profiting from others being incarcerated. The more that are

incarcerated, the greater the profits. And this is not the

first time in history such a situation has arisen...

It is building an American Gulag, one that threatens to

assume the mantle of The New Evil Empire.

The conception of an American Gulag did not start with

Stalin. It harks back to the Nazi era. Aside from its assault

on humanity, the idea of slave labor always has been a blunder.

It will be viewed as no less a blunder when the American Gulag

finally emerges from its nightmare -- if it ever emerges. For

now, it must be stated that our historical memories are short,

indeed.

THE GULAG

By the time Josef Stalin took command of the U.S.S.R., the

inner circles knew communism to be a failure. Aleksandr

Solzhenitsyn related this intelligence in volume two of his

Gulag Archipeligo. He also explained that Stalin closeted

himself for several days with a Turkish businessman named

Naftaly A. Frenkel, an old friend. Frenkel reasoned, as do

most businessmen, that values and profits are predatory, always

achieved at the expense of others. He told Stalin that in

order for Communism to succeed, it would be necessary to get

free labor. This conclusion achieved, the two then proceeded

to construct their syllogism.

Frenkel pointed out that not just any labor would do.

This free labor had to know how to do things -- and thus the

judgement was made to draw up a list of engineers. "Now," said

Frenkel, "arrest every seventh one!" These workers would bring

their own energy into the system. And the system would harvest

this energy, giving all those who confessed to choreographed

crimes only thin cabbage soup and minimal support for life.

Most would be dead in a year or two.

This free labor built and staffed the Gulag. As the Gulag

expanded, coal, minerals, gold -- especially gold -- and timber

met the raw materials requirements of what the pundits called

"the future now."

There was a problem with this business equation. It did

not answer the requirements of economics. Because free labor

was used, raw materials failed to generate the base income that

could -- via the multiplier -- hoist up the national income.

As a consequence, the Soviet economy always operated without an

adequate social surplus, or a proper profit for the system.

Cheap labor in fact sounded the death knell for communism

that far back. It was only a decade or two before the Stalin

era that Henry Ford reasoned, "If we do not raise the

industrial wage to 50 cents an hour, the worker will never be

able to own a Model T car." Accordingly, Ford took the lead in

raising the American industrial wage to 50 cents an hour.

Others accepted this reasoning and joined the effort. On this

basis the United States built the biggest steel industry, the

biggest auto industry, the biggest just-about-everything.

There were depressions called panics, and then there came that

engineered depression of the 1930's, which was crafted by

business people who wanted the disparity required by free

trade. There were also periods of structural balance. These

were created by stabilization measures, by raw material prices

in line with wages and capital costs, and by an understanding

that free labor was a delusion of maximum dimension because the

absence of income short-circuits the exchange equation.

Today, half the world is coming apart because the act of

production is not creating and distributing the credits needed

for consumption. It took over seven decades for Stalin's

economic error to undo communism. And yet the United States is

following Frenkel's advice in its own dumb way.

Blunders and folly are the stuff history is made of, and

there are enough of both to bend over almost anyone except for

the tragedy involved. A case in point.

Just 50 years ago, millions of human beings were mined for

everything from their gold wedding rings to their human flesh,

which was turned into lamp shades, after their bodies were

worked to death by a slave labor system that grew up in the

middle of the greatest civilization in the history of the human

race -- in Western Europe. How this happened will never really

be understood until we come to grips with why it is happening

again today, right here in America.

Auschwitz was a private prison. Like many Nazi

concentration camps, it began as a detention center for

prisoners of war and political opponents of the Nazi regime.

As the number of prisoners began to grow exponentially, the

camps were turned into slave labor operations, modeled on

Quaker, American Friends Service Committee-run work camps in

pre-war germany, whose philosophy was that hard work is the

best rehabilitation.

The official Nazi policy for Auschwitz and other camps,

enunciated by Fritz Saukel, who was hanged at Nurenberg as the

head of the Nazi slave labor program, was "All the inmates must

be fed, sheltered, and treated in such a way as to exploit them

to the highest possible extent, at the lowest conceivable

degree of expenditure." If this sounds like the Contract with

America, well that's the way it is.

Beginning July 6, 1940, I.G. Farben Company, the world's

largest chemical company, set up a giant factory near the

Auschwitz concentration camp in Poland. Prison labor produced

artificial rubber and oil from coal to supply Hitler's war

machine with tires and motor fuel. Two and a half million

laborers died or were killed at Auschwitz.

But I.G. Farben wasn't just a German company. In 1925,

I.G. Farben was merged with Rockefeller's Standard Oil Company

of New Jersey. The DuPont company also adopted numerous cartel

arrangements with the main partners.

As documented in great detail in The Unauthorized

Biography of George Bush, it was George Bush's father and the

Barrimans who helped the Nazis' rise to power. These same

interests, which are tightly allied with the British Crown, are

behind the so-called Conservative Revolution in America today.

Today, the United States leads the world -- or at least

those parts of the world that keep reliable statistics -- in

the rate at which it incarcerates its citizens. The

accompanying graph, from 1992, shows that the United States has

a higher rate of incarceration per 100,000 population than even

South Africa before the end of apartheid.

In June 1994, the U.S. prison population broke through the

one million mark. Today, nearly one and quarter million people

are in our prisons and jails. You can see that the rate has

basically grown by 6 to 8% a year since 1980, with the two

biggest growth years being 1980-81 -- Ronald Regan's first year

in office -- and 1988-89 -- George Bush's first year in office.

The racial victims are black in the American Gulag. And

it borders, if does not reach, genocide.

THE RATIONALES

As icing on the cake, and to provide a rationale for free

labor, the death penalty became re-established, perhaps not so

much to punish killers, but to get people use to the iron-hard

clout of the judiciary.

A 1993 report by the House Judiciary Committee's

Subcommittee on Civil and Constitutional Rights lists 48 known

cases in which innocent people were sentenced to death since

1973 -- and escaped execution. Those were the ones that we

found out about before it was too late.

Dr. Death -- Jack Kevorkian -- has proposed that death row

inmates donate their organs for transplants as part of the

newest form of recycling to hit post-industrial America. The

death house, however, is mere window dressing for the real

purpose of this new Gulag.

MODEL FACTORY

The model private prison or "factory within walls" -- as

Supreme Court head Justice Earl Warren called them in 1972,

after he visited Communist China and learned how it was done --

is Federal Prison Industries, Inc., better known by its trade

name, Unicor.

There are 46 U.S. locations where Unicor operates its 97

factories, employing over 15,000 inmates. This is a for-profit

corporation run by the Department of Justice, with $405 million

annual income. inmates earn minimum wage, but their average

net income, after deducting room, board, clothing, victim

restitution, family support, and fines, is $1 per hour.

Established in 1934 by an act of Congress, which already

aped the Nazi model, Unicor today produces metal products,

clothing, and textile products, graphics and services,

electronics, plastics, and optics. It produces every stick of

furniture used by the government. If it weren't for prison

labor, Newt Gingrich wouldn't have a chair to sit on!

Private prison companies, from 1983-1994 represent one of

the biggest growth industries in America. The growth curve for

the American Gulag looks remarkably like the graph for the

growth of derivatives, and not without reason.

There are nearly 50,000 private prison beds in America as

of June 1994, most of them in Texas. In Virginia, Governor

Allen has proposed to build 10,000 new prison beds through

private companies. They're used by state and Federal

governments. The advantage is clear: Private companies don't

have to pay their guards union wages, they don't have to offer

pensions, and they can cut whatever corners they like on the

prisoners. They can also build prisons in localities where the

population opposes them as long as there is no zoning ordinance

against it.

PRIVATE PRISONS

Financing for the private prisons is coming from the top

levels of Wall Street: Goldman Sachs, Prudential Insurance,

Smith Barney, Shearson Lehman and Merrill Lynch are among those

competing to underwrite prison construction with private tax-

exempt bonds. Some of the big defense contractors, including

Westinghouse, are also entering the prison business.

The way inmates are typically handled in private prisons

is not what the average American might expect. They are

degraded and often forced to undergo intense brainwashing

sessions which are designed to pacify and detoxify the inmates

and make them suitable for labor.

In addition to private companies which profit from

building prisons and running them for the state or county --

charging per diem for each prisoner they keep -- there is a

booming business inside state prisons akin to what Unicor is

for federal prisons. Here you see some examples of what is

being produced in privately-run industries inside state

prisons.

California -- logos for Jerry Garcia band and Lexus autos.

Hawaii -- Macadamia nuts; Spaulding golf balls.

Maryland -- Modular houses, processed hot dogs.

New Mexico -- Hotel chain reservations.

Oregon -- Designer blue jeans called "Prison Blues."

South Carolina -- Electronic cables.

Utah -- AT&T telemarketing. This was stopped by the

Communications Workers of America union in 1993.

Washington -- Eddie Bauer garments (for all you yuppies).

Thirty states have legalized privately-run industries in

their prisons. In most cases, the inmates are paid minimum

wage simply because the labor unions haven't yet been totally

smashed. Like Unicor, however, the average net income to the

prisoner is a dollar an hour.

This, of course, is still significantly higher than the

ten cents an hour that prison maintenance workers routinely

earn. As a result, like the house servants under Southern

slavery, those who can get a job working in private industry

are considered the lucky ones.

THE STING

Now lets turn to the legislation that has created this

potential American Auschwitz.

A look at the effect of the so-called War on Drugs

conducted by the Regan and Bush administrations, and their

counterparts in the various states, reveals that between 1980

and 1992, convictions for drug offenses grew from near zero to

100,000 per year. Drug-related convictions now account for

more than 30% of all incarcerations, and, for the most part,

affect only the low-level street peddlers and users. With

mandatory sentencing laws, the rate of incarceration zoomed

from 1980, when only 19 out of 1,000 drug convictions actually

resulted in incarceration, to 1992, when the rate shot up to

104 per 1,000.

Despite this, the drug plague continues to grow. Maybe

that's because the institutions that profit from the drug trade

are the same ones that finance the prison-building industry.

It's also undeniably true that incarceration breeds crime, and

large-scale incarceration, as we have in America today, breeds

large-scale crime.

The newest prison-stuffing legislation is called "three

strikes and you're out." Since the baseball teams are on

strike, are Americans amusing themselves by imprisoning their

fellow citizens? As of December 31, 1994, Three Strikes

legislation had been enacted in 14 states and was pending in

seven. And these are the most populous states. Under this

legislation, anyone convicted of three violent felonies (two in

Georgia -- Gingrich's home state) goes to prison for life.

And, finally, here are the key provisions of the Taking

Back Our Streets Act of 1995, the criminal justice part of the

Contract with America. This list, with some exceptions, is

what was passed by Congress.

1. No parole; mandatory, lengthier sentences (actually

these were passed at a federal level in the 1980s by an earlier

crowd of conservative revolutionaries). They are listed here

because the Contract with America wants them extended to state

law.

2. Increased funds for prison building will be made

available only to those states which eliminate parole and cut

amenities for prisoners.

3. It will no longer be unconstitutional to overcrowd

prisons. Prisoners may only sue on the grounds that

overcrowding violates their Constitutional rights.

4. The Effective Death Penalty bill drastically limits

habeas corpus appeals (Art. I, sect. 9 of the U.S.

Constitution) and reduces jury discretion in giving the death

penalty.

5. The Exclusionary Rule, which precludes illegally

obtained evidence from being introduced at trial, will be

eliminated.

6. Felons will be forced to make full restitution to

victims, despite their personal circumstances.

The Gingrich/Gramm/Armey consortium has taken out a

Contract on America that will guarantee a ready source of

profit and slave labor for their pals on Wall Street. The only

thing that is needed now, to make this potential Auschwitz into

the real thing, is what led to it the last time -- a global

financial collapse and a population tolerant of fascism. Judge

for yourself how far we are from that.

That the above could be unfolding without a totally

corrupt judiciary is a delusion of the simple minded. As View

from the Country, in this issue, explains, there is no Bill of

Rights, and very little Constitution. The "despotic branch"

has the nation functioning under a new type of judicial

tyranny. This erosion of the great society could still be

stopped -- if Congress has the sand to act.

Joe Stalin tried to rescue a failing economy with free

labor. Now the United States is trying to rescue a failing

economy with cheap labor -- either dollar an hour prison labor

or equally cheap foreign labor. Before this blunder is laid to

rest, there will be sorrow no tears can symbolize.

===

This report was prepared by Charles Walters. Additional

material was provided by Fred Huenefeld and Mary Anne Wertz.

END-ARTICLE



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Dec. 6, 2010