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The article examines the actual role of cigarettes as currency in the German economy at the end of World War II, as opposed to popular mythology surrounding the events. Details are given describing the institution of a limited barter economy alongside the black market and traditional system and the presence of cigarettes as a primary commodity within them. Connections between the restrictions of Reichmark-American dollar exchanges are analyzed. Conclusions are offered suggesting that while cigarettes did serve in a monetary capacity, it was a limited one.

This articles suggests that the accepted analysis of price formation in black markets is defective and the conclusions based on it incorrect. The accepted treatment of price formation in black markets is based substantially on the standard analysis of price formation under discriminating monopoly. For instance, Professor Bronfenbrenner in a well-known article suggests that a monopolist would produce the output at which marginal cost equals the controlled or official price (which equals the marginal revenue on official sales), that he would make sales in the black market up to the amount at which marginal revenue in that market equals the official price, and that he would sell the rest at the official price. This analysis assumes that the black market price is a function of the quantity supplied in that market and is independent of the quantity supplied in the official market. This assumption is inappropriate. With a given total output, any change in black market sales necessarily involves a diversion of supply to or from the official market, and a corresponding diversion of demand. In other words, black market demand is directly related to a change in black market supply. It is, therefore, inappropriate to represent the black market demand as a fixed curve determining a different black market price for each quantity supplied in that market. In a situation with a given total output, the black market price changes only if the slope of the black market demand curve changes with different allocations of the total quantity between the official market and the black market. The marginal revenue in the black market is also constant, and the "discriminating" monopolist has no scope to vary his black market sales out of his total output--uniquely determined by marginal conditions in the official market according to the accepted analysis--so as to equate marginal revenue in the two markets.

Focuses on the delay function in the analysis of factor substitution and shadow wages. Derivation of a twice-adjusted shadow wage function; Effect of the introduction of an underemployment adjustment to the market wage; Factors affecting the location of the compensated isocost curve.

Recent literature on productivity indicates that the traditional definition is being modified to include such factors as quality, diseconomy, social value, and other measures considered by some more "relevant" to today's environment. What is needed, in the opinion of the authors, is the development of more and better "success indicators" that can be used by governmental agencies to assess and present the payoff of social services programs, and to improve them to the point that they warrant the public's confidence. The bulk of the criticism of social services governmental programs has been due to major differences between the expectations of the various client groups about services to be performed and expectations of agency employees who provide the services about the results to be achieved. Client satisfaction is not a new concept in measurement, either in the public or private sector. Elected officials exist by it. They point to such success indicators as number of terms in office, their voting records, their positions on issues, legislation they have introduced, legislation passed, committees they have served on, and other measures of performance.

In seeking to identify the second characteristic of public service which gives it great appeal, one must acknowledge the importance of the institutional aspects of bureaucracy. It is a characteristic which is also found, and carefully preserved, in many of the largest and oldest of our private organizations. In fact some have observed that at a given point in size there are remarkable similarities in organization and operating procedures between big government and big industry. Government agencies must have organization structures which are not dependent upon individual personalities for their perpetuation. This is necessary to a far greater degree than in the private sector, because the entire top management can change overnight as a result. By contrast, in the private enterprise situation regulations, policies, and practices unless directly dictated by law can be changed flexibly as required. In public practice the vast majority of rules, regulations, and policies are founded on laws and interpretations of laws. Change is often impossible except through the most painstaking, well thought through proposal.

It has been demonstrated that monolithic explanations of supervisory behavior fail to do justice to the diversity of roles empirically found. In order to explain why one particular supervisory system has the characteristics it does, it was found necessary to go beyond the usual analysis of organizational and technical factors and to consider the possibility that foremen constituted some form of occupational grouping which had its own role-definitions and its own mechanisms for transmitting these. Because foremen's occupation was embedded in two different types of organization, some discussion of organizational differences was necessary in order to show how accommodation between occupational and organizational principles was achieved. Despite formal differences, these two types of organization functioned in two ways which allowed occupational role-definitions to structure behavior. But a greater tension existed between these principles in the public authority than in the private sector companies. The nature of foremen's occupational role-definition was seen to correspond to generally held norms in the industry and to reflect both specific structural factors found historically in the docks and more generally, the nature of craft industries.

Historians and scientists have largely ignored the temporary federal agencies which controlled the World War II economy. One of the most important organizations, the War Production Board (WPB), which regulated the allocation of supplies and production, has been virtually disregarded. Yet many of the Board's problems probity of businessmen, military attempts to command the economy, relations between business executives in government and military leaders merit attention. Analysis of one of the major disputes, the 1944 struggle on industrial reconversion, raises these problems and reveals much about the relationship of business and the military in the wartime government. Powerful financial and industrial interests dominated executive positions on the WPB and used their authority to protect prewar competitive patterns and to support military demands. Distrustful of labor, generally unsympathetic to small business, and respectful of the military, representatives of these business interests resisted reconverting.

The article discusses the effects of business taxes on financial organizations. Business taxes are, in one essential, no different from any other category of taxes. They represent the transfer of income and spending from the private sector of the economy to the public sector. They consist of a portion of private incomes which would have been spent or saved voluntarily to satisfy the present and future requirements of private individuals and groups. All taxes have in common the force of redirecting or of reallocating the resources of a community. It is the hypothesis here that taxes on business cause a greater misallocation of resources than do taxes on individuals.

The aim of this exploratory study is to investigate consumer sovereignty in the public sector of the economy. If the consumer is to be sovereign he must control both the public and private sectors. Consumer sovereignty, as used here, is taken to mean a process of choice such that the society embodying it may be clearly seen as the result of that choice. Choice must be free, informed, responsible and personal. Freedom of choice is basic to this concept. Personal choice is stressed because choice must not be made for persons but by them. It was also stipulated that choice be informed and responsible. People who freely choose must live according to the consequences of their choice, they must solve their problems for themselves. And in order that the act of choice be meaningful it must be an informed choice. The federal budgetary process is introduced by the President's annual State of the Union Message which may be considered as an expression of his idea of the overall valuations of the nation. The leading problem of consumer sovereignty is twofold: first, how to achieve a process of economizing in the public sector which embodies the preferences of freely operating and informed persons, no one being excluded from the process; second, how to maintain a true consumer sovereignty in the private sector at the same time.

The resolution of conflict through citizen participation in the decision-making process is receiving widespread attention at the levels of both theory and practice. The view that decisions concerning the allocation of resources, both private and public, should allow the widest possible action on the part of the individual seems essential in a democracy and, indeed, is basic in American tradition. The rationale of antitrust policy has been to prevent restraints which hampered the determination of price and output through the free play of consumers and producers in the market place. The concern with increased participation rests in part on the assumption that the present decision making process fails to assimilate enough information about the desires of all citizens. Clearly, a process which increases the flow of relevant information should lead to improved decisions in the same sense that well-informed and rational markets lead to a superior allocation of resources in the private sector of the economy.

This essay utilizes a simple dichotomous market model drawn from economic theory to analyze the emergence of administrative corruption. The paper argues that the ideal-type of modern bureaucracy posits a system analogous to the mandatory pricing system of market economics, while corrupt bureaucratic systems more resemble the free market. In the latter model prices are determined by supply and demand, rather than by fixed schedules prescribed and enforced by some central authority. On the economic market when a government attempts to maintain the mandatory pricing system but finds that supply and demand are greatly out of balance, there is the likelihood of the emergence of a free market system regardless of official intentions. The result has come to be called the "black market." In some settings, under certain circumstances one may similarly find the emergence of "black-market bureaucracy." The author suggests what some of these circumstances might be and concludes with some observations and questions about the control of this kind of bureaucratic black marketeering, its utility in economic and political development, and its future in the underdeveloped world. [ABSTRACT FROM AUTHOR]