The Prison Economy
Sean Turnell, as an economist, became fascinated with the internal economy of Insein Prison, recognizing it as a microcosm of the broader economy outside its walls. He found that the official economy of the prison was dysfunctional, much like the country's official economy affected by the colonial legacy. The black market within the prison, however, was where the real economic activity thrived. Interestingly, this black market was fueled not by contraband as one might expect, but predominantly by food, given the insufficiency of nutrition provided by the jail. The prison guards served as the primary suppliers in this market, motivated by the opportunity to supplement their meager official salaries. Other external suppliers exploited the captive market, imposing steep mark-ups on goods ranging from basic food items to actual contraband like cigarettes and alcohol. But the most intriguing aspect of this prison economy was its system of currency. Unlike the typical use of cigarettes as currency in POW camps, Insein used tea and coffee sachets. These sachets, particularly local brand ‘three-in-one’ sachets, were the most valued, forming a hierarchy in this unique monetary system, mirroring the complexities of a real-world economy within the confines of a prison. In the following excerpt from our podcast discussion earlier in the year, he goes on to describe this in more detail.
“The most valuable of all were local branded, three-in-ones, high sugar content. They were sort of the Swiss francs of the system, the really high valued currency.”
The prison was a wonderful microcosm to see economics in action. With respect to the prison economy itself, you'd get to see the supply of food, the meat being stripped away from the ration every day and getting sold into the black market. There was a lot of that going on. To me, one of the most exciting things, because I'm a monetary economist, I've always been fascinated by the question of what is money.
We don't even really think about it, although with the nature and the meaning of money, funnily enough, prison camps and prisons are great locations to observe the meaning of money. I was particularly fascinated as to what functioned as a means of exchange; what was used as money within the jail?
Now, to some extent, it was actual money, like it was actual cash. Kyat was not allowed, of course; it still functions a little bit. But the basic currency, I was surprised to see, were coffee sachets! The most valuable of all were local branded, three-in-ones, high sugar content. They were sort of the Swiss francs of the system, the really high valued currency. And you would use them to measure the value of other goods and even use them to exchange. Somebody might want to buy a piece of bread from someone else. And that might be two coffee sachets. An apple might be three, or whatever it was.
And so the coffee sachet became the sort of standard and unit of currency. You can sort of save in it; you can exchange it. Or sometimes, it was used as a unit of account to measure everything else. I was really surprised to see that because I'd read many years earlier about the extraordinary thing in World War Two that cigarettes had been the currency of choice amongst prisoner of war camps. In Myanmar, it wasn't the cigarettes, although, except in the margin. Because the trouble with cigarettes is that (A) they were banned, which, of course, didn't totally rule them out. I think people wanted to smoke them; so, [B] they never lasted long enough to be currency and instead was the coffee sachet.
Also, within the prison, we got some inkling as to what was going on outside, because there was a flow of food into the prison and so on. There was also a system run by the guards, where they would sell food, sort of in a gray area, I think, in terms of the prison regulations, but you could see through the pricing there. Here, by pricing, I mean actual currency now, in kyat currency. You could see the prices rise dramatically, as the SAC [State Administration Council] became more and more entrenched and the economy just trended down. You could just see the spiking of all sorts of basic items. We had a fairly clear idea about the shortages outside, about inflation; particular goods just disappearing, goods that you could get before, which just suddenly weren't available. It was an interesting place from which to observe the collapsing economy outside.