Source: CryptoNewsNet Original Title: Samourai Letter #2: Notes From The Inside Original Link:

The Shadow Economy of Federal Prison

The shadow economy of FPC Morgantown runs on pouches of mackerel. Yes, the fish. Much like any fiat or precious metal standard, there is no intrinsic value to the currency—nor to the mackerel.

You might think you could eat the mackerel if you wanted, and there’s some amount of protein that a prison economist could model. But alas, no. Most mackerel in circulation is so old that eating it would result in a visit to the medical station or worse.

Why Mackerel?

Why mackerel and not chicken, salmon, tuna, or stamps like other prisons? Stamps seem more logical—multiple denominations, government tender, some outside value, hard to counterfeit, don’t go rancid. But stamps have limits; mackerel pouches apparently do not.

Before examining why mackerel became the standard, we need to understand the white market first.

The White Market

Each prisoner has two ways to earn dollars. A friend or family member can deposit money into your prisoner trust fund account, or you can earn through your prison job—ranging from $0.20 to $1.00 per hour.

Every week there’s a designated commissary day. You fill out a sheet like an old mail order catalog, marking items and quantities. You wait over an hour while employees gather your items.

You can buy items to make your stay more comfortable: “greys” (comfortable sweatshirts and pants), sneakers, shelf-stable food items, and snacks. Most importantly, pouches of mackerel—now $1.40 each, up from $1.00.

The Constraints That Drive Grey Markets

Two critical factors drive the grey market:

First: Each prisoner has a $360 monthly spending limit. It’s not difficult to hit. A tablet costs $148, sneakers $70, work boots $100. You must be strategic about what you buy and when.

Second: Artificial limits exist on certain items—only 10 pouches of tuna, 1 notebook at a time, 20 stamps of one denomination, 10 of another.

These artificial limits, inflated prices, and suppressed wages explain why grey markets exist in every prison globally. This mirrors the economic forces well-studied during the Soviet Union’s reign and visible today in Cuba.

Whenever limits and restrictions are imposed on otherwise free markets by top-down administrators, participants find workarounds. The black/grey market is the largest market on earth—not due to criminality, but because honest actors are pushed out of the permissioned system.

The Hustles

For guys without outside help, they must make money on the inside to supplement their pittance prison wages. People run various hustles:

Some do laundry—a wash, dry, and fold service charging 1 mack per garment with volume discounts.

Some are chefs preparing hot food to sell from their cells. There’s a symbiotic relationship: the chef hoards the iron for cooking, limiting availability for pressing clothes. The laundry man has the only other iron, so if you want pressed clothing, you must use his services.

Chefs have runners taking hot food cell to cell, collecting mackerel as payment—a prison equivalent of food delivery services. Some operate on the wrong side of the “law,” selling contraband like cell phones, cigarettes, and vapes.

When sports games air, bookmakers and gamblers try their luck at a mackerel windfall.

For Those With Outside Support

For guys with money flowing onto their books, motivations differ:

Some want to purchase more than artificial limits allow. Some are required to pay fines or restitution—if they keep too much on their books, required monthly repayment increases. So they keep their books light and handle only mackerel, like a businessman minimizing taxable income.

Some corner niche markets—like Keebler Chocolate Cookies, a very popular item—and become the go-to market maker.

Humans make rational decisions in their economic self-interest. Institutionalization amplifies this.

Currency Conversion

Successful hustlers accrue large amounts of macks. How do they convert to “real money”? Like every economy, there are currency converters—and in a prison filled with educated white-collar criminals, it’s a sophisticated operation.

From what’s gathered, converting macks to dollars works through the seller getting an associate on the outside to send USD via Cash App or deposit money onto their books using Western Union.

Barter and Currency

Barter occurs—some refuse macks and trade higher-value chicken, soda, or Flaming Hot Cheetos. Everything is negotiable.

But barter becomes ineffective at scale; currency must be utilized. Like all economies, what serves as currency is generally worthless—paper, metal, pukka shells—but there’s shared acceptance that it represents agreed-upon value.

In FPC Morgantown, that’s mackerel pouches, worth roughly $1.00.

Why Mackerel?

The short answer: unknown. Best theories: 1) Most don’t want to eat mackerel, so they stay in circulation longer than desirable items like chicken; 2) There appears to be no limit on mackerel pouches from commissary, unlike stamps which are always limited.

These observations likely led predecessors to found an entire shadow economy based on the Mackerel Standard.

Closing Thoughts

It’s December 26th, the day after Christmas—my eighth night as a prisoner. It hasn’t taken long to see how things really work, how the real economy functions, how humans adapt to any situation.

Like the outside, there are winners and losers, moguls and paupers, blue collar and white collar. But unlike the outside, there’s shared camaraderie between prisoner classes—an “us versus them” undertone, prisoner versus authority.

Merry Christmas to everyone. I wish I was there to celebrate with family and with you.

—Keonne Rodriguez