The Private Prison Industry: A special sick kind of crony capitalism

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I think most of our readers know that we are for the private sector doing almost everything. The private sector and the competition within the sector creates more and better goods and services for all of society.

But government contracting, often referred to as part of the “private sector,” is in fact not. It is a grey netherworld, part of the crony zone in the economy. Many contractors would not exist if it were not for government mandated rules and regulations. The “private” prison industry operates in this twilight where taxpayers pay for profits.

These companies want prisoners. That’s how they make their money. The more which is criminalized in society, the more potentially these companies make. That’s a pretty scary proposition and it is one of the reasons why crony capitalism in the prison industry should be of concern to conservatives, liberals, and libertarians alike.


You can show me any section of the criminal code, and I can tell you the anecdote that put that policy in place. Laws rarely make their way to the books because of research, data analysis or evidence-based best practices. Instead individual financial greed – and not the public interest – is all too often the driving force behind criminal justice policy.

I know. I saw firsthand how illogical criminal justice policies are created as the Director of the Oklahoma Department of Corrections.

Here’s how the scheme works: Private prisons create demand for their services much like drug dealers ensure that their customers are addicted, but not so addicted that they die. These companies inject their lobbying dollars and campaign contributions into the political world, contributing to a climate in which no one can be reelected by appearing soft on crime. The result is a machine that passes laws to ensure more and more people flow into prisons, regardless of whether society actually is made better by having these people behind bars.

The bottom line is that private prisons’ current business plans simply cannot coexist with meaningful evidence-based sentencing reform.

In other words – no war on drugs, no profits.

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