EconTalk Richard Davies on Extreme Economies
Mar 9, 2020
Richard Davies, an economist and author of "Extreme Economies," shares his insights on economies in extreme situations. He explores the underground economies in Angola's penitentiary, where inmates barter with ramen noodles amid harsh conditions. The discussion shifts to contrasting refugee camps in Jordan, highlighting how policy affects personal agency. Davies also delves into the economic disparities in the Darien Gap and the historical complexities of the Congo. His experiences reveal resilience and innovation in the face of adversity.
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Angola Prison Overview
- Angola prison, a former slave plantation, houses 5,000 inmates.
- Most prisoners serve life sentences, creating a unique internal economy.
Angola Prison Wages
- Inmates work for extremely low wages (2-20 cents/hour, now 4-40 cents).
- This broken link between effort and reward necessitates alternative economies.
Barter and Currency in Prison
- Barter exists, but the double coincidence of wants limits its effectiveness.
- Currency, like tobacco, simplifies trade by acting as a medium of exchange.
