Taken as a whole, opinion was hostile to the middleman

A series of passages from the recently read Black Rednecks and White Liberals by Thomas Sowell. Combative to the point of provocative but as usual crammed with unexpected facts or interpretations of facts. Page 71. Sowell's argument in this chapter is that there is significant evidence that the prejudice that is seen against traders such as Jews, Ibo, Chinese, Lebanese, etc. is not against them as minorities but against them in their function.

An often-cited economist's account of rudimentary economic activities within a prisoner-of-war camp in Germany during World War II showed the economic and social role of middlemen among the men in the camp. Prisoners of war were fed by their captors, while the monthly shipments of Red Cross packages supplemented their food and provided a few amenities like chocolates and cigarettes. All prisoners received the same material goods but of course they valued different items differently. Non-smokers traded cigarettes for chocolates. Sikhs among the prisoners traded away canned beef for jam or margarine.

On days when the Red Cross packages arrived, direct one-on-one trades created chaos in a camp with more than a thousand prisoners. Camp authorities sought to bring some order into the situation by setting up bulletin boards on which prisoners could make their offers of trades. But what proved to be even more efficient arose spontaneously among the prisoners themselves: Particular prisoners would circulate around the camp, trading back and forth - playing the role of middleman among their numerous fellow prisoners, who traded with one another without coming into direct contact. The other prisoners saved themselves the bother and the middlemen ended up with more material goods, in effect charging for their services.

The middlemen who emerged in this informal economy were not necessarily ethnically different. Those individuals who played the middleman role in the camp ranged from a Catholic chaplain to a Sikh. Moreover, the needs they met, though seemingly trivial from the perspective of a larger and more affluent society, were matters of "urgency," according to a British economist who was one of these prisoners. Things like cigarettes, jam, razor blades and writing paper meant a lot in the grim conditions of a prisoner-of-war camp.

The other function of middlemen - lending and charging interest - also arose in the camp. As prisoners' supplies of cigarettes or sugar ran low near the end of the month, those who had saved these items would provide them to those had run out - in exchange for a pledge to pay back more than was lent when the next Red Cross package arrived. The economist among them was fascinated to see many of the economic phenomena associated with a complex market economy appearing spontaneously in these primitive conditions. But he also noted social and political phenomena generated by the work of middlemen:

Taken as a whole, opinion was hostile to the middleman. His function, and his hard work in bringing buyer and seller together, were ignored; profits were not regarded as a reward for labor, but as the result of sharp practices. Despite the fact that his very existence was proof to the contrary, the middleman was held to be redundant...

Here, in a microcosm, was the fundamental problem of the middleman down through the centuries and around the world. In the prisoner-of-war camp, at last these misconceptions were not compounded by the additional factor of ethnically different middlemen and there was no market
for political demagoguery.