It uses economics to explore the secret world of the convict culture, inmate hierarchy, and prison gang politics. Like entrepreneurs in countries with weak states, inmates engaged in illegal activity cannot rely on state-based governance institutions, such as courts of law and the police. Correctional officers will not resolve a dispute over a heroin deal gone wrong or help kill a predatory rapist. Inmates must create rules to govern the society of captives. In today’s prisons, gangs play a pivotal role in protecting inmates and enforcing illicit deals in contraband markets. They have sophisticated internal structures and often rely on elaborate written constitutions. To maintain social order, gangs adjudicate conflicts and orchestrate strategic acts of violence to negotiate the competing demands of inmates, gang members, and correctional officers. This book uses economics to explain why prison gangs form, how they interact with formal institutions, and how they influence crime beyond prison walls. Economics explains the seemingly irrational, truly astonishing, and often tragic world of prison life.