Private Prisons Are Guaranteed Inmates by the State


When I was studying criminal justice, the concept of the “prison-industrial complex” was brought up in comparison to the military-industrial complex warned about by Dwight Eisenhower. As the military-industrial complex describes the system of a collection of suppliers to the US military, as well as all who financially benefit from the waging of war, the prison-industrial complex are those who financially benefit from the warehousing of people who are convicted of crimes by the state.

This article from StoryLeak describes an effect of the latter. Apparently state and local governments have made contracts with privately run prisons that guarantee a steady supply of inmates, specifying financial penalties for those governments if they fail to supply enough inmates. There is a lot of money to be fleeced from taxpayers in this industry. Indeed, I think this presents an interesting challenge for minarchists, who typically believe that military defense and prison operations are legitimate functions of government: even at its most basic and accepted functions, governments find a way to be wasteful and benefit special interests at the expense of the rest of us.

What I find silly is that many people, when confronted with this problem, place their blame on private business, the profit motive, or some such thing. On the contrary, the problem is one with the state, particularly the ones who draw up these contracts. They clearly have less of an interest in spending money wisely, especially since it isn’t theirs, and have the personal incentive to grant favors to private prison corporations, which have favors of their own to grant public sector employees in return. Why else would they have something in the contract that calls for more money to be paid to these private prisons for essentially providing less service?

We see here, once again, the danger of public-private partnerships, where cronies are paid for services that would never be demanded in a free market, but only where taxpayers can be forced to pay for things nobody is really willing to pay for with their own money. I doubt even the most fervent drug warriors would be willing to pay for the costs of imprisoning a marijuana user if they bore the full cost of it themselves; it might even be the case that they wouldn’t want to pay what they are paying now, subsidizing by every other taxpayer, if they knew their individual contribution. Nonsensical policies remain largely because the costs to individuals are hidden. The same consideration can be given to innumerable things that the government spends our money on: pretty much any victimless crime, battleships, aircraft carriers, fighter jets, and all other antiquated military equipment that would not exist but for unwilling buyers being forced to pay for it.

The problem doesn’t begin, and therefore won’t end, by shutting down companies that provide the government with goods and services that wouldn’t ever exist in a free market; rather, it is keeping the government from spending money on such things in the first place. Get rid of the demand side and there will eventually be no supply side to speak of.


2 responses »

  1. I completely agree with you regarding victimless crimes and that we are jailing people for ridiculous transgressions but that is a separate argument. My biggest problem with the private prison industry is they have zero incentive to rehabilitate inmates. They actually profit from repeat offenders. If we are jailing our citizens with hope they will be fit to re-enter society and be productive then a private prison system that profits from career criminals is counter intuitive. This is one of the few areas I don’t think private industry is better than the state. I would love to see some non profits involved with the prison system in helping to rehabilitate inmates, teaching them skills, providing role models and helping to place those who are released in jobs. There is a better way but you are right that it should not involve the exchange of money between the state and private industry.

    • Thanks for the comment. I find myself questioning how much prisons ought to be relied upon as a punitive measure. In the English common law system, before the kings started to insert themselves, restitution was the primary punishment. But kings wanted their cut and started to declare more and more acts as “disturbing the king’s peace” and fines would be paid to the crown. And so we find ourselves today: if fines are paid as a sentence, the proceeds typically go to the government (please see Bruce Benson’s “The Enterprise of Law” for more on this subject). I see no reason why greater reliance on restitution wouldn’t be superior to the status quo: the victim is compensated, the offender is punished, and the rest of us don’t have to pay for the latter’s housing.

      But to reply directly to your point about this being an area where private industry is inferior to the state, I say, Good! I don’t want there to be entities that are better at putting massive numbers of people in cages than the state. As I mentioned in the post, I think there are many “services” that wouldn’t exist without the state because nobody would voluntarily pay for them. Massive incarceration is one of those things. I do not know exactly how a stateless society would deal with the worst criminal offenders (though we have some ideas from historical societies as mentioned in Benson’s book, as well as that in Iceland as described by David Friedman in “The Machinery of Freedom”), but I am confident that incarceration would not be relied upon to the extent that it is.

      But as state-run justice systems are what we currently have, I believe your proposal of non-profits being more involved in rehabilitation of inmates as an unambiguous improvement. Some are already involved, but it’s difficult to make a noticeable difference when there are so many inmates.

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