All Commentary
Saturday, April 1, 1995

Economics 101–From Prison

Government Bureaucracies Tend to Become Self-Perpetuating

Education, as the late Malcolm Muggeridge observed, has become the great mumbo-jumbo and fraud of our time. But prison, as it has through the ages, continues to teach invaluable lessons.

It was only when lying on rotting prison straw that Alexander Solzhenitsyn finally understood that the line between good and evil does not run between nations, political parties, or social classes, but right down the middle of every human heart. The great Russian writer would not have learned that essential truth in any American public high school, or even at Harvard, where he once received a rather frosty reception.

A more recent case in the United States brought home some lessons about the prison system itself.

Patrick J. Nolan was once the rising conservative star of the California Assembly, where he served as Republican leader. Mr. Nolan became embroiled in an elaborate FBI sting operation, in which the federal agency went so far as to establish a phony shrimp-processing company and even float phony bills in the California legislature. One of these bills passed and agents had to tell Governor George Deukmejian to veto the measure because it was a fake. This case itself is a lesson in how the government spends our money but there is much more.

Nolan was one of those who accepted contributions from the agent-entrepreneurs. While the details of the case would require a lengthy article, some Sacramento insiders believe Mr. Nolan is innocent. But after another high-profile target of the scam pleaded guilty, Mr. Nolan didn’t like his chances and caved in. A lawyer with a degree from the University of Southern California, Mr. Nolan found his economic education continuing at the Federal Prison Camp in Dublin, California.

“It came as quite a shock to me,” Mr. Nolan writes, “to learn that our judicial and penal systems are just like every other bureaucracy … [W]here was my healthy suspicion toward government structures? Why did I think these agencies were exempt from the excesses of other parts of government just because I agreed with their aims?”

Like all bureaucracies, says Mr. Nolan, “the judicial-penal complex spends lavishly trying to convince us they are doing all they can to protect us and if they had a little more money they could get the job done.”

Mr. Nolan realized that the system had a stake in expanding, not reducing, the number of people under its control. Hence, bureaucrats indulge a classic “bait-and-switch” operation in which they exploit the public’s legitimate fears of violent crime as the basis for yet more spending. But Nolan notes that when they get the money, as they have in the recent Clinton crime bill, they don’t target murderers, rapists, and muggers. Rather, says Nolan, “when the dollars are spent most go to combat a newly expanded list of non-violent, often unintended and, in fact, often quite innocent transgressions against the bureaucratic regulations and controls government increasingly imposes to hamstring the people.” In fact, he says, “they go after non-violent criminals because they are easier to get.” And here Mr. Nolan speaks from direct experience.

The former assemblyman noted that a “substantial portion” of his fellow inmates had been incarcerated for “bureaucratic ‘crimes’ arising from disputes with government employees over billing procedure, loan documentation, late filing of documents or other violations of statutes that are technical in nature.” The message the system sends, he says is “submit to the bureaucrats or be destroyed.” And that process comes with a price.

“Bureaucrats and government lawyers,” he adds, “consumed massive resources in prosecuting these men. Courtrooms were tied up for weeks while their cases were tried. Now they languish in prison, costing the taxpayers thousands of dollars for food, housing, and prison guards, not to mention the loss of their productivity to the economy.” But on paper each conviction looks good, “like the body counts that came out of Vietnam.”

Mr. Nolan also observed that government lawyers, prison builders and suppliers have done very well under the current system, which welcomes lock-’em-up measures such as “three strikes and you’re out.” According to the most recent figures, American prisons now house over one million inmates—a staggering, unprecedented number.

It would be easy to dismiss Mr. Nolan’s rude awakening as a self-serving defense, but that would be to miss an important lesson, indeed, a challenge to his fellow conservatives. Says Mr. Nolan: “All government bureaucracies–even those founded to do things we like–not only tend to become self-perpetuating, they expand to serve those who work for them and do business with them.”

It has seldom been put any better, even by someone not in prison.


—K. L. Billingsley
Mr. Billingsley is a media fellow of the Pacific
Research Institute in San Francisco.