Profiting From Crime

I read a lot and I’ve written a bit on the economics of the war on drugs. But there’s something I just learned that surprised me, which is pretty hard to do. Did you know that there are privately-owned and operated prisons in the U.S.? Not just a few, but lots of them? I guess I had heard about private prisons before, but never realized how widespread they really are. In case you don’t know, a private prison is a for-profit business. Just like many other “services” provided to the government by private industry, companies bid on and receive contracts to build and operate prisons. And make money doing it.

Maybe it’s just me, but that seems a little not quite right. I have no problem with the government contracting with private companies for other kinds of services, like building fighter planes or running the Senate cafeteria. But isn’t the criminal justice system supposed to be, you know, part of the government? I thought that, at the very least, profiting from crime was frowned upon. Criminals certainly are not allowed this privilege. For example, a convicted murderer isn’t allowed to write a book about his crimes. Why is it that big business is allowed to make big bucks on the incarcerated?

So how about some cold, hard facts on prisons in the U.S. of A.? On any given day there are over 1.5 million Americans in prison, one of the few things we still lead the world in. Not that we didn’t have to put in a little effort to achieve that honor. Why back in 1980, before we had administrations that were so “tough on crime,” we had fewer than 400,000 people in prison. But with a little hard work we managed to more than triple that number in less than 30 years. Pretty impressive.

It makes you think that crime must be running rampant in this country. Well, that’s not exactly the case. For example between 1975 and 1985 the serious crime rate actually decreased slightly while the number of people in prison during that same period nearly doubled. So how does that work exactly, when crime rates go down and prison populations go up? I guess that’s what being tough on crime is all about.

Although I have to admit, there is one type of crime that has been on the rise. Can you guess which type? That’s right, drug-related violations. Over a 25-year period starting in 1980, state and local arrests for drug violations rose from around 600,000 annually to almost 2 million per year. Of course over that same period actual drug use stayed about the same. Again, that’s just more evidence that being tough on crime is actually accomplishing something.

But what about private prisons? After all, that’s what this is all about. Thirty U.S. states, Puerto Rico, and Washington, DC have a total of over 150 private prisons. Those private prisons house 7.4 percent of the nation’s prisoners which, if you do the math, works out to about 116,000 people. At an average cost of around $25,000 per year to house a prisoner, that’s just under $3 billion going to private prisons each year. And I’m sure they’re getting a lot more than that.

Right now we are spending an estimated $6 billion per year on construction alone just to keep up with the rapidly-growing prison population. No wonder these private companies want a piece of that pie. In fact, they want it so bad that during the 2002 and 2004 election cycles they gave $3.3 million to candidates and state political parties across 44 states. And experts estimate that prison populations in 10 states will increase by 25 percent between 2006 and 2011. So there’s lots more money to be made.

And it doesn’t hurt when someone like the soon-to-be former Vice President owns stock in one of the largest private prison companies. There’s no one tougher on crime than Mr. Cheney. Coincidence? Maybe. Conflict of interest? Definitely. Seems only fair that Mr. Cheney was recently indicted in a private prison case. Makes you wonder how many other tough-on-crime politicians also make money in one way or another from the private prison industry.

With all this money being made in the business of incarceration, and even more to be made in the future, how can we ever expect things to change? There’s absolutely no incentive to reduce our prison population. And the best incentive of them all, money, to keep that population growing. You know what they say about money talking.

I guess we’ll just have to look on the bright side. At least we still have something left that we can lead the world in. No one builds more prisons or puts more people in them than the good ol’ U.S. of A. Suck on that Japan, Finland, and Canada. They think they’re so great just because they’re so far ahead of us in student math and science test scores. Let’s see them even try to compete with us when it comes to locking people up behind bars. Then we’ll see who has the last laugh.