America's Parasite Prisons
In the wake of the U.S. Justice Department declaring that they will phase out the use of private prisons, it's time for us to openly acknowledge that probably every critique the left can throw at private industry applies to the private prison industry. In short, the private prison industry really does put profits before people, and the results have been terrible. In her announcement on the change of policy, Deputy Attorney General Sally Yates stated:
They simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs; and as noted in a recent report by the Department’s Office of Inspector General, they do not maintain the same level of safety and security...
So does this not prove to all of us free market fanatics that government involvement is clearly necessary for at least some parts of the economy? Short answer: no.
The so-called private prison industry isn't a private industry at all and would not exist in a free, competitive market.
Let's first look at the way a truly private business operates on the market. The goal of every business is to turn a profit, and the way they do this is by creating a good or providing a service that the public at large values. In other words, private businesses create value for their customers and the profit they earn is their reward for doing so. Apple earns a profit by creating products that people value more than the money they spend on those products. If they did not value the products more than their money they wouldn't buy them. The same applies to McDonald's, Old Navy, Amazon, and any other private business you can think of.
"Private" prisons on the other hand, only seek to create value for the government. Why is it different if your customer is the government rather than private individuals or other firms? Private individuals and firms have money to patronize other businesses because they themselves created value in their own field. For example, Bob gets paid by his employer because he creates value for his employer, who is paid by their customers because they create value for those customers. Bob and his employer are then able to use their profits to patronize other businesses who provide goods and services that they value and on and on. The government is different because they do not earn profits by creating value for anybody. They get their money by simply taking it out of the productive sector of the economy through taxation. In other words, the government is a parasite.
Since "private" prisons do not serve or create value for the public on the market but rather rely on government payments for their very existence, they are fundamentally indistinguishable from the government itself. They are an agent of the government in all but name, and thus suffer the same inefficiencies as any other government project. A difference in operations from other government agencies does not make them different in nature and does not change the fact that without market pricing all of their decision-making about how to allocate their resources is completely arbitrary and irrational like all government spending.
The so-called private prisons that are derided by the left, and are being abandoned by the U.S. government, possess no attributes of a private business and are thus nothing more than government-run prisons. Absent the government these prisons would not exist, they do not operate within a market framework, and cannot then be considered a failure of the free market, but yet another government boondoggle.