A 1975 STUDY BY DANZIGER AND WHEELER (APPENDED) FOUND THAT AN INCREASE IN THE EQUALITY OF MALE INCOME DISTRIBUTION IS A BETTER PREDICTOR OF LOWER CRIME RATES THAN AN INCREASE IN THE HARSHNESS OF CRIMINAL SANCTIONS. ASSUMING THE STATE OUTLAY IN NEW PRISON AND OPERATING COSTS OVER THE NEXT 4 YEARS CONTINUES TO BE APPROXIMATELY 38.9 MILLION DOLLARS, THE USE OF THESE FUNDS TO ENCOURAGE BUSINESS EXPANSION AND TO PROVIDE SALARY SUBSIDIES WOULD RESULT IN GREATER CRIME REDUCTION THAN THE COST OF INCARCERATION OF PROJECTED OFFENDERS. WHILE SUCH A CRIME PREVENTION PROGRAM MIGHT BE EFFECTIVE, IT WOULD DISPLACE JOBS BY PLACING EXCESS OFFENDER AND CORRECTIONAL PERSONNEL INTO THE LABOR MARKET AT A TIME WHEN THE ECONOMY, EVEN WITH EMPLOYMENT/SALARY SUBSIDIES, IS LEAST ABLE TO ABSORB THEM. SUCH A SOLUTION APPEARS UNACCEPTABLE AND IMPRACTICAL. IT IS SUGGESTED THAT PERHAPS A MAJOR PROBLEM IN CORRECTIONAL POLICY HAS BEEN A FAILURE OF MANAGEMENT TO EFFECTIVELY UTILIZE RESOURCES. PRISON MANAGEMENT HAS PLACED TOO MUCH EMPHASIS ON COSMETIC IMPROVEMENTS, INCREASES IN MANPOWER AND INCREASED ORGANIZATIONAL SOPHISTICATION, AND TOO LITTLE ON THE PRODUCTIVITY OF THE SYSTEM. INCREASING MANPOWER/OFFENDER WORKING RELATIONSHIPS, EXPANDING THE ROLE OF INMATES AS EMPLOYEES, PUTTING PROGRAMMING ON A CONTRACT BASIS DEPENDENT UPON VOLUNTARY INMATE DEMAND AND PARTICIPATION, AND SYSTEMATICALLY REVIEWING PROGRAM FEASIBILITY AND BENEFITS MIGHT PROVIDE A MEANS FOR MORE EFFECTIVE UTILIZATION OF CORRECTIONAL RESOURCES. THE CONCEPT OF AN INDUSTRIAL PRISON APPEARS TO HAVE A NATIONAL CONSENSUS. SUCH AN APPROACH EMPHASIZES PRISON PRODUCTIVITY COUPLED WITH INMATE JOB TRAINING AND THE DEVELOPMENT OF WORK ETHIC MOTIVATION IN A MANNER WHICH WOULD HELP PRISONS AND PRISONERS TO BECOME SELF-SUPPORTING. SOME OF THE OBSTACLES TO THIS APPROACH INCLUDE: (1) ALL NONINDUSTRY INMATE LABOR WILL HAVE TO BE COMPENSATED IN RELATIONSHIP TO PREVAILING AND PRISON INDUSTRY RATES; (2) CURRENT STAFF FACING DISPLACEMENT WILL RESIST THE APPROACH; (3) PRISONERS WILL PROBABLY BECOME INCREASINGLY ORGANIZED AND HAVE INCREASING FUNDS AND AUTHORITY TO FORCE NEGOTIATIONS; (4) THERE WILL BE CONFLICT BETWEEN PRISONERS' RIGHTS AND THE EXPANDED RIGHTS OF PRESENT UNIONIZED CORRECTIONAL MANPOWER; AND (5) EMERGING COLLECTIVE BARGAINING CONTRACTS WILL EVENTUALLY HAVE A SUBSTANTIAL IMPACT ON PRISON INDUSTRY FISCAL RESOURCES. (JAP)