Gilmore gave us her answer to the thorny question of what explains prisons in chapter 1: "prisons are partial geographical solutions to political economic crises, organized by the state, which is itself in crisis. Crisis means instability that can be fixed only through radical measures, which include developing new relationships and new or renovated institutions out of what already exists." What we're looking for, now, is to find out the problem that prisons were expanded to solve.
Gilmore says it's the usual capitalist suspect - securing a system of unequal wealth distribution and accumulation - under new political circumstances. The state of California was added to the United States as the result of a war of colonial conquest, and then organized by the colonizers according to the typical hierarchies of the era: "Black-white, European–non-European, and Protestant-Catholic". These hierarchies, and especially the business interests atop them, were defended by the usual means. To take just one pair of examples: federal and state funds provided infrastructure to greatly increase the wealth of a small white landowning class (particularly those whose landownership allowed them to monetize groundwater, which was in short supply) and those around them. Then "race-restrictive covenants" prevented that wealth from leaking to the wrong color people, by shutting people of color out of the neighborhoods wealth lived in (and, consequently, the informal networks that circulate the capital, information, and business opportunities that determine tomorrow's wealth distribution).
The World War II economy boosted California's economy, as it was a production hub for various war machinery. To keep these manufacturing gains for the long haul, California needed a specialized worker base that could invent and manufacture yet more war materiel. They networked the universities (note: many of which were created by a redistribution of Indigenous lands likewise won by colonial conquest) to create a "master plan" that was marketed at furnishing higher education to every Californian high school graduate.
But the world economy spoke louder than California's plans could. Stagflation comes at you fast - the world recession of 1973 further complicated crises that had already begun in the state's economy. The middle was hollowed out: on the workers' side, unions lost bargaining power through a combination of labor-saving technological innovations and the Federal Reserve's war on inflation, which waged war on union power via control over the money supply. On the business side, larger agribusiness bought out smaller and insolvent farmers
Meanwhile, the demographics of the state had changed dramatically. Immigrants from Central America filled out work in the agricultural sectors as jobs and wages in the industrial war economy shrunk. High wage work with racial demographics skewing white was replaced, in the aggregate, by low wage work with a much higher composition of Black, brown, and Asian workers. The fact that these happened at the same time set the stage for a deliberate campaign by elites to defund the welfare state. The receipt of welfare was racialized, gendered, and demonized - it's no accident that eventual President Ronald Reagan began invoking the "welfare queen" on the national stage immediately after declining to seek a third term as California's governor. California's affluent revolted, pushing through ballot measures to slash property taxes and increasingly turning to towards a "law and order" politics where coercive control, not social support, was the policy choice du jour for the racialized underclass.
Perhaps the most important section of this chapter is called "The Four Surpluses". Some surplus is inherent to capitalism, which is designed to produce profit (a surplus!). But when the surpluses exceed the capacity of the current system to manage them, you get crisis - whether crisis is good or bad depends on where you're standing, and how the system responds to manage the new surplus. Gilmore groups into four the surpluses that resulted from these new political facts. Three of these seem particularly important for our purposes (the fourth is financial capital, I think it'll be easier to understand its importance later).
Surplus land: Capital moves, literally, in the spatial or physical sense. Factories and infrastructure get built or maintained in a city or block depending on whether capital is "there" or not. As it moves, buildings are abandoned, upkeep deteriorates, and the combination of yesterday's presence of capital and today's absence becomes a visible part of the built environment. Both rural and urban spaces go through cycles of investment and revaluation. Since agriculture's peak in 1978 till the time of the book's writing (2007), Gilmore estimates that 100,000 acres of California farmland went out of use per year.
These last two are helpfully taken together:
Relative surplus population: Gilmore says: "Capital must be able to get rid of workers whose labor power is no longer desirable—whether permanently, by mechanical or human replacement, or temporarily by layoffs—and have access to new or previously idled labor as the need arises. These necessities, as Marx’s ( 1967) science of capital accumulation demonstrates, are not due to the personalities or preferences of heads of firms: CEOs who resist such “adjustments” to the labor force jeopardize profits. The progressive nature of capitalism requires the essential commodity—working people’s labor power—in varying quantities and qualities over space, sector, and time." Surplus population, that rings a bell...aren't we glad we studied Marx?
Surplus state capacity: The state's capacity to manage, regulate, and legislate ballooned in response to the New Deal. The arrangements built out of that expansion, as all such political arrangements do, reflected the balance of power between competing interests and organizations at the time. These arrangements also set the starting conditions for tomorrow's battles - in this case, those over how the economic situation was going to be responded to at the level of policy. The combination of world economy, national policy, set one important initial response withdrawal of affluent state members from social support (via the demonized welfare policies).
This framed the other possibilities, since it meant that there was going to be joblessness and insecurity to go around. The remaining questions were simply how to manage it and distribute it. How was that? You'll never guess:
"Changes in labor-market structures have had particularly harsh effects on African American men in the prime of life (Miller 1996), while displacing other workers as well..." "steadily declining workforce participation among Black women with less than high school diplomas..." "Increased underemployment and joblessness is not an exclusively African American domain, however, although Black people are disproportionately represented in it. Between 1970 and 1980, the earnings of Chicanos aged 25–34 in the Los Angeles region declined from those of the previous decade, and although earnings improved in the 1980s, they did not regain the old highs. At the same time, Chicanas did not experience a compensatory gain serving to maintain household income levels...During the same period, overall joblessness for young adult Black men increased 25 percent, while that of white males in the cohort decreased."
Essentially - things get bad for every population of the underclass (particularly those with the least education), and how bad depends on placement in a racial hierarchy. As Gilmore reminds us in this chapter: "... rates of underemployment and joblessness, while meeting a need for capital, are not apolitically visited upon workers (Oliver et al. 1993; see also Massey and Denton 1994): the “market” did not do it...Rather, the post-Keynesian state participated in the production of the relative surplus population through specific actions and inactions."