Outline: In this article, the author demonstrated the economic activity within a specific P.O.W. Camp, in which he witnessed and the emergence of market, the transformation of cigarette from a good to currency, the development of paper money, the price fluctuation and the final outbreak of the market.
Economic Concept:
i. Economic laws are the same no matter what situation it is.
ii. Price is determined by both supply and demand.
iii. Entertainment spending is on the basis of a general level satisfaction of necessities.
iv. Money paper needs the support of the level of general wealth.
There rhetorical questions:
i. Since cigarette is both common good and currency, does its role as common good accounts for the failure of it as currency in the final life of the P.O.W. ?
ii. Is middleman really to blame in this situation?
iii. Since the shop is based on a non-profit standard, how would someone be willing to work in it?
My opinion:
The author definitely presented an interesting example of a simple society to illustrate the basic economic principles.It works well in presenting how market works in the simplest level. But I do have some doubts, as illustrated following, about the details of this mechanism.
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