http://dash.harvard.edu/bitstream/handle/1/3685820/desan_coinreconsidered.pdf?sequence=2

via

http://neweconomicperspectives.org/2013/04/was-cigarette-money-in-world-war-ii-pow-camps-a-case-of-commodity-money-origination.html

(Be warned: the paper is an open-access article published by that notorious
reactionary organization, Harvard University..)

------------------------snip

But unfortunately for our commodity money theorists, the POW camp story is
almost as much of a fairy tale as is the tall tale of *The Princess and The
Hair*. If the economic theory of “pure” exchange is purely anything, then
it is purely mistaken.

As Christine Desan explains in her article, “*Coin Reconsidered: The
Political Alchemy of Commodity
Money<http://dash.harvard.edu/bitstream/handle/1/3685820/desan_coinreconsidered.pdf?sequence=2>
*”, Radford’s story “capture a powerful intuition about money’s origins and
its character that continues to anchor assumptions about the market.” That
“most of that history is imagined and modeled rather than mapped” only
makes it more compelling. That this story was a chimera seems somehow to be
outweighed by the fact that it was a *shared* daydream – common among
(apparently almost) everyone from Menger to Marx.

The more closely we examine Radford’s fable, the less convincing it
becomes. As Desan reminds us:

“There is a problem with the paradise presented… (in Radford’s account)…
and the problem is critical. That ‘brand new society’ — with its cigarette
currency and its pristine market — was a POW camp.”

Far from being a stateless society or a paradise of market individualism,
Radford’s POW camp was in fact… a POW camp. And that is not something we
should allow ourselves to easily forget. There was a “state,” and for that
matter the “state” (the German guards) was all-powerful. It was possible
for the “market economy” to emerge because and only because the guards and
the Red Cross established and preserved the conditions to enable it to
emerge. Cigarettes and other commodities were – because of decisions by the
Red Cross and the Germans which lay entirely outside of the control of the
prisoners – delivered from a distant and utterly disconnected external
world:

“Recognizing that fact subverts the meaning of the microcosm. The condition
for the function of its market and its money was a situation in which
governance and all the functions of the collective had been externalized
and determined by an alien power. Note that centralized authority was not
absent; rather, it was omnipresent, fixed, and definitive. The structure
that determined Radford’s camp thus *established as premises* precisely
those issues of relative value that are negotiated collectively when a
community of users *itself* creates a currency — and, for that matter, a
market. Those issues range from the profound to the apparently mundane.
Each connects a society’s constitution, as a dynamic of people interacting,
to its money, as the mode they use together and as individuals to mark and
transfer value.”
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