Weep, Libertarians —

The Justice Department plans to end its use of private prisons after officials concluded the facilities are both less safe and less effective at providing correctional services than those run by the government.

“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”

I don’t want to be a wet blanket, but that ought to have been obvious all along. The problem with outsourcing anything is that – unless there ways to automate overlapping efforts – the only way for the outsourcer to make a profit is to cut corners. The bigger the corner cut, the bigger the profit. What a great incentive structure!

That’s the problem with government services: you have to accept that certain things are going to be loss-leaders (roads, infrastructure, prisons, defense, etc) not profit-centers. If you further accept that certain things will always be costs, then you can’t fairly say you’ll make the problems local, because then you’re simply pushing inequality down to each jurisdiction.

The cynic in me is worried that this move is actually because the venture capitalists backing the for-profit prisons aren’t seeing the return on investment that they were expecting, so they’re cashing back out to try something else. And that would allow the libertarians to be smug: the invisible hand of the market has corrected for-profit prisons! Yay! Actually, either way the invisible hand moves, the libertarians get to be smug. Funny how that works.


  1. Pierce R. Butler says

    Per a recent piece in Mother Jones, for-profit prisons hold about 8% of the US’s incarcerated (that includes state pens, immigration detention camps, etc).

    Still, this move means either letting some of the present inmates out early, or greatly reducing present arrests & convictions (both hard to imagine in an election year), or building new slammers, or eminent-domaining the corporate coolers.

    What can you recycle a used prison into, anyway?

  2. says

    Money is likely the reason. But I suspect it’s also just renaming them, pretending to end private prisons without actually changing anything (e.g. the US “withdrawal” from Afghanistan).

    I also don’t expect conditions to improve much. Medical care and the quality of food will likely remain abysmal.

  3. lorn says

    One of the dogmatic assumptions of Free Market advocates, and Libertarians, has been that Government programs are inherently, unavoidable, inefficient and that private enterprise operations are inherently more efficient. In one way that isn’t entirely wrong. If your measure of efficiency is maximized profits for the investor class than government programs are indeed almost always wildly inefficient and private enterprise operations are almost always better. On the other hand if you use the more common, (less capitalist) measure of efficiency, services provided for dollars spent, the dogma fails to hold true. In fact if you measure efficiency by services and products provided per dollar spent private enterprise is all over the map from good to abysmal.

    But even with this understanding it has to be pointed out that government operations are different. The government is subject to public disclosure. Private enterprise is free to hide their failures and pay everyone off to keep things quiet. There is no requirement for internal audits and the stink of failure can get lost. Government programs are required to be audited and while things do get covered up, with responsibility getting dispersed to meaninglessness, the reality always gets out eventually.

    Private enterprise reliably channels public money and resources into private hands. Good quality products and services are far less of a sure thing. Government programs, if properly designed, regulated, and not sabotaged by congress, can often beat the private model. Medicare, in terms of appropriate medical care provided for dollars spent, is far more efficient than other medical insurance plans.

    The historical record is that privatization of government programs doesn’t demonstrate the sorts of cost savings that were initially assumed. In one program I was familiar with the Navy used to do most of its own maintenance and routine repairs. As of the 80s a whole lot of that was contracted to private enterprise. From the start there were problems. If a sailor is doing the job you can set schedules and methods. With a private contractor it is all much more difficult.

    Even something simple, like how paint is applied, has to be written into contracts in near infinite detail because there is no mechanism for correcting things on the spot. With a sailor you simply tell them to do it a different way. With an civilian employee of a contractor you have to work through their corporate structure and down through multiple layers of sub-contracts. In the end it it was consistently somewhere between a toss-up and a loss.

    One of the more difficult situations comes about when the ship has to leave port and the job isn’t done. On a civilian ship contractors can just go along, finish the job, and get off at the next port. Navy ships are ships of war. How do you deal with civilians on a military vessel? You can’t order them to do anything and you can’t expect much because they are, when it comes right down to it, slobs working for a paycheck and wanting to go home.

    The question was raised about what to do with, and what could be expected from civilian food services workers In Iraq if the base was being overrun. Do you form a cordon around them and protect them? Do you arm them? Do you let them go and expect them to fend for themselves?

    In WW2 on the island of Guadalcanal the Japanese broke through US lines. In response they brought support units of cooks and clerks into the line to fill the gaps. They were lightly trained and largely unprepared for the job, and took far more casualties than a line unit would, but they were available and under military command. They saved the day. You can’t do that with civilians.

    I’ve gone far afield but the point is that private enterprise is, contrary to what the Chicago School of Economics tells us, is not inherently more efficient than a government program if your measure of efficiency is not profits delivered to the investor class. Government programs have advantages and if they are well designed, run, and regulated, they can shine.

  4. says

    It seems pretty clear to me that a major assumption of US military strategy is that nothing goes wrong and the US doesn’t lose. That’s part of the “getting over vietnam” trauma that’s likely to blow up in someone’s face.

    I agree with you that the problem of protecting civilians is a serious issue. That is one way that the modern high-tech army increases its costs so dramatically: to protect your high-tech logistics you need a whole extra army — which also needs logistics. The thousands of USMC that first landed in Vietnam were there to provide protection for Da Nang air force base (which was a fat target) The quagmire begins once the logistical train starts to suck more and more troops and their logistical trains in behind them. I remember reading about the Pizza Hut that the US built at the air force base in Kandahar, and thinking “that’s going to get attacked” – it’s a bad idea.

    I think the main push behind privatization is mostly corruption. It’s another way for the military-industrial complex to transfer lots of money from the public into their pockets. And the process is speeding up.