Opposition to mass incarceration and the war on drugs has lately become fashionable. The Koch brothers, Grover Norquist, and Newt Gingrich are lining up with the NAACP, ACLU, and Van Jones to support criminal justice reform. Many assume that budget savings are driving this newfound consensus.But understanding decarceration only through the lens of cost cutting has a major blind spot. America’s contemporary system of policing, courts, imprisonment, and parole doesn’t just absorb money. It also makes money through asset forfeiture, lucrative public contracts from private service providers, and by directly extracting revenue and unpaid labor from populations of color and the poor.

In states and municipalities throughout the country, the criminal justice system defrays costs by forcing prisoners and their families to pay for punishment. It also allows private service providers to charge outrageous fees for everyday needs such as telephone calls. As a result people facing even minor criminal charges can easily find themselves trapped in a self-perpetuating cycle of debt, criminalization, and incarceration.

Thanks to the contemporary activism of Black Lives Matter, Black Youth Project 100, the Dream Defenders, and hundreds of Ferguson and Baltimore protestors, as well as the long-standing work of activist intellectuals such as Angela Davis, Ruth Wilson Gilmore, Heather Ann Thompson, and Michelle Alexander, many Americans are acquainted with the horrors of police killings and mass incarceration. Lesser known are the devastating economic consequences of the leviathan of policing, courts, bail, jails, prosecution, prisons, probation, and parole.

In an era of fiscal austerity and crisis, mass incarceration has enabled private contractors, municipalities, counties, and states to make money off large numbers of America’s most vulnerable residents. The historical roots of these extractive practices stretch far back in the American past.

The promise of boundless opportunity has been a persistent theme in the United States’ self-conception, from the mobility of Jacksonian democracy to the enduring belief in “the American dream,” a concept first named in 1931 and celebrated ever since. Central to this narrative is Congress’s outlawing of debtors’ prison in 1833. Twelve states followed suit between 1821 and 1849. The young country’s encouragement of greater adventurousness contrasted sharply with mother England’s draconian Poor Laws, which enforced the poverty for which they ostensibly compensated. Unleashing the appetite for capital investment and experimentation in America required forgiving bankruptcy so that potential entrepreneurs could start over.

American criminal justice doesn’t only cost money. It also makes money.

But like so many American institutions, debt forgiveness—and the social mobility it enabled—applied almost exclusively to native-born white men. Nonwhite populations faced land divestment, chattel slavery, and disproportionate incarceration, followed by a subsequent regime of debt peonage and forced labor.Prisons throughout the country—including in the antebellum urban North and parts of the Midwest—used convict labor, an extractive system that evolved into an even more brutal racial form in the post-emancipation South.

Traveling through the Black Belt in the 1890s, W. E. B. Du Bois described a fertile, if broken, landscape plagued by the upward redistribution of wealth.“A pall of debt hangs over the beautiful land,” he wrote in The Souls of Black Folk. “The merchants are in debt to the wholesalers, the planters are in debt to the merchants, the tenants owe the planters, and the laborers bow and bend beneath the burden of it all.”The Thirteenth Amendment, which abolished slavery and involuntary servitude “except as a punishment for crime” enabled the widespread use of debt peonage and convict leasing. This resulted in the deaths of tens of thousands of African Americans between the 1870s and the 1940s, exceeding by a significant magnitude the number who died from lynching. At its worst, more than one in four leased convicts died in under two years from a mix of overwork, malnutrition, and unsafe working conditions.

State, county, and municipal government played an essential role in the development of these coercive post-emancipation labor practices, which used debt as the pretext for de facto re-enslavement. Criminalization of vagrancy, loitering, quitting a job, petty theft, and even talking loudly in public could result in incarceration for blacks, accompanied by exorbitant fines and court costs. White employers paid off these debts and in return forced victims to work for years without pay under horrendous conditions. African Americans had no legal recourse to contest such practices, and employers took advantage by imposing additional debt for land use, seed, livestock, food, and other staples. The result was a newly freed population ensnared in an endless cycle of debt, forced labor, and worker abuse that recreated, in the words of Pulitzer Prize–winning author Douglas Blackmon, “slavery by another name.”

This extractive system was central to the southern economy under “Redemption” and Jim Crow. Indeed,debt peonage, chain gangs, and convict leasing enabled the economic resurrection of the region and continued well into the Progressive Era. The city of Atlanta, the crown jewel of the industrial New South, was rebuilt with red brick fashioned by black convict labor. Public works—roads, aqueducts, bridges—and private residences benefited from this forced labor system enabled by criminalization of large portions of the African American community, including women and children. James W. English, a primary shareholder in the Chattahoochee Brick Company who served as a future police chief and mayor of Atlanta, leased more than a thousand convicts to work in his Georgia brickyards. Similarly many of the Gilded Age industries of the South—including not only construction but also agriculture and mining—used convict labor to amass wealth.

Too often the South is understood as exceptional, but the process of racial divestment was national in scope. Financial predation extended beyond the geographical reach of legal segregation and found a new vehicle in racially discriminatory practices such as blockbusting (in which realtors overcharged black renters and home buyers), redlining, and subprime lending.

It also persisted in the criminal justice system in ways that have been made visible by mass protests in Ferguson in response to the August 2014 police shooting of Michael Brown. Sustained activism prompted the federal government and journalists to investigate the town and its woes. Further inquiry revealed interlocking webs of public and private predation that relied on courts and police to garner revenue from black residents through excessive ticketing as well as the levying of court fees and fines. Today the small municipality north of St. Louis has come to exemplify the dangers of racial profiteering. But while it is extreme, Ferguson is far from an isolated case; many jurisdictions extract money through law enforcement and the court system.

Contemporary extractive methods rely on two interrelated sources of debt: private debt and criminal justice debt, also known as legal financial obligations (LFOs). The former, which pays out to private companies, has a way of generating the latter, which pays out to both private companies and public institutions.

Private debt is familiar to most of us. It can easily and quickly be incurred from auto loans, mortgages, extortionary payday loans (frequently the creditors of last resort for low-income people), credit card charges, and medical bills.

Private lenders or, more commonly, debt collection companies can in some cases bypass bankruptcy proceedings and take non-paying debtors directly to civil court. A recent report from ProPublica shows just how common civil suits for debt collection are. For instance, 66,000 such suits were brought in Newark alone between the years of 2008 and 2012. Defendants in such suits are overwhelmingly African American. In St. Louis, Chicago, and Newark, majority-black neighborhoods suffer court judgments for debt collection at twice the rate of majority-white neighborhoods. In Jennings, Missouri, a 90-percent black city next door to Ferguson, there was more than one court judgment for every four residents. The effect is far-reaching; five of the eight city council members of Jennings have been sued over debt.

Legal judgments were not always the norm. Zealous private collectors began popularizing the use of municipal and county courts in the 1990s, and the practice has since grown. Collection agencies aggressively purchase consumer, medical, and student debt for pennies on the dollar and sue for much smaller amounts than banks do. Were the debt to remain in the hands of major banks dealing in billions of dollars worth of transactions every day, small-time debtors might be too unimportant to attract legal attention. But collection agencies specialize in suing large numbers of people for relatively little money, making escape that much more difficult. That people of color are vastly more likely to face court proceedings than are white people with the same income reflects both racial discrimination and the stark wealth gap. Black families, on average, have one-thirteenth the wealth of white families and Latinos have roughly one-tenth.

This wealth gap is a result of the long and continuous history of legalized dispossession via slavery, Jim Crow, forced labor, and myriad racial disparities in housing, education, employment, lending, and incarceration. Consequently many African Americans have been prevented from building the assets that might insulate them from life’s emergencies, resulting in debt and legal hazard that itself generates further opportunities for extraction.

One such opportunity arises when defendants in civil suits do not show up for court dates. In such cases, they can be charged with contempt, failure to appear in court, or disobeying a court order, and judges can issue arrest warrants accompanied by steep fines. According to the Marshall Project, many private debtors are forced to “pay or stay,” trapped in jail until they post bond or pay their creditors. Upon arrest they, like all criminal defendants, begin to accrue a second—arguably more calamitous—debt from the justice system itself.

Criminal justice debt is an unwieldy set of financial obligations consisting of fines, fees, and restitution payments. Fines are imposed during sentencing for infractions such as speeding. Fees comprise a broad and capacious category covering charges levied by public and private entities. Costs are racked up at every stage of the process: jail booking fees and per diems for pretrial detention, bail investigation fees, costs of drug and DNA testing, court costs and felony surcharges, public defender application costs and recoupment fees (issued directly to the state, not to the lawyers themselves), and the list goes on. Then there is restitution, which mandates cash payments to victims for personal and property damage.

Forty-one states also charge offenders for the cost of imprisonment itself, and forty-four states charge for costs of probation and parole. To make matters worse, the overwhelming majority of the states with the largest prison populations charge “poverty penalties” by imposing additional costs on those unable to pay off criminal justice debt immediately.

For the low income populations who make up 80 percent of criminal defendants (the percentage incapable of paying for their own defense), this additional debt becomes a further obstacle to housing and employment, which often require credit checks. Criminal justice debt also acts as a de facto indicator of incarceration history, which nullifies the victories of activists across the country who have successfully “banned the box” requiring job applicants to list felony convictions.

Meanwhile the large revenue stream created by criminal justice debt creates perverse financial incentives for state and local governments to criminalize their residents. Ferguson demonstrates this dynamic in profound ways. Public safety and court fines comprised 20 percent ($2.5 million) of the municipality’s total operating revenue for 2013, an 80 percent increase from 2011. In 2013 alone, the city issued more than 9,000 warrants for minor violations such as parking violations. From 2011 to 2013, 95 percent of people cited in Ferguson for the essentially meaningless charges of “failure to comply” and “manner of walking in the roadway” were African American. It is under precisely this circumstance that police officer Darren Wilson fatally shot Michael Brown.

While Ferguson is notorious for public predation on black residents, it is not alone. In 2013 two smaller jurisdictions in St. Louis County, St. Ann and St. John, received an even larger portion of their revenue from fines and forfeiture—39.6 and 29.4 percent respectively. In municipalities throughout the country, fines, “user fees,” and other punitive charges supply a growing source of extractive income in a time of fiscal austerity. Tellingly it is not uncommon for these charges to far exceed the costs of restitution for crime victims themselves.

The private sector is also developing new ways to mine revenue from criminalized people, beyond the well-known method of for-profit prisons. Private companies now perform probation, parole, drug-rehabilitation, and reentry services on contract. One of the most egregious examples is the private electronic-monitoring industry, which provides technology used for pretrial tracking of defendants, for house-arrest sentences of nonviolent offenders, and as a condition of probation.

While this technology has been around since the early 1980s, the offender-funded business model originated roughly a decade later. Like SWAT teams and anti-gang injunctions, the earliest precedents of this for-profit model stem from Los Angeles. After the L.A. rebellion in 1992—in which law enforcement arrested more than eleven thousand people, nearly three times the total arrested in the 1965 Watts rebellion—the world’s largest urban jail system was straining at the seams. Sentinel, a private company, recognized an opportunity. The company proposed that the L.A. probation department require reentering offenders to wear its monitoring system—and pay for it. Sentinel’s “offender-funded justice” model promised savings for taxpayers and revenues for its shareholders. The city signed up and the contemporary era of privatized electronic monitoring began.

Forty-one states charge offenders for the cost of their imprisonment.

People compelled to use the system may be charged anywhere from $9.25 to $49 per day, with monthly costs ranging between $300 and $1,519. They also must pay substantial set-up costs. Those who cannot pay are returned to custody, costing the monitoring companies nothing. The value of companies that provide electronic monitoring has soared as profits have rolled in. In 2011 the private-prison giant GEO Group purchased Behavioral Interventions, the country’s largest electronic provider, for $415 million. It is no wonder the for-profit model of electronic monitoring has been rapidly expanding. Indeed, the bipartisan consensus on the need for decarceration has only strengthened the position of the electronic-monitoring industry.

By devolving the cost of punishment onto criminalized people themselves, the offender-funded model helps turn a profit for private firms while providing cost-savings for the municipalities that contract them. The consequences for individuals can be devastating, as in the case of Antonio Green, a disabled South Carolina resident who was arrested in 2014 for driving without a license. He initially took the option of electronic monitoring rather than jail. But after watching his financial and personal life unravel under the weight of nearly $2,500 in fees over the course of a year, Green found himself with no option but to go to jail. “I gave up,” he told a reporter for International Business Times. “I was falling apart. It felt like being on a chain gang. Those bills were getting out of hand. I said, ‘They’re just going to have to lock me up.’”

And so the cycle continues. Poor people face debt, jail for minor infractions, and further debt to pay for their punishment. The well of poverty grows deeper as extractive states, municipalities, and private companies seize the income of vulnerable populations.

In 1983 the Supreme Court determined, in Bearden v. Georgia, that a debtor could only be jailed for failing to pay a fine if it were proven that the person could pay the fine and willfully chose not to. Drawing on the due process and equal protection clauses of the Fourteenth Amendment, the case reaffirmed earlier rulings that it is unlawful to incarcerate indigent debtors for their inability to pay—the foundation of the extractive system.

But as in the past, the law, without enforcement, has provided little remedy. History offers a lesson to today’s activists: as long as there is a way for state and private entities to make money off of criminal justice, they will seek to criminalize as many people as they can. Not only did Bearden fail to stem the cycle of criminalization, debt, extraction, and more criminalization, but the situation has worsened. Several factors may be at work.

Chief among them is the sheer growth of the infrastructure of punishment over the last forty years, which has helped to naturalize a variety of practices that strip people of their rights and financial means. “In the 1970s and 1980s we started to imprison more people for lesser crimes,” civil rights lawyer Alec Karakatsanis argues. “In the process, we were lowering our standards for what constituted an offense deserving of imprisonment, and, more broadly, we were losing our sense of how serious . . . it is to incarcerate. If we can imprison for possession of marijuana, why can’t we imprison for not paying back a loan?” Karakatsanis has been fighting de facto debtors’ prison by suing municipal courts.

Another factor is the way in which many judges apply their discretionary power to determine what constitutes “willful failure” to pay criminal justice debt. Too often judges rely on capricious and unpredictable standards to gauge the indigence of defendants. It is not uncommon for judges to ask whether or not defendants smoke and decide, if the answer is yes, that they have the means to pay. Tattoos and nice clothing have also been cited as evidence of an unwillingness to meet legal financial obligations.

Post-recession fiscal austerity is also driving growing extraction. Ironically the same cutbacks that have helped make decarceration a bipartisan initiative make extraction that much more urgent. This is not to say that predation disappears in times of plenty. Pervasive opposition to individual and corporate taxes since the Reagan era has forced local jurisdictions to supplement fiscal shortfalls, sometimes through the kind of extreme rent-seeking behavior seen in Ferguson.

Considering the persistence, in one guise or another, of justice system practices designed to extract capital and labor from poor and working class black citizens, we need to reevaluate the history of criminalization in America. There is a tendency to think of mass incarceration as a relatively new phenomenon that commenced with the war on drugs and the political imperatives of the Nixon administration. But racially disproportionate incarceration and caging predate these more recent developments. It was a necessity of slavery, of course, but also a hallmark of Redemption and Jim Crow, when new institutions of white domination formally replaced those outlawed by passage of the Thirteenth, Fourteenth, and Fifteenth Amendments. It also characterized—and continues to characterize—the policing and confinement practices of states and municipalities throughout the North and West. Criminalization of black, brown, and indigenous populations is as old as America itself and it has often been a means of predation.

Perhaps the most important lesson to be learned from the brutal history of American debt peonage and convict leasing is that many of the foundations of racial inequality are economic. Racism and white supremacy are often understood as either psychological or socially constructed ideas, thoughts, and feelings. But Jim Crow’s coercive labor practices; race-based contract housing, redlining, and subprime lending; and today’s cycle of debt and imprisonment remind us that the economic life of racism is arguably its most enduring feature. While public discourse and protocol have changed since the civil rights movement—presumptive Republican presidential candidate Donald Trump not withstanding—successful challenges to the deeper material inequities of racialized wealth and opportunity have proved more elusive. The foreclosure crisis triggered by the Great Recession, which impacted twice as many black homeowners as it did white, is another reminder that racism is at its most destructive when intertwined with economic structures that facilitate profiting off the misfortunes of others.

Looking at incarceration from the point of view of debt also raises new questions about the nature of our democracy. Many people know that, in most states, those convicted of felonies lose their right to vote for a period of time—in some cases for life. Fewer realize that, in many states, a precondition for felons to regain their right to vote is that all of their criminal justice debt must first be paid. This penalty functions as a modern day poll tax, with severe consequences for the African American community in particular. One out of every thirteen African American men cannot vote because of criminal disenfranchisement laws, about 4.5 times the national average. Equally troubling are fees for use of public defenders, which impair low-income people’s ability to receive the fair trials mandated by the Constitution. Fear of debt has led many to forego legal representation and even to plead guilty to avoid at least some financial damage.

There are, however, glimmers of hope in recent pushback from the Obama administration, civil libertarians, and prisoners themselves. The Ferguson protests and subsequent investigations have had an enormous impact. In March the Department of Justice’s top civil rights prosecutor, Vanita Gupta, issued a forceful letter to state judges warning them against unconstitutional fine and jailing policies that entrap the indigent in “cycles of poverty that can be nearly impossible to escape.” Echoing the findings of the Department’s March 2015 report on Ferguson’s police department and court system, Gupta warned against courts adopting profit-minded policies that endanger poor people’s equal access to the justice system. She also emphasized the dangers of contracting probation services to private companies that directly benefit from discretionary fines they themselves impose. In early May the Colorado ACLU also won a settlement with the city of Colorado Springs, which ended the practice of jailing people for their inability to pay fines and provided compensation for those whose constitutional rights were violated.

In addition to these practical reform efforts, a larger reexamination of the economic and extractive dimensions of mass incarceration is needed, apart from establishing more equitable means testing of people brought before the courts. This is especially urgent in this protean moment of decarceration in which new systems of surveillance and control such as electronic monitoring are being widely adopted. If justice reform relies on the offender-funded model, perverse financial incentives for greater criminalization will persist.

One of the enduring lessons from past struggle for social change is that where there is the greatest suffering, there is also the most creative and insightful response. The pattern holds in a recent compelling protest against criminalization and extraction: a May Day labor strike in an Alabama for-profit prison. “Our mass incarceration is a form of slavery, because we’re not being paid for our work, but we’re being charged outrageous fines,” one of the prison strikers explained. Kinetik Justice, a spokesperson for the Free Alabama Movement, called for “transparency in the courts and humanity in the prison system.” Although the strike ended after a couple of weeks, its larger demands for prison reform, elimination of forced labor, and the end of predatory fines resonate strongly throughout the United States. Prisoners themselves—in a state with one of the most brutal histories of chain gangs and convict labor—took a stand against profiteering at their expense. Listening to their stories, and shaping policy accordingly, will help us all summon a more compassionate and just future.