Prisons in YOUR future!

[Jim Devine <JNDF%LMUACAD.BITNET@xxxxxxxxxxxxxxxxx>]

 Economic Analysis:

 "Three Strikes and You're Out" May Cause an Economic Boom

 by

 Devon James

 Many pundits and politicians have warned that California's
 recently-passed "three strikes and you're out" reform bill (along
 with the similar ballot initiative on the November ballot) will
 lead to disaster. But few have noted the positive side of the
 deepening of our criminal justice system. This plan may easily
 lead to a California Renaissance, providing the "jobs, jobs,
 jobs" so often promised by our leaders.

 The massive prison-building project that will result may be
 substitute for the the Depression-era Works Project
 Administration and other public-works projects: think of all the
 prison guard jobs there will be, not to mention jobs as cooks,
 skip-tracers, wardens, etc. Further the building of prisons will
 involve many construction workers, in a program that will last
 far into the future. Most importantly, as the British economist
 John Maynard Keynes pointed out in the 1930s, there will be all
 sorts of multiplier or "spread" effects: prison employees will
 spend their incomes buying products, raising the sales revenues
 profits of California-based businesses and even attracting more
 business investment from neighboring states. Businesses will also
 be attracted and their profits boosted by improved standards of
 law and order, which would lower the cost of crime and
 crime-related insurance. All of this will lower unemployment, as
 will the increase in the inmate population. This cheerful
 projection is far from utopian: as the L.A. Times reported
 recently, earthquake-related funds flowing into the area has
 encouraged the area to recover from stagnation earlier than
 expected even by economic forecasters. Every cloud indeed has a
 silver lining! Now think about the effects of a permanent
 program of prison-building, one that may be similar to the
 Vietnam-era defense build-up in terms of relative magnitude!

 But what about the costs? Prisons hire many workers. But
 these jobs have relatively low skill requirements and thus
 require relatively low pay. In his book The Work of Nations,
 Labor Secretary Robert Reich has proposed that Americans be
 trained for the emerging high-tech jobs. But with the upcoming
 prison boom, the positive results of such a program can be
 attained without such expensive training. Many public-school
 teachers from the inner city already have the requisite skills.
 Further, training costs will hardly strain the community college
 and state university systems. The University of California might
 have to restructure its criminology programs, however, because
 they tend to be too cerebral to produce the state's ideal prison
 guard. But that is completely in line with current plans to
 downsize and reorient the U.C. system to meet the needs of the
 Twenty-First Century.

 Others have argued that prison costs per inmate are
 exorbitant. But this ignores the growing trend toward using
 prison labor to produce such marketable commodities as the
 components of electric cars, another potential California growth
 industry. More importantly, these "worst case scenarios" assume
 that prisons are operated by inefficient government
 bureaucracies, which flies in the face of the trend toward
 privatization, the employment of efficient and innovative
 entrepreneurial talent. The thriving private prison sector has
 been in the forefront of the movement to employ the increasingly
 inexpensive electronic bracelets to control the movements of
 felons. The newest equipment allows the automatic electronic
 punishment of those outlaws who stray from their assigned zones,
 helping to efficiently control the miscreant population. Further,
 the skills of workers shed by the right-sizing defense industries
 may be used to produce even better equipment, here in California.

 Pessimists worry that the three strikes program will tend to
 glut the prison-services market by discouraging crime. But the
 progressive decline of the cities and the public schools will
 assure a steady stream of blue-collar criminals to be
 incarcerated, a stable pattern of high utilization rates in
 existing prison facilities, and a constant demand for new
 prisons. As a side-benefit, there will be constant demand for the
 services of the California National Guard, to put down prison
 revolts and to round up new inmates. This in turn will encourage
 a further reduction in the unemployment rate.

 Other nay-sayers argue that the demand for prison services
 will rise much too fast relative to the supply. But there
 currently exist all sorts of unused military bases, libraries,
 and schools that could be turned into temporary prisons until the
 new high-tech prisons are built. Further, the supply of these
 venues will increase due to the cut-backs needed to pay for the
 new and improved prisons.

 Indeed, whole areas, such as South Central Los Angeles or
 several redundant branches of the University of California, could
 be turned into permanent prisons. Who could object to giving a
 needed Keynesian stimulus to South Central's stagnant economy?
 These areas can be transformed into "prison industrial parks,"
 allowing the utilization of what economists term economies of
 large-scale production: by concentrating large numbers of prisons
 in specific areas, the guard cost per lawbreaker ratio can be
 attenuated. In line with modern crime-control theory, outside of
 the the prison-industrial park, there can be larger and more
 efficient electrified fences and aquatic imprisonment channels,
 guarded by armored cars and canine units. These AICs (so-called
 "moats") can solve our current toxic-waste problems and the
 constant drumbeat of "Not In My Back Yard!" by affluent voters:
 what could discourage prison escapes more than the fear of
 encountering noxious or even radioactive effluents in trying to
 swim to "freedom"?

 A more serious problem may shed tears on this rosy scenario
 in the future: the globalization of production. So far,
 prison-guard jobs have by and large been what Labor Secretary
 Reich terms "in-person services," activities that must be done
 face to face. These jobs are not of the sort that are exported
 to other countries as with manufacturing jobs that used to dot
 California's economic landscape. But our financially-strapped
 state government (along with the deficit-fearing federal
 government) will look to economize where possible, especially
 given the possibilities of prison over-population in California
 and in the U.S. as a whole. So it is quite possible that a
 country like China or Mexico will soon demonstrate its
 comparative advantage in the provision of incarceration services.
 Given the progressive declines in communications and
 transportation costs, and the opening up of world trade under the
 North American Free Trade Agreement and the General Agreement on
 Tariffs and Trade, it is quite possible that in the Twenty-First
 Century, prisoners will be exported to the aspiring countries on
 the Pacific Rim. This trend would mesh with the recent
 down-sizing of prisoners' civil rights and the developing
 harmonization of legal standards world-wide.

 In this case, the Keynesian benefits of the up-and-coming
 prison boom to California would be quite limited in the long run.
 California's leaders, including Governor Pete Wilson, should be
 seeking future alternatives: for example, what are the
 possibilities for exporting so-called contract labor to other
 countries? This California Outward Orientation/Labor Employment
 and Education program (recently proposed by State Senator Hay
 Tomden (D-Anaheim)) could prepare us for even the Twenty-Second
 Century!

 -- Erzatz New Service, March 10, 1994

in :-) solidarity,

Jim Devine   BITNET: jndf@lmuacad    INTERNET: jdevine@xxxxxxxxxxxxxxx
Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA
310/338-2948 (off); 310/202-6546 (hm); FAX: 310/338-1950