Prison Profiteers

Criminal justice in early America centered on vengeance and swift corporal punishment for sinners, criminals, and African American slaves.  When formal corrections eventually formed in the mid-19th Century,  there was a propensity to involve private sector actors and profiteering motives.  For instance, several states instituted “convict leasing” systems that provided cheap convict labor to commercial enterprises.  Prisoners were swiftly processed by local courts and transported as subsidized labor to private warehouses, railroads, and plantations.  Market-based corrections eventually waned in the early 20th Century as  prison maintenance became accepted as a core governmental function characterized by publicly-controlled prison facilities.

The Reagan years ushered in an administrative movement toward privatization or “contracting-out” of government services with market-based actors, especially in the area of human-support services (e.g. charter schools, non-profit health facilities, etc.).  Political elites of all ideological stripes have embraced the notion of “entrepreneurial government” that harnesses the dynamism and innovation of private sector actors in public service provision.  Over the past few decades, we have witnessed the privatization of schools, garbage collection, military services, mental health services, welfare-to-work offices, electronic record-keeping, and myriad other governmental functions.  In the push for privatization, public-private partnerships have also waded into more controversial waters, such as the administration of America’s prisons.

While incorporating private-sector actors into government functioning makes some policy sense, all government functions are not created equal and favorable market conditions do not exist universally.  Thus, the success of privatization is likely conditioned by specific policy areas and situational nature of the marketplace.  Free-market ideology alone does not guarantee improvements in policy implementation.  In the case of America’s prisons, it could be argued that privatization will do little to improve service delivery.

1.  A competitive market for prison maintenance services does not exist.  It is unclear that a market would exist at all without government support (prisoners are not exactly lucrative “customers” in the open marketplace).  At best the market functions as an oligarchy with a few major players seeking government contracts.  Correctional Corporation of America and the Wackenhut Correctional Corporation operate effectively as a duopoly, guaranteed contractual renewal irrespective of performance.  In short, there are few if any competitive rivals and minimal market pressure to function optimally.

2.  Profiteering motives could induce perverse incentives along several dimensions.  Maximizing profits means maximizing “customers” or in this case maximizing the number of prisoners.  Thus, prison corporations could potentially lobby for even more punitive criminal justice measures, producing a steady stream of clients (and revenues).  Mass incarceration strategies (e.g. War on Drugs) have imprisoned millions of Americans over the past few decades, and might only worsen under a privatized system.  Secondly, Maximizing profits also involves minimizing costs to personnel and services.  These could come in the form of company layoffs, cuts to worker wages/benefits, or cuts in prisoner services (like health care or food service perhaps).  Shareholders might enjoy extra dividends but prison security and prisoners themselves will likely take the brunt of privatization efforts.  There is a human cost to corporate “efficiency” that is likely magnified in the prison privatization context.

3.  Scholars and practitioners have suggested that a “paradox of privatization” exists in the provision of public services.  In short, the paradox states that shedding government functions to the private sector requires increased government oversight mechanisms to monitor private sector actors.  When the government contracts with third-party providers, more government is needed to make sure market actors are accountable to taxpayers.  Any cost savings reaped from private-sector prison management are blunted because of increased costs to government oversight.

4.  Last but not least there are thorny ethical issues related to corporate control and the power to incarcerate citizens.  Should corporations be in charge of punishment in America, an areas that has traditionally been the purview of government authority?  If we are going to incarcerate and punish millions of individuals, should there be some baseline public accountability?  Is it unethical to profit from the punishment of American citizens?

Today, approximately 3 million individuals populate America’s prisons, and the U.S. has the highest incarceration rate in the world.  We should be striving to reduce the incarceration rate, and I’m not convinced that allowing corporations to profit from mass imprisonment will abate those trends.  We should think long and hard about the potential drawbacks to prison privatization before handing the keys of justice over to the Correctional Corporations of America.