International

Cigarettes: The Most Stable International Currency


Cigarettes: The Most Stable International Currency

Photograph by Bloomberg

The way to a corrupt official’s heart is through his lungs. Or at least his smokes.

Cartons of Good Cat brand cigarettes are selling for as much as RMB5,600 (US$890) per carton in the city of Xi’an, in the Chinese province of Shaanxi. The suspicion, according to reports last week, is that they are being used to bribe officials.

In China, where giving and sharing cigarettes is customary and a large percentage of people smoke, luxury cigarettes have become a common currency for bribery. “Because of corruption, you cannot do business, in effect, you can do nothing, if you don’t send gifts to those in power,” says an editorial from Xinhua News Agency.

The latest smokes-for-sway news may be setting off an uproar on the Chinese Internet, but this is far from the only time, or the only country, where cigarettes have acted as money when cash would be too obvious—just look at U.S. prisons.

In jail, “a pack of cigarettes costs enough to be a meaningful object of exchange that has a fairly standardized value compared to other items that could be bought in a commissary, [for example, a] candy bar, toilettes, food,” says Stephen Lankenau, a sociologist and associate professor at Drexel University’s School of Public Health in Philadelphia. (Though the 2004 ban on smoking in federal prisons has rendered cigarettes virtually worthless as a parallel currency. They’ve largely been replaced by stamps in that capacity.)

Jails are not the only place where cigarettes have been as good as cash. In poverty-stricken areas, certain brands can carry enormous cachet, especially since they are not subject to devaluation and are an accessible (and legal) form of payment. In Romania in the 1980s, Kent cigarettes (no other brand would do) were reportedly used to bribe doctors to treat sick children, skip in line, get a better cut of meat, and obtain rare or elite products and services. The cigarettes would circulate for so long that they went stale—but they were never meant to be smoked in the first place.

When Germany’s currency, the Reichsmark, was weakened after World War II, cigarettes were commonly used in barters for a couple of years, particularly between Allied soldiers and Germans, Peter Senn wrote in a 1951 report, “Cigarettes as Currency,” in the Journal of Finance. “Allied soldiers and civilians in Germany indulged in black market practices to a surprising extent,” he wrote.

One might say those were simpler times. In smoking-averse American cities today, a lit cigarette will prevent you from getting indoors in many places. So what earns the support of a Chinese official will not get a person so far in Wall Street or Washington.

Venessa-wong-190x190
Wong is an associate editor for Bloomberg Businessweek. Follow her on Twitter @venessawwong.

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