As I said in my previous post on The Nazi Officer’s Wife, I see economics everywhere. This book is no exception.
Here are two.
First, some background for the first one. In April 1941, Edith Hahn Beer was forced to sign a contract obligating her to go to an asparagus farm in Germany to do slave labor. She and her Jewish fellow workers were forced to wear yellow stars at all times. But in the times they had off, they wanted to go into town and shop for things. That presented a dilemma.
She writes:
The police told us we must write to Vienna for the yellow stars, and that when they arrived, we must wear them at all times. But if we had done so, no shopkeeper in town would have waited on us. So we didn’t wear them. Our supervisors on the farm seemed to care not at all. I believe that in their way they had began [sic] to want to keep us content enough to go on obediently working for them, even more than they wanted to please the police.
Incentives at work. Economic self-interest on the part of the supervisors, who were trying to reach their production quota, overcame obedience to government rules.
The second is about adjustment to Hitler’s price controls.
The farmers outside the city made fortunes from bartering, because people would bring their most valuable furnishings to trade for some carrots, maybe a slab of bacon, or some fresh cheese. People joked that the farmers now owned so many Persian rugs that they put them in the cowsheds.
By the way, I wrote in some detail about how this barter continued after the war in response to the Allies continuing to enforce Hitler’s price controls. It’s in “German Economic Miracle,” in David R. Henderson, ed., The Concise Encyclopedia of Economics. The barter ended as soon as the price controls ended–and the German economic miracle commenced.
READER COMMENTS
Ahmed Fares
Aug 24 2024 at 8:56pm
re: how the base effect is used to mislead people into accepting price controls
A two-minute clip with the exchange above in the first minute:
WATCH: CNBC host slams Elizabeth Warren on price gouging ban
steve
Aug 25 2024 at 9:39am
I also thought Warren was wrong but then I recently saw this piece by Bourne at CATO whom I think generally does good work. Using his numbers (chart at the bottom) it looks like 35% of the price increases we saw over the 4 years when inflation was highest went to profits. That is much more than I would have expected. (In his analysis he seems to want to concentrate on just the last year or two.) I have to think I am interpreting this wrong or he got the numbers wrong but his numbers usually seem good.
Steve
https://www.cato.org/commentary/new-nonsense-profit-driven-inflation
David Henderson
Aug 25 2024 at 12:02pm
Does anyone have comments on my actual post?
Peter
Aug 25 2024 at 1:43pm
It wasn’t really a comment worthy post, i.e. just two assertions of facts that I don’t think any reader of this blog would disagree with. That isn’t to say it was bad, I found it be post worthy as I missed your previous post on this so went down a fifteen minute rabbit hole on the book before deciding I’ll never read it.
David Seltzer
Aug 25 2024 at 3:59pm
Peter: “It wasn’t really a comment worthy post, i.e. just two assertions of facts that I don’t think any reader of this blog would disagree with.” A bit judgmental Peter. David referenced “German Economic Miracle,” in David R. Henderson, ed., The Concise Encyclopedia of Economics. Several assertions in that article supported with empirical work make this a most worthy post…IMHO.
Jon Murphy
Aug 25 2024 at 6:54pm
This story is fascinating. It suggests the supervisors were more afraid of the penalties for letting Jews walk around without their yellow stars than the penalties for missing quotas.
It’d be interesting to see what the relative penalties were. I’m assuming the supervisors would face some consequence.
Comments are closed.