The Department of Justice announced it would end its reliance on for-profit prisons run by companies such as Corrections Corporation of America and Geo Group. The decision followed an internal study, which found that private prisons tended to be less safe and poorly administered, and provided limited long-term savings for the federal government.
Shares of CCA and Geo Group initially fell, losing 40 percent of their value. They have since rebounded, driven by the optimistic view that the decision, which affects 195,000 prisoners in federal facilities, won’t spill over to the privately run state and local prisons and jails that house more than 2 million prisoners.
Shareholders of these corporations, along with advocates of privatization, shouldn’t shrug off the federal decision so hastily.
They should remember what happened the last time prison privatization became popular and that proponents sought to turn incarceration into a business, claiming it was cheaper, more efficient and could even achieve better results than public control.
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This belief foundered on the reality that privately run prisons often failed to turn a profit, and when they did, those profits often came at the expense of the inmates’ well-being. These failures and abuses eventually led to a repudiation of private prisons, with the business of punishment and rehabilitation monopolized by the state. Another shift may now be at hand.
The first major defeat for private prisons was in 1887, when Congress passed a law forbidding the contracting of any inmates in the federal prison system. With private enterprise banned from the national penitentiaries, the battle shifted to the individual states. After a pitched battle, New York curtailed then completely banned private contractors in the prison system by 1897. Massachusetts followed suit, as did Pennsylvania.
The pro-profit prison industry fought back, but eventually, state after state banned for-profit arrangements with contractors, moving prisons onto the public accounts.
Eventually, though, the tide would turn yet again. In 1979, President Jimmy Carter signed the Justice System Improvement Act, which laid the foundation for the Prison Industries Enhancement Program. This lifted a ban on interstate commerce in goods made by prisoners, and helped usher a new age of prison privatization, spearheaded by corporations such as CCA.
These companies have thrived as the nation’s prison population skyrocketed, with many inmates incarcerated for nonviolent drug offenses. As unease over this situation has grown, voices on both ides of the political spectrum have begun to agitate for prison reform. And that has gone hand-in-hand, much as it did over a century ago, with growing attacks on the marriage of punishment and profit.
With the federal government taking the lead, much as it did back in 1887, the U.S. might be on the cusp of another revolution in thinking about the appropriate relationship between prisons and profit.
Stephen Mihm is an associate professor of history at the University of Georgia.