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October 4, 2017
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December 1, 2017

The Perverse Economics of Mass Incarceration

By Ernest A. Canning


The United States has long been a nation mired in irony.

In 1814, when Francis Scott Key penned the Star-Spangled Banner, proclaiming that America was the “land of the free,” nearly 90% of African-Americans were slaves.

It was an irony that was not lost on the former slave, Frederick Douglass, when, in 1852, he took exception to being asked to pay homage to the 4th of July:

What, to the American slave, is your 4th of July? I answer; a day that reveals to him, more than all other days in the year, the gross injustice and cruelty to which he is the constant victim. To him, your celebration is a sham; your boasted liberty, an unholy license; your national greatness, swelling vanity; your sounds of rejoicing are empty and heartless; your denunciation of tyrants, brass fronted impudence; your shouts of liberty and equality, hollow mockery…There is not a nation on the earth guilty of practices more shocking and bloody than are the people of the United States, at this very hour.

Today, even as we examine the purpose behind “taking a knee” as a form of protest to the disproportionate numbers of African-American victims of police violence and to “structural disenfranchisement”, very few stop to consider the continuing irony that arises whenever the words, “the land of the free,” are proudly repeated during the singing of our National Anthem.

How can a nation that locks up more people than any other, permitting wealthy corporations to exploit what amounts to a huge pool of prison slave labor, accurately be described as the “land of the free”?

“Land of the Incarcerated”

The United States locks up more people than any other nation; a half million more than China, which has a population five times greater than ours. The U.S. “accounts for only 4.4% of the world’s population. It incarcerates 22% of the world’s prisoners.”

It wasn’t always this way. Between 1925 and 1972, U.S. incarceration rates experienced a period of stability — between 110 inmates in prisons and jails per 100,000 residents (1925) and 161 inmates per 100,000 (1972), according to the National Academy of Sciences. Over the next forty years, U.S. incarceration rates “more than quintupled to a peak of 767 per 100,000” — nearly seven times greater than the current incarceration rate in neighboring Canada (118 per 100,000).

By 2016, “more than 2.3 million [convicted] people” could be found languishing inside our state and federal prison systems, according to the Prison Policy Initiative, while, annually, some 11,000 million people, most of whom had not been convicted, spent some time in our nation’s jails.

There are two principal factors behind this phenomenal growth: the farce known as the “war on drugs” and the perverse economics that gave rise to America’s overcrowded Prison-Industrial Complex. And, contrary to the racially-tinged, fear-exploiting claims that are a part of the mostly Republican law and order demagoguery, neither the “war on drugs,” nor harsh sentencing are driven by a desire to protect the health, safety and security of law-abiding Americans.

Even as America’s violent crime rate steadily declined, “the number of inmates serving life sentences grew from 34,000 in 1980 to 161,957 in 2016,” according to the Sentencing Project.

Farcical “war on drugs”

Although it exceeds the scope of this article, it is important to note that there is a significant body of academic work that links nefarious activities on the part of the covert branches of the United States government to the global illicit narcotics trade. (See, e.g., Peter Dale Scott, Drugs, Oil and War (2003)).

The tactic of utilizing drug monies to fund covert operations dates back to 1949 when unmarked C-47 transport aircraft, belonging to a CIA front-company, flew arms to remnants of the defeated Nationalist Chinese army in Burma. The military supplies would be off-loaded at CIA airstrips. The supposedly empty planes were then used to transport opiates to Taiwan, Bangkok, and Saigon. The illicit drug smuggling funds helped offset the cost of that failed operation. (Joseph Trento, Prelude to Terror (2005)). It is a tactic that was applied throughout the U.S. presence in Laos and Vietnam (Alfred McCoy, The Politics of Heroin (2003)).   CIA-aided narcotics trafficking provided funds for the illicit effort to use the Contras to overthrow the Nicaraguan government in the 1980s (Peter Dale Scott & Jonathan Marshall, Cocaine Politics (1991)).

U.S. complicity allegedly involved on-again, off-again symbiotic relationships between the covert branches of the U.S. government and a bevy of drug-smuggling military juntas, opium producing warlords and organized crime, both at home and abroad. According to Trento, by 1967, the CIA began shipping Southeast Asian heroin inside the body bags of American GIs who had been killed in combat to Dover Air Force Base, which “became a Mafia pickup point.”

Over the years, academic theses as to the scope of that symbiotic relationship, as well as the global economic significance of the illicit narcotics market, has evolved. Scott, a former Canadian diplomat and U.C. Berkeley professor emeritus, has advanced the theory that selective drug war enforcement permits the CIA and other covert agencies to exercise monopoly control over the trade, while ostensible illegality maximizes it’s profitability.

Illicit narcotics, according to Economics Prof. Michel Chossudovsky, represent the world’s third largest cash commodity, behind only oil and weapons. Globally, we are dealing with a cash commodity with an estimated value of $1.3 trillion. Illicitly laundered drug monies have become such a critical component of the global banking system, according to Antonio Maria Costa, head of the UN Office on Drugs and Crime, that drug monies provided the “liquid capital” needed to prevent the collapse of several banking institutions during the 2008 global financial meltdown.

Afghan poppy cultivation flourished during the CIA’s in-country assistance to the Mujahideen during the Soviet occupation in the 1980s. It was all but eliminated by the Taliban in 2000-2001, only to return with a vengeance following the U.S. occupation and the return of the CIA. Afghanistan now accounts for 90% of the world’s supply of heroin. And, during both periods in which the CIA has been present in Afghanistan, the United States experienced opioid epidemics.

Those disturbing academic analyses suggest that the “war on drugs” is an Orwellian farce that imprisons its customer/victims, who are the source of covert agency funding and the stability of global banking institutions.

If one assumes that these academics erred and that the true motive behind narcotics prohibition is the protection health and safety, the best that can be said is that the “war on drugs” has proved to be an abject failure.

“During the last 40 years, more than 45-million drug-related arrests have cost an estimated one trillion dollars,” Amy Goodman reported in 2012 on Democracy Now! “Yet drugs are cheaper, purer and more available than ever.”

Between 1980 and 2015, the U.S. experienced “a more than 10-fold increase in drug-related incarcerations, from 40,900 to 469,545,” according to the Sentencing Project. Yet, drug abuse in the U.S. has soared to an “all-time high.”

If truly motivated by a desire to protect public health and safety, narcotics prohibition, like alcohol prohibition before it, is a fool’s errand. You can’t prevent drug abuse by locking up users. In fact, many prisoners continue to abuse illegal contraband narcotics while incarcerated.

Despite the drug war, the U.S. ranks number one in the world in per capita illicit narcotics consumption. This contrast sharply to Portugal, which, as Nicholas Kristof of The New York Times aptly observed, is “winning” the “war on drugs” by “ending it.”

In 2001 Portugal decriminalized all narcotics possession and elected to treat addiction as a medical, as opposed to a legal, issue. Over the ensuing years, as U.S. opioid-related deaths soared by 540%, Portuguese opioid overdose deaths “plunged more than 85 percent.”  The U.S. per capita drug overdose mortality rate is now 50 times greater than Portugal’s.

From public health perspective, there is one aspect of the “war on drugs” that is especially counterproductive.

Marijuana is, by far, the least dangerous of controlled substances — 100 times safer than alcohol. And, contrary to its federal misclassification of marijuana, alongside heroin, as a Schedule I narcotic, marijuana has an established medical value as an attractive alternative to opioid pain control. Indeed, a 2014 Internal Medicine study published by the Journal of the American Medical Association revealed that states that had legalized medical marijuana experienced a 24.8% reduction in opioid-related overdose deaths. (A subsequent U.C. Berkley study revealed that 92% of patients prefer cannabis to opioids and that 97% believed that cannabis could reduce their intake of opioids.)

Yet, “between 2001 and 2010,” according to the ACLU, “there were over 8 million marijuana arrests in the United States, 88% of which were for possession.” During that period, the rate of these arrests increased, so that, by 2010 “there was one [marijuana] arrest every 37 seconds.”

Although there was some movement in the opposite direction as both President Barack Obama and Attorney General Eric Holder expressed concerns about mass incarceration and the need to respect the decision by voters in several states to legalize marijuana, Attorney General Jeff Sessions not only seeks to resurrect federal prosecutions for medical marijuana use but also seeks to exploit asset forfeitures for those who dare to partake of the forbidden fruit.

Prison-Industrial Complex

The dynamics of mass incarceration can only be understood by dissecting the economics of the multi-billion industry that has become known as the “Prison-Industrial Complex”. It is an industry that operates under two perverse economic incentives: (1) a privatized prison industry whose financial success is dependent upon greater numbers of prisoners serving lengthier sentences, and (2) the availability of a slave labor pool to corporate America that produces a wide array of goods and services for as little as 17 cents per hour.

There’s major disconnect between declining crime rates and increasingly harsh sentencing laws.  It is a disconnect that is directly tied to private-prison industry economics.

As documented by SourceWatch, Corrections Corporation of America (CCA), America’s largest private prison company, does a great deal more than simple lobbying.   CCA has both participated in and led the Legislative Task Force of the American Legislative Exchange Counsel (ALEC) that has been responsible for a plethora of harsh sentencing laws that have been meticulously drafted to maximize private prison industry profits.

ALEC is a secretive organization that includes “public sector” members (almost exclusively Republican state legislators) and “private sector” members (major corporations and their lobbyists). ALEC represents nothing less than an effort by corporate America to privatize the legislative process. An ALEC task force will draftr a bill, like “three strikes,” which the public sector members then introduce in their respective state legislatures. In those states where Republicans hold a majority together with a Republican governor, the ALEC-drafted bill becomes law as a fait accompli.

For the most part, corporate exploitation of prison slave labor is perfectly legal. The 13th Amendment prohibits slavery and involuntary servitude, “except as punishment for crime whereof the party shall have been duly convicted.”

There’s an unresolved legal issue as to whether the 13th Amendment prevents compulsory labor on the part of detainees.

In 1997, the conservative U.S. 5th Circuit held that compelling an immigrant detainee to work 8-hour shifts in the detention center’s Food Services Department under threat of solitary confinement did not violate the 13th Amendment, because it amounted to a civic service akin to jury duty.

In 2012, the U.S. 2nd Circuit reached the opposite conclusion with respect to a Vermont detainee who had not been convicted of a crime but was similarly compelled to work in a prison laundry. The 13th amendment, the court ruled, proscribes all forms of “involuntary servitude.”

Economically, it isn’t just those caught up in the prison slave labor system who suffer.  Like industrial outsourcing under “free trade”, corporate exploitation of prison labor eliminates the necessity to pay a living wage to members of America’s dwindling middle class.

In an article published by Global Research, Vicky Peláez set forth a stunningly broad list of American corporations that exploit prison slave labor for as little as 17 cents per hour in both public and privately-run state and federal facilities. She also produced a astounding list of products produced by that slave labor pool inside federal prisons:

The federal prison industry produces 100% of military* helmets, ammunition belts, bullet-proof vests, ID tags, shirts, pants, tents, bags, and canteens. Along with war supplies, prison workers supply 98% of the entire market for equipment assembly services; 93% of paints and paintbrushes; 92% of stove assembly; 46% of body armor; 36% of home appliances; 30% of headphones/microphones/speakers; and 21% of office furniture.

*(It is indeed ironic that that the military-industrial complex, which feeds at the public trough, and whose CEOs are amongst the top 0.1%, are amongst those who have exploited the prison slave labor loophole of the 13th Amendment.)

Every product manufactured inside a prison at slave wages is a product not produced at a cost of a livable wage that a U.S. corporation might have otherwise paid to a law-abiding American citizen.

Mass incarceration also adversely impacts other areas of public spending.

In a New York Times op-ed, former President Jimmy Carter, citing former California Governor Arnold Schwarzenegger, noted that, “in 1980 10 percent of his state’s budget went to education and 3 percent to prisons; in 2010, almost 11 percent went to prisons and only 7.5 percent to higher education.” Nationwide, “state correctional expenditures rose from $6.7 billion in 1985 to $56.9 billion in 2015”, according to the Sentencing Project.

That these inequities have largely gone unnoticed may, in part, be due to racial disparities in drug war enforcement.

Nationally, “five times as many Whites are using drugs as African-Americans, yet African-Americans are sent to prison for drug offenses at 10 times the rate of Whites,” according to the NAACP. By 2001, one in every five African-American males had, at some point, been incarcerated. “If current trends continue, one in three black males born today can expect to spend time in prison during his lifetime.”

The ultimate irony is that a disproportionate number of those who now perform prison slave labor are the descendants of the same African-American slaves who were ostensibly freed in 1865 following passage of the 13th Amendment.


For the oligarchic elites at the pinnacle of the Prison-Industrial Complex, the “war on drugs” and mass incarceration make perfect economic and political sense. These not only offers immense profits but reduce the political power of its victims via felony disenfranchisement.  For everyone else, mass incarceration should be seen as the embodiment of tyranny.