How Do Power And Economics Work In Prisons? With David Skarbek

How do American prison gangs facilitate money, trade, and economics behind bars? What causes this and what can we learn from it?

David Skarbek is Professor of Political Economy and Director of the Center for Philosophy, Politics, and Economics at Brown University.

David’s award-winning book, The Social Order of the Underworld: How Prison Gangs Govern the American Penal System, challenges the view that inmates create prison gangs to promote racism and violence. On the contrary David argues that gangs form to create order and protection within prisons. We discuss his book, which explores prison governance and economics, and in many ways also asks us to look closely at the hierarchy and functioning of the world outside of prison. 

David Skarbek website - http://www.davidskarbek.com/

David Skarbek on X - https://xcancel.com/DavidSkarbek

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Episode Transcript

(00:00):
And so a lot of the checks and balances that we think are so
crucial when the state wields coercive and even fatal violence
are absent in a lot of these extra legal non state and and
prison based situations. So certain elements of the
market emerge with the politics and the governance doesn't
necessarily emerge alongside that.
We're at the same speed. Hello, I am Cody Ellingham, and

(00:23):
this is The Transformation of Value, a place for asking
questions about freedom, money, and creativity.
My guest today is David Scarbeck, Professor of Political
Economy and director of the Center for Philosophy, Politics
and Economics at Brown University.
David's award-winning book, The Social Order of the Underworld,
How Prison Gangs Govern the American Penal System,

(00:46):
challenges the view that inmatescreate prison gangs to promote
racism and violence. On the contrary, David argues
that gangs form to create order and protection within prisons.
His book explores prison governance and economics, and in
many ways also asks us to look closely at the hierarchy and
functioning of the world outsideof prison.

(01:06):
David, welcome to the show. Great.
Happy to be with you. You know, I think economics is
unlike most other fields. We start off with
simplifications, toy models and conventional wisdom.
And instead of sharpening our understanding and updating these
concepts as we go deeper, a lot of the time those initial
simplifications stick even amongthe educated public and the

(01:29):
government. Whether it's the origins of
money, the actual role of bartertrade, the formation of nations,
these questions often get given a treatment that doesn't reflect
the nuance or history. Perhaps because it's difficult
to remove ourselves from the subject matter.
We are fish in the ocean trying to study water.
However, prisons are an interesting area where economic

(01:51):
and political theories can be tested and observed from the
outside. Prisons are mostly
self-contained. They exist within a system of
official rules but are also governed by rules emerging from
within. Prisons have connections to the
outside, but there is value, incentives and motivated
participants literally locked within these systems.

(02:13):
I want to start off with understanding what motivated you
to write about prison economics and governance please.
I mean, there's a personal and professional connection.
Growing up in the Bay Area in California, I was very much
aware of mass incarceration, some of the political effects,
some of the social effects, a newer number of people who had

(02:36):
been incarcerated for, you know,short times and longer times.
And when one particular individual was released after
about 10 years, you know, he became a good friend and, and we
chatted often about it. And so I was always curious
about how those experiences has unfolded for him and how they

(02:56):
had impacted him in ways that, you know, might not be easily
written down or, or quantified. And later in grad school at
George Mason University, I took a class on constitutional
political economy, which is essentially using economic
models of decision making to tryto understand what political
constitutions do, why they look the way they do, and why some

(03:18):
are more effective than others at different tasks.
And for that class I had to write a paper and I wrote a
paper based on the written constitution of a prison gang in
California. And I thought it was extremely
interesting topic. It turned out that the economic
models were highly predictive and it, it gave an answer to one

(03:41):
question, which is how might gangs organize within prisons
and why might they need a constitution?
And it raised a bunch of other ones, which is, why are gangs
more important in some places than in others?
What are the consequences of their existence?
And so professionally, I've justsort of asked a question and
generated more questions and, and tried to get some

(04:02):
understanding on those things. And so in a somewhat spontaneous
or emergent way, it's been a very interesting research
project. Well, there, there is a
conventional wisdom that a groupof criminals in prison would
exist in a perpetual state of anarchy.
But actually, as you detail in your book, inmate society is
surprisingly orderly and organized.

(04:24):
You mentioned this constitution that you you wrote about.
Can you tell me more about the system's rules and protocols
that shape this order, both fromthe prison authorities but also
from the prisoners themselves? Yeah.
And the other professional connection to this is that
public choice economists in the 1970s, primarily Gordon Tolick

(04:44):
and James Buchanan, wrote a series of papers investigating
the positive analysis of the economic analysis of anarchy.
So not is it like a good or a bad thing or good or bad ideal,
but like, how might we think society and social order will
exist in situations where the state doesn't have a substantial

(05:05):
presence? And that motivated my interest
in understanding prisons, which,you know, you know, in in
somewhat unintuitive sense, they're places of extreme
dominance of the state and surveillance.
And yet there are these core pockets or arenas in which
people can't or won't or desire not to rely on state based legal

(05:25):
institutions and organizations. And so it provides a a fun and
interesting opportunity to try to study some of these sort of
pre state or non state dynamics.And what my work has found is
that the social order that emerges in these anarchic, quasi
anarchic settings, it doesn't always look the same.
Sometimes it looks drastically different.

(05:47):
And so one of the things that I discovered in writing my first
book was that at one point therewere no gangs in California
prisons. The prison system in California
existed for more than 100 years,and no gangs like those that
exist and dominate today operated within their walls.
And so it raises really interesting sort of comparative
institutional question, which is, you know, if there's some

(06:09):
social order that exists and persists for a long time, why
might it be wildly different at some other point in time?
And so there's descriptive variation that then calls out
for some theoretical and empirical investigation and
explanation. Yeah, yeah.
Well, you do write about how before the 1950s there were no

(06:31):
prison gangs in the United States.
And certainly your book outlinesa lot of the history and the way
that evolved and and I guess thechanging dynamic or the changing
demographic of the prison gangs played a big role in there.
So maybe coming to this idea that you establish in your book
of governance theory and kind ofwhat that means for prison

(06:55):
social, or perhaps you could tell us a little bit more about
how you saw that changing demographic, that changing
situation with prison gangs leading to a new form of order.
Emerging. So the approach that I use is
very much based on new institutional economics, people
like Eleanor Ostrom, Doug North.Governance is the sort of

(07:17):
function that defines and enforces property rights, that
facilitates agreements or exchange, and that aids in the
production of collective and public goods.
And for me, when I look at prisons, often officials are
providing formal governance. They're formally providing those
things, but it seems empiricallyand historically that there's a

(07:38):
lot of additional governance that incarcerated people want
that is extra legal, that is beyond the scope of a formal
governance. And so in California, for many
years, based primarily on ethnographic studies conducted
by sociologists in the 30s, forties, 50s and 60s, governance

(07:58):
was provided in an extra legal way, in a very informal way, in
a very decentralized way. Gossip and ostracism are
extremely powerful mechanisms ofsocial control in small
communities. Everybody knows other people's
relative social standing. If you're standing falls because
you act in a way that people don't appreciate, you feel that,

(08:21):
and people don't want to hang out with you.
They don't want to support you, they don't want to share a
cigarette with you. Likewise, ostracism.
If there's few other people to turn to when one group
ostracizes you, you really want to avoid doing something that
violates the norms. And so in prisons in California,
before gangs, prisoners followedwhat they called the code, or

(08:43):
sometimes the convict code, which was a set of norms of
behavior that emerged. Nobody sat down and wrote out
what the norms were. They emerged.
They were individuals choosing to either abide by the norms or
not, and to either punish violations of the norms or not.
And taken together, the code, the convict code, is a pretty

(09:04):
sensible set of norms. Don't snitch.
Don't steal, don't complain, payyour debts back.
These are the sorts of norms that I think actually apply just
in general in life, like try to be a good person, try not to
cause a lot of trouble. Don't be, don't whine too much.
And so people could either abideby the norm and have friends and

(09:25):
resources, or they could violatethose and be outcast and fall in
status. And in small communities,
especially homogeneous communities, that works really
well. It doesn't require a lot of
resources. It doesn't require a lot of
organization. And so in small communities of
homogeneous people, norms tend to provide extra legal

(09:46):
governance extremely effectively.
So what I discovered in writing my book, though, is that
starting the 50s, sixties, 70s, and then certainly in the 90s,
there's a huge increase in the prison population in California,
and it becomes much more diverse.
And that has two different effects.
The first is that in bigger prison populations, the

(10:07):
information cost of knowing people's relative standing just
skyrockets. It's tough to know who's in good
standing, who's not, and for what reasons, and how reliable
that is. And so the threat of losing
status kind of diminishes. It's not as powerful because
there's just so many different people there.
The second, in terms of homogeneity, is that prisons

(10:29):
became much more racially and ethnically diverse during this
period. And that had a a few different
effects, but one of them is thatthere's a lot less agreement on
what constituted a violation of the norms.
What constituted the severity ofthe violation?
And then how does somebody come back in a good standing?

(10:51):
And as more people with different backgrounds, different
cultures, different world experiences come into that
collective conversation, it was less clear sort of who was right
and who was wrong and when and where and why.
And so it becomes much less effective as a coordination
mechanism for informally or in adecentralized way enforcing the

(11:11):
convict code. And So what I document in the
book through historical and archival evidence is that chaos
increases substantially in the 1960s during these periods of
demographic change. And the violence that's
increasing, the serious acts of violence that are increasing,
the riots that are increasing are all signals that what used

(11:32):
to work well doesn't anymore. And that is what motivated the
initial founders, creators of prison gangs in California, to
in fact create those, to create those groups.
Yeah. So you focus quite or you focus
on the United States and certainly there's quite a lot of
study on California, which I believe has the largest prison

(11:55):
population in the US, right. And this governance theory that
you develop is interesting because correct me if I'm wrong,
but my understanding is the the commonly accepted frameworks,
the deprivation theory and the importation theory, which kind
of try to explain why these prison gangs exist for other
reasons. But this governance theory that

(12:17):
you've developed seems to encompass both this period of
norms and in this move to prisongangs.
And the governance provided by the norms was acceptable and
that worked for a period. But when changing demographics
came along, it then required a more formalized structure and we
got these prison gangs. Is it?
Is that? Is that correct?
Yeah, I think that's right. And one of the things that I

(12:39):
find intellectually very appealing is a a theory that's
relatively parsimonious but can explain a lot of different
variation. And this theory seems to explain
the California case fairly well.Historically, it seems to
explain cross state differences in the United States fairly
well. And it also is actually a theory

(13:01):
that was taken from economic historians who were trying to
understand, you know, the emergence of states in Europe
hundreds of years before. And so there's a sense in which
it's a radical out of sample prediction of the ability of new
institutional economics to explain when we have more
decentralized and more centralized governance

(13:22):
institutions in operation. So that for me intellectually is
very satisfying. I think that that it's a high
virtue that it has that adaptability.
And criminology is a field that I've spent my entire career
engaging with and have much appreciation for, but it's a
field more than a discipline. So there are people from many

(13:43):
different disciplines, many different departments writing
about topics in criminology. And the explanations, therefore,
are much more varied than you might expect within a single
discipline. And there are ways in which they
are. The explanations are
undisciplined in that they don'tseem to be a part of a broader
intellectual architecture to explain some particular set of

(14:07):
outcomes or institutions. Yeah.
Well, what what was interesting to me as well, this coming back
to the idea of private property,of protection, of structures
that help promote order. You're right, if I if I go to a
store and purchase a bicycle, then it's legally mine.
However, if I do not invest resources to secure it, then it

(14:28):
won't be mine for long, especially if it's left
unlocked. And you also write, unlike
normative theories of who shouldhave property rights over
something, the positive theory of property rights looks at
whether someone can actually enforce a claim.
And I think there's something almost, there's something quite
profound about the prisons as a site of study because they're a

(14:50):
site of, in a sense, a pure, pure physicality.
You know, there's this like verystrong athletic men confined
into small spaces. And so you must get a
distillation of what would otherwise be a very dispersed
effect maybe out here in, in thefree world.

(15:11):
And, and that's very interestingto me because that aligns with
what you've said about states aswell.
And, and the kind of the connection there with the
monopoly on violence. You know, who, who has the
biggest stick, who, who's stronger, who can physically
over overwhelm someone else. That kind of rule of the jungle
kind of comes into this. But instead of leading to an
anarchic state, it it leads to akind of equilibrium where the

(15:34):
violence kind of starts to even out perhaps.
Yeah, I think that's right. And there's a sense in which the
potential for chaos and serious violence creates a huge benefit
if you can find ways to avoid it.
And so the people actively involved are really caught in
the crosshairs far more than us mere observers in terms of the

(15:58):
the sharp costs and benefits of them being able to avoid some of
these situations. Prisons themselves are also
extremely interesting to me in terms of sort of game theoretic
studies of conflict because there are 4 characteristics that
define them, either through practice or for by definition,
that are really uncooperative. That should lead to really

(16:20):
uncooperative predictions. So there's a selection effect in
who goes to prisons or people charged with or convicted of
crimes. It's not just a random pull from
the population. There's also a selection bias in
that it's disproportionately people from disadvantaged
socioeconomic and minority communities who maybe have
access to less education, fewer resources, fewer ways to invest

(16:43):
in producing cooperation. There's no choice who your
neighbors are going to be in prisons for the most part.
So you can't select into cooperative, cooperative
relationships. And there's very few exit
options available in the prison setting.
So the threat of exit to generate better and more
cooperative outcomes is absent. So in each of those four ways,

(17:03):
prisons are quite different fromsociety more generally and point
in the direction of there shouldbe less cooperation happening
there. And so for me, it's even more
remarkable and interesting when they're able to eke out
organizations and institutions that actually generate
cooperation, that have systematic mechanisms for
reducing conflict, for facilitating the underground

(17:27):
economy. All of those are sort of even
more impressive given the disadvantages in which those
people find themselves. Yeah.
The other thing that's really interesting is this emphasis on
trade and productive economy that you develop.
And if we look at, say, subjective preference, you write

(17:48):
criminals, like all people respond to incentives.
However, I mean, these these happen to be their own
incentives. And you know what, in the
probation of prison, you know, there there is a demand for
things like illicit drugs that may be from the outside, it
would be easy to criticize. But if you look at it from a
subjective point of view, you know, that's what these people

(18:09):
need to pass the time. And so there is a an economy
that emerges and you write quiteextensively on how these prison
gangs help regulate and in fact enhance that economy.
It's a kind of public good within the prison system to
enable trade to take place. So maybe you can tell me more
about some of the economics and the trade aspect that you

(18:30):
discovered? Yeah.
And and almost universally when we study incarcerated
populations, there are underground economies and it's
difficult in to get access to the underground economy.
But everywhere we look, the the very first article in economics
and one of the first ethnographies of prison life is

(18:50):
the economic organization of a prisoner of war camp by a guy
named RA Bradford in in the 1940s who was incarcerated N1.
And what he finds is what dozensand or if not many more studies
have replicated, which is that these economies, these markets
emerge and people have a demand.And there are entrepreneurial

(19:12):
people who find ways to call forth supply into the
underground economy in California.
In the context that my first book studies, which is, you
know, basically the 1960s to the2000s, drugs, alcohol, tobacco,
tattoo equipment, cell phones, these are all things that many

(19:33):
incarcerated people want access to that are contraband.
And in fact, prison rules prohibit a wide range of goods
and services. They prevent exchange amongst
incarcerated people themselves. But that doesn't stop the fact
that there's a demand and willingness to pay.
And it is a profit opportunity available for an entrepreneur

(19:53):
who's able to sort of connect buyer and seller.
And So what we see in Californiaand in prisons across the
country and around the world through time are markets for
these things and. They're executed in different
ways, but there's a sort of a relentless there's, there's a

(20:13):
relentless ability to to make these markets happen and the
scarcity is greater than it is on the street.
So I think drug prices are typically anywhere from 4:00 to
maybe six or seven times the price on the street.
So there is more scarcity there,but it's getting in.
And whether I speak to incarcerated people or prison
officials, they all say, you know, there's no way to stop it.

(20:35):
We can't make prisons these sealed places that can't get
access to resources in the underground economy.
And of course, once these markets are in operation, and
certainly on any scale, there are important questions that are
raised, more general questions, which is how do we avoid
conflicts? And when those conflicts arise,
how do we resolve them? Is it always violence, or can we

(20:58):
find ways that are, you know, less destructive of the rents
that we're getting through some other mechanism?
Can we find ways to adjudicate peacefully?
And that's what the convict codedid at one point in California.
That's what gangs did. Later they said, you know, we're
going to resolve disputes and that's going to, if not

(21:18):
eliminate, reduce the amount of violence that that's used.
Yeah. Well, again, there's some very
interesting connections with political theory around the role
of the state and that here, as you write, for illicit markets
to operate effectively, there has to be an arena in which
inmates can resolve commercial disputes.
If an inmate owes someone money,the lender can work with their

(21:40):
gang to be paid. And this certainly resembles the
court system or the role of the state in enforcing contracts and
that sort of thing. And this is very interesting
because we're seeing this like instantiation of this hegemonic
relationship that we would see out, you know, with the
government of a country. We're seeing that emerge again

(22:01):
here in prison walls. And that is fascinating, right,
to see that same thing emerge. It's extremely interesting.
There's a sort of small literature of people studying
trade beyond the state. Stateless exchange and there's
some classic studies that look at this in the context of the

(22:23):
sort of so-called free world outside of prisons and it is
pretty remarkable. One thing that from a sort of
political theory, philosophy, politics angle that I would note
though, is that a lot of the things that we care a lot about
when it comes to state based decision making, you know,
there's a sort of modern, you know, and modern culture and

(22:44):
idea that with great power comesgreat responsibility, right?
And so the current instantiationof that wisdom is different from
Winston Churchill, but Winston Churchill said a lot of things
like that. And I think the idea and and
something to keep in mind when thinking about extra legal,
extra state governance is that some of the things we think

(23:05):
matter a lot when the state makes decisions are actually
absent with the gangs. So when a gang decides that
someone has violated some rule and should be assaulted or
killed, there wasn't a trial, there wasn't due process, there
wasn't a right to face accusers,there's not an appeals process,
there's not a Supreme Court through which death sentences
essentially can be reviewed. And so a lot of the checks and

(23:28):
balances that we think are so crucial when the state wields
coercive and even fatal violenceare absent in a lot of these
extra legal non state and and prison based situations.
So certain elements of the market emerge with the politics,
and the governance doesn't necessarily emerge alongside
that or at the same speed. Well, what's interesting about
that, to take AI guess a statiststance and and and play play

(23:53):
that side of it. Perhaps we could look at that as
one of the great benefits of modern democratic nation states
is that we have a lineage of, you know, thousands of years of
innovation in these systems and these checks and balances, which
if we were to reset the clock and and start again, you know,
we we begin from this kind of warlord kind of a place, these

(24:13):
kind of warring tribes that, youknow, eventually eke out an
equilibrium. But it's, it's not a very modern
or enlightened place from which to build a political system.
And so perhaps criticism of the state need to be sort of checked
with the idea of like, well, what's the alternative?
You know we go back to a War I. Think that's a, that's
definitely the right question assort of what's the alternative,

(24:35):
right? That's the classic econ and and
part of it, you know, is also like if you look at states
worldwide, most states haven't had a a well executed rule of
law historically speaking. It's like an extreme minority of
them. So state based rule doesn't
equal rule of law in any sort ofautomatic or or obvious way.

(24:55):
Yeah. And, and, and even that
question, I mean, we're getting into, you know, some deeper
stuff jurisprudence, but like what is law?
Because in a sense, the law or the, the moral code of prisons,
as you detail, I mean, it comes from a place that's perhaps
quite different. It speaks to maybe a certain

(25:16):
psychological state that a lot of these people are in.
Certainly there, there, there, there dictates when it comes to
certain kinds of prisoners who, you know, automatically get
given death sentences for certain kinds of crimes
involving, you know, vulnerable people, for example, or the,
the, you know, if you talk to the prison authorities, you're
instantly, you know, labeled as a, as a, what's the word for it?

(25:41):
Anarch, I think is there is there a word where, you know,
you, you're talking to the, the prison authorities.
Yeah. There's this kind of laws that
we don't have out in the free world.
You know, we've developed other kinds of ethical moral systems.
And so there's this kind of 2 tracks.
And in a sense, and maybe it's abit Jungian, but it kind of
comes back to like the human psyche in a sense.
You know, a lot of these people are disadvantaged people that

(26:03):
come from broken homes. And I wonder if that has an
effect on sort of their worldview as to right and wrong
even perhaps. Yeah.
And and yeah, that's right. The the sort of law is more
emergent, it's less deliberationbased.
It's deliberated amongst the people who have a, a, some

(26:25):
systematically different view ofthe world.
And so we wouldn't necessarily expect it to sort of reach the
same policy conclusions that thelaw that our legislative bodies
here in the US come down to. There's a hypermasculine ideal
in prison that is just it. It's not any not consistent with

(26:50):
rule of law. And you know, as as you
mentioned, there are certain crimes for which you have in
essence forfeited your rights inthe sort of prison system of
maybe not law, but legal order. And so it emerges it's much more
tribal, right? It's not it's not customary law.

(27:11):
And in fact, when I finished my book and then started reading
about clan based societies, it looks a lot more like clan based
society. There's collective
responsibility. There are depending on the clan,
you know, certain religious beliefs that largely influence
what the law is amongst those groups.

(27:32):
So I don't see it as a proto state, but more as something
adjacent. If you lack, maybe say it
differently. If you have large diverse
populations and you don't have high quality government.
This sort of tribal rule, triballaw seems to be the sort of
natural third equilibrium to exist, and it gets us farther

(27:54):
than decentralized norms alone would.
But it has sort of inherent constraints cooked into it, it
seems. Yeah, I realized the word I was
looking for before was snitch. Sorry for the the person who
talks to the guards, but what you just said about hyper
masculinity is really interesting because you also
detail women's prisons and how you don't see the same formation

(28:15):
of gangs and women's prisons in California.
Isn't that interesting? Extremely interesting, and I
wrote about this a bit more in my second book on the puzzle of
prison order. But these women prisoners are
governed by the very same laws and policies that male prisoners
in California are. Many of the prisons that women

(28:35):
have been housed in were built for men.
And yet nothing like these entrenched gang based structures
operate in women's prisons. And you know, I have a, a
partial explanation for this, which is that those populations
have always remained quite small, meaning that they take

(28:57):
advantage of the effectiveness of decentralized governance.
It's cheap, it works. Why invest in the costly
structures of gangs? And that's consistent with this
divergent. The thought experiment that I
wouldn't like to see as a real experiment would be, well, what
if we increase the women's prison population by 80,000

(29:18):
people? That would be a more thorough
test and we could find out if they form gangs.
Then my explanation seems to be predominate.
If not, maybe it's something else.
But yeah, that variation across genders is quite stark.
And the lives of a man or a woman in a prison in California
are just so extremely different.It's it's pretty striking.

(29:43):
Well, to take out the gender aspect of it, though, what's
also interesting is you talk about, I believe it's like the
special needs units which house homosexual men and prisons and
how they also don't have the same formation of gangs that you
see. And so maybe you could talk a
little bit more about that. Maybe it isn't about whether
someone's male or female, right?Yeah, that's, that's right.

(30:03):
And so, so I expand on all of this in the in the second book,
that sort of 2 pages you're referring to is essentially my
second book. The Gay and transgender Housing
unit in Los Angeles County Jail is controversial, and I don't
have an opinion about whether weshould have it or not.
But essentially there's a form on prisoner intake that asks if

(30:27):
you're a gay or transgender, andif you are, the prisoner intake
interview is immediately stopped.
You're moved to a high visibility area and then you
essentially get put into a different intake process where a
team of deputies, at least historically, have interviewed
you to find out if you're, quote, really gay.

(30:48):
So gay in the sense that these people think you'll be perceived
as a victim in the general population.
And if you get through that process, then you'll be housed
in a much smaller dormitory. There's 3 or 4 dorms of people
who have all gone through that process as well.
They don't form gangs there. They have something much closer

(31:11):
to the convict code, which is consistent with this explanation
about the size of the population.
Also, because of this very unusual and controversial
selection or entry process, the people who are there have lived
much more similar lives than thepeople in the general
population. They're from similar

(31:31):
communities, they've had similarbackground experiences, they've
come from similar neighborhoods to some degree.
And so each one of those things means that even if there's a a
substantial amount of, say, racial or ethnic diversity,
there's a lot of homogeneity on other margins.
And the similar life experiencesthat people have had should

(31:54):
facilitate these more decentralized mechanisms of
control. So it's an extremely interesting
housing community. There's very few of those across
the United States and there's been some great legal
scholarship on on what is happening and, and I included it
as a way to sort of test this broader idea about prison social

(32:16):
order. Yeah, I, I, I do look forward to
looking into your second book a bit more.
Interesting to see you expand onthat.
This is interesting the the ideaof this diversity though, and
certainly perhaps a confronting idea, but you're right, research
in a broad range of situations finds that greater ethnic and

(32:37):
social diversity is associated with lower contributions to
public goods and collective goods.
And I mean, this is interesting,right?
Because, you know, we live in a globalized, multicultural world.
Certainly many countries, you know, there's questions around
immigration, around different kinds of people integrating.
How do you interpret that? I mean, it could perhaps be a

(32:59):
bit confronting for some people this idea that that actually
lowers the the public goods and,and these kind of communities
perhaps. So I think it's a pretty well
established in the sort of economic literature that ethnic
fractionalization is, is a sort of popular measure of that.
And we won't get into the details of how it's measured,
but basically the more fractionalized you are, the more

(33:22):
diverse you are. And we find that it correlates
with less public good provision,people less willing to fund
local schools, pay their taxes, all of these things that are
sort of what we like to think ofas good for society.
And there's a lot of different mechanisms that might explain
why macro level diversity reduces that sort of public

(33:46):
willingness to pay. I don't have an opinion about
which one of those is necessarily right.
And so I view that as a challenge to overcome.
So in some settings, research bypolitical scientist Jessica
Trumstein, for example, shows that we recognize that diversity
cools our interest in public goods investment.

(34:09):
And so there's an endogenous response where we say, well,
let's work harder to respond to that problem.
And so the actual effect is smaller than we might think it
is. Theoretically.
Division of Labor is limited by the extent of the market.
So the Adam Smithian sense of let's include everyone pushes

(34:31):
for let's have more people. And at some point that means
more diversity. I think this more empirical
literature now says, well, there, you know, we have to find
a way to facilitate not just larger communities, but larger
and more diverse communities. A lot of the times people will
ask me about the Nordic prisons and maybe you're seeing a
documentary about them or read about them.

(34:53):
But they're they're, they're extremely, you know, posh in one
sense, right? There's like tons of resources.
They've got these great environments to live in, lots of
resources. And, you know, the literature
there seems to think that in these small, highly homogeneous
countries, they're willing to pay for resources like that, you

(35:15):
know, because it's someone like them there.
And it's not obvious that we would have that same intuition
here, that we're just happy to pay because, you know, there's
someone like me there. It might be that the diversity
reduces public willingness to sort of pay in or be taxed for
these sorts of resources. Yeah, that's interesting.
I wonder if there's nuance here because I did a little bit of

(35:36):
research. I'm from New Zealand originally
and I did a little bit of research just comparatively, you
know, looking at the New Zealandprison situation.
And at the end of the day, I mean, there is racial
differences. But New Zealand, you know, it's
an island country. It doesn't share any land
borders. And I wonder this idea of
diversity, whether somewhere like California, where you do

(35:56):
have a large population of people coming from Mexico,
you've got people with Mexican background.
You've got maybe this kind of crossroads of quite different
cultural backgrounds that would otherwise maybe integrate over
time in an island country. Or somewhere like Scandinavia
where, you know, the Nordic countries.
I wonder whether there's a nuance here where this idea that

(36:18):
ethnic and social diversity can be counted through institutions
such as, you know, schools that actually, you know, bring
children together from differentbackgrounds and they start to
kind of become, even though theymight have like an ethnic
background that's different. They kind of start to form
around norms of identity of, of belonging.
Whereas, you know, somewhere like California where maybe

(36:41):
there's a large immigrant population, there's a lot of
people coming in from Mexico, sothat South America, Latin
America, whether that that all feeds into this kind of mix of
kind of incompatibility, different social backgrounds
perhaps. Yeah, I mean, it's, I guess my
intuition is that there's a wellestablished macro relationship.

(37:02):
There's a lot of possible explanations for it.
Social capital plays an important role here at one at
some point where we have bondingsocial capital where we, you
know, re establish more connection with the people who
are like us. And then there's bridging social
capital, where we're connecting with people from different
groups, from different backgrounds.

(37:23):
And yeah, in a place like California that's not just
diverse but mobile, maybe these communities are more in flux.
And what we see when we look at the sort of extreme other side.
So there's Lisa Bernstein has this famous paper on Orthodox
Jews and the diamond trade in New York.

(37:45):
And the homogeneity there is community.
It's religion, it's business. They view the world in a very
specific type of way, and they can lean into that to get the
cooperation. So my sense on sort of
diversity, which I wouldn't certainly wouldn't, you know,
stop at ethnic diversity, I think it's much, much broader
than that. I think the concept of social

(38:06):
distance from anthropology and sociology is extremely relevant
here. But all those other ways and
we're much more different. It's harder to lean into those
differences to get the good outcome in more diverse places.
And so it's up to sort of institutional entrepreneurs to
find ways to like, you know, overcome those those

(38:27):
differences. Well, would it be true to
interpret that statement though,this idea that maybe in the
1960s, nineteen 70s, when there was an increasing diversity,
that's when there was increasingchallenges within the prison
system. But would you say that perhaps
these prison gangs are actually in a sense reducing diversity by

(38:50):
amalgamating it into blocks per SE?
And so you've got these kind of different ethnic blocks that in
a sense actually the the averagedistance between a prisoner,
because they're now locked into an ethnic block is maybe lower
and so thus less violence and, and maybe higher quality of
living. Is that is that accurate or?

(39:11):
Yeah, that's interesting. I guess my sense is, yeah, I
mean, so the gangs simplify lotsof differences into a few
important differences, black, white, Hispanic, other.
That's what they would say. And then geographically, are you
from Northern, Central or Southern California?
And that's sort of the thing that matters the most about you.

(39:34):
And the gangs do that. And there's a way in which, OK,
now each gang is responsible fortheir, quote, own people.
And that's the by far most salient aspect of a person's
identity. So yeah.
Yeah, that's a really interesting observation.
I think that's that. That's true that they as a

(39:57):
matter of fact, have isolated a few characteristics to be
extremely important and to just sort of ignore a bunch of other
ones. Well, the other thing that would
lead credence to that is this idea of self governance.
So say, you know, you have a a white gang and if someone steps
out of line and, and, and kind of brings in a so, you know,

(40:19):
maybe a diversity of their own, you know, they do something way
out on the spectrum, The gang will actually enforce that and
kind of bring it back in. And you write about this, you
know, they'll they'll punish their own people who go out and
do something without the consensus of the gang.
And so it kind of in a sense homogenizes the behavior a
little bit more. And they get the same tattoos,
they got the same haircut, they all do the same thing, and

(40:40):
they're the same race. And it's sort of, yeah, it's, I
think it's an interesting kind of approach to identity.
Yeah, I mean, prisons flatten identities.
You know, the classic they give you a number to replace a name.
It's not entirely true, but yeah, you can't wear what you
want. Dress how you want, act how you
want. And the gangs exert tremendous

(41:03):
in Group pressure, punishing their own affiliates when
problems either social or economic, arise with other
groups. And, you know, one of the
telling clues in this, you know,evidence is that if some group
doesn't bring a new prisoner into the fold, it's the other

(41:25):
guys who say, hey, you need to incorporate that person into
your group because they want them to be governed by that
other group. And so, yeah, there's very much,
yeah. I mean, it's certainly not fully
voluntarily chosen, but people have to affiliate.
And the gang says these are the things that matter.

(41:45):
And we're going to keep an eye on you, and we're going to make
sure you follow the rules. Yeah, are you familiar with the
concept of homo psycho? I don't think so.
So the Latin concept of, you know, the the, the condemned man
living outside, you know, say living outside of a Roman city
and ancient times and effectively not of any

(42:07):
particular city, state or any particular tribe affiliation.
And thus kind of becomes subhuman, becomes a target, can
be killed by anyone without any legal repercussions as that
sound familiar? Because, yeah, I wonder whether
in this case someone, I mean, I don't, I don't know if it's even
possible to not join a prison gang in California.
But if you try not to, you become this kind of vulnerable

(42:30):
individual. You know the homo Seca in a
sense who can and will be taken advantage of right by others.
Yeah, in California, for the most part you have to you're
automatically going to affiliatewith some group and there's ways
to opt out, but some group has to be responsible for your
behavior. And in general, like, my sense

(42:55):
is that people want that becausethey want they don't want some
loan Wolf who's going to do something disruptive.
They don't want some guy who's going to cause trouble and, you
know, initiate a large riot thatleads to people getting hurt or
stabbed. You know, for many years, the
Department of Corrections would just put everybody of a

(43:15):
particular race on lockdown after a riot.
And, you know, nobody wants to be locked down for for weeks and
months. So, you know, we don't want
somebody who was unaccountable or unaccounted for in the prison
system. And I think that's true today.
Some people can opt out through,you know, certain religious

(43:35):
affiliations if done in the right way.
But no, I mean for the most part, somebody has to be
responsible for some group has to be responsible for everyone.
Yeah. Well, again, this is interesting
to me because it it, it sort of mirrors the nation state, right?
You know, it's you you need to affiliate with with a nation
state. You can't generally speaking,

(43:56):
you know, this is very few caseswhere people are outside of
those systems are the sort of hermetically sealed nation
States and certainly more parallels there.
But something I wanted to come back to this idea of, of the
Mafia and the, the, the formation of protection and in
particular the Mexican Mafia that you write about, because I

(44:17):
thought this was fascinating that the Mexican Mafia in
California, it's a Californian prison gang, but it only has a
few 100 official members. But it's able to exert control
over very powerful St. gangs on the outside, such as MS13, who
are known for incredible brutality and violence.
How is it that the Mexican Mafiacan have such an outsized impact

(44:38):
compared to the street gangs to become sort of the gang of
gangs? It's extremely interesting, and
it's not limited to the Mexican Mafia.
In fact, there's gangs in Northern California that play a
similar role there and places inNew York and Baltimore.
But a few number of people who can control the county jail and

(45:02):
then later the state prison, butespecially the county jail, have
an extremely credible threat of violence.
So there may be hundreds or thousands of people who are in
gangs on the street. Maybe they're armed, maybe
they're experienced with violence, but when that one
person is arrested and taken to jail, they don't have the rest
of the gang with them. They don't have a weapon with

(45:23):
them. They may not be knowledgeable
about the structure and the organization, the architecture
of a jail. And you know, a handful of well
organized and well armed prison gang members can basically say,
when you get here, if you haven't done what we've said, if
you haven't paid our gang taxes on your drug sales, we have a
list and they had lists and on. Now that things have gone

(45:46):
digital on phones, it's even easier to keep and communicate
and update lists. So people on the street
anticipate quite rationally thatthey will be incarcerated in the
future. The prison gang will have a
credible threat to hurt you and they'll have information about
whether you paid or not. So you can either not pay and
mean grave danger when you're locked up in the next year or

(46:06):
two, or you can pay now and thenreceive and said the protection
and safety of that gang. And so this relatively small
number of people are able to amplify and project this
tremendous amount of localized incarcerated power across large
parts of Los Angeles. And there's a sort of stationary

(46:29):
theory, stationary bandit theoryof state formation by Mansor
Olson. And he basically argued that
once you have the credible threat of violence, you can
extort more if you can protect that person from other
extortionists. So you want to be the sole
extortionist. And it may be that if you can

(46:50):
increase the revenues from whichyou're extorting, you'll have an
incentive to not only provide protection, but to, you know,
produce a market or to pave roads or provide local public
goods that allow the earnings toincrease such that even more can
be taken from those. And we see that in Los Angeles,
the Mexican Mafia is the informal court, the sort of

(47:10):
quasi government when there are disputes between rival gangs,
they make rules about what sort of violence can be used in the
street. Most famously in the early
1990s, they forbid drive by shootings amongst Hispanic gangs
in Los Angeles. And the numbers of drive by
shootings collapsed instantly and for many, many months.

(47:32):
So they they write rules about behavior, they write laws for
for gangs and they adjudicate disputes amongst them.
So it's a really, I mean, a really shockingly high level of
control exerted beyond prisons, you know, illustrating the fact
that prisons are not silos. They're, they're permeable.
They, they, you know there are influences into them and there

(47:54):
are influences spread out to theoutside.
Is there a sense of diplomacy that exists between the gangs
and also with prison authorities, like in terms of
these structures? I mean, do prison authorities
consult the the shop callers when it comes to the way the
prison is run and and sort of particular issues?

(48:15):
So in in a general sense, like it's clear that that does
happen. I suspect that it probably
varies in different prisons depending on who's working, the
personalities of correctional officers, personalities of the
shot callers who are involved. There are examples in my book
where they consult about which people should be housed together
in the same cell, for example. I think that in some instances

(48:40):
at at at some point people, correctional officers would sort
of recognize that they're delegating a certain amount of
control and governance to shot callers.
I think to some degree shot callers are able to also pull it
away from correctional officers.It's not a one way voluntary
surrender of power, but people who are shot callers and gangs

(49:05):
have a lot more information thancorrectional officers do.
They have, in a sense, a wider range of penalties available.
They're less accountable to someextent.
And it makes sense, I think thatthey would be able to entrench
themselves in these important ways.
And what we've seen is that evenwhen you go to the highest
security prisons in California, the gangs are just as, if not

(49:28):
more important in those places, meaning that, you know, you
can't just easily lock up the gang problem and end it.
There's a sort of relentless series of people who are going
to step in to fill those roles because what they're providing
isn't purely predatory. It's not purely extortionist.
What the gangs provide is more safety in a dangerous

(49:49):
environment, a way to adjudicateconflicts in communities where
those things are real and have really negative consequences.
And so whenever you lock up 1 gang leader or shot caller, or
if you were to lock up an entiregang, there's a market profit
opportunity available to somebody who can fill that power
void going forward. I'm, I'm really interested to

(50:12):
talk now about money and medium of exchange within the prison
system. And you suggest that stamps
replaced cigarettes as a medium of exchange, yet also my
impression from the book is that, you know, dollars also
really important in the prison economy.
Can you tell me more about the trade, the the actual medium of

(50:33):
exchange and and how money workswithin prisons?
It's probably changed a lot since I wrote my book, or at
least I I wouldn't want to speaktoo much about what's happening
now. Cigarettes, historically very
important medium of exchange. Now, now meaning 20 years ago,
the stamps seem to be like the medium of exchange for all the

(50:54):
reasons that you know, you know it's divisible, It's, you know,
it's going to stick around. It's not going to degrade.
There's a real use value for it now with the proliferation of
cell phones and prisons and appsthat can allow you to, you know,
shoot money around. These problems, which weren't a

(51:14):
huge problem before, I think areeven easier to solve now.
So if you went back to the 90s and you wanted to do a drug
deal, there's two people in prison.
One's going to get the drugs in,the other wants to pay the
person for doing so. The buyer would ask a family
member or a friend on the outside to give X amount of

(51:34):
money to the incarcerated person's friend or, or wife or
somebody. And so they're being exchanged
for money on the outside and exchange of goods on the inside.
And you know, with digital currency now and, and all that,
I, I just imagine that that problem's much less of a problem
even now. Yeah, maybe this is
anachronistic, but I also, I my understanding is like ramen

(51:57):
noodles have played a role. And do you know if that's still
relevant or if that's some? Of the people you know at
different times. Ramen noodles, Honey buns, some
things are more and less, you know, available and in demand
for for exchange. Yeah.
I, I, I assume and you know, I assume that it's a very context
dependent about what's the sort of most generally agreed upon,

(52:20):
commonly used medium of account.Yeah, I, I guess the, the reason
I asked that is, you know, I'm very interested in money and I
got some some more questions in that regard.
But this idea of like how that forms and, and if, you know,
we're looking here at, say the formation of, of tribes, you
know, mirroring the nation state, also wondering whether
you know, some of these other attributes of monetary systems

(52:43):
or central banking, etcetera. You know, if, if we can see
analogies and like, for example,you know, if we were to take
ramen as the ramen noodles as the medium of exchange in a
certain prison, you know, what would it mean for the prison
authorities to increase or decrease that supply?
And what would the impact of that be these?
I mean, there's a hypothetical questions, but certainly
interesting to me, you know how the emergent nature, the the

(53:05):
emergent way that money is decided on within a certain
context is quite interesting. Yeah, and, and state officials
try to prevent that. So in California 15 years ago,
there was a limit on how many stamps you could have in your
personal property because they don't, you know, they didn't
want you to just have your big bank there.
The Radford article that I mentioned before is the best,

(53:27):
our most enjoyable description of the evolution of these.
So I don't know if you know thisarticle, but he basically
documents how the Red Cross is like sending these endowments
down to all the prisoners. And some like the coffee and
some like the chocolates and some like the cigarettes, and
some don't. And there's this exchange that
happens and there's a priest who's able to move across

(53:48):
multiple housing units in this POW camp and he knows what the
exchange values across all of them are.
And so he leaves with like the standard package and comes back
with three times as many things because he's able to arbitrage
across these different separatedprotected markets.
So that the description of the evolution of markets there is is
really frustrate. Yeah, well, on that sense as

(54:10):
well that this idea of governance structures of, you
know, welfare of public good coming back to the Mexican
Mafia, you also write here, Mexican Mafia reportedly
increased the routine volume of goods available for all
prisoners, making more goods available at lower prices.
And the condition of many Chicanos and convicts has been

(54:32):
significantly improved because of this.
You know, these these prisoners claim they're in a better
position. Other Chicano prisoners, that is
Mexican ethnicity prisoners, claim they're in a better
position than other groups inside of prison because of this
this work, this kind of public good, this infrastructure that
their gang is providing. Yeah.
I mean, getting access to the contraband is a major benefit to

(54:56):
your group. And then if they're able to, if
that revenue stream generates incentives to reduce public
goods, then that's a direct and an indirect or a personal and a
more general way of improving one's life on a sort of daily
basis. Yeah.
And I do want to just come back to this bigger idea of the state

(55:19):
then David. I'm wondering if what your views
are on, I guess questions of state and if this has figured
into your your study of prisons?Well, how do you mean?
So I guess politically, if there's certain schools of
thought that you, you have informed your, your background

(55:40):
perhaps in terms of general political, economic, social
theories, these kinds of things.Yeah, I mean, I think that I
think that states are coercive entities that under some
conditions benefit the common humanity and the others don't.

(56:00):
I think that Madison, James Madison, one of the great
founding fathers of the United States, the author of the US
Constitution, was a genius man. And he said that, you know, the
benefits that states give us require us to give it coercive
capacity to empower it. And when we empower it, it's

(56:24):
strong enough to protect our rights.
And that power also means it's strong enough to violate our
rights. So the grand political challenge
is empowering States and constraining them to use that
power in ways that's desirable for the people who are governed
by it, who are governed within it.
And that's a problem that the gangs face.

(56:46):
You know, they wanted gangs thatwere strong enough to protect
their rights, but then not use that power to violate it.
And I think that's the that's the challenge for political
development is how do we get states with the information and
the incentives to use the power in ways that are constrained by
our social desires for what it'sdoing.
And the bigger the society and the more diverse it gets, that's

(57:09):
a harder problem to solve. So that's why I don't think many
states have successfully done that and done it for sustained
periods of time. Yeah, thank you for that.
I guess I'll ask again. Yeah, I live in Japan, but I'm
from New Zealand. And so both these countries
have, I guess, different social understandings, public

(57:30):
understandings of the role of the state.
I think, you know, Japan's a very collectivist place,
Confucian ideas of right and wrong, you know, different
conceptions of rehabilitation. Perhaps New Zealand, a very
tight knit place, but small, a small country with kind of
egalitarian origins, but definitely defers to the state
more. And So what you've just shared,

(57:52):
I think is a, there's this kind of idea of looking back at the
founding fathers, their role, their critique of the state is
very fascinating. And, and I do see that come
through. And you're writing, I think,
which is why I asked about it, because certainly it seems like
there is an opportunity for progress to be made, especially
on just on a human level with, with these, with these prisons

(58:14):
where, you know, perhaps we can learn from, from what's not
working and what is working evento improve outcomes and kind of
the overall quality of life. So that there is maybe the
opportunity to rehabilitate people into the community,
right? And it maybe this is a bit of a
bigger topic, but this is a ballooning prison population,

(58:36):
which I think you, you what, youknow, if you take, it's like
over 2 million people in the United States, right?
Which is quite incredible to think about.
Yeah, I mean, it's, it's gone down a little bit, but it's
massive and it'll be difficult. It's easy to send people to
prison. It's very difficult to get them
out. And there are widespread social,

(58:56):
political and economic fallout from prisons.
For me, I think that while mass incarceration has been misguided
and, and, you know, a failure, it was a response to a
substantial social harm, which was dramatic increases in

(59:17):
violent crime and the homicide rate.
And there was different ways that we might have responded and
we chose one that's turned out to be very ineffective.
And so I think that affects the the country in terms of the
citizens that we're making. There's been a lot of really
interesting work in political science about how contact with

(59:38):
the carceral state, whether it'sincarceration, arrest or even
being detained for tickets, dramatically affect people's
willingness to invest and participate in political
activities and to invest in other pro social, you know, non
profit style activities. So the impact of the of the

(59:59):
prison as the state entity on society has been huge and in
many ways quite destructive. In the United States, do
prisoners have the right to vote?
I think in two states that they do and there are not massive
dramatic differences across those two places.
OK, that's interesting because one other little fact that you

(01:00:21):
mentioned, which was quite interesting is that I think
before the 1960s, prisoners who entered the system lost their
civil rights and they faced what?
Civil, civil, civil death, whichis very interesting, right?
It's sort of a exodus from the the the free world into this new
world. And of course, the 13th
Amendment eliminates slavery, but not for incarcerated people.

(01:00:46):
It says it's specifically there.And so in most states, there is
forced labor by incarcerated people, typically at extremely
low wages. Is there any constitutional work
on that, that you know know of? I think it's the 13th Amendment.
OK. But in terms of like people
concerned about that and and thehuman rights side of that, or is

(01:01:08):
that locked in and it's not going to change?
I mean, I think there's lots of people working in this sort of
space who wish that it didn't say that.
I'm not sure if there's any realpolitical momentum to change
that. Yeah, Well, I mean, just sorry,
not not to go off on a tangent, but that it's interesting that
kind of role like political franchisement,
disenfranchisement, you know, once.

(01:01:29):
Different states have different felon disenfranchisement laws.
For many of them, it's just while you're incarcerated.
For others, it's while you're sort of still, you know, under
supervision by the state. And in a few cases, not very
many at this point, it's sort oflifetime disenfranchisement.

(01:01:50):
And so, you know, the the criminology studies that look at
this go through and look at congressional elections and
presidential elections, and theytry to estimate for people who
how many people were were free, who would have been able to vote
but couldn't. And we guess about based on
demographics, how many vote Republican, how many vote

(01:02:11):
Democrat? And were any of those closes
races close enough that felon voting might have changed it?
And in something like four or five of the congressional votes
in the last 30 or 40 years, it would have mattered.
And that that effect is amplified because once you get
into Congress, it's much easier to stay there.

(01:02:31):
And so if there's some arbitraryreason one person's elected
instead of the other, then it probably matters.
And then in 2000, Bush and Gore was decided by an extremely
small number of people in a verylocalized place in Florida.
And, and it's quite plausible that if felons could have voted
in Florida at the time, we wouldhave a different president

(01:02:51):
elected. So these two things do have a
pretty substantial impact. Yeah, I just, I mean, I'm
curious again, the United Statessituation is interesting that,
you know, you have this kind of parallel structures forming and
perhaps on the rehabilitation side, you know, reintegrating
with political structures, civicstructures of the free world

(01:03:14):
would be an interesting area of exploration.
I'm sure there are people looking at this, but you know,
losing all, you know, you would almost feel that the the prison
gangs and the mafias would, you know, they offer more perhaps.
And so you get recidivism and people coming back into the
prison system and not being ableto escape that that cycle
potentially. Yeah, I think that's true of a

(01:03:34):
lot of different places where mafias are important is it's
there's a tension or a pole fromthe state to the mafia, though.
The state doesn't want you to just pay their extortion.
They want you to turn to them for governance.
So there's competition over the sort of civic location of, you

(01:03:58):
know, people's minds. Yeah, or, and, and I mean, just
on that note of the state, the other thing that sort of stood
out to me, this idea of the, thetribute of the tax, it seems
that we end up at this number ofabout 10 to 30%.
It's not enough to like fully shut down and, and destroy the
productive base, but it's also, you know, it is still
extracting. And that number seems to be the

(01:04:20):
same whether it's a prison gang or the nation state, which is
very fascinating to me. So my it goes back in time right
all the way? Yeah.
I mean, I think, you know, there's an overly simplified
idea about supply side economicswhere if you tax too high,
people earn less because they don't want to pay it.
And you can sometimes increase your total tax revenues by

(01:04:41):
reducing the rate because peoplewill still earn a lot and
they're happy to give you less over more when, when you then
when you take more over less. And I, I suspect that there's
something like that going on. Yeah, Just the final topic,
David, I would like to explore if that's OK, please.
Moving beyond the context of prison economy is just a little
bit. I'm very interested in political

(01:05:04):
economy broadly and in particular the technology of
Bitcoin. Is Bitcoin something you've
encountered before? I mean, could you just give me
an idea roughly if I mean if youknow much about Bitcoin before
I. Got some Ethereum and some
Bitcoin and an account and beyond that, no, essentially
nothing about it. No, OK, well, let's let's.
Boil this down into some principles, then.

(01:05:26):
For me anyway, I see Bitcoin as a new logic of payments.
You know there's no way to undo or reverse the transaction
without consent. In principle, Bitcoin cannot be
confiscated. It can exist in secret, you may
not even know if someone has it or not.
And in short, it is the system without trusted third parties or

(01:05:48):
middle men. And the only conclusion I come
back to as I've studied this deeply is that somehow this
nature of Bitcoin can bubble up into our relationship with the
state, perhaps enabling new waysof social organization and
protection. And I wondered if you had any
thoughts based on maybe what youknow or any kind of conjecture
on what this kind of new form ofmoney could mean for the way we

(01:06:11):
interact with power structures perhaps?
I I don't have much to say aboutthat.
My sense is that it's not just the currency, but it's a way of
enforcing contracts. And since the state is what many
people turn to to enforce contracts, I would welcome

(01:06:32):
innovations and advances and anycapacity in terms of, you know,
doing that and doing that better.
Yeah, that's fascinating. I mean, I'm very interested as
we move into this kind of increasingly digital world,
maybe we see fracturing or challenges around ideas of, of
nation and borders and trade. Certainly the United States is,

(01:06:55):
is beginning this process of, of, of tariffs and there's trade
wars and all sorts of things happening.
And, you know, casting my mind down again, this goes, I
appreciate this goes beyond your, your, your writing.
But I do wonder if there's something here where, yeah,
something like this smart contracting you talk about or,
or or stateless money kind of provides a vehicle in a way that

(01:07:18):
allows trade to happen without going through these these
official structures. And in a sense, mirroring what
we see with these prison economies perhaps where new,
new, you know, there's official rules that, you know, du jour
govern trade, but actually people find ways to do things
without that middle man of the state.

(01:07:40):
So much of economic and commercial conflict avoid state
based legal adjudication becauseit's slow and it's costly and
it's highly regulated. And you know, perhaps Bitcoin
and thing technologies that function in those ways are going
to provide lower cost ways and maybe we'll ask the state to do

(01:08:02):
different things than it does now.
This would come back. What you just said would come
back to the side of institutional economics and
transaction economics, right? Like what is the cost of
adjudication and is it easy to sort it out between yourselves?
And yeah, maybe, yeah, maybe maybe there's there's something
in here. And I mean, look, this is, this
is a new area, I think, but certainly a, a real focus for me

(01:08:22):
and, and really fascinating to see this emerge, to see that the
way trade and and these these structures form within prisons.
And, and then just finally, I mean, the other place, I don't
know if this is on your radar atall, but the other place where
this is really interesting is online multiplayer video games,
which in a sense is similar kindof a structure where there's a

(01:08:43):
self-contained economy, there's official rules and then emergent
rules. There's a connection to the real
world, but it's it's also sort of, I say, is this something
you've encountered at all or is it something?
Yeah, I've seen a few papers on it.
I couldn't tell you the authors or the titles, but yeah, you
know, what's really fun about these sorts of studies is it's

(01:09:03):
something that emerges, you know, rather than being
designed. And it emerges and it turns out
that it works pretty well. And then, you know, importantly
well, how does it emerge and whyis it working well or not?
And as case studies in the emergence of social
institutions, yeah, I'm a big fan of those, those sorts of

(01:09:25):
papers. And as as long as we also look
at all of the instances where the social emergence leads to
really bad outcomes, right. It's very easy to select on the
dependent variable when the, youknow, the the economy looks
really good or things work really good.
But there's plenty of failures out there that we should also
study to know why sometimes it works better than than others.

(01:09:47):
Yes, and I'm certainly reminded of Hayek's ideas around
Frederick Hayek's ideas of spontaneous order and the
emergence of institutions here. It's not the kind of thing that
we could design. It just happens naturally from
people collaborating and workingtogether.
But look, David, really fascinating.

(01:10:08):
I really enjoyed your book and your writing.
It really got me thinking, I must say.
And I think this concept of the,the order emerging within these,
you know, ostensibly chaotic systems, it's very fascinating.
You mentioned your second book that you wrote as well.
What was the title of that one? It's called the puzzle of prison
order. Why?

(01:10:29):
Life behind bars varies around the world, so I look at Brazil,
Bolivia, some of the Nordics, men's prisons in England,
women's prisons in California, and the gay and transgender
dorms that we discussed earlier,and it's a more unwieldy set.
It's a little more exploratory, and I'm making two main

(01:10:49):
arguments there. One is why life varies across
those places. But the second and more
important argument is a methodological 1 to my
colleagues in criminology, whichis that comparative ethnographic
studies of prison social order should be a thing.
The vast, vast majority, 99% of ethnographies are single site or

(01:11:13):
single country studies and we need to take a comparative turn.
Since the 1970s, comparative political scientists have
developed an extremely good literature on how to think
through comparing cases in different places and times.
The tools are there and we as criminologists need to just grab
them and start comparing across countries to better understand

(01:11:35):
the informal life of prisons. Yeah, that's incredible.
And what's next for you is there?
What's on your radar? Are you working on any of your
projects at the moment? I've done a little bit of
initial work on rehabilitation programs in South Carolina.
They actually have a very low recidivism rate, so when people
leave their prisons, they tend not to come back.

(01:11:56):
It's been a priority. They have a lot of innovative
and it seems effective programs to get people back on track upon
release. So 1 project will be looking at,
you know, successes and failuresof rehabilitation in the United
States. And then I'm hoping to work on a
more popular oriented book on the role of policing in the 21st

(01:12:18):
century in the United States. That's fascinating.
And if people want to find more,they want to follow you.
Where? Where do you want to send them,
David? You could follow me on
[e-mail] all my papers and and
links to my books. Cool.
All right, Well, thank you very much for joining me and sharing
your wonderful insights, informative insights on your

(01:12:40):
writing and your book, The Social Order of the Underworld,
How Prison Gangs Govern the American Penal System.
Thank you. Pleasure to chat with you.
Thank you so much. I am Cody Allingham, and that
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(01:13:02):
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And you can always e-mail me at [e-mail].