigarettes. In the author’s words, “The public and semi-permanent records of transactions led to cigarette prices being well known and thus tending to equality throughout the camp, although there were always opportunities for an astute trader to make a profit from arbitrage.”3 Many POWs were smokers and smoked at least some of their currency, but the supply of cigarettes was more or less continuous since the POWs received cigarette rations in packets from the Red Cross and other organizations. Still, the cigarette reached its widest role as a commodity medium of exchange in the postwar German setting. In the wake of the Third Reich’s defeat, the collapse of German society was not total. However, for the vast majority, it was close enough to seem so. Eleven million German soldiers remained in Allied POW camps. In German cities, more than half of the dwellings had been destroyed by Allied bombing, which had also left half a million German civilians dead and many more injured.4 Hundreds of thousands of Germans who had been evacuated from their homes remained stranded in rural areas far away. Moreover, after twelve years of National Socialist inflationary and restrictive economic policies, wartime shortages, rationing, and totalitarian control, ordinary Germans had been looking at something like economic collapse before the Allies even arrived to occupy Germany. Then, things got worse.
Read the rest here:
To Smoke or Not to Smoke: The Cigarette Economy in Postwar Germany, 1945–48 | T. Hunt Tooley
During the three years after World War II, Germans—facing a ruined economy and wildly depreciating currency—turned to cigarettes as a medium of exchange on a massive scale.
