Case Study: Radford

1. What, according to Radford, accounts for the development of an exchange system in a P.O.W camp?
As Radford mentioned in the article that “‘Goodwill’ developed into trading as a more equitable means of maximizing individual satisfaction”. Therefore, self-satisfaction is the most important motivation of P.O.W camp exchange system. In the P.O.W. camp, the prisoner will receive same commodity parcel in a fixed period without any struggle. However, everybody has their own preferences, and the stuff in the parcel cannot exactly satisfy their needs. For example, some of the prisoner are non-smoker, they get cigarette like everyone else. Some of the prisoner are smoking addiction, they need more cigarette than they have. If the smoker has something that non-smoker want, the non-smoker …show more content…
The prisoners do not have metallic currency or paper currency in the camp, but they still need a thing as the medium of exchange. As Radford mentioned in the article that “although cigarettes as currency exhibited certain peculiarities, they performed all the function of a metallic currency as a unit of account as a measure of value and as a store of value, and shared most its characteristics”. In a limited resource environment, the cigarette seems like the best choice, because it is convenient to keep as well as carry, and most of the prisoners convinced its value. Therefore, the cigarette became a medium of exchange as money. The permanent camp has a mature exchange system due to its more stable than transit camp, the cigarette currency works better. However, the transit camp has higher population mobility and more informed, its exchange system is not stable like the permanent camp. The market is highly respond to the demand, every information may causes volatility. Hence, the cigarette did function well as money in the permanent camp better in the transit