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TED@New York

Jeff Smith: Lessons in business ... from prison

June 7, 2012

Jeff Smith spent a year in prison. But what he discovered inside wasn’t what he expected -- he saw in his fellow inmates boundless ingenuity and business savvy. He asks: Why don't we tap this entrepreneurial potential to help ex-prisoners contribute to society once they're back outside? (From the TED Talent Search event TED@NewYork.)

Jeff Smith - Recovering politician
Once an up-and-coming star in the Missouri State Senate, Jeff Smith went to prison for covering up an election law violation. Since his release, he's created a new space for himself as a professor, writer, political commentator and advocate for those he was locked up with. Full bio

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Double-click the English subtitles below to play the video.
B.J. was one of many fellow inmates
00:15
who had big plans for the future.
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He had a vision. When he got out,
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he was going to leave the dope game for good and fly straight,
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and he was actually working on merging his two passions into one vision.
00:25
He'd spent 10,000 dollars
00:30
to buy a website that exclusively featured women
00:32
having sex on top of or inside of luxury sports cars. (Laughter)
00:35
It was my first week in federal prison,
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and I was learning quickly that it wasn't what you see on TV.
00:44
In fact, it was teeming with smart, ambitious men
00:48
whose business instincts were in many cases
00:52
as sharp as those of the CEOs
00:55
who had wined and dined me six months earlier
00:57
when I was a rising star in the Missouri Senate.
00:59
Now, 95 percent of the guys that I was locked up with
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had been drug dealers on the outside,
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but when they talked about what they did,
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they talked about it in a different jargon,
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but the business concepts that they talked about
01:15
weren't unlike those that you'd learn in a first year MBA class at Wharton:
01:17
promotional incentives, you never charge a first-time user,
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focus-grouping new product launches,
01:25
territorial expansion.
01:29
But they didn't spend a lot of time reliving the glory days.
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For the most part, everyone was just trying to survive.
01:34
It's a lot harder than you might think.
01:37
Contrary to what most people think,
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people don't pay, taxpayers don't pay, for your life
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when you're in prison. You've got to pay for your own life.
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You've got to pay for your soap, your deodorant,
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toothbrush, toothpaste, all of it.
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And it's hard for a couple of reasons.
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First, everything's marked up 30 to 50 percent
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from what you'd pay on the street,
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and second, you don't make a lot of money.
01:57
I unloaded trucks. That was my full-time job,
02:00
unloading trucks at a food warehouse,
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for $5.25, not an hour, but per month.
02:04
So how do you survive?
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Well, you learn to hustle, all kinds of hustles.
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There's legal hustles.
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You pay everything in stamps. Those are the currency.
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You charge another inmate to clean his cell.
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There's sort of illegal hustles, like you run a barbershop out of your cell.
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There's pretty illegal hustles: You run a tattoo parlor out of your own cell.
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And there's very illegal hustles, which you smuggle in,
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you get smuggled in, drugs, pornography,
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cell phones, and just as in the outer world,
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there's a risk-reward tradeoff, so the riskier the enterprise,
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the more profitable it can potentially be.
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You want a cigarette in prison? Three to five dollars.
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You want an old-fashioned cell phone that you flip open
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and is about as big as your head? Three hundred bucks.
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You want a dirty magazine?
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Well, it can be as much as 1,000 dollars.
03:00
So as you can probably tell, one of the defining aspects
03:04
of prison life is ingenuity.
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Whether it was concocting delicious meals
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from stolen scraps from the warehouse,
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sculpting people's hair with toenail clippers,
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or constructing weights from boulders in laundry bags
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tied on to tree limbs, prisoners learn how to make do with less,
03:26
and many of them want to take this ingenuity
03:30
that they've learned to the outside
03:33
and start restaurants, barber shops,
03:35
personal training businesses.
03:37
But there's no training, nothing to prepare them for that,
03:40
no rehabilitation at all in prison,
03:43
no one to help them write a business plan,
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figure out a way to translate the business concepts
03:48
they intuitively grasp into legal enterprises,
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no access to the Internet, even.
03:54
And then, when they come out, most states
03:57
don't even have a law prohibiting employers
03:59
from discriminating against people with a background.
04:02
So none of us should be surprised
04:05
that two out of three ex-offenders re-offend
04:08
within five years.
04:10
Look, I lied to the Feds. I lost a year of my life from it.
04:13
But when I came out, I vowed that I was going to do
04:18
whatever I could to make sure
04:22
that guys like the ones I was locked up with
04:24
didn't have to waste any more of their life than they already had.
04:26
So I hope that you'll think about helping in some way.
04:30
The best thing we can do is figure out ways
04:34
to nurture the entrepreneurial spirit
04:37
and the tremendous untapped potential in our prisons,
04:39
because if we don't, they're not going to learn any new skills
04:42
that's going to help them, and they'll be right back.
04:46
All they'll learn on the inside is new hustles.
04:48
Thank you. (Applause)
04:51
Translator:Joseph Geni
Reviewer:Morton Bast

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Jeff Smith - Recovering politician
Once an up-and-coming star in the Missouri State Senate, Jeff Smith went to prison for covering up an election law violation. Since his release, he's created a new space for himself as a professor, writer, political commentator and advocate for those he was locked up with.

Why you should listen

In 2004, Jeff Smith ran for the U.S. Congressional seat vacated by Dick Gephardt, and came this close to defeating Republican Russ Carnahan. His inspiring, but ultimately unsuccessful, campaign was documented in the award-winning documentary, Can Mr. Smith Get to Washington Anymore?

A year later, Smith ran for the Missouri State Senate and won in a hotly contested election. He quickly became a rising star in the legislative body, focusing on education reform and tax credits among other things. However, in 2009, the FBI opened a criminal investigation into whether Smith had lied about a violation in his 2004 campaign. He ultimately plead guilty and spent a year in jail. It’s a story he has told on This American Life

Since being released from prison, Smith accepted a position as an assistant professor at The New School's Milano Graduate School of Management and Urban Policy in New York City. His research focuses on political campaigns, the role of race in urban politics and the legislative process. At the same time, he writes for The Recovering Politician, City & State NY and Politico's The Arena, and is working on an memoir. 

The original video is available on TED.com
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