Bernie Roddy writes "The following is an attempt to interpret for the prison activist the thinking typically taught in courses in business ethics, and to apply some of the language to the industry of imprisonment.

Advocates of a free market economy are generally social contract theorists. In defense of the free market, open competition is thought necessary to encourage innovation in production methods and a tailoring of production to meet demand. The result is supposed to be the best product at the best price, weeding out trivial products for which there is no need. All this serves the common interest. However, social contract theorists hold that obedience to law is required of anyone who would enjoy its protections and advantages. This means that if you agree to accept, say, a court's decision in your favor, you must also accept the one against your interests. Only by agreeing to abide by unfavorable rulings will others agree to abide by them when the decision of law favors you to their disadvantage. By refusing to sacrifice your own interests in some cases, you risk going it alone in what is called the "state of nature" and considered a terrible alternative.

If we consider together such free market thought and social contract theory, we can see that what is found objectionable in civil society (a form of natural selection without social protection) is embraced in the private sector (where it is considered necessary for innovation). Where public life is concerned, the "state of nature" is held to be, in Thomas Hobbes' terms, a condition of scarcity, limited altruism, equal need, and limited power on the part of everyone, and is therefore to be avoided even at the expense of periodic sacrifices in self-interest. But an exception is made where competition is valued rather than feared. Cooperation and the personal sacrifices it requires is to be preferred to a struggle with other selfish individuals, except where the "invisible hand" of market forces is taken to ensure the general welfare of a capitalist economy.

Why the change in attitude about this state of nature, hostile to human flourishing without cooperation, but conducive to it in competition? The answer is that if it works to your disadvantage, you call for a social contract that protects you, but if you are the stronger, you defend competition on the grounds that liberty is to be highly valued. This is why the business community is a staunch defender of government and the respect for law in civil society but resists what it considers government intrusions into the private sector, where violations of pollution laws are treated as comparable to parking violations. (This is also why enforcement resources should be directed more toward punitive measures against corporate abuse than toward the incarceration of individuals engaged in minor drug transactions.)

Which way business thinks depends on which way will protect and advance corporate power. A similar choice is offered on a separate question: What justifies a corporation's existence? That is, why allow corporations to operate at all? On one account, a corporation is justified by the arrangement it has with society at large. It offers goods and services of value to society, and failing its end of the deal, its support and protection is no longer due. A corporation's profitability is thus insufficient to justify requiring that society permit it to continue operations, because society must also value what it contributes. As the prison and weapons industries show, profitability can be obtained where social value is absent. This is social contract thinking and it is a threat to corporate power. It considers every corporation bound by social responsibilities and rests the power to permit their operations in the hands of the people.

On a competing account, everyone has a natural right to do what they want with their property, and any corporation sustained by voluntary private investment is therefore legitimate. A corporation's only responsibility is to maximize return on investment, duty deriving from a contract, but a contract with shareholders, and one that depends for its legitimacy upon a natural right. Because nobody has a right to other people's property, nobody has a right to anything produced by it, and your investment remains yours, together with any profits. Interference in this process is held to be comparable to theft. A prominent proponent of this view, Robert Nozick, argues that taxation of any kind constitutes a form of theft. Although the public interest is supposed to be served by protecting private investment, the defense of private property does not turn on its social utility. There is no responsibility that shareholders have to make any socially valuable contribution through their investments. On this view those who apply themselves to the conversion of natural resources into products and services that satisfy some sort of demand, whatever it is, deserve the personal rewards and have a right to them. Scant protection is given public resources preyed upon for private gain. We can call this natural rights thinking.

Just as corporations can be expected to embrace the social contract only when advantages cannot be ensured by coercion, they will prefer defending a natural right to property unless the public threatens to confiscate it. They will deny that the existence of a corporation is justified by some sort of contract with the community and insist that a natural right is at issue. But this social contract theory of government is subject to a criticism that will transfer to the version of the social contract theory designed to justify corporations. Critics have argued that western governments are more likely the result of force followed by refinements for greater control. Beginning as rackets to be modified into democracies, contracts serve less as consensual agreements than as modifications of ineffective coercion. Slavery gives way to wage labor and the result is an improvement in the administration of work. What appears to be the result of consensus is nothing more than the consequence of discipline obscured by the language of freedom. We are hard pressed to find anywhere evidence of a consensual contract between citizens and government in which free and informed parties enter into agreement. As David Hume put it, someone who finds himself on a boat with a tyrant cannot be said to have agreed to cooperate simply because he prefers to stay on board and reap the benefits.

Corporations are no different. They operate by force, and this is gradually refined by necessity. They accumulate property and apply maximal control compatible with efficiency. Where control is obstructed contracts appear. There is little evidence that the actual arrangement between corporations and society is anything other than refinements in mechanisms of control over workers and markets.

More than profitability, however, the bare control over property drives corporate behavior, because it motivates individual behavior and the managers and executives of corporations are individuals. Increased worker participation might improve productivity, for example. But even if worker control over decisions regarding grievance claims, hiring and firing, promotion and discipline, payscales and shift schedules, were known to improve productivity, the increase in worker control itself would be enough to dissuade management from relinquishing control. Here management will claim its right to property. Workers themselves would qualify as property if this were at all possible. If you can define enough things as your property, questions about "liberty" become questions about the range of uses you can make of it, and so you can continue to see yourself as an advocate of freedom as you pursue sweatshop policies. An undue focus on corporate profitability would require that you relinquish control to workers and shareholders if this were more profitable.

It may often happen that your property is intimately connected to the people you hire to operate it. This puts in conflict the privacy of workers, on one hand, and your control over your property, on the other. Applying the social contract, you would want to say that anything workers agree to do in exchange for wages is within your rights to enforce. Because workers are easily replaced and the stakes are so much higher for the job applicant, you can write the contract you want and then rely on social contract thinking to do the rest. This allows you to monitor individual worker activities in detail and run drug and personality tests as long as these tactics can be excused as "job related." Your right to the job performance specified in the contract serves to excuse expanding your control over the private lives of your employees. It is essential to your control over workers that they accept the myth that they are responsible for their end of the employment contract and are not persuaded that the relationship is essentially one of coercion. Only then can they be convinced that their privacy must be sacrificed as well.

The other area where social contract thought must be carefully manipulated is liability. Incorporated businesses have limited liability. They cannot be sued for more than what is invested in them, which protects the home and possessions of executives and shareholders. In order to persuade people to limit the liability for the harms resulting from business, such protection is held to be in exchange for the goods and services thereby encouraged. So even if a company is thought morally responsible for more harm than can be compensated for by the value of the company's assets, society agrees to bear the burden of the additional costs, letting managers and shareholders off the hook. However, the corporate attitude toward product liability replaces social contract thinking with questions of blame and negligence. If a product has been adequately tested for normal uses and a consumer is injured in an unexpected use, management insists on matching liability with culpability. This means that if the company cannot be blamed for some oversight, the injured consumer is left with the costs of health care bills and lost work. Since the company is not culpable or at fault, having performed all reasonable safety tests, it is not liable. If there were a social contract, it would not matter whether management had taken every reasonable precaution against defects. Such a contract would require compensation. But all thought of such a contract is abandoned as soon as the issue concerns product liability rather than the grounds for limiting liability to incorporated firms.

Now consider the prison industry. Prisoners constitute a growing proportion of the private sector in the U.S. (Currie) For the 30 years between WWII and 1972 the proportion of the population that were prisoners stayed between 93 per 100,000 and 119 per 100,000. Over the next 25 years, between 1972 and 1996, the proportion of our citizens held in prison rose to 427 per 100,000, a fourfold increase. The actual number rose from about 200,000 to 1.2 million. These numbers do not include the most recent ten years, but by all accounts the trends continue. Moreover, by one account there are about 4.6 million Americans who are legally prohibited from voting because of a felony conviction. (Sentencing Project) According to the study, if we take only disenfranchised veterans who have been denied the right to vote as inmates, ex-felons, or people on parole or probation, the total is 585,355 Americans. Combine the rapid expansion of the prison industry with the disenfranchisement of its inmate or paroled population and the withdrawal of economic support of the neighborhoods in which inmates have struggled to survive, and you begin to understand the role of the prison industry from the perspective of business. I do not want to digress to the role of race in all this, but there can be no doubt whatsoever that the bulk of the costs of the reorganization of American society by means of the transferal of impoverished neighborhoods into the prison system is being paid by black and latino communities.

Prisoners are an attractive work force. Like slaves or maquiladora and sweatshop workers, they are easy to control under conditions in which workers could otherwise be expected to rise up against employers. The South Carolina Department of Corrections (SCDP) was audited by the state in 2003. (Rigby) The report's findings covered the period from July 2001 to June 2003 and reveal several ways in which the business of bondage enlists government cooperation. Obviously, firms do not need to provide prisoners health insurance or other benefits, and prisoners have no right to organize. The workplace challenges thrown up by various civil liberties are quickly resolved against labor. Questions about rights to freedom of speech, equal opportunity, privacy and the like are easily accepted by Americans as out of place in the prison. But although the standards for maintaining respectful working conditions may be different, convict labor bears certain similarities to the workplace on the outside. SCDP's Prison Industries Program (PIP) works like a temp agency that operates with greater control over wages and incentives to labor-hungry firms than do most temp agencies. It leases inmates out to private companies who pay the corrections department the compensation that is to go toward things like child support, victim restitution, and room and board. (Health care services for inmates is another fertile ground for business "innovation.")

The report on South Carolina's convict labor program, PIP, establishes that an unfair advantage is given to companies who have access to PIP labor. Although state laws are written to contain the competitive advantage that comes with slave labor, the program effectively permits paying wages well below the standards for the area. In addition, state law also requires state agencies to purchase SCDP goods and services when competitive with private vendors, and SCDC is not required to submit bids or quotes to state agencies before being selected for contracts over private companies. Thus, what would otherwise go unnoticed as merely a return to plantation working conditions, has come to public attention for its unfair competitive advantages. (Smith and Wright describe a suit brought by a disgruntled competitor of the Washington Department of Corrections in Washington state.) This illustrates the way in which social contract thinking conceals what I called earlier its function of modifying for efficiency those means of coercion that are no longer effective.

Maintaining or increasing crime and prison rates is in the interest of corporations connected with the prison industry. Such corporations accept construction contracts for new prison facilities, provide goods and services like food and health care to inmates and staff, and use prison labor for hire or to produce goods for sale. In general, the individuals who will become prisoners are rarely a threat to the affluent. So, prisons can be treated as part of the private sector, rather than as a public institution, but as a part that is excluded from the domestic environment of their managers. Perceived more and more as private property, like any other industry, prison operations are insulated from the kinds of oversight expected in the public sector, and companies can rely on the public perception of prisoners as deserving imprisonment to excuse falling short of expectations in "corrections." Like a third-world worker, a prisoner is said to have accepted the terms of a contract according to which doing time and seeing their rights abrogated is an appropriate exchange for criminal activity. In the early 1970s this perception of the prison was challenged when prisoners protesting their treatment at Attica were massacred. On September 13, 1971 33 inmates were shot dead in a courtyard by armed guards stationed above them at the prison complex. But the improvements that resulted from the exposure of prison conditions at Attica have been subject to renewed attack by our representatives. In 1995 Congress decided to deny inmates access to Pell grants, and 22 years of successful inmate education offered by the Green Haven Prison (to which 500 inmates were transferred from Attica) came to an end. (Zahm, Taylor) Knowledge is power. Businesses instinctively understand this and recognize it as a threat.

The existence of a prison industry raises questions about the manner in which social contract or natural rights thinking is supposed to justify the existence of corporations involved in prison-related goods and services. For example, the idea that a corporation's existence is justified by its agreement to provide something of value to the community becomes problematic if the service it provides consists in constructing cages in which to imprison a growing proportion of the population. If we consider the fact that those who are imprisoned are very likely to have been denied basic educational and economic opportunities, the violated contract of interest becomes that between a citizen and its popularly elected government, rather than any that has been violated by the offender. Or take the popular notion that a corporation's only responsibility is to make a profit for its shareholders. The idea derives from the notion that the only right at issue is the right to property. This makes some sense only if investments are used to pursue innovations that lower costs or improve sales without merely benefiting from, or encouraging, the misfortunes of others. But now add in the fact that prisoners themselves constitute a kind of resource by which to profit, and all motivation for rehabilitating prisoners vanishes. The prison industry's objective is to profit from imprisonment, not to raise the quality of life for the disadvantaged in this country. And as long as management sees its responsibility to be toward shareholders, the remarkable similarities between prison industries and really lousy, corrupt government agencies will be suppressed.

Nobody who witnesses this sacrifice of public interest to private advantage could be surprised by it once they learned who holds public office and who sits on corporate boards. Economic disparities in the U.S. are incredible, and legislators, if not drawn from corporate board rooms, are quickly beholden to them. The case of Prison Rehabilitative Industries and Diversified Enterprises (PRIDE) in Florida illustrates a novel twist to this problem. (Reutter) Designed as a way to raise state profits from its rehabilitative services, PRIDE administers prison labor, education, and post-release job placement. Its purpose is to emulate a for-profit corporation, but to do so with the protections against liability enjoyed by the state. Such protections require accepting public responsibilities.

Paying 20 to 55 cents an hour, the jobs offered by PRIDE remain highly desirable to inmates subject to Florida's debilitating prison conditions. In 1979 the federal government, seeking to encourage state and local efforts to provide job opportunities comparable to those on the outside, created the Federal Prison Enhancement (PIE) program. The deductions taken by PRIDE from the wages generated by prison labor under the PIE program go toward victim restitution, family support, taxes, and inmate room and board. However, for a variety of reasons, PRIDE proved unprofitable. It therefore created Industries Training Corporation (ITC), designed to offer prison labor to PRIDE for a cost. But operations of ITC are virtually indistinguishable from PRIDE, including PRIDE's CEO, former jail warden Pamela Jo Davis, who is ITC's president. ITC is released from the restrictions against pursuing profits that PRIDE works under, and so the final result is that ITC risks public funds to undertake ventures involving prison labor for the purpose of private gain. The board of PRIDE, having figured out how to tap public funds, has now learned how to redirect the profits by means of ITC.

In his article on PRIDE in Prison Legal News, David Reutter writes that, at first glance, prisoners who work for PRIDE appear to have a significantly lower recidivism rate (18% for 2001) than the Florida Department of Corrections' general population (33%, dating back to 1993). They are apparently less likely to return to prison after release. However, Reutter says, PRIDE's prison labor is more likely to be older, white, better educated, incarcerated longer, and serving longer sentences. These factors narrow the range of prisoners who are released in a way that artificially suppresses the recidivism rate, What remains very clear, however, is that the beneficiaries of PRIDE's restructuring are corporate executives posing as public officials.

If the prison system in the U.S. were an independent state, and if inmates were offered choices between several different managers from the likes of PRIDE, it would qualify as a democracy blighted by economic caste and a prohibition against emigration. If prisoners were offered the option of leaving the system only to enter one that holds fewer prospects, it would resemble the employment conditions of impoverished residents in a third-world nation. Suppose now that prisoners of this state attempt to argue that their democracy is unjust, that it is not excused by the bare fact that the terms of the employment agreements entered into by them are accepted voluntarily and are preferable to the personal consequences of refusal (sitting in a cell). Such a society would have lost all sense of the social good, the private interests of the affluent would have completely overwhelmed whatever went by the name "public good," and any social change of significance would turn on the extent to which prisoners satisfied with their lot could be persuaded to join forces with those with better vision, greater courage, and less to lose. Such a society would be consistent with the interests of private enterprises that have access to the coercive resources of the market. Imagine that with time productivity increases as the barriers to civil liberties are removed in the general population, and that prison life is tolerated by a larger and larger proportion of inmates. If a growing proportion of prisoners were also being held in solitary confinement, how long could prisoners be expected to await the legitimation of resistance before taking action?

Bibliography

Currie, Elliott, Crime and Punishment in America (Henry Hold, 1998).

Davis, Angela Y., Are Prisons Obsolete? (Seven Stories Press, 2003).

Dyer, Joel, The Perpetual Prisoner Machine: How America Profits from Crime (Westview Press, 2000).

Reutter, David M., "Florida's Private Prison Industry Corporation Under Siege," Prison Legal News, January, 2005, 1 - 5.

Rigby, Michael, "South Carolina Prison Industry Program Problematic, Audit Finds," Prison Legal News, February, 2005, 22.

Sentencing Project, "Disenfranchised Veterans in the United States," www.sentencingproject.org/pdfs/1023.pdf.

Shaw, William H. and Barry, Vincent, Moral Issues in Business, 9th ed. (Wadsworth, 2004). I used various essays from this text for a course in business ethics I taught during the Spring term, 2005.

Smith, Roger and Wright, Paul, "Washington Prison Labor Program Struck Down," Prison Legal News, December, 2004, 22.

Taylor, Jon Marc, Prisoners' Guerrilla Handbook to Correspondence Programs in the United States and Canada (Biddle Publishing, 2002). In addition to the listing of programs, this book iincludes several essays by Taylor about his own experiences and researches as an incarcerated student.

Zahm, Barbara, The Last Graduation (58:00 min. videotape, Deep Dish TV and Zahm Productions, 1997)."