In Support of Privatized Prisons
2025 New Year's Resolution Fulfillment
As long-time readers will know, my annual new year’s resolution is to find a way to change my mind on something.
For this year it ended up being reversing my opinion on privately-owned/run prisons.
This is an issue on which I have changed my mind back-and-forth several times over the past couple of decades. Perhaps more charitably I should say that I have refined my position on it updating for new information and new arguments.
I had grown opposed to them fearing they created a constituency who would lobby for more and longer incarceration. Despite the likely benefits from more-certain incarceration in deterring crime, there is likely no benefit from longer prison terms. Likewise, I am opposed to the idea that we need such a large proportion of our population (one of the highest rates in the world) behind bars. Mass incarceration is a problem.
To be clear this is a fraught issue. Deterrence is not a straightforward solution, and rehabilitation when actually tried has mixed results. Add to this the problem with incarceration being the first or only lever pulled in dealing with undesired social behavior. The drug war comes immediately to mind, but there are many other areas of concern dealing with actual crimes. Remember the truth in the adage: We should imprison people we are afraid of, not people we are simply mad at.
So, anything that might unduly increase incarceration was highly suspect for me. Since private prisons generally are paid to lock people up rather than based on a more difficult metric such as recidivism, they fell into the suspect category.
New thinking on the incentive problems and public choice concerns were what made this change decisive. First, it turns out that the problem of increased support for incarceration (keeping in mind we are concerned with prison sentences that are too long and people being improperly incarcerated in the first place) exists with or without private prisons. As I describe below, private prisons did increase this problem at the margin, but this seems to be a much smaller effect than it might appear at first.
Second, the public choice/incentive problem emerges in another respect—closing prisons. This was the real driver of change for me.
The coming plunge in prison population has brought to the forefront the opportunity and need to close many prisons. And perhaps surprisingly it turns out it’s easier to close a private prison than a public prison because the private entity is worried about profitability while the public prison is subject to the whims of the public and the powerful, vested interest of the corrections’ unions.
The public is ill informed, disinterested in the details, and generally pre-occupied with a knee-jerk, “lock-‘em-up” position. There is a growing movement who promotes criminal justice reform including incarceration (their good work even got through to Trump in his first term). Still, we need a lobby with vested interest who will promote a sensible policy, and private operators could be this group. They are at least more likely than the public entity. Private capital can take its investments elsewhere. Government actors would instead lobby for continuation of the status quo rather than lose their jobs.
Interestingly this is a reversal of a prior argument I mentioned above that led me to disfavor private prisons. Privatized prison supply does create a vested interest in favor of extending the scope of incarceration—the so-called prison-industrial complex. Privatizing prisons did add to this incentive problem since private prisons do better by extending their market (increasing the volume and number of prisons). Government prisons have a countervailing force that is a little stronger whereby unions have greater power and greater benefit for their members when there is scarcity in supply.
So government-owned/operated prison systems suffer in two regards as compared to privately-owned/operated systems. One, they benefit by undersupplying prisons, which leads to overcrowding. This is a problem not only if you care about cruel and unusual punishment as do I but also if you care about making sure there are facilities to imprison those who should be there. Two, they fight against reductions in prison spending, which is now the coming need, noting that they most fiercely fight to protect prison personnel pay and employment.
To be clear private prison corporations are in need of greater scrutiny both in how they operate and what they advocate for. This is obviously true for government prisons too thinking about California’s problems and New York’s Rikers Island among many others. Neither type of operator should be shielded from liability for negligence or abuse. But when it comes to a choice of owner/operators, there are reasons to support private prisons—especially if you are interested in eventually closing some down.
I appreciate the seriousness and good faith of this piece, and I agree with much of the diagnosis. Incentives d matter. Public systems are not immune to capture, and unions, bureaucracies, and political fear absolutely distort prison policy. We aren't in agreement in that.
Where I part ways is on the conclusion.
If mass incarceration is genuinely a problem (I agree that it is ) then I don’t think reversing your position on private prisons follows. It actually cuts the other way.
The core issue for me is not who runs prisons, but whether anyone is allowed to profit from human confinement , which is a relentless torment that's hard to imagine. And, Once human failure, captivity, or prolonged suffering becomes a revenue source, that incentive leaks into every adjacent decision: sentencing pressure, supervision rules, revocations, contract structures (Commissary, communication access), lobbying priorities. Even if outcomes are sometimes “no worse” (and very often there is evidence that say they are consistently worse) than public facilities, the capitalization of human ruin creates a structural gravity that is extraordinarily hard to counteract.
The argument that private prisons may be easier to close because capital can move elsewhere is interesting in theory, but I don’t see strong evidence for it in practice. What we do see consistently is that private operators lobby to preserve or expand their markets, not shrink themwhich is exactly what basic incentive analysis would predict. The profit motive is simply too powerful to rely on as a reform ally.
It’s also worth noting that while government prisons have deeply flawed incentives of their own, they are at least directly adjustable by public policy. Budgets, sentencing laws, parole standards, staffing models, and oversight can be changed without first overcoming a corporate obligation to shareholders. Public systems are sticky, but profit-seeking systems have strength of a different order.
So while I agree with you that public prisons are badly broken, I don’t think privatization is a corrective. I observe them as an accelerant. If we both accept that mass incarceration is harmful, then allowing any part of it to function as an industry is a contradiction we shouldn’t normalize.
I say all this with respect with appreciation and acknowledgement fir the way you’re willing to change your mind on this substack. I just think this is one of those cases where the original instinct was the right one: no justice system should be financially rewarded for keeping mass people locked up. That line matters.
Those are all great points, and they continue to resonate with me as they did when I held the same position. This is definitely one where I could see myself changing my mind yet again. New evidence showing a lot of corporate power being exerted that thwarts my thesis would be the most likely source of change.
The way I see it, counter a little bit to what you’re saying, is that corporate interest, while powerful, are one step removed from the decision makers rather than being the decision makers themselves. Both public prisons and private prisons have vested interests who want to preserve and extend the prison system. This is an area where the public’s general demeanor against corporations works in the favor of what is a good policy pursuit— less incarceration. If public interest continues to grow against incarceration, then it will be easy for them to cut ties from the corporate interest that pursues it. Specifically, I see those private prison operators becoming pariah in the public mind.
To be sure that is a theory wrapped in hope. But it is grounded in a lot of evidence that we see when it comes to the public position changing on a particular topic. Think about tobacco in particular. Set aside the fact that I think we’ve gone way overboard with anti-tobacco sentiment and policy. I want to legalize all drugs and that includes tobacco. Still imagine if the government owned and operated cigarette manufacturing and sales. I believe in that world it would be more difficult to pass anti-tobacco legislation. It was much easier to scapegoat the tobacco companies. Again, to be sure they weren’t angels themselves.
So perhaps my change of mind rest a lot with the changing environment of a reduced future prison population, which implies the need to close a lot of prisons. I could be persuaded that this is just a pragmatic change of position based on this new landscape—making my position a bit wishy-washy.
I will say that there’s always someone profiting off of incarceration. That’s where public choice comes into play strongly. Corporations benefit by running profitable prisons. That much is obvious. But it is also the case that the public administrators and people working in the department of corrections also benefit from incarceration. This is less obvious but still true. I think those public actors are somewhat more powerful than the private actors since they are more directly in control of the system. The work of John Pfaff helped me a lot to see this. My point of view was shaped from reading his research and being persuaded by it, and I should’ve referenced him directly in the post.
I would also like to think it is easier to hold private prisons, more liable for bad behavior and bad results than public entities. Again, this is a theory wrapped in hope that has substantiation in other domains.
Appreciate your thoughts for sure, and I would say there is a very good chance you are right and I am wrong on this one.