Private prisons and the reasons for incarceration

Via the Westword, an interesting report on the cost-effectiveness of private prisons. Essentially the conclusion is that when you try to save money by privatizing prisons, you also get an inferior product. I’m not sure this should be terribly surprising. The idea that private programs can manage things more efficiently than the government has always been a pretty dubious assertion at best.

People always point to the Post Office, which is losing money. Of course, it’s losing money while charging less than 40% the rates of its private competitors, and also has a mandate to deliver to every home in the United States. Meantime, the VA is a highly cost effective health care provider, and the federal entitlement programs are highly efficient.

The government isn’t the best choice to do everything: the private sector is good at adapting to market pressures to create new products that people will buy, and make existing products cheaper. That said, the private sector is a poor choice to provide essential public services. The private market will always look for the cheapest way to meet the bare minimum standard (that’s efficiency!).

In the case of prisons, this goes back to the rationales for punishment. Although rehabilitation has in some ways been written off as something that works, at least public prisons attempt to have rehabilitation programs. Public prisons will also strive to maximize security within their budgets. That’s because money they don’t spend on making their product better just goes back into the general budget. Although some people decry this “use it or lose it” approach to budgeting agency services, the alternative for exclusive private contractors is far worse.

The alternative for what private contractors can do with their money is reinvest it in their business and try to make more money. While this is a good thing for private companies that make useful stuff like TVs (they advertise, or try to improve the product) it’s really really bad for companies who make all their money on the government. Their option for marketing is to spend the money on lobbying. So basically the private prisons are stripping down their services in order to capture the legislature into sending them more programs (and this is borne out in the report).