08 August 2014

More Black Market


by R.T. Lawton           (continued from 18/Jul/14)

In the low end of the Vietnam Black Market, almost everyone had a hand in the trade. It was politely called the barter system and was for small immediate gain. What could it hurt?

See, every soldier in-country had a ration card which allowed him to buy two cartons of cigarettes, two cases of beer, two bottles of wine and/or two fifths of hard liquor per month. But, not every soldier smoked and not every soldier drank booze, which then created a market for those extra goods. The rationed amounts mentioned above generally sufficed for the needs of most G.I.'s, however there were outsiders who had no access to the PX (cigarettes) or the Class Six Store (booze).

Simple solution, trade those extra goods which you bought from the non-smoking, non-drinking soldiers who otherwise didn't use their ration cards. Want some cases of steaks or lobster to supplement your C-rations or scant mess hall chow? Trade some of those extra purchased goods to a civilian contractor or merchant seaman who had connections to his company's kitchen. Need a freezer to keep those extra steaks cold as they're hidden behind a false wall in your company area? Once again, trade some of that booze or cartons to a civilian for that freezer. You say a real ice cream factory went into operation down in the ville and they don't make their product out of reconstituted milk like the military does? Now you're trading PX items to Vietnamese workers who smuggle out gallons of whichever flavor of real ice cream you desire. This may be bartering, but it's still operating in the Black Market, only on a much lower scale.

Today's World

But then you don't need a time of war to have a Black Market in existence. I once entered a mob joint in downtown Kansas City and sat at the corner of the bar where I could watch everything going on. When I ordered my second drink, I gave the bartender some extra money and asked her to get me a pack of Winstons. My second drink came fast, then she wandered around for a while before disappearing into a back room. A few minutes later, she came out and wandered around again before finally depositing the cigarettes in front of me on the bar. I had paid full price for the pack, but it didn't have a federal tax stamp on it. She never went near the vending machine in plain sight against the wall. These smokes were contraband, smuggled out the back door of an East Coast factory or else high-jacked from a semi trailer before the government got paid and put a tax stamp on them.

Operators in this market may only make nickels, dimes or quarters on every small sale, but they are in it for the volume. In the end, all those nickels, dimes and quarters add up to very big dollars, and those are untaxed dollars not subject to state and federal sales or income taxes. Free money, so to speak.

All this merely goes to show that any economic system with man-imposed restrictions or regulations allows for the creation of a Black Market for desired goods. The schemers will find a way to operate in this environment.

There's also the underground market created between thieves and those loose-moral people who are not adverse to buying on the "midnight discount" or "three-finger discount" plan. The first refers to goods stolen by burglars and the second to goods stolen by pickpockets and shoplifters.

You've all read news articles or seen TV shows where law enforcement has run a sting operation. This usually consists of a rented storefront or warehouse where law enforcement installs concealed cameras to record all transactions, plus law enforcement personnel in an undercover capacity, or an informant, work the front counter to purchase stolen goods from criminals. After a period of time, the crooks get arrested. But, cop sponsored stings are only a small portion of the real fencing of stolen goods operations we never hear about.

And then there are those who make and sell counterfeit t-shirts, computer chips, fake brand-name handbags, etc. Don't forget DVD's of pirated movies or pirated songs from the music industry. All trade mark and copyright violations done on the sly to be sold on the Black Market.

Bottom line, criminals and schemers will keep looking for ways to work the system. Like the line says in that song, Smuggler's Blues: "… it's the lure of easy money."



To read about the black market with the U.S. Army in Cold War Germany, get Black Traffic, an e-novel by our very own David Edgerley Gates. (kindle, nook) It's a good one.

6 comments:

Stephen Ross said...

Nice piece, RT. I immediately thought of Milo Minderbinder in Catch 22, and his selling of the squadron's parachutes!

Fran Rizer said...

R.T., interesting column that provides an idea for a short story that I'll begin as soon as I click on "publish your comment." Thanks.

Leigh Lundin said...

Your article reminded me of a girlfriend who had been intimate with the Youngstown Mafia, a story that may never get told. But your paragraph on counterfeits struck a chord. Counterfeit items aren’t always consumer goods and can be mundane. In the 1970s, the US and Canada had problems with counterfeit bolts.

Bolts are tested for tensile strength and ISO strength ratings are forged or stamped in the heads of bolts, screws, and rivets, commonly a number or small radiating lines. One of the lowest rated, grade 2, typically carries no markings at all. Some overseas genius figured out he could stamp low grade bolts as grade 8, which are supposed to be more than twice as strong and might be critically used in fighter jet engines. Thus the Air Force reportedly became involved in testing not-so-simple bolts.

See this page for bolt head markings.

janice law said...

Interesting piece. Of course, black markets have two sides. One is cheating the overall society; the other, in times of war, occupation and repression, may represent a potential life line.

David Edgerley Gates said...

R.T., thanks very much for the plug. In re Viet Nam, there were big differences in the economies of scale, selling off smokes or Class VI liquor at the low end, and the enormous kickback schemes run by senior NCO's in the PX system - a protection racket, in effect - not to mention the traffic in China White. A good piece.

David Dean said...

As usual, R.T., so very informative and interesting. Thanks for this.