Privatize the Prisons

Overcrowded prisons. It’s a problem indeed. Our culture has become so corrupt that our prisons are completely full, and we don’t have room for any new convicts. What’s more, these prisons are very expensive, and cost taxpayers a bundle. Building new prisons is more costly than we can afford, with the budgets already broken as it is. Yes, a real problem.

Solution: Privatize it.

How in the world do you privatize a prison?

Prison convicts are capable laborers. They have chosen to use their skills for ill conceived schemes contrary to the laws of the land. But they have skills. To just coupe them up behind bars, shooting the breeze is a ridiculous waste of wealth. They are moochers, not producing any value to society, but sucking out their life sustenance from it. Why in the world are they not at least providing for themselves?

Think of it this way. A businessman produces a certain product. He needs cheap labor to produce it. The government sells a prison full of cheap labor to this businessman, passing the duties of securing them, feeding and housing them, protecting them, etc. to the business. The business then gets a decent sized labor force, employing the prisoners in the work of their business. It’s really not a bad trade at all. The business maintains the prison, keeps prisoners secured, feeds them, disciplines them when necessary, educates and trains them, and puts them to work. The government not only is rid of the responsibility of securing and providing for these convicts, but they are paid to get rid of it.

There will have to be audits and assurances that the 8th Amendment rights aren’t being violated, and that the prisoners are being treated fairly. But overall, the responsibilities for these prisoners fall to the businessmen. I hesitate to make the comparison, but it really is akin to the slave trade of old. These convicts have, by their improper infringement on the rights of others, forfeit their own rights as citizens, and therefore have lost their rights of liberty. They are then, by definition, slaves of the state. The state has every right, as slave owners did in the past, to sell their slave property to others who would certainly use them far more efficiently than the state does.

A prison, run by a business, will be run like a business. Those who are productive will be compensated. Those who are not will be incentivized. Again, protections will necessarily be in place to ensure that cruel and unusual is not a part of the incentivizing. But certainly positive incentives, and occasional negative ones, will prod prisoners to be better and do more. Prisoners could even be paid. Weird concept, I know. But wouldn’t it be a great if a convict could earn savings through hard work, so that a decent sized fund is there waiting for him when he gets out, thus enabling him to make a new start for himself? Or he could continue to provide for his family while behind bars. And the time in a real, productive, legal business will give them skills and experience that will help them get work when they get released.

Let’s let the private market have a crack at the problem. I bet it fixes itself better than anyone would have hoped for.

A Search For Hope

Hope. It’s kind of the buzz word these days. We hear it all over political speeches and General Conference talks. It’s a word that inspires a positive premonition in us. But what is it?

A few months ago I considered writing a book on the 3 core principles of the Gospel outlined by Paul: faith, hope, and charity (see 1 Cor 13:13). I’ve given some thoughts on faith and love in previous posts. The topics are deep and interesting and certainly substantive enough to fill a book.

But hope… We’ve lost our understanding of hope. And I’m having a hard time trying to rediscover it.

What is hope? Is it an expectation of better things to come? That’s how we have it defined in our modern lingo. But isn’t that faith? Or are they the same? Paul certainly implied that they’re different.

I have yet to find a definition that feels right. Please feel free to comment any thoughts you may have.

So far, I have only figured out that hope is a byproduct of faith. Moroni 7:40-42 shows this. “Wherefore, if a man have faith he must needs have hope; for without faith there cannot be any hope” (v. 42).

Elder Wilford W. Andersen pointed this out in his address in the Saturday morning session in this last Conference. “Hope comes from faith in Jesus Christ. He has already overcome the world and has promised that He will wipe away our tears if we will only turn to Him and believe and follow. Some who at this very moment feel desperate or discouraged may wonder how they can possibly regain hope. If you are one of those, remember that hope comes as a result of faith. If we would build our hope, we must build our faith.”

I believe that the list that Paul gave us was not, in fact, just a list of primary gospel principles. Note that he indicates that the greatest of these is charity. Is charity really more important than faith? No, that’s not what he meant by “greatest”. What I believe he was saying is that it is a step by step process. Charity, as Christ possessed it, is the ultimate goal. But faith is our starting point, which leads to hope, which hope then leads us to our goal of charity.

I feel that this is an important piece that we’re missing. If we are lacking in charity, we must first grow our hope, just as we must increase our faith in order to build hope. It’s not like it’s an automated process, where if we have faith we automatically beget hope, and hope automatically produces charity. No, we must preach charity just like we preach faith. We must work to have each of these things. So hope must be striven for. But if we are to obtain it, it would certainly help to understand it.

Government "Solutions"

Thomas Sowell once pointed out that, when it comes to economic matters, generally there really aren’t any solutions, only tradeoffs. If this is true, than it is a vital concept for the American public to grasp, as our politicians continue to bombard us with their “solutions” to our economic woes. If there are no solutions, we ought to be far more skeptical of the proposals they try to push.

Incumbent Utah Senator Bob Bennett had a segment on a local radio show, where he pitched his campaign platform. He described his private sector experience and success, and pointed to that as evidence of his ability to produce innovative solutions for the American people. This hacked me off. I called into the program the next day to express my displeasure. “We don’t want government to provide innovative solutions”, I told host Bob Lonsberry. “We don’t want them to provide solutions of any kind. We want them to leave us alone so we can solve our own problems.”

Let’s examine Dr. Sowell’s claim for a minute. Economically speaking, there are no solutions, only tradeoffs. He didn’t blanket this statement over all cases, but said it is typically the case. Is it? If so, when is it so, and when is it not?

In private industry, are there solutions? Absolutely. Creative ideas to make businesses solvent and successful abound. Are these just tradeoffs, allowing one business to thrive solely at the expense of the failure of another? This is a commonly held notion, but is absolutely false. The world is not a pie, where taking a bigger slice means less for the rest of us. If you produce more via hard work and innovation, and are therefore more successful, it is because you have added to the pie, making the pie bigger. Thus economic solutions do indeed exist in wealth producing industries.

What about government? Government produces nothing. It is completely and entirely a service sector. The services they provide are paid for with the wealth produced in productive industries. Thus any solution they invent cannot, by nature, come from an increase in production of wealth. They produce no wealth. Government tends to treat the economy as a pie because for them it is. They can only increase the size of their slice by taking from other slices. Any solution they invent cannot come from government. Unless they find a way to govern private industries to become more efficient and productive than they are now of their own accord, they cannot increase the size of the pie. Thus any solution can only involve moving one part of the pie to another. There indeed are only tradeoffs.

Many argue that moving this money around could result in a more effectively balanced distribution, so industries can grow better. Actually, the typical argument is to take from the rich industries to give to poor people. This will, they argue, give the poor a chance to improve their station and get the ball rolling for higher education and thus higher wages. Is it possible then? Could a well-planned redistribution of wealth create a more effective growth rate for the economy? Yes, it’s possible. But those who argue for it don’t understand the mechanism that’s already in place.

If an industry has the potential to create good returns, and produce high amounts of wealth, but lacks sufficient funds to get the ball rolling, what happens? If an industry indeed has a strong plan for growth, investors from across the world are more than willing to fund the project, with the expectation of a decent return on their investment. What about the argument that poor people need some help getting started? Banks are already very willing to invest in students by giving them loans to get through school. Why is it, then, that some people choose not to go to school? Is it because they can’t find a way to pay tuition? No, it’s because they either don’t like school, or they don’t feel it’s a good investment of their time and future earnings. It’s their choice to not attend school. If you give them more money, is that decision going to change? No. You’re not investing in them, you’re donating to them. There is no return on investment. It is simply a wealth transfer.

When we come to understand wealth and money, we will learn that Wall Street is not the enemy of the nation. It is not the cause of a huge and unfair maldistribution of our resources and wealth. It is exactly the opposite. It is the most effective system available to put all the resources exactly where they can best be used.

Government, on the other hand, is the economic enemy of the nation. It’s kind of strange to think about it that way. But Government “solutions” are not solutions, but tradeoffs. And in nearly all cases, these tradeoffs are for the worse, simply because they move money away from the ideal balance that was established naturally by more prudent investors who are willing to put their own money on the line for these companies.

Let government deal with social issues as they will. But we need to stop them from providing any more economic “solutions”.

The Food Standard

I’ve been doing a little bit of study on monetary policy the last couple of days. It’s interesting to see the different viewpoints on how money works. Most of these views fall short of a true and full understanding. As a result, the policies proposed by politicians, economists, and analysts have certainly fallen far short of able to accurately manipulate currencies to produce the desired results.

Politicians, having almost no concept of wealth and money, find it personally advantageous to increase the monetary supply, thus giving themselves “free” funds to buy power and support with. The Federal Reserve has mistakenly dedicated itself to attempting to control interests rates rather than the money supply. Interest rates cannot be accurately controlled, nor should they be manipulated. The money supply, on the other hand is fully in their power, and they’ve done a terrible job with it.

Money used to be real. For centuries they used precious metals as trading mediums. These metals had real value to those people, and thus the value of the traded item was esteemed equivalent to the value of the metal. America, during the 17th century, used tobacco as their trading medium. Again, a certain value of tobacco was traded for an equivalent value of goods. Eventually America went back to gold for their trade medium. Each Federal Reserve note (dollar) represented an amount of gold stored by the Fed. Theoretically, you could have returned the note and received the gold you owned.

Decades ago, however, our politicians got tired of being tied to a physical commodity for their currency. It allowed for no currency manipulation, thus preventing them from exploiting the contemporary economic theories to their advantage. So they got rid of the requirement. Now a dollar theoretically still represents a value, but it is just a representation. The value it holds is imaginary, it is not contracted to anything of real value. Thus it only successfully serves as a currency if the people who possess them agree upon their value. This is a very risky and unstable system.

First, it allows for, and even encourages monetary manipulation. The mere possibility itself promotes skepticism, but when currency is manipulated, trust in its value naturally and correctly diminishes. Second, it creates an imaginary market, a market of value. Value does not itself have a value. It is not a product to be traded. It is an idea, an opinion. Thus the currency market is false and unstable, having no real foundation. And third, establishing an economy on imaginary currency provides no safety net to fall to. There is no physical resource behind the paper to use in a crisis. If the currency loses its value, you are left with nothing but empty promises.

Because of these issues, many have called for a return to the gold standard. Thus there would be a valuable resource behind every dollar bill, and actual resources in the bank if and when we run into hard times. But is gold really what we want to be turning to in a crisis? What value does gold really have? It is a great value when economies are good, because it is relatively rare and nice to look at. But if we need to use it to get the economy moving again, of what use would it be? Would foreign nations give us their resources in exchange for gold if they needed those resources as well? What good does gold do for them? The high value that we have put on gold is the same as the value we’ve given to the dollar. There is no real value except what we imagine it to be.

To illustrate the point, if everyone considered gold to be unpleasant to look at, would it still be valuable? If the answer is no, then its entire value is based on an opinion. It is imaginary. And if economies fail, the imaginary value of gold will suddenly disappear.

Instead, money should be based on something of real value, something useful. What, if there was no money, would be of such value that he who had a lot would be considered rich, and he who didn’t was poor? What would people trade their products and services in order to obtain? This is a stable resource, the resource on which we should base our currency.

The answer that came to my mind was food.

Consider that as a scenario. Our monetary system is based on non-perishable food and seeds. Fort Knox is a huge storehouse of food. The Federal Reserve is a reserve of food. All banks are food banks. Supermarkets would still exists, but we could pick up basic canned food items from the bank if we wished. Each can deposited to the bank returned a market dollar value in currency. The currency is then used as it is today. But if ever needed, the money could be returned for cans of food. That currency note is actually tied to food, so when you pay for something in cash, you are trading food for that item.

At first I wondered if this would not lead to inflation. All of sudden money really could grow on trees after all. Farm production would certainly increase. This is what happened in the 17th century with tobacco. The number of tobacco farmers grew quickly, and the tobacco production grew to huge surplus levels, and thus the value of the tobacco dropped significantly. This was one of the earliest known problems with inflation. Would having a food based currency not lead to the same issue? Well, not really. If the supply surplus is huge, than the value of food could certainly drop, just like anything else. But of all things, food is the one thing that can never collapse in value. Its demand will never diminish.

Inflation would not actually happen until the surplus covered the world, since food is of great value to all nations. Selling food to foreign nations for their resources would be easy. Thus our surplus would serve, not only to provide a safety net in case of collapse, but also as barter items for foreign trade. So food would not begin to lose value until the entire world was covered with food. An interesting solution to the world’s starvation problems. At this point, if the production of food was to continue to increase, and inflation began to happen, the free market would naturally balance the production. New food producers would stop popping up as they become less profitable, and service industries would grow instead. Food, and thus money, would find its natural and optimal balance, and thus promote the optimal conditions for economic growth.

I see only a couple of issues with using a food standard for currency. First is determining a system of what foods to buy, and what the value of each item is. Quality and taste determine the value of food. This could be resolved with market values, as the food market would never cease to exist. But I could foresee issues with food companies fighting over determined market values. Of course, these issues would be resolved with markets as well. Banks will try to get the most food for the buck. So will consumers. Competing food producers will fight for the most buck for the food. Competition between banks and consumers will give producers fair prices. Competition between producers will give banks and consumers fair value.

The other issue that I foresee is that of the perishability of food. A system would have to be worked out that food is not stored away for too long and is cycled properly. The system would likely be somewhat complex, and would require government to administer it (you all know how I feel about adding to government responsibilities). But it is certainly something that could be worked out.

Once we replace our trade from exchanging items of value for currency of imagined value to exchanging things of value for a currency of real and unimagined value, the economy no longer will be held in submission to the whims of politicians, but be freed to grow at a rate never before imagined. If we were to use food, the only universal and irreplaceable staple of life, we would accomplish the most stable and perfect base for trade that’s ever been tried. And we would find it easier to sleep, knowing that we all have more than a year’s supply of food stored up all across the nation.