The Political Economy of the Prison Crisis

The huge expansion of the criminal justice system in the United States over the past thirty years has replaced social welfare programs with mass incarceration.

Chris Sturr

This article is from the January/February 2006 issue of Dollars and Sense: The Magazine of Economic Justice available at

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This article is from the January/February 2006 issue of Dollars & Sense magazine.

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First in a series of articles on the political economy of the prison crisis in the United States.

However much we may know about the high rates of incarceration in the United States, the numbers still astound. As of the end of 2004, more than 2.1 million people were incarcerated in prisons or jails in the United States; this makes for an incarceration rate of 724 per 100,000. An additional 4.9 million adults were on probation or parole, and about half a million juveniles were in detention or on probation, for a total of more than 7.5 million people under supervision by the criminal justice system. If all those people lived in one place, the resulting metropolis would be almost as large as New York City.

The number of people in prison or jail in the United States has not always been so high. Throughout the 20th century, until the 1970s, the number of people in federal or state prisons hovered around 200,000. However, beginning in the early 1970s, the numbers began to climb; the number of people in prison now tops 1.36 million. The United States imprisons people at a far higher rate than other countries. The rates of incarceration for comparable industrialized countries are many times lower than the U.S. rate of 724 per 100,000 (for prisons and jails combined): Canada's rate is 116 per 100,000; France's is 80; Finland's is 50. The U.S. rate is also considerably higher than the country with the next highest rate, Russia (529 per 100,000).

How are we to understand this crisis of mass incarceration? At first glance, three factors stand out.

The "War on Drugs"—laws, sentencing policies, and enforcement initiatives ostensibly aimed at reducing drug abuse—has clearly contributed to the huge increase in incarceration. Since the mid-1970s, with the passage of the Rockefeller Drug Law in New York state and similar provisions in California, states have adopted tough drug laws and longer sentences for drug-related crimes, while the federal government has made funding for state and local police contingent on targeted enforcement of drug laws. As a result, arrests, convictions, and incarceration for drug-related crimes have shot up. The share of state prisoners incarcerated for drug-related crimes rose from 21.3% to 57.9% between 1991 and 1997; 56.3% of federal prisoners are in for drug-related crimes.

"Tough on crime" policies in general have also contributed to the prison boom. Throughout the 1980s and 1990s, states and the federal government adopted mandatory minimum sentences, including "Three Strikes" laws that mandate long sentences for a third felony conviction; many states also adopted "truth in sentencing" laws that have reduced the possibility of parole. The federal parole system was eliminated in 1987, and there has been a huge increase in the number of life sentences without parole. In general, indeterminate sentencing and judicial discretion—the hallmarks of the judicial system until the early seventies—have been steadily eroded. The result has been marked increases in the average sentences for all categories of crimes. Prisoners are being kept in prison for longer than ever before, and are paroled much less frequently than they used to be.

Race and racism are perhaps the most striking features of the prison boom. In the early 1970s, about one-third of state and federal prisoners were Black or Latino; today about two-thirds are. The rates of incarceration, when broken down by race/ethnicity and gender, follow a striking racial pattern. The incarceration rate for all men in the United States is 1,346 per 100,000; but for non-Latino white men the rate is much lower—717 per 100,000. Latino and Black men take up the slack, with rates of 1,717 and 4,919 respectively. Racism at every stage of the criminal justice system contributes to these disparities. For example, 13% of the U.S. population is Black, and 13% of drug users are Black. Yet Blacks represent 35% of those arrested, 54% of those convicted, and 74% of those incarcerated, for drug-related crimes.

In fact, there is little correspondence between the huge increase in incarceration and the ostensible aims of tougher drug and sentencing policies. The prison boom has not had a corresponding impact on the crime rate or on rates of drug abuse, and crime rates in the United States continue to be comparable to those of other advanced industrialized societies. The United States has a rate of crime victimization (21%) comparable to those of Finland (19%), France (21%) and Canada (24%), even though the incarceration rate here is more than six times as high.

While the prison crisis is clearly a consequence of the drug war, harsher penalties, and racism, what has led to these policies, and why has racism begun to take the form of an incarceration boom?

Surely a core part of the answer is that the prison boom is clearly also an economic phenomenon. In 2001, spending on the criminal justice system at all levels of government topped $167 billion (vs. $36 billion in 1982); the number of people employed by the criminal justice system was 2.3 million people in 2001 (an increase of 81% over 1982). The sheer amount of money expended on policing, courts, and incarceration, and the number of people—prisoners, supervisees, or employees—caught up in the criminal justice system, show that the "prison-industrial complex" has become a huge sector of the economy.

How has the U.S. economy become so largely a penal economy?

One simple answer is private profit. Corporations have reaped huge profits from prison construction and from the provision of subcontracted services to prisoners (food, health care, pay phones); the market for calls made from prison pay phones alone is estimated at $1 billion a year. The operation of prisons themselves is another source of profit: as of 2001, 6.1% of state prisoners, 11.9% of federal prisoners, and 10.1% of Homeland Security detainees were housed in private facilities, chiefly those run by the two corporations holding a 75% market share in the industry, Wackenhut and Corrections Corporation of America. Yet another source of profit is prison labor; a wide variety of companies—including such familiar ones as Victoria's Secret, Dell, Motorola, and Microsoft—have taken advantage of the low cost, and armed supervision, of prison labor.

But private profits don't tell the whole economic story. Mass incarceration also has an impact on the labor market. The beginning of the prison boom coincided with de-industrialization and the increasing export of manufacturing jobs overseas. As jobs have been lost in the United States, low-skill workers have become less economically useful as wage-laborers. Prisons absorb some low-skill workers as prisoners, others as guards or service workers. One key factor contributing to the low unemployment rate in the United States, in comparison with European social welfare states, is its high rate of incarceration. If prisoners were counted among the unemployed, the difference would be much less.

Some economists have also argued that the U.S. criminal justice system functions as a kind of "penal Keynesianism." Just as in "military Keynesianism," —government use of military spending as economic stimulus to regulate the cycles of capitalism—spending on prisons is arguably now being used in a similar way. Building prisons has also become a key economic development strategy in many rural areas (as ineffective as that strategy has proven to be). Other interests—for example, prison guards (and their unions), local police departments, and social service agencies—have come to depend on the flow of government money through the prison economy.

When viewed in the context of recent changes in the global economy and the neoliberal policies of the U.S. government abroad and at home—including attacks on the welfare state and the privatization or elimination of many government services—the prison boom can be seen as a matter of exchanging social welfare policies for penal welfare policies. There has been a shift toward policies that favor private, corporate interests, with the complicity of professionals and civil servants; the burden of this shift has fallen squarely on the economically and politically disenfranchised communities—largely Black and Latino—that have been most adversely affected by the prison crisis. Other issues—the high rates of incarceration among Native Americans; the increasing rate of incarceration among women, especially women of color; the increase in detention of immigrants by Homeland Security; the high incidence of rape in prison and the special burdens faced by lesbian, gay and trans prisoners—must also be part of our picture of the shift to a penal economy.

It has long been clear that mass incarceration does not solve the social problems it purports to—it neither reduces crime and drug abuse nor makes our communities safer. But pointing out the ineffectiveness of current policies in achieving their stated aims is not enough if those policies have now become crucial for maintaining our current economic and political status quo. Activist strategies against the prison crisis and efforts to build alternatives to mass incarceration must take into account the real—economic and political—causes and functions of the prison crisis.

Chris Sturr is co-editor of Dollars & Sense.

Sources: Bureau of Justice Statistics; Sentencing Project; Prison Policy Initiative; Christian Parenti, Lockdown America (Verso, 1999); David Garland, The Culture of Control (University of Chicago Press, 2001); Jens Soering, An Expensive Way to Make Bad People Worse (Flashpoint, 2004); Loïc Wacquant, Deadly Symbiosis: Race and the Rise of Neoliberal Penality (Cambridge, 2006); Nils Christie, Crime Control as Industry (Routledge, 2000).
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