The New Capitalism

Editor's Note-Readers 0f this article must keep in mind that it was written in 1994 and figures quoted have dramatically changed in the past five years.



by C. Stone Brown, a Black history/political writer who lives in Philadelphia

The United States of America has quietly become one of the world's leaders in the rate of incarcerating its citizens. Federal and state prisons have reached the dubious milestone of having a million or more imnates in prison. That number does not even count America's jail population, which according to the U.S Justice Department is a record half-million, more than double the jail population 15 years ago. The custodians of America'g penal systems have abandoned the idea of rehabilitating convicts.

No doubt, the custodians are acting on orders from an impatient mainstream America, who regard criminals (with exception to white collar criminals) to be innately corrupt, natural born predators of society. What is America's collective sociological need that drives its approach to dealing with crime? Statistically, violent crime disproportionately affects the underprivileged of our society. However, solutions are not often the ideas of the underprivileged, frequently they are paternally administered by the privileged class. If the solution to America's crime problem is left to the actions of the privileged class, we should expect the solution to augment their status, while further alienating the underprivileged.

This explains the presence of America's growing "Prison Industry." According to The National Prison Project Journal, some of America's largest Wall Street brokerage firms, such as Goldman Sachs & Co, Prudential Insurance Co., Smith Barney Shearson Inc., and Merrill Lynch & Co., are underwriting prison construction with private tax-exempt bonds. Indeed, America has found its anecdote to crime, it is Wall Street's biggest merger to date-Crime & Capitalism. Crime & Capitalism is a very suggestive expression, it immediately discloses an American trend -- that crime does pay, and if justice does not prevail, profits surely will.

The increasing number of private prison firms are the latest societal indicator that "street" crime is permissible, under the tacit pre-scription that it is contained, managed and operated like a business enterprise. Private prison firms are very attractive to many states whose budgets have been depleted by mandatory sentencing guidelines and the latest "three strikes your out" craze. These private firms offer their services on a per item charge to house the state's convicts. This relieves state governments of the burdensome cost of constructing new prisons, paying guard wages, insurance, pensions, and other associated maintenance security cost.

There are approximately 80,000 private prison beds in the United States; experts believe this number will rise considerably in the next decade. According to an article in the Toronto Star, the largest private prison company is (CCA) Corrections Corporation of America. CCA was founded in 1983 by Doctor Crants, a graduate of West Point and Harvard Business School. CCA is listed on the prestigious New York Stock Exchange, it answers to shareholders and has board meetings like all publicly traded companies. What does distinguish CCA from other listed companies is how crime affects stockholder profits. Indeed, the annual FBI and Justice Department national crime data, are excellent leading indicators of future dividends. For companies like CCA, the local Metro sections of American newspapers are no less important than the business section. CCA has grown considerably since its debut in 1983.

It is now (1994) a $200-million company with over 31 prisons spread over America, Australia, and the United Kingdom. CCA has already come under scrutiny in two states. Tennessee's $60 million contract with CCA was under review by the state legislature, and at two of their private facilities in Texas, a 1990 report revealed that inexperienced" prison employees had used excessive force on inmates. Additionally, inmates were not extended services which were required under the state contract to assist imnates return to society. Few would argue, it is in the interest of CCA profits, that prisoners return to their facility and not back into society.

Surprisingly, some of America's icon companies are diversifying their investments in private prison construction. For instance, American Express has invested millions in private prison construction in Oklahoma. And (GE) General Electric has invested in "life" sentences by financing private prison construction in Tennessee. As America's system of justice sanctions the profits and privatization of prisons, convicted criminals are no longer viewed as pariahs of society. Comparable to slaves during America's colonial period, convicts have become a very desirable commodity across the nation. Perhaps the convicts are not as seductive as the profits they yield to many communities.

For example, the state of North Carolina sends its convicts to a private prison in Oklahoma, and recently the state of Virginia chartered 150 inmates to a county-owned, for profit detention center in east Texas. In 31 days, those 150 Virginia prisoners earned the Texas county more than $200,000. The owner of the east Texas detention center, Bobby Ross remarked: "Its kind of like a factory in a sense." For many involved in the industry of crime, it's no surprise that a county in Texas would be one of the first to recognize the profitable merging of Crime & Capitalism. Texas now has the largest penal system in the country, larger than the even the federal government. At a projected figure of 200,000 inmates, Texas knows convicts like Idaho knows potatoes. Although Texas may be the Lone Star State, they have plenty of company when it comes to taking advantage of America's swelling prison population. In California, crime is a synonym for job security- Just ask the state correctional officers whose average salary is $45,000 annually. It was a small investment for the prison guard union to contribute nearly a half million dollars ($425,000) to Gov. Pete Wilson's gubernatorial campaign. This was the largest single contribution ever reported by a candidate for governor. If the old adage "money talks," has any legitimacy, one can only deduce that Gov. Pete Wilson was being advised in unequivocal terms that "crime" is the commerce of California's future.

In the East, New York city crime is a "cash cow" for one particular Republican county in New York state. According to the state's corrections committee chair, in 1992, the 110th district received $124 million in salaries, local purchases of food and supplies, maintenance contracts and other operating expenses. Suburban counties similar to the 110th district in New York state have a financial interest in watching urban crime flourish across the nation. For instance, in New York state, 71 percent of prison imnates are from New York city. However, nearly 99 percent of those prisoners are transported upstate to New York's affluent white middle class suburbs, where urban crime is converted to good paying jobs.

In Pennsylvania, privatization of prisons is being challenged in court by Prison Employees Union. According to an August 22, 1995 Philadelphia Inquirer article: "Prison Union Sues Over Loss of Jobs," caught between a bitter law suit is the second largest private prison company, Wackenhut Corrections Corp. The lawsuit was filed by the Delaware County prison employees union, asserting the county's decision to privatize was illegal under the state constitution. With 250 union employees, the union has no assurances of being rehired by Wackenhut Corp. With only one labor union in its 28 U.S locations, Wackenhut Corp. isn't exactly a haven for union activity. In other areas of the state, draconian measures are being employed to help defray the cost of incarcerating inmates. For instance, counties such as Berks, Chester, Montgomery, and Lehigh charge inmates for health care and in some instances rent, says Angus Love, Executive Director of Pennsylvania Institutional Law Project, a legal service agency. When inmates are unable to pay, collection agencies are hired to pursue payment. Critics see such measures as an unnecessary roadblock to financially handicap a convict's chance to integrate back into society.

Along with warehousing criminals, state penal systems have located another method of exploiting its prison population. State governments are instituting a slave-like work force within its prison walls. With cooperative agreements with small manufacturing companies, states are merging in creating a semi-factory prison work force. The prison work force is paid minimum wage, at least where labor unions have forced their hand. Inmates net approximately $1 an hour after deductions. Thirty states have legalized privately run operations. Here are just a few of the states, companies and products/services involved:

California: logos for Lexus automobile

Hawaii: packing Spaulding golf balls

Maryland: modular houses, processed hot dogs

New Mexico: hotel chain reservations

Oregon: designer blue jeans, called "prison blues"

South Carolina: electronic cables

Washington: Eddie Bauer garments

There is also a boom in companies vending their product or services to the "prison industry." How many industries can boast the rate of its target market (prison population) is growing 8.5 percent annually? The scope of vendors at the 1995 (ACA)American Correctional Association Convention, range from a "Dial soap" representative, to QueTel Corp, who impress prison wardens with technology to bar code imnates.

Should Americans be legitimately fearful that Wall Street has recognized that crime not only pays, but it pays billions? Ask Arthur McDonald, former owner of California's largest private prison firm, Eclectic Communications Inc. McDonald, now retired from the $10 million dollar sale of Eclectic, told the Los Angeles Times, "Crime pays. I hate saying that, but it really does." Since that sale in 1988, Eclectic has received contracts exceeding $50 million.

Have we reached that critical stage in America where the alienated and disenfranchised of our society are valued only for their eventual imprisonment? Although these are questions for all Americans to answer, how they are answered, will disproportionately affect the future of African Americans. The American prison and jail population is over 1.5 million. While African Americans are 13 percent of the general population, they are nearly half of the 1.5 million incarcerated population. Experts believe that the prison population has swelled due to the socalled "War on Drugs." Drug related convictions are certainly one of the reasons African-Americans are disproportionately incarcerated, but one has to question why? According to the Department of Health and Human Services, 2.4 million (64.4 percent) of crack users are White, compared to I million Blacks (26.6 percent). Yet, in a 1992 study by the U.S Sentencing Commission, 91.3 percent of those sentenced for federal crack offenses were Black, while 3 percent were White.

Such stark numbers reveal that African Americans are the flesh that maintains a profitable prison industry. When the privileged of society take aim to profit from the misery of crime, they become accomplice to social disorder, complicit in creating a criminal class. Their quality of life becomes tied to a misery/revenue index where profits are merely a function of the misery of others. America's symbol of justice is unfolding before our eyes. It is no longer a blind-folded woman, it is now an accountant, not balancing the scales of justice, but debits and credits on a balance sheet.