Privatized Prisons: A Human Marketplace

By Llewellyn Hinkes-JonesJanuary 10, 2013

Privatized Prisons: A Human Marketplace

IN THEORY, PRIVATELY RUN PRISONS are simply another municipal resource that for-profit management companies like the Corrections Corporation of America (CCA) and GEO Group believe can be run cheaper and more efficiently than in the hands of government agencies: a free market alternative to the bureaucratic red tape of waste and regulation in the world of penitentiary administration. But running a penitentiary is not the same as running a municipal sewage authority. Having a monetary value tied to human incarceration and justice creates a deeply perverse incentive that should not exist in the world of commerce. When the for-profit prison industry places the iron fist of criminal justice in the invisible hands of the market and sells it as a cost-cutting measure, it is hard not to interpret as anything but the predatory capitalism of a self-perpetuating slave state.


Most criticisms of privatizing prisons have come in the form of labor, management, and financial issues. This is an argument of numbers in which critics hope to show that the same cost-cutting measures that enable private prisons to be profitable are also to blame for subverting the security, accountability, and quality of life standards of those facilities. The promise of a more efficient penitentiary runs in stark contrast to various, well-publicized examples of private prisons accused of devolving into “gladiator schools” of violence and decay, run by fewer, inexperienced, undertrained, and underpaid staff who may not respond to such chaos responsibly. Cost overruns, sometimes well above what any state-run facility would charge, often eliminate any pretense of a financial benefit. Accusations of corruption, cronyism, and excessive CEO pay are commonplace.

One private prison has been accused of colluding with gang members to help manage inmates and save on staffing costs. Others have actively avoided housing sick inmates, leaving the higher medical care costs that those patients might incur to the state and federal penitentiaries. The legalization of interstate prisoner exchanges has only enabled this practice further. Private prisons can now cherry-pick low-cost, low-threat inmates, not just from other state-run prisons nearby, but also from across the country, to fill empty beds and maximize cell occupancy. Prisoners can be transferred to the state with the fewest regulations on prisoner treatment and facility standards.

Private prisons have also been able to profit off of their captive audience by overcharging on prison services such as interstate phone calls. Not just an overpriced luxury, phone access can be the sole source of communication between inmates and their family, friends, and legal representation, especially if they have been transferred far from the state that originally imprisoned them. The end result being that prisoners can find themselves out of contact with anybody who can advocate on their behalf, hindering the appeals process and giving them little recourse against abuse.

Still, numerous studies detailing the failings of private prisons have not stood in the way of their development, largely because there is such a desperate need for prison space in the United States. America’s outsized prison population is the largest in the world, easily dwarfing that of various totalitarian regimes across the globe. The sheer quantity and percentage of those behind bars in America has grown exponentially ever since the initiation of the War on Drugs in the 1970s. The overcrowded conditions exacerbate violence on prisoners and staff alike. The prevalence of rape that has resulted, often dismissed in popular culture as an extension of justice served, is a horrible standard for any society.

In this way, private prisons, with their promise of quickly building and staffing new complexes, were proffered as the salvation for an overcrowded system. In the early 1980s, when private companies like CCA gave birth to the for-profit model in the US and began offering to handle temporary immigration detainment, their service came as a boon to the burdened states. If these nonviolent populations could be contracted out, then the overflow of drug offenders could be handled in the public system. But by entering into this Faustian agreement and creating another billion-dollar criminal justice empire based on profit, the states have enabled the ever-growing prison population to continue its expansion.


In the three decades since the birth of the first private prison in the United States, the incarcerated population has continued to grow, only compounded by stricter sentencing guidelines like “three strikes” rules and mandatory minimums for drug possession. Rather than questioning the meteoric rise of incarceration in a developed country, the prison industrial complex has become increasingly dependent on private markets to ease the burden of the oversized prison population.

Human rights groups have long called for drug decriminalization, immigration reform, and changes to sentencing guidelines to address overcrowding, but they are no longer debating with the public as to what defines cruel and unusual punishment. These groups are now arguing against a multi-billion-dollar criminal justice industry and lobby dominated by private prisons, lawyers, security construction companies, bail bondsmen, surveillance technology vendors, weapons manufacturers, and police, sheriff, and prison guard unions who see nothing wrong in using their largesse to broaden the definition of what constitutes a jailable offense.

Particularly with respect to drug and immigration law, private prison companies lobby on behalf of bills and donate to campaigns that support stricter sentencing guidelines and building more prisons. These companies also fund efforts with pro-corporate, quasi-lobbying groups like the American Legislative Exchange Council (ALEC) to draft legislation that would result in locking up more people for minor offenses and misdemeanors.

Arizona’s Senate Bill 1070, the “Support Our Law Enforcement and Safe Neighborhoods Act,” may be the best example of this. Private prison companies heavily lobbied on behalf of the ALEC-drafted bill that would have allowed law enforcement to imprison anybody accused of illegal immigration simply because they were caught without paperwork. If fully enacted, it would have been a windfall to the immigration detention industry operated by private prison companies. Copycat bills using the same legal language have since been discovered in various other states.

CCA officials have callously admitted that their financial model “could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices.” This conflict of interest would seem criminal if it were chemical manufacturers trying to set standards on allowable pesticides in food products, but it seems downright diabolical when the lobbying concerns imprisoning American citizens. The only way that this for-profit perversion of justice is able to exist is because the criminal justice system takes advantage of groups with less ability to enact reforms, such as minority populations and the poor — especially in how the laws are enforced. A Human Rights Watch investigation detailed this racial discrepancy in prosecution, noting, “Ostensibly color-blind, the US drug war has been and continues to be waged overwhelmingly against black Americans.”

With their growing influence, this heavily financed lobby has also been able to slowly erode restrictions on the use of prisoners as commercial employees. Prison labor has long been banned in various states from competing on the free market since it violates numerous labor laws and essentially amounts to a slave workforce who can be paid subminimum wages and have little recourse against harsh working conditions. The for-profit prison industry is determined to change that.

This profiteering might be defended as part and parcel of running an efficient penitentiary, but it’s hard not to view it as a vicious cycle of exploitation; prisoners are used as cheap labor, sometimes against their will, obstructed from leaving in due time, and given worse treatment all to help fund a lobby that seeks to trap ever more into their galley. When the venture is not profitable enough, the inventory can be auctioned off to the lowest bidder like chattel, creating a kind of de facto system of legitimized slavery.


The more the prison system is privatized, the more such perverse incentives grow. While privatization advocates agitate for stricter sentencing guidelines that will advance profits, the private system opens up even more moral hazard on an individual level. When the prison is under the oversight of the local sheriff’s office, like it is for Louisiana’s parish system, local law enforcement can be paid by the city on a per-inmate basis. By opting to use private prisons that offer a lower per-inmate cost than the state-run facilities, the sheriff’s office can then keep a larger portion of the per diem for themselves. Financing criminal justice this way essentially gives law enforcement a bounty on the heads of all those they capture. As a result, the incarceration rate for nonviolent and municipal offenses, like unpaid parking tickets, can make up a majority of the pretrial prison population. Policies like this have helped turn Louisiana into the prison capital of the world.

One of the more venal, blatant examples of the quid pro quo subversion of justice created by monetizing the criminal justice system is the recent “Cash for Kids” scandal in Pennsylvania. In that instance, two judges were paid by a representative of a privately run juvenile penitentiary to dole out excessively harsh sentences to teenagers independent of the accused’s guilt.

Although the full extent to which the profit motive has influenced the judicial system is not known, the market valuation of a for-profit prison system may be the greater, looming threat. The commodification of prisoners — allowing them to be traded on the market as shares in private prison companies — corrupts all those invested in the enterprise. Decriminalization, immigration reform, and changes to sentencing guidelines increasingly go against the interests of all those who knowingly profit from investments in the criminal justice system. Once these investments are bundled, repackaged, and sold as financial instruments, the moral distance only increases.

Jail not only removes people of their freedom but also enters them into a world of depression and violence, leaving permanent marks on those who survive and disenfranchising the ones who are found guilty of felonies. Any enterprise that commonly affects people so drastically would usually not be considered profitable because of the inherent liability. A single incident of excessive abuse by a prison guard could lead to lawsuits and significant fines. The costs for insurance coverage of such an enterprise can be astronomical. In the parlance of the market, this is translated as “managing risk,” which is one of the reasons private prisons tend to specialize in such nonviolent populations as juvenile offenders and detained immigrants. This leaves higher-cost offenders, those with histories of violence and health concerns, to state and federal penitentiaries who must foot the bill for higher guard-per-inmate ratios and more advanced security features to handle these types of offenders.


To deal with the growing concerns of violence, the prison industry has embraced the Supermax model in which solitary confinement and constant surveillance are applied to dissolve gang affiliations and separate out mentally unstable prisoners. Originally intended for the “worst of the worst,” these disciplinary tools have only increased in popularity in the few decades since their origin.

The original model of this combination of surveillance and isolation was Eastern State Prison of Pennsylvania. The prison’s design was based on Jeremy Bentham’s philosophy of the panopticon, which posits that isolation and observation can foster introspection, giving jailers “a new mode of obtaining power of mind over mind.” With only their thoughts and the feeling of being constantly watched, prisoners would realize the error of their ways and reform themselves.

Although temporarily solving issues of prisoner-on-prisoner and prisoner-on-staff violence, long-term solitary confinement is considered an incubator of psychosis. Over a lifetime it can lead to mental health issues associated with violence, paranoia, and suicide. The United Nations considers it torture. It also cuts off prisoners even further from potential legal recourse. Embracing isolation as an acceptable form of incarceration effectively negates the idea of prisoner rehabilitation.

Upon visiting Eastern State, the warden of New York’s Auburn prison reflected that:

There is no doubt that uninterrupted solitude tends to [...] harden the heart, and induce men to cultivate a spirit of revenge, or drive them to despair [...] A degree of mental anguish and distress may be necessary to humble and reform the offender; but carry it too far, and he will become either a savage in his temper and feelings, or he will sink in despair.

Although most current Supermax facilities tend to be publicly managed, various private facilities now have Secure Housing Units (SHUs), which operate as a prison within a prison dedicated to the Supermax model of solitary confinement and surveillance.


The costs for construction of these newfound facilities and the advanced surveillance, automation, and architectural features they employ far exceed those of most medium-security prisons. This shift toward building more, highly advanced, and costly facilities that can hold fewer inmates per square foot might seem contradictory to the original cost-saving intentions of private prisons, but construction of new fortified complexes can be justified with the promise of a new criminal justice economy to small, rural towns in decline. Those future prospects can then be used to float bonds that pay for the up-front costs of construction. Going into multimillion-dollar debt to imprison an ever-growing portion of the American population may not be a devious part of the town charter, but, as the financial incentives increase and the moral distance grows, the more tempting these decisions become.

Then there are also the political incentives for building penitentiaries as instruments of gerrymandering. Even though they are ineligible to vote, some states count detainees in their census. Once a new prison is built, new representative districts can be drawn to include the disenfranchised prisoners. Using prison construction as a financial incentive and a political tool like this can end badly if sentencing reforms do get passed and crime rates drop statewide. If the predicted inmate population does not live up to speculation, towns can be left deep in debt, without the industry that they had hoped would be their financial salvation and with an empty, forbidding structure on the outskirts of town.

Yet, more municipalities may turn to incarceration as an investment opportunity in the wake of globalization and a dearth of domestic jobs. Each one will have to debate whether solving their financial plight will be worth entering their community into the culture of what Foucault termed the “carceral state,” where security, policing, and surveillance are prevalent. By tying their financial survival to the prison industrial complex, municipalities will be ever more dependent on security and the increasingly militarized and unregulated industry that monopolizes it.

The continuing justification for all of this is that there is a violent aspect of society to be protected from; that we are all a thin blue line away from anarchy and chaos. But if this were truly the cause, then we would be defining criminality upward, especially for nonviolent offenses. Otherwise, we are merely enabling a life of violent recidivism for those unlucky enough to be tempted into victimless crimes from a place of poverty and whose existence is forever altered by their experiences in prison.

This trend exists independent of the privatization of prisons, but privatization only encourages the vicious cycle and opens up new opportunities for exploitation. The purported benefits of cost and efficiency from the free market are intended to solve a problem that never really existed. Costs of nationwide incarceration were only an issue because of an exploding prison population that did not exist 40 years ago and has nothing to do with improper management or corruption in publicly run prisons.

This monetization of the criminal justice system is nothing new. The convict leasing system of the Reconstruction-era South allowed prisoners to be rented out to private industries for labor projects. The conditions were deplorable and corruption was rampant. The system targeted African Americans, who often received unduly harsh sentences for misdemeanor crimes. Sheriffs sometimes earned bounties for each prisoner they delivered to the camps, and numerous deaths resulted from the use of “whipping bosses” to keep prisoners in line. The system was highly profitable, and it wasn’t until the late 1920s that convict leasing was eventually phased out in most states after high profile incidents shined a light on the incorrigible practice.

The State of New York in the 19th century also ran their prisons on a “fee system” in which independent prison operators charged on a per-inmate basis. Eric Schlosser, in his 1998 analysis of the prison industrial complex, noted that:

Under the fee system local sheriffs charged inmates for their stay in jail. A 1902 report by the Correctional Association of New York harshly criticized this system, warning that judges might be inclined to “sentence a man to jail where he may be a source of revenue to a friendly sheriff.” Whenever the fee system was abolished in a New York county, the inmate population dropped — by as much as half.

Up until the 19th century, most of the prisons in London were also privately run. Independent “gaolers” would purchase the right to run a prison at their whim. The whole enterprise was profit-driven and horrendously corrupt. Conditions in the privately run prisons, like that of the infamous Newgate prison, were horrid. Author Henry Fielding considered it “a prototype of hell” and lamented how the per-diem prison system enabled the basest savagery of the human condition.

Anything from food and bedding to removing irons or leaving the jail at the end of a sentence required payment. Prisoners were forced into slave labor activities, like pushing a concrete tread wheel to grind corn, to help pay for the most basic of amenities. The whole system was ripe for abuse by the gaolers who coordinated with underpaid police officers and court justices. These justices, often referred to as “trading justices” because of their penchant for bribery, sometimes had fixed menus of how much they charged for an indictment, independent of the accused’s guilt.

Police could concoct false charges, foment disputes among the poor, and create accusations of prostitution and impropriety out of thin air as a way to send as many people to prison as possible. Some were simply thrown in prison on suspicion of a crime and not released for months while pending trial. Many of those subject to such exploitation were simply guilty of indebtedness at a time when debtors’ prisons were still commonplace.

Eventually, the contracted prison keepers of London were limited in what they could do and charge. A report presented to Parliament on the practice of billing on a per-prisoner basis stated that:

Such an income, frequently ill paid, to a humane gaoler, leaves him also too much open to the imputation of harshness, whilst it gives to a harsh gaoler a power of oppression.


The parallels with current day prison privatization are quite striking. The simple difference being that the economies of the poor have changed. Whereas the London gaolers took advantage of the poor and lower class, the current American system is directed at minority populations. The perverse incentive that offers those in power to take advantage of the disenfranchised still exists, yet it now thrives under the false pretense of efficiency.


LARB Contributor

Llewellyn Hinkes-Jones is a Washington, DC writer and author of Demented Agitprop: The Myth and Madness of Agenda 21 Conspiracies. His work has appeared in the Toronto Star, The Atlantic, The Morning News, Washington City Paper, and The Awl.


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