Tuesday, October 21, 2008
Mackerel Beat Dollars?
"When Larry Levine helped prepare divorce papers for a client a few years ago, he got paid in mackerel. Once the case ended, he says, 'I had a stack of macks.' ... 'It's the coin of the realm,' says Mark Bailey, who paid Mr. Levine in fish. ... There's been a mackerel economy in federal prisons since 2004, former inmates and some prison consultants say. That's when federal prisons prohibited smoking and, by default, the cigarette pack, which was the earlier gold standard. ... Elsewhere in the West, prisoners use Power Bars or cans of tuna, says Ed Bales, a consultant who advises people who are headed to prison. But in much of the federal prison system, he says, mackerel has become the currency of choice. ... The Bureau of Prisons [BOP] views any bartering among prisoners as fishy. ... Another problem with mackerel is that once a prisoner's sentence is up, there's little he can do with it--the fish can't be redeemed for cash, and has little value on the outside. As a result, says Mr. Levine, prisoners approaching their release must either barter or give away their stockpiles", Justin Scheck (JS) at the WSJ, 2 October 2008.
This article is rich. It teaches much. Do you remember Economics 103, "Introduction to Micro"? You should have encountered a "Robinson Crusoe" economy. That's like what we have here. Note the prisoners need no "Fed" to regulate mackerel's exchange value for other things. The BOP shows its political correctness by banning smoking. Having banned cigarettes, the prisoners adopted something else as currency. Why not mackerel? Tobacco was used as currency in Colonial Virginia. I bet the "mackerel inflation rate" is lower than the US core rate. Why does the BOP oppose prisoner bartering anyway? Would it prefer prisoners steal from each other? I think prisoners operating in an exchange economy might learn something. This is very important: mackerel can serve as currency precisely because they are not consumed. JS used the term "gold standard". How interesting. What do you think will happen if Uncle Sam issues a new currency one day and only lets you exchange say $10,000 maximum per person, cancelling the rest? Countries have cancelled currencies many times.