Federal Prison Economics 101: Currency

No money coming in from the outside? FRP payment (restitution, fines, etc.) taking up all of your prison paycheck? There are other ways to make a living in prison. You just need to get yourself a hustle and put your full faith into the credit that backs the almighty postage stamp.

In Federal Prison, Stamps Are Money

When I was at FPC Duluth, the value of a 1st class "forever" stamp was pegged at 30 cents. You may have paid 45 cents for it at the commissary, but on the 'pound it was worth 30 cents. On occasion, if there was a shortage of stamps on the compound (i.e., demand exceeded supply), the price of stamps would creep up toward actual value.

Such inflationary periods only really affected stamps bought in "books" of 20. Sometimes, they actually were a book of stamps like the ones you might purchase at the post office (or in our case, the commissary). More often, a book was a cut-up collection of mismatched, well-worn stamps, often from different vintages, usually held together with tiny, black rubber bands that guys who wore braids would otherwise use to keep their hair tight. A store-bought -- or "flat" -- book, was even more valuable during inflationary periods than a regular book.

Stamp Inflation

On the FPC Duluth compound, and I'm sure the same is true at other facilities, stamps were in circulation like dollar bills circulate on the streets. A lot of them were older, many had been on the compound for years. New stamps were always being added by people who would buy them from the commissary or otherwise acquire them from the outside -- although sending in stamps through the mail or delivering them to inmates in any other way is against institution rules, they still came in illicitly. But, at the same time, stamps were removed from circulation on just as regular a basis.

Inmates mail letters, or send out art or crafts that they made. In some cases, the stamps in circulation were so old that they actually weren't "forever" stamps, and therefore valueless. Such stamps were usually passed off to new inmates before they got wise to their inability to use them and just held onto them until the next bus of eager-but-naive campers arrived on the compound. Occasionally, a more scrupulous inmate would come across a soft, faded 33¢ Purple Heart stamp and just throw it away.

 Regardless of how the stamps enter and exit circulation on the compound, there is a continual ebb and flow of supply. For the most part, this works. That is, until a more macro-level event comes along to mess up everything.

Inflationary Events

On the compound, several predictable, inflationary events occur throughout the year. Mind you, such events don't increase the purchasing power of stamps, just the cost of obtaining them if you actually need the physical stamps. During football season, stamps become scarce on the weekends as bookies and pool organizers hold onto bets and take the "stickers" out of circulation. So if you need to mail a letter or pay somebody that requires "cash" you should plan accordingly. Otherwise, you may be paying $8 for a flat book on Sunday that you could've had for $6 if you bought it on Wednesday.

Stamps are damn near impossible to come by in the days leading up to the Super Bowl. The NCAA Tournament also puts some inflationary pressure on the cost of stamps. As inconvenient as such times are, you can always plan ahead. Moreover, you know that by Monday or Tuesday, everyone will be paid out and you can go back to the normal pricing.

It's the unpredictable "market mover" events that cause more serious problems on the compound... we'll get to those in the next post.

Federal Prison Economics 101: The Basics

The federal prison economy pretty much reflects the way things work in the real world. Except that it's just that: a reflection. Everything's a little blurred around the edges and illusory. On the other hand, there's nothing quite like a little time in prison to make you realize just how much a fiat currency -- like the US dollar -- is based on faith and cooperation to begin with. A little rocking of the boat and all hell breaks loose.

The prison economy has two distinct bases: "outside" finance and "inside" finance. In this post, we'll take a look at the former. I'll follow up with a look at the inside economics of prison camp in my next entry.

Where Does It Start?
The prison economy has to start somewhere, and for all intents and purposes, it begins with our family and friends. You all "put money on our books" -- i.e., make a deposit in our Bureau of Prisons (BoP) inmate trust account -- by sending a money order or wiring funds to the BoP lockbox facility in Des Moines. After it's processed, the funds are then available to us:  for use at the commissary; to purchase educational or craft materials; to downloand songs for MP3 players; for medical or dental co-pays; or, in large chunks, to make payments toward fines, criminal restitution and child support. Most importantly, for many, the funds were used to pay for phone calls and email minutes.

The other source of income that inmates receive is from prison "jobs". In some cases, where a facility has a Unicor operation -- a manufacturing arm of the BoP that makes chairs, desks, file cabinets, bed frames, plastic spoons, etc., to be used in government agencies like the BoP itself -- inmates can make several hundred dollars per month. Where I was, FPC Duluth, anyone earning more than $30 per month for his job (about 30 hours per week) was "prison rich". I made around $18 per month cleaning the bathrooms in our dorm. 

That being said, it's not like we really had to work very hard; nor did we exactly have bills to worry about. The wages we earned were simply a little extra to spend on the email terminals and a subject about which to piss and moan -- probably, the most popular prison camp pasttime.

For most, camp wages are not a major source of income. At camp, the majority of US dollars comes in from friends and family. Others, however, don't use -- or need -- US dollars to make a living in federal prison. They rely, instead, on the facility's "inside" economy, which a future post will examine a little more closely.