Private Prisons: How “They” Make Money By Throwing Us in Jail

The United States of America currently holds the title for the highest incarceration rate in the world. In 2010, a study by the International Centre for Prison Studies at Kings College in London estimated that out of a population of 310.64 million people, 2,266,832 Americans were incarcerated. Furthermore, many Americans (at least 5 million total) are either on parole or probation.

These numbers may not seem too staggering. Two million people out of 310 million only represents a small fraction of the population. However, when we put these numbers into perspective and view them in comparison with other nations, they are alarming. America prides itself on being a fair and modern nation, yet we have a higher incarceration rate than all other nations, including “corrupt” nations like Russia. And despite the fact that the violent crime rate in America has been on the decline, our incarceration rates have increased dramatically.

There is even more disturbing news. About 100,000 adult inmates are housed in private prisons. These facilities are sponsored and run by private for-profit businesses. Advocates of private prisons claim that these institutions save taxpayers money, but as we will see, this is not necessarily true. Furthermore, the fact that these prison corporations actually sell shares on the stock market is a testament to the fact that they are quite literally in the business of locking people up…and keeping them locked up.


When local and state governments are looking to build a prison, they appeal to taxpayers to sponsor the building and maintenance of the institutions. This method had been fairly effective until around the mid-1980s. Taxpayers, most likely realizing the many flaws in the prison system, stopped funding public prison projects. This came after a huge increase in the American incarceration rate, starting in the 1960s and 1970s. Local, state, and federal law enforcement agencies were given more power, resulting in higher incarceration rates throughout the nation. Rather than deal with the socio-economic problems that fueled many of the “crimes” being committed (such as drug use), America decided that locking up these “criminals” was the most effective solution. This led to a prison boom, which eventually led to overcrowded and poorly-run prison facilities. The governments ran out of money and the boom came to a halt.

In 1983, a small group of three Tennessee investors decided to take advantage of this situation. They saw an opportunity for a lucrative business and subsequently created the Corrections Corporation of America (CCA). By 1984, the CCA had been contracted by the INS to build the first modern private prison in the United States, a detention center in Houston (where better than Texas to build detention centers and prisons) built to house immigrants awaiting processing.

CCA and other private prison businesses generate profit by offering to buy and maintain failing prison institutions from state and local governments. This initially bodes well for the states, because running prisons is a costly business. However, contractual agreements between the private prison businesses and the states ultimately do more harm than good; the CCA requires prisons to contain at least a thousand beds and to retain at least a 90% occupancy rate for a period of 20 years. States are subsequently obligated to fill their prisons, which eventually ends up costing them more money. Furthermore, the societal impact of such a system is devastating.

Advocates of the private prison business claim that private organizations build newer, kinder, and gentler prisons. In reality, private prison corporations seek to maximize their own profit and nothing more. They could care less about the inmates, who to them are just numbers. For this reason, there has been a lot of criticism aimed at the treatment of inmates under private corporations. And it’s not only the inmates who are treated harshly: many corrections officers have had their paychecks cut and many have even been fired because of the greedy, profit-seeking private prison corporations.

A good spiel is necessary when companies like the CCA make a sales pitch to potential investors. The CCA cites recession-proof investment opportunities, high rates of recidivism (going back to jail) among prisoners, and the potential for “accelerated growth in inmate populations following the recession” as reasons for people to invest in the private prison industry. What this all means is that private prison businesses are making money by seeing to it that more and more people become incarcerated. Additionally, they are making money by seeing to it that those who are eventually freed from the prison system go right back into prison.

Besides the greed of companies like CCA and the financial toll private prisons have taken on states, one of the biggest problems with the private prison business is that it essentially requires more and more people to be locked up for longer periods of time. The social impact of such a system is extremely detrimental. The system criminalizes drug use and other petty “crimes” and creates longer prison sentences for such “crimes.” Most prisoners are not murderers and rapists: most are in prison on drug-related charges. And while I fully support locking up violent offenders, I cannot support the incarceration of people whose crimes amount to nothing more than smoking some really good herb.

Rather than deal with the underlying social factors that drive people to commit crimes and use drugs (poverty, racism, classism, etc.), our system criminalizes the people who are victims of these social issues. It is easier to throw people in prison than it is to reform a society.

Don’t get me wrong; everyone is responsible for his or her own actions. But when you are dirt-poor; or when you belong to a group of people who have historically been and continue to be discriminated against because of their ethnicity; or when you have to work long, draining hours at multiple blue-collar jobs just to survive, you are more likely to be drawn into “crime” than if you were an upper middle class WASP afforded with the best healthcare, education, and opportunities.

The prison industrial complex is real, and it seems that private prisons are at the forefront of the issue. America, the land of the free and the home of the brave, happens to also be the land of greed and the home of the enslaved. Our prisons are our solution to socio-economic issues that will not go away simply by punishing those who are victims of them. Many people are indeed dangerous and should be locked up, but many prisoners are nothing more than good people whose circumstances have led them to believe that crime is the only way out. And while we cannot blame the prisons for perpetuating the act of people committing crimes, we cannot overlook the fact that many prisoners would not be prisoners if they had not been marginalized from birth. Furthermore, the fact that there now exists a system that profits from throwing people into cages means that the real issues will not be solved any time soon.

As someone recently commented on a post I put on Facebook, one of the biggest reasons for America’s high rate of incarceration is that more people in prison equals more money.

It’s big business.

Think about it.

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