Category Archives: economics

by | 14 March 2026 · 8:37 am

Gierek’s Poland Redefines Socialism

From Ryszard Kapuscinski: A Life, by Artur Domoslawski (Verso, 2012) Kindle  pp. 225-227:

Kapuściński does not watch the Polish drama from close up, because at the time he is in Mexico. When he comes home from his posting, he finds a totally different atmosphere in Poland.

There is not a trace remaining of Gomułka’s plebeian socialism. At the beginning of the new decade it is far easier than in previous years to get basic goods: food, clothing, household equipment. Life for the Poles becomes more bearable, and Gierek’s slogan in the first years of his government – ‘May Poland grow in strength and may people live more affluently’ – is not far from the daily experience of the decided majority. The miners are thrilled, because they are getting fabulous salaries and bonuses; the farmers complain less, because Gierek does away with compulsory annual supplies of agricultural products to the state at fixed prices.

The Gierek era is also a time when the PRL opens up to the West. It is easier to get a passport, and if someone goes off on a journey to the other side of the Iron Curtain he can officially buy a hundred dollars (earlier this was possible only on the black market, and was a hundred times more expensive). Previously condemned or ridiculed Western popular culture gains ‘civic rights’ – American films and serials on television are virtually one of the trademarks of the decade. Home-grown entertainment of a fairly good standard also appears; a boom in popular songs begins, and a couple of excellent cabarets open. Poland is having a good time drinking and dancing.

His Highness showed particular vivacity and keenness. He received processions of planners, economists, and financial specialists, talking, asking questions, encouraging, and praising.

As the new leader, Gierek has ambitious plans. On the advice of Party experts he considers some sort of semi–market reform but quickly drops these complicated ideas. Why bother? Poland can live on the reserves saved up by the previous first secretary, and shortly afterwards a miracle occurs – Western credits start to pour in.

The capitalist countries of the West are experiencing a boom, there is cheap money looking for an outlet, and socialist Poland willingly accepts loans of any size. There is no need to rationalize anything: abracadabra, and goods which previously you could only dream about appear in the shops. Salaries go up, and the hope returns that finally the affluent life everyone has been waiting for is just around the corner.

If you use foreign capital to build the factories, you don’t need to reform. So there you are – His Majesty didn’t allow reform, yet the factories were going up, they were built. That means development.

Prefabricated concrete construction takes off; people still have to wait for flats, but they are relatively cheap. Young couples get special credits, they buy fridges, washing machines, television sets and furniture – all on hire purchase, and if someone’s really lucky he’ll also get hold of a coupon for a car (still a deficit item).

One was planning, another was building, and so, in a word, development had started.

After a year of hard work there are cheap holidays and, for those who can manage it, even trips abroad – to Bulgaria, Romania or the Crimea. Youth organizations which in the years when the foundations of socialism were being built stood for ideological zeal, altruism and personal sacrifice are now concerned with ‘fixing’: first to arrange the supply of some deficit, hard-to-acquire goods for their activists, then some foreign travel.

Something like a socialist middle class emerges – a broad group consisting of most Poles, geared to consumerism. One of the leading dissidents of the era admits years later that this was the only period when he really did fear society and felt marginalized. Because almost all Poland approves of Gierek’s socialism at the beginning of the decade, very few people are bothered by the lack of elections, the rule of a single party, or the limited freedom of speech. To live and not to die! Long live socialism and Comrade Gierek! Bravo, bravo, bravo!

[H]e even liked progress – his most honourably benevolent desire for action manifested itself in the unconcealed desire to have a satiated and happy people cry for years after, with full approval, ‘Hey! Did he ever develop us!’

Kapuściński comes back from a world where socialism means a heroic struggle, the sacrifice of one’s personal peace and quiet. Latin America is a revolutionary volcano: Cuba sí, yanquis no; the idol of the young is the recently assassinated Che Guevara; Salvador Allende is conducting a peaceful socialist revolution in Chile, which the Americans, the local oligarchs and the middle class want to overthrow.

Over there: For their belief in socialism, the young idealists are ending up in prison, being tortured, or dying in the jungle, and are often completely misunderstood by those whose rights they are demanding. Over here: For their belief in socialism, the young wheeler-dealers are the first to get a flat, a car and a trip to Sochi. There: great ideas, the clank of rifles; here: fairly OK cash, idle gawping at the TV, having a ball. There: rebellion, nonconformism, adrenaline; here: fake smiles, making the right faces for the authorities. If that is socialism, is this socialism too? Where can a man go, where can he find a place, how can he fit into life on this other planet?

Now he is a star on a national scale. During the past few years, while he has been away, several of his books have come out, strengthening the position of the talented reporter and expert on Africa and Latin America. Despite the limitations imposed by the system, it is much easier to write significant texts about the Third World; censorship is not as sensitive to an ‘incorrect’ tone in these as it is in articles and books on national topics or the West.

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Filed under democracy, economics, industry, labor, Latin America, nationalism, philosophy, Poland

by | 7 March 2026 · 8:48 am

The Thaw Hits Poland, 1956

From Ryszard Kapuscinski: A Life, by Artur Domoslawski (Verso, 2012) Kindle pp. 83-85:

When did the cultural dissent, later known as revisionism, cease to be partly fashion and become front-line politics?

It starts with a secret speech by Khrushchev, given in February 1956 in Moscow at the Twentieth Congress of the Soviet Communist Party. Its content creates a sensation in Poland: here is the Soviet Party admitting to murder, to the destruction of its political opponents, to fabricated trials. Knowledge of similar methods used by the authorities in People’s Poland has already reached certain segments of public opinion: almost two years earlier, Józef Światło, deputy director of Department X at the Ministry of Public Security, defected to the West and exposed crimes committed by the Polish apparatus of repression (his department was involved in eradicating ideological deviations within the Party). The Poles hear these revelations on Radio Free Europe; those who are glued to their wireless sets manage to catch bits of these nightmarish stories despite the jamming devices working at full steam.

Khrushchev’s speech initiates a political earthquake throughout the socialist bloc, most of all in Poland and Hungary. It is discussed at Party meetings, in cultural circles and on the streets. Duplicated using crude methods, the key points of the speech can be bought for an astronomical sum at flea markets and bazaars. At exactly the same time, Polish Party leader Bolesław Bierut dies in mysterious circumstances, prompting a wave of speculation: Was he murdered? Soon there’s a popular saying: ‘He went out in a fur overcoat and came home in a wooden overcoat.’ Straight after that the Party’s number two, Jakub Berman, is thrown out of his job. The Party is bursting from the inside.

There is a clash between two tendencies, later called fractions. One group is known as the ‘Puławians’ – people who seek more civic freedom, relative autonomy in cultural life, more democracy within the Party, less central planning within the economy, and more independence for enterprises. They have the sympathy of opinion-forming circles and of many people in the press and the cultural world. (It is interesting to note that they meet at the flat of Ignacy Loga-Sowiński, secretary of the Central Council of Trade Unions, and Irena Tarłowska, still editor-in-chief of Sztandar Młodych). The other group is called the ‘Natolinians’. They are believed to have connections with the Soviet embassy; they’re not keen on democratization, but they’re not against sacrificing a few scapegoats, preferably of Jewish origin, on the altar of squaring accounts with Stalinism.

The political prisoners are released, including people from the post-war anti-communist underground as well as followers of the ‘new faith’, who were locked up for being critical or as a result of internal power struggles. Functionaries within the apparatus of repression who have been particularly cruel to the prisoners lose their jobs and are accused of abusing their power. The Stalinist system is collapsing . . .

In June the workers’ rebellion in Poznań occurs. After several days of strikes and street demonstrations, the army and the secret police fire on the protestors. Several dozen people are killed, and many are wounded. A Party plenum calls the Poznań revolt ‘counter-revolutionary’ and a campaign by ‘imperialist circles’. Prime Minister Józef Cyrankiewicz warns that any hand raised against the people’s power will be cut off. The entire movement for renewal finds itself under threat. A day after the massacre, on the orders of the Party leadership, Sztandar Młodych – like other papers – writes about the tragedy in a tone ringing with Stalinist propaganda:

…

The Poznań tragedy is a shock, especially for those who still believe in socialism but want it to be thoroughly reformed. As a result, the workers’ protest, the massacre and the Party leadership’s conservative attitude to the tragedy accelerate the impetus for change. At the production plants, workers councils are established, and pro-democratization rallies are held at schools and colleges. The culmination of the political turmoil is a Party plenum held in October. Comrades from Moscow fly to Warsaw, headed by Soviet Communist Party First Secretary Khrushchev, and Soviet troops move towards the capital. There is a fear that their tanks will run down the Polish movement for the renewal of socialism.

The crisis ends with the election of a new Party chief, Władysław Gomułka, who led the communists during the war and who has recently been released from prison. He was sent to jail in the early 1950s for so-called rightist–nationalist leanings. Gomułka – who installed the Stalinist system in post-war Poland, took part in the elimination of the opposition, and agreed to Poland’s becoming subordinate to the Soviet Union – did, however, want Polish socialism to retain some specific national features. He was not a fan of collectivization; he was in no rush to condemn the ‘Yugoslav path to socialism’, which was independent of Stalin; and he was fond of the national features of Polish Socialist Party tradition.

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Filed under democracy, economics, labor, nationalism, philosophy, Poland, USSR

by | 2 March 2026 · 6:51 pm

Polish Culture Shock, 1956

From Travels with Herodotus, by Ryszard Kapuscinski (Vintage,  2009), Kindle pp. 12-13:

The confrontation between East and West took place not only in the military realm but in all other spheres of life as well. If the West dressed lightly, then the East, according to the law of opposites, dressed heavily; if the West wore closely fitting clothes, then the East did the reverse—everything had to stick out by a mile. One did not have to carry one’s passport around:—one could see at a distance who was from which side of the Iron Curtain.

We started making rounds of the shops, accompanied by Mario’s wife. For me, these were expeditions of discovery. Three things dazzled me the most. First, that the stores were full of merchandise, were actually brimming with it, the goods weighing down shelves and counters, spilling out in towering, colorful streams onto sidewalks, streets, and squares. Second, that the salesladies did not sit, but stood, looking at the entrance doors. It was strange that they stood in silence, rather than sitting and talking to one another. Women, after all, have so many subjects in common. Troubles with their husbands, problems with the children. What to wear, one’s health, whether something burned on the stove yesterday. And here I had the impression that they did not know each other at all and had no desire to converse. The third shock was that the salesclerks answered the questions posed to them. They responded in complete sentences and then at the end added “Grazie!” Mario’s wife would ask about something and they would listen to her with sympathy and attention, so focused and inclined forward that they looked as if they were about to start in a race. And then one heard that oft-repeated, sacramental grazie!

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Filed under economics, Italy, Poland, travel

by | 4 February 2026 · 8:15 am

Parajutes in Burma, 1944

From Burma ’44: The Battle That Turned World War II in the East, by James Holland (Grove Atlantic, 2024), Kindle pp. 329-330:

Watching the ground operations at the airfields, [Gen. William] Slim was surprised by the range and flexibility of Snelling’s air supply. Rations, fuel and ammunition were, for obvious reasons, the priority, as well as mail, grain for animals and a host of other supplies. ‘The emergency and fancy demands made,’ he noted, ‘were also met with the promptitude and exactness of the postal order department of a first-class departmental store.’ These included blood plasma, instruments, drugs, spare parts for guns and other weapons, boots, clothing, the daily issue of SEAC (the new troops’ newspaper), typewriter ribbons, cooking pots and even replacement spectacles. The sheer range and logistical effort was mind-boggling.

From 2.30pm that afternoon, the first of a number of Dakotas and Commandos dropped supplies over the Admin Box. The multicoloured parachutes had been another bit of clever forward-thinking. Snelling had been unable to get enough parachutes supplied from India and there was no hope of acquiring the number needed from back home in Britain; SEAC was still bottom of the priority list for parachutes, as for everything. The answer was to make them of paper or jute instead – there were a great many paper mills in Calcutta and Bengal was the jute capital of the world. Paper parachutes, it turned out, would not work, but jute ones would. Slim now contacted the leaders of the British jute industry in Calcutta, asking for their help. He told them that to save time they were to deal with him and Snelling direct and warned them that he had no idea when exactly they would be paid. Despite this, within ten days they were experimenting with various types of ‘parajutes’, as they called them. By trial and error they soon arrived at the most efficient shape and weight of cloth, and within a month they had parajutes that were 85 per cent as reliable as normal silk parachutes. It was agreed they would be colour-coded – red, green, yellow, black, blue and orange, each denoting a different type of load. The cost of producing a parachute was around £20 at that time; the cost of a parajute was £5.

Despite this, Slim was rebuked for not going through the proper channels in securing these essential additions to the air-supply operation – not that he was bothered; some things were more important, and in South-East Asia they all had to use their initiative and think outside the box, no matter what some desk-wallahs thought. The entire war there was becoming an exercise in lateral thinking.

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Filed under Britain, Burma, economics, industry, Japan, military, South Asia, war

by | 30 January 2026 · 9:39 pm

Polish Realia: Imperatives

Ciągnać ‘Pull’ [cf. Pociąg ‘train’, Ger. Zug ‘train’ < ziehen ‘pull’]
Chwyć dowolne uchwyty ‘Grab any handles [on the equipment]’
Mów, pisz i czytaj [po Japońsku] ‘Speak, write and read [Japanese]’
Odkry ponad 70 smaków ‘Discover over 70 flavors’
Otwieraj i zamykaj ‘Open and close [here]’
Otwórz teraz ‘Open now’
Pal tutaj ‘Smoke here’ [in designated area]
Pchać ‘Push’
Pochyl się lekko do przodu ‘Lean slightly forward’
Poczekaj tutaj ‘Wait here’
Popłyń z nami do Szwecji ‘Sail with us to Sweden’
Trzymaj drzwi zamknięte ‘Keep door closed’
Siedź prosto ‘Sit up straight’
Skontaktuje się ‘Contact [us here]’
Skup/Sprzedaż ‘Buying/Selling’
Stań przed urządzeniem ‘Stand in front of the device’
Ustaw siedzisko ‘Adjust the seat’
Wykorzystaj kupon na zakupy ‘Take advantage of the coupon for shopping’
Zagłosuj tutaj ‘Vote here’
Zamów/Odbierz (tutaj) ‘Order/Pick up (here)’
Zeskanuj tutaj ‘Scan here’
Znajdź nas ‘Find us [here]

Negative imperatives
Nie hałasuj ‘Don’t make noise’
Nie odrywaj ‘Don’t tear off’
Nie skacz ‘Don’t jump’
Zakaz biegania ‘No running’
Zakaz palenia ‘No smoking’
Zakaz pływania ‘No swimming’
Zakaz picia ‘No drinking’
Zakaz wjazdu ‘No entry’
Zakaz wstępu ‘No entry/access’

Clickbait
Dowiedz się więcej ‘Find out more’
Kup teraz ‘Buy now’
Nowy sezon | Oglądaj teraz ‘New season | Watch now’
Pobierz aplikacje ‘Download app’
Przeglądaj ‘Browse’
Sprawdź ‘Check [it out]’
Szczegóły wydarzeń na [URL] ‘Details of events at [URL]’
Więcej na [URL] ‘More at [URL]’
Zagraj teraz ‘Play now’
Zarejestruj się ‘Register [yourself]’
Zarezerwuj ‘Reserve [here]’
Znajdź sklep ‘Find store’

Recruiting brochure
Zamieszkaj w USA na wakacje. ‘Live in the USA on vacation.’
Poznaj ludzi z całego świata, ‘Get-to-know people from the whole world,’
rozwijaj się i odkrywaj uroki Stanów ‘develop and discover the charms of States’
po zakończeniu programu wymiany. ‘after the end of the exchange program.’

Wyjedź na wakacje do USA! ‘Go-away on vacation to the USA!’
Spędź lato w Ameryce w ośrodku kolonijnym dla dzieci
‘Spend the summer in America in a [summer] camp center for kids’

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Filed under economics, education, language, Poland

by | 21 January 2026 · 9:09 am

Wrocław: Każda podróż to opowieść

The catchphrase on a travel poster, Każda podróż to opowieść ‘Every journey is a story’, in our fine hotel in Wrocław caught my eye because Polish opowieść is cognate with Romanian poveste ‘story, tale’, an old borrowing from Slavic. The Romanian infinite verb is a povesti ‘to tell a tale/story/lie, etc’. But for a polyglot traveler, podróżnik poliglotów, călător poliglot, every journey is a vocabulary lesson.

We were in Wrocław sightseeing for a few days on the way to a conference in Szczecin for my better (unretired) half and some other foreign teachers in Poland and neighboring countries. One of Wrocław’s major tourist attractions is the hundreds of tiny krasnal ‘gnomes’ all over the city, but I found its topographical vocabulary more interesting, especially in contrast to Kielce, which was never a castle town (or a river town).

Like every old town in Poland, Wrocław has a ratusz ‘town hall’ in a rynek ‘central market square’ surrounded by its stare miasto ‘old town’. Our hotel overlooked one piece of the old moat (fosa) side of the old town. The Odra river, with its many branches, islands (wyspy) and bridges (mosty) bordered the far side of the stare miasto, which is nowadays typically criss-crossed with trams and busses. The large railway stations in both Wrocław and Krakow touch the edges of each city’s carefully maintained stare miasto, which is surrounded by przedmieścia ‘suburbs’, a bit like the Japanese jōkamachi ‘castle towns’ that lie outside the castle walls and moats. One such early suburb in Wrocław is Przedmieścia Świdnickie (formerly Schweidnitzer Vorstadt), which lay outside the Świdnica Gate.

By the way, every one of the (six or eight) young English-speaking staff we queried at our hotel had studied six or more years of German in school, then let that ability lapse in favor of informally acquired (often fluent) English! This seems to be the pattern throughout Polish Silesia.

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Filed under economics, education, Germany, Japan, language, Poland, Romania, travel

by | 17 January 2026 · 8:46 am

Polish Diaspora in France

My latest compilation from Culture.pl has an article on the Polish diaspora in France. Here are some excerpts:

When we think of the Polish diaspora, France is rarely the first place that comes to mind – often overshadowed by the UK, the US or Germany. Yet the Polish presence in France is older, more complex and more deeply woven into the country’s cultural fabric than most realise.

Through interviews with contemporary Polish migrants and archival research into historical communities, a layered story emerges – one as much about shared histories as it is about work, struggle and identity. Beginning with 19th-century exile, expanding through interwar labour migration, and continuing into today’s cosmopolitan realities, Poles have long helped shape the life of their adopted country. And France, in turn, has shaped them.

The earliest sustained Polish presence in France took shape in the 19th century, following the failed November Uprising of 1830-1831. Thousands of officers, intellectuals and activists fled the Russian-controlled partition and sought refuge in France, launching what became known as the ‘Great Emigration’. This wave of political exiles – over 5,000 by 1833 – formed one of the most enduring diasporic communities of the era. Unlike other groups who returned after political amnesties, most remained as long as Poland’s partitioned status endured.

One bold but ultimately unsuccessful plan – to form a Polish legion to fight in Portugal’s Liberal Wars in 1833 – was led by General Józef Bem and reflected the enduring ideal of transnational solidarity. It gave lasting currency to the phrase ‘For our freedom and yours’ (‘Za wolność naszą i waszą’), which became a defining expression of Poland’s internationalist military ethos throughout the 19th century.

Polish émigrés built schools, charitable institutions and political societies. Some were initially settled in places like Belle-Île-en-Mer off the coast of Brittany, while growing numbers made their way to Paris, which would soon become a central hub of Polish cultural and political life in exile.

…

Building on these early foundations, Paris evolved into what some would later call ‘Poland’s second capital’. Throughout the 19th century, the city became a vibrant centre where Polish political elites, artists and intellectuals gathered, united by a commitment to preserving national identity in exile.

Nowhere was this more visible than at the prestigious Collège de France, where Polish national poet Adam Mickiewicz was appointed the first Chair of Slavic Literature in Western Europe in 1840. His lectures, a blend of cultural commentary and political advocacy, attracted wide audiences – including figures like George Sand – and reflected diasporic longing for unity and liberation. Though ultimately dismissed for the political intensity of his teachings, Mickiewicz remained an emblematic figure in Franco-Polish cultural relations.

That same spirit of cultural continuity shaped another enduring institution: the Polish School in Paris, founded in 1842 by General Józef Dwernicki and fellow émigrés. The school aimed to raise children in Polish language and tradition, even as they grew up on foreign soil. With Mickiewicz himself serving as vice-president of its council, the institution embodied how deeply intertwined education, culture and politics were in émigré life – a place where Polish identity could be preserved and transmitted across generations born in exile.

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Filed under economics, education, France, language, migration, military, nationalism, Poland, Portugal, Russia

by | 13 January 2026 · 6:32 am

Grains of Poland

During the heyday of the Hanseatic League, Poland was the granary of Europe, and its diet remains very rich in grains. Hardly any of its many breads contain just one grain, and one of its many brands of yogurt calls itself 7zbóż ‘7cereals’. Here are the cereal grains listed in its jogurt z brzoskwinią, gruszką i ziarnami zbóż ‘yogurt with peach, pear and cereal grains’ variety: jęczmień, pszenica, żyto, owies, gryka, ryz, pszenica arkisz, otręby pszenne ‘barley, wheat, rye, oat, buckwheat, rice, spelt wheat, wheat bran’.

Speaking of food labels, here is the breakdown of wartość odżywcza 100 g productu ‘nutritional value in 100 g of product’:
Wartość energetyczna ‘energy value’ 96 kcal
Tłuszcz ‘fat’ 2,5 g
w tym kwasy nasycone ‘incl. saturated fatty acids’ 1,8 g
Węglowodany ‘carbohydrates’ 14,7 g
w tym cukry ‘incl. sugar’ 13,5 g
Błonnik ‘fiber’ 0,6 g
Białko ‘protein’ 2,6 g
Sól ‘salt’ 0,07 g

Multiply by 3 for the 300 g tub of yogurt!

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Filed under Baltics, economics, food, Germany, language, Netherlands, Poland, Scandinavia

by | 24 December 2025 · 3:59 pm

Preparing for VE Day in London

From Victory ’45: The End of the War in Eight Surrenders, by James Holland and Al Murray (Grove Atlantic, 2025), Kindle pp. 169-172:

ON 7 MAY IN LONDON THE BRITISH Prime Minister, Winston Churchill, was woken with the news of the surrenders earlier that morning in Reims: Jodl had signed on behalf of the Flensburg government at 2.41 a.m. Delivering the news was Captain Richard Pim, head of the map room. Churchill looked at the document and initialled it. This was the news he had been waiting so long for. He teased Pim that finally he had made up for years of bringing him bad news by delivering the best news of the war. Celebrations, though, would have to wait – a decision was made that 8 May would be ‘Victory in Europe Day’, rather than as the BBC had po-facedly decided ‘Ceasefire Day’. Even with unfinished business in the Far East, this was bigger than any ceasefire; Churchill would have his victory.

The news was impossible to contain – the Ministry of Information told the public at 7.40 p.m. that a formal announcement of the victory would be made the next day by the Prime Minister. That said, the shooting hadn’t yet stopped. The Kriegsmarine took it upon itself to sink two ships off the Firth of Forth, the Norwegian Sneland I and the Canadian Avondale Park. Nine merchant seamen were killed by U-2336, the last maritime deaths in the western theatre, drawing out the pointless killing to the very last.

Nevertheless, a national holiday was declared for 8 May. Knowing that the moment was approaching, the government made sure that the Ministry of Food had sufficient beer for the impending celebrations. Licensing hours were extended – though this conjures up the notion that they could somehow be enforced on such a day. The ministry had prepared for VE Day, instructing shops on how long they should open, reassuring people that milk would be delivered as usual and that bakers should bake enough bread for the following day. Government departments received the code words ‘Mousetrap: noon tomorrow’ to alert them to it being official.

…

Celebrations had begun on the evening of the 7th and went into the early morning of the 8th – at 2 a.m. ships in Southampton Docks sounded air horns and a searchlight flashed V for Victory.

…

The newspapers were also allowed, for the first time since war had been declared, to run a weather forecast. Weather forecasting had been a top-secret enterprise up to this point, something upon which the fate of nations, of invasions, of bombing raids and air defence hung. VE Day lifted such secrecy. The first forecast since September 1939 predicted rain for the afternoon. Fortunately it was wrong and a fine day followed, with sunshine – the ‘King’s weather’.

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Filed under Britain, Canada, economics, food, Germany, military, nationalism, publishing, Scandinavia, war

by | 23 December 2025 · 4:02 am

Forging Ahead for the Postwar

From Victory ’45: The End of the War in Eight Surrenders, by James Holland and Al Murray (Grove Atlantic, 2025), Kindle pp. 52-54:

While, on the face of it, Wolff appeared to be one step ahead of Kaltenbrunner in his contacts with the Allies, the RSHA chief had been stockpiling immense amounts of cash for a post-war world in which money could well buy him out of trouble. Twenty miles north-west of Bolzano, down a long Alpine valley, lay Merano, a small spa town popular before the war for its mountain sports, which had been home to a number of Jews, most of whom had since been arrested and deported. Since early the previous year, it had also been the headquarters of an outrageous money-laundering operation. In fact, there were warehouses next to Merano’s racecourse now stuffed with boxes full of counterfeit British and US banknotes.

The location of Merano – between Innsbruck and Austria to the north, Switzerland to the east, and with Verona, Lake Garda and Bologna all as local satellites – made the town the ideal place from which to run a money-laundering operation. To launder money, the ability to distribute it and spread it to the four winds was essential, but equally important was to keep the enterprise away from too many prying eyes. Kaltenbrunner was mostly in Berlin, but Merano was surrounded by mountains and isolated. Here another of his creatures could mastermind the entire operation with comparative impunity.

Forging British banknotes had originally been devised by the SD back in 1940, although the counterfeiters initially struggled and by the time of Heydrich’s assassination in Prague in June 1942 the operation had already been wound down. Under Kaltenbrunner, however, counterfeiting British notes was revived as Operation BERNHARD. The aim was no longer to flood the British economy but rather to use the money to finance secret intelligence operations. And this time the counterfeiters were of an entirely higher calibre: Jewish prisoners at Sachsenhausen concentration camp to the north of Berlin who were superb at the art of forging banknotes. By 1943, some 140 prisoners were producing tens of millions of pounds’ worth of notes from six flat-bed printing presses. By May 1944, Kaltenbrunner ordered them to start producing US dollars as well, not exactly for intelligence operations but for his own personal use, whether that might be a last stand in the Alpine redoubt – certainly his cover story – or, more realistically, to accumulate a vast private fund for a rainy post-war day.

Running the laundering of this extraordinary counterfeiting operation was another unscrupulous rogue called Friedrich Schwend, part of the mosaic of corruption, criminality and deceit that marked the Nazi regime. Like Kaltenbrunner, Schwend had been only too willing to cast ideology aside in favour of looking after number one and was proving adept at adapting his skills to self-preservation. Schwend was thirty-eight, a former pre-war car engine salesman and a smooth-talking charmer who had been working for the Abwehr, the Wehrmacht’s intelligence service – rather than the SS-run RSHA – at the start of the war. Repeatedly getting himself into trouble, he was caught out by his superiors selling unauthorized but bogus German U-boat plans to the British for cash, captured by Italian secret intelligence agents, turned back over to the Germans at the Brenner Pass and flung in prison at Klagenfurt in the Austrian Alps.

Kaltenbrunner learned about Schwend from none other than Wilhelm Höttl, who suggested this canny rogue as just the man for overseeing a money-laundering operation. That Schwend had fallen foul of the Abwehr was no disqualification for working for Kaltenbrunner; quite the opposite, in fact. Releasing Schwend from his incarceration, the RSHA boss instructed him to run the entire laundering operation of forged banknotes, giving him, frankly, astonishing levels of latitude so long as he successfully and swiftly spread the notes as far and wide as possible. Incredibly, Schwend even negotiated for himself a 33.33 per cent cut of every pound sterling he brought into circulation.

In very swift order, Schwend established his small operation under the entirely fake name of ‘Stab. 4 Deutsches Panzerkorps’, initially at Abbazia and Trieste before realizing that Merano offered a considerably better, more discreet location. Taking over the Schloss Labers, a grand – but not too grand – villa perched among vineyards on a hill overlooking the town, and protected by a small squad of SS police troops, Schwend got down to building a fortune. With the forged notes he bought houses, hotels, ships, cars and shares in a number of companies. Some of it was used for bribes and he also sent plenty to vaults in Zurich. He developed a dense network of couriers and agents, including Jews. Jack Van Herten, for example, was a Dutch Jew operating under the cover of the International Committee of the Red Cross. In reality, he was smuggling Jews to the Middle East but at the same time passing on laundered money for Schwend. And Schwend also took over those warehouses at the Merano racecourse, hiding counterfeit notes in race boxes that were then distributed to Holland, France, Denmark and elsewhere. It was a huge operation and Schwend was making millions. But Kaltenbrunner was making even more. And right under the nose of the Höchster SS und Polizeiführer in Italy, Karl Wolff.

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