Markets in Everything: Rat Tails

During the Korean War, the Chinese government accused the U.S. of engaging in germ warfare–air-dropping canisters filled with germs and bacteria-infused insects and pests not just in Korea, but in China, too. The accusation sounds ridiculous now, but at the time, it sounded somewhat plausible. General MacArthur, after all, openly mused about using nuclear bombs in Korea, and nearby Japan used biological weapons just a few years earlier during World War II.

The propaganda campaign caused a nationwide scare, as well as major cleanup efforts. As historian Frank Dik├Âtter explains on p. 148 of his new book, The Tragedy of Liberation: A History of the Chinese Revolution 1945-1957,
the campaign also caused a most unusual market to form:

From north to south, people were also required to kill the ‘five pests,’ namely flies, mosquitoes, fleas, bedbugs[,] and rats. In Beijing every person had to produce the tail of one rat every week. Those who greatly exceeded the quota were allowed to fly a red flag over the gate of their house, while those who failed had to raise a black flag. An underground market in tails rapidly developed.

Market orders emerge, even during some of history’s darkest hours.

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