Microkhan by Brendan I. Koerner

Ransom as Lifeblood

March 10th, 2010 · 7 Comments

For fairly obvious reasons, we find it unable to resist scholarly examinations of North Korea’s currency weirdness. Why would Dear Leader’s regime see fit to instantly vaporize what little wealth the Hermit Kingdom’s poor citizens have managed to scrape together? (We suspect the answer has something to do with the abuse of Hennessy, which has been known to spur some of Microkhan’s more foolish behavior.)

We hoped to find an answer to our question in this Japan Focus article. But we came away traveling on a whole different intellectual track, after doing a double-take at this line:

East Germany sold a total of almost 34,000 political prisoners to the West at an average fee of 90,000 Deutschmarks.

Whoa. That sounds like quite a bustling business, and our first instinct was to assume that the writer misplaced a comma somewhere. But sure enough, the GDR raked in substantial dough selling inmates to West Germany—a grand total of nearly 3.5 billion Deutschmarks between 1964 and 1990, presumably all in hard currency that the country so desperately needed. Considering that East Germany’s total annual exports didn’t top $3.5 billion until the 1980s, the ransom cash that the Erich Honeker regime raked in may well have kept the nation afloat during some mighty lean years.

So vital was the prisoner trade to East Germany’s fiscal health that the country snuck in bona fide crooks amidst the dissidents, just to glean some extra cash—or just to rid itself of troublesome citizens:

An internal note by Herman Kreutzer shows of the Ministry for Intra-German Relations show, for instance, that in October 1973 30 percent of the transports consisted of criinals and were therefore “extraordinarily bad.” This became a public issue in 1973, when a series of former prisoners committed crimes in the Federal Republic,and it was subsequently discovered that Bonn had paid for their release. The most spectacular case, causing a flood of letters requesting a stop to the purchases, concerned the “Taxi Murder in Hanau.” One month after their release, two former prisoners shot a taxi driver and stole 137 DM. Since the Federal government kept track of every transport, it turned out that the GDR sometimes just filled the coaches with ordinary criminals without receiving payment for them. Kreutzer almost desperately states in the file that it was impossible to send these people back since, according to the Federal constitutional law, they were West Germans, as were all Germans.

It also strikes us that the West vastly overpaid for these prisoners. The average ransom seems to have been several thousand dollars more than what private companies now pay when their employees are snatched in the developing world. The passions stirred up by the Cold War may have warped the market somewhat.


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7 Comments so far ↓

  • Jordan

    I wonder why North Korea hasn’t gotten in on that racket. They certainly have enough Japanese and South Korean individuals would probably be ransomed back.

    Also, targeting luxury goods seems extremely difficult. They already have a very high value density and creating import restrictions will only increase their value. That should provide more than enough incentive for smugglers.

  • Brendan I. Koerner

    @Jordan: Good question about why NK hasn’t gotten into the ransom racket. I do think there has probably been some payment in kind for the release of Japanese kidnappees (as well as info on those who perished in captivity)–unfrozen accounts, etc. The South would seem a much better partner for such a scheme, but maybe Dear Leader thinks getting into the ransom biz will make him seem less terrifying–which, of course, is really his only bargaining chip.

  • Captured Shadow

    Something is a little funny about the math there. 34K x 90K is 3.06 Billion not 3.5 but maybe that is just round off on the prisoner number “almost 34,000”. Over the 15 years, it is somewhat less impressive 204Million per year but still enough to fund a great Olympic squad.

  • Brendan I. Koerner

    @Captured Shadow: I trust the Journal of Contemporary History breakdown far more than the Japan Focus piece, given the latter’s generally poor writing. The author of the journal article is pretty specific about the sums involved:

    “During these 26 years, 33,755 prisoners were released from the GDR, for a total sum of 3,436,900,755 DM and 12 pfennigs.”

    Love how he stuck the pfennigs in there.

  • scottstev

    I miss the old-school currencies. With the rise of the Euro and the end of the Cold-War, we’ve lost some variety in news accounts.

  • Brendan I. Koerner

    @scottstev: At least we’ve still got the zloty.

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