Prison Economics:The cold war comes home to roost

Danny Mack

"When the tyrant has disposed of foreign enemies by conquest or treaty, and there is nothing to fear from them, then he is always stirring up some war or other in order that the people may require a leader."

The cold war, which began as a standoff with Joseph Stalin in 1945, ended in a 1993 period of "detente" which is Russian for "We're really tired, can we stop this?" While it lasted, life in United States was shaped by it. 

The fear of communism, fueled in large part by the alcohol-induced paranoia of Senator Joe McCarthy, was the impetus behind americas involovement in virtually every foreign civil war for the last 50 years, including Vietnam. The cold war cost us $20 trillion, and 118,000 lives. Once we were convinced that communism was the greatest of all evils, money and lives were no object.

We are just now begining to learn that the soviet threat was, to put it mildly, greatly exaggerated. It was necessary for all americans to fear Russia. Otherwise we never would have agreed to the vast spending by the Pentagon on "defense." Corporations such as Boeing and McDonnell Douglas were literally created by the American public's fear. The fact that Russia was bankrupt and no longer the superpower or "evil empire," as we had always been told, didn't stop the Reagan/Bush administration from escalating the military buildup. Russia's impotence, though it was known to our State Department, was kept from the American people during the 80's for two reasons. First, it gave our fearless leaders time for one last-hurrah spending binge. More importantly though, before the Iron Curtain was lifted to reveal the great Russian bear as a near-Third World country, it gave them time to create an equally frightening new enemy within our own borders. 

Today's "criminal" is our new bogeyman, and the political rhetoric is every bit as paranoid as that of the McCarthy era. Cold War defense contracts have been replaced by Crime War prison contracts in our race to lock people away from society. America needs an enemy, and with the worldwide fall of communism we have turned our anger and aggression inward, declaring war on our own people. The prison building programs, begun in the 80's, continue at a rate unprecedented in world history. With 1.6 million people behind bars and over five million under the control of the justice machine (either on parole, probation, or on bail), America is by far the world leader in locking up its own citizens. 

The timing couldn't have been better for this shift in institutionalized hatred. In a high-tech world there is no place for low tech-people. The displaced and disaffected victims of the technology boom are at the bottom of the economic food chain, and as Richard Nixon discovered during his 1968 campaign, poor people can be a formidable political force if they are not kept under control. Reagan's trickle-down economy turned out to be a flood-up economy, and the gap between rich and poor became greater than ever. Ten percent of the U.S. population owns 90% of the riches. The government is charged with protecting this very rich minority from the rest of us, and the threat of imprisonment is a very effective tool when it comes to keeping the huddled masses in line. The national debt is blamed on welfare mothers, violent crime on the very young, and the drug problem on poor blacks. The solution, according to the ruling class, is to lock them up and throw away the key. Never mind that it would cost less to house, feed, clothe, and send them to college. That would never satisfy our national hunger for vengance. The least able to defend themselves are always made into scapegoats. 


As programs and entitlements are cut, Oregon, like many other states, has seen an explosion in the number of homeless teens on its cities' streets in recent years. The state legislature's response to this very visible sign of poverty was to pass Measure 11, which went into effect April 1, 1995. This Draconian measure allows 15-yer-olds to be prosecuted as adults, and 16-year-olds to actually be placed in adult prisions. It also mandates very long sentences, even for first- timers, with no possibility for parole. The list of crimes that can be prosecuted under Measure 11 makes it appear to target only the most serious crimes against persons or property, but days after it went into effect a portland youth was charged with kidnapping, for pushing an aquaintance out the front door of a friend's home and punching him in the nose. The sexual-abuse section of the statute says that a 15-year- old who touches the buttocks of a 12-year-old, even with consent, must be sentenced to 8 1/2 years in prison, 7 1/2 years which could be served in an adult prison. Just imagine the 23-year-olds we'll get out of THAT deal! It's no coincidence that Measure 11 went into effect on April Fool's Day. The voters don't have a clue as to the nature of the monster they are building. 

As a result of Measure 11, Oregon now needs ten new prisons. California is also in the middle of a prison-building spree after the passage of their "Three Strikes You're Out" law, under which the theft of a 50c slice of pizza can get you thirty years in that state's brutal corrections system. The object of this tough-on-crime philosophy is obviously not to reduce crime (in fact, it turns misguided youths and petty crooks into full blown sociopaths), but to build prisons. 

The prison business is the fastest-growing industry in the country, and the reasons are purely economic ones. In a world economy where most of the manufacturing is done in Third World countries, millions of Americans have been left with no meaningful work. The "make-work" of the prison industry, although it is degrading and produces nothing of value, is often the only alternative for the downsized. 

More people are employed in the prison industries than in any Fortune 500 company except General Motors. A large majority of prison guards are young men and women fresh out of the military. Nintey-five percent of these are recruited by the Federal Bureau of Prisons before they are discharged. The skills learned in the military services are considered desirable by the B.O.P, but few of these recruits have skills that would be marketable in the civilian workplace. The regimented by-the- book life of the prison system is a perfect environment for those whose first life experience after high school was military service. 

Small, depressed rural communities are targeted for prison construction because the money that prisons bring with them outweighs the usual fears of having one in your backyard. Escapes are so rare as to be almost nonexistent, and the theory that undesirable relatives of the prisoners will move into the area has been proven less of a problem than anticipated. Many people are put to work immediately upon the approval of a new prison site. Draftsmen, architects, engineers, construction workers, and material suppliers all benefit from the prison boom. After construction is completed, literally thousands of people will become dependent on the prison for their livelihoods. The B.O.P. has a policy of hiring 60% of its total staff from the local communities. It is common for husbands and wives to work together at their local penal institution. 

Not only do local businesses such as laundries and food suppliers share in this new-found wealth, but a new breed of entrepreneur has also emerged, offering mail-order gifts, quasi-legal services for prisoners, and transportation/lodging for visitors. Another advantage to a small community is the fact that prisoners can be counted as citizens in a local census. With the population increasing by one or two thousand souls overnight, government allocations for sewer, water treatment, and road maintenance also increase. This is a big selling point for small towns where the population may actually double with the building of a single prison. 

The alarming thing about all of this economic well being, is that it induces a political shift to the right in the hearts and minds of those affected. What prison guard or support staff in his or her right mind would ever oppose a bill that would lock up more people for greater lengths of time? How could a business owner who depended on this prison-generated income vote in favor of programs designed to decrease recidivism? It's a simple matter of job security. 


The private sector has not been able to ignore the lure of big bucks in the prison business. Federal officials are now comfortable with allowing private companies to run federal prisons, because the industry has gained experience running state and local jails. Wackenhut Corrections and Corrections Corporation of America, the two industry leaders, make a profit by housing prisoners for the federal government. Both trade on the New York Stock Exchange. 

Corrections Corporation, a 13-year-old company based in Nashville, Tennesee, employs many former government officials, including, as director of strategic planning, Michael Quinlan, who directed the B.O.P. during the Bush administration. Wackenhut, of Coral Gables, Florida, has as its director, Norman A. Carlson, who preceded Mr. Quinlan as director of the B.O.P. Benjamin R. Civiletti, a former Attorney General, also works for Wackenhut. 

In 1993 the Donald A. Wyatt Detention Facility was opened in Central Falls, Rhode Island. Wyatt is owned and operated by Cornell Corrections, a private company financed by investors. The facility had 300 beds and a contract with the federal government for $85 a day per prisoner, but no inmates. "Build it and they will come" seemed to be the philosophy at Cornell, and when they didn't come it was quite an embarassment. Wyatt would need a full house to survive. The prison's financial backers, realizing that their investment was in jeopardy, mounted a vigorous lobbying campaign to divert prisoners from other states. Facing backruptcy and angry bondholders, Cornell Corrections turned to a lawyer who specialized in brokering prisoners for private prisons. Attorney Richard Crane was paid an undisclosed sum when 232 prisoners were moved from North Carolina to Rhode Island soon afterward. 

When Wall Street analysts and brokers, lawyers, corporate CEO's, and rich investors stand to profit from locking people up, you can bet that they will be throwing large amounts of money at politicians who favor the imprisonment of an ever growing segment of the population. In the short term, Cornell was lucky that North Carolina needed to relieve some overcrowding. Long-term, the prospects are frightening. At this point, can we be far from the days of the debtor's prison? The strongest power the government has, short of the death penalty, is that of incarceration. That power should not be handed to those motivated by profit. 


Contrary to what we learned in grade school, the 13th Amendment to the Constitution did *not* abolish slavery in 1865. The Amendment reads, "Neither slavery nor involuntary servitude except as punishment for a crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction." The purpose of this Amendment was not to abolish slavery, but to limit it to those who had been convicted of crimes. The sad fact is that great numbers of newly freed blacks were then "convicted" and forced to work without pay in state prisons. This simply transferred the ownership of slaves from private parties to the state. Today, with the advent of private, for-profit prisons and joint-venture prison factories, this ownership is shifting back to the private sector. Slavery has come full circle. 

UNICOR, the prison manufacturing industry of the B.O.P., and by far the largest slaveholder in the U.S., makes a wide range of products for sale to other government agencies and contractors. UNICOR is the "preferred" supplier for these government customers. The word "preferred" in this case is intentionally misleading, and actually means mandatory. If the U.S. Navy needs 500 wooden chairs, and doesn't want to buy them from UNICOR because of over-pricing, poor quality, and slow delivery, it is required by law to ask UNICOR for an exemption. These exemptions are never granted, and this is how "preferred" becomes "mandatory." With this kind of lock on such a huge section of the market, the concepts of competition and free trade go out the window. 

UNICOR operates 90 prison factories and is rapidly expanding. The products range from office and dormitory furniture to electronics. Individual states have modeled their prison factories after the federal example, with one dangerous difference: They market their products to the private sector. San Quentin inmates enter computer data for Bank of America, Chevron, and Macy's. Prisoners in New Mexico take hotel reservations by phone. Hawaiian convicts package golf balls for Spaulding, and at Folsom they manufacture stainless steel vats for beer brewers. The list goes on and on. Businesses all over the country are jumping at the chance to hire prisoners, and why not? There is no unemployment insurance to pay, no health benefits, vacation, sick leave, or payroll taxes. It is estimated that total prison sales will reach $8.9 billion by the year 1999. 

And how about prison labor for strike breaking? It's certainly nothing new. In 1891 in Briceville, Tennesee, mine owners attempted to break the miner's union by using prison laborers. In what is now known as the Coal Creek Rebellion, union workers took over the mine and freed all of the prisoners, thus temporarily ending prison labor in Tennesee. More recently, young inmates at the Ventura Youth Facillity in California made flight reservations by telephone for TWA while unionized flight attendants were on strike. The company then transferred ticket agents to flight attendant jobs. 

What will happen to all of the free world workers who are displaced by the slave labor of the 90's is the most depressing thing of all. After their unemployment insurance runs out, and they discover that retraining is of no use when there are no jobs to be had, they will become members of the group most likely to end up in prison: the poor. At a January 1996 town-hall meeting in New Hampshire where Seantor Phil Gramm was campaigning for the GOP primary, he pitched a proposal that would require all prisoners to work six days a week for sub-minimum wages manufacturing consumer goods in private no-frills prison "enterprise- zones." A woman in the crowd was heard to shout, "In order to get a job, an American is going to have to commit a crime!" 


Despite a declining crime rate, a lot of money is being made from increasing incarceration. Unfortunately, it doesn't appear that this cycle will be broken anytime soon. As long as big business owns our political system and profits from prison building, the momentum of the Crime War will continue. One encouraging fact is that, at some point, there must be a level of diminishing returns. When every family in America has a member behind bars, a political change will be enevitable. Knowledge is the key to a free and equitable society. We must ask tough questions and demand answers. Remember, the Cold War lasted 50 years. Let us hope the Crime War ends sooner. 

[Danny Mack is currently an inmate in one of America's prisons. This article was originally published in the Loompanics Unlimited Spring 1997 supplement.]