Three decades after the war on crime began, the United States has developed a prison-industrial complex—a set of bureaucratic, political, and economic interests that encourage increased spending on imprisonment, regardless of the actual need. The prison-industrial complex is not a conspiracy, guiding the nation’s criminal-justice policy behind closed doors. It is a confluence of special interests that has given prison construction in the United States a seemingly unstoppable momentum. It is composed of politicians, both liberal and conservative, who have used the fear of crime to gain votes; impoverished rural areas where prisons have become a cornerstone of economic development; private companies that regard the roughly $35 billion spent each year on corrections not as a burden on American taxpayers but as a lucrative market; and government officials whose fiefdoms have expanded along with the inmate population. Since 1991 the rate of violent crime in the United States has fallen by about 20 percent, while the number of people in prison or jail has risen by 50 percent. The prison boom has its own inexorable logic. Steven R. Donziger, a young attorney who headed the National Criminal Justice Commission in 1996, explains the thinking: “If crime is going up, then we need to build more prisons; and if crime is going down, it’s because we built more prisons—and building even more prisons will therefore drive crime down even lower.” – Eric Schlosser, The Atlantic
The United States has, bar none, the largest prison population in the world. According to the ACLU:
- With only 5% of the world’s population, the U.S. has 25% of the world’s prison population – that makes us the world’s largest jailer.
- Since 1970, our prison population has risen 700%.
- One in 99 adults are living behind bars in the U.S. This marks the highest rate of imprisonment in American history.
- One in 31 adults are under some form of correctional control, counting prison, jail, parole and probation populations.
On top of these horrid statistics, 86% of all Federal inmates are being incarcerated for victimless crimes, such as drug use or administrative crimes (not filling out paperwork in time, etc.). And imprisoning all of these people isn’t cheap: According to the national Prisons Bureau:
The fee to cover the average cost of incarceration for Federal inmates in Fiscal Year 2011 was $28,893.40. The average annual cost to confine an inmate in a Community Corrections Center for Fiscal Year 2011 was $26,163.
According to a report from the Vera Institute for Justice, in the 40 states that participated in their study, the total cost of incarceration to taxpayers was $39 billion! And all of that money is fueling an industry of great import: the prison-industrial complex. This includes, among others, construction firms, prison managers, wardens, food service providers, security personnel and technology, counselors, and so on. This complex is becoming increasingly private rather than public, as described in a 2012 report from the Sentencing Project:
In 2010, private prisons held 128,195 of the 1.6 million state and federal prisoners in the United States, representing eight percent of the total population. For the period 1999-2010, the number of individuals held in private prisons grew by 80 percent, compared to 18 percent for the overall prison population. While both federal and state governments increasingly relied on privatization, the federal prison system’s commitment to privatization grew much more dramatically. The number of federal prisoners held in private prisons rose from 3,828 to 33,830, an increase of 784 percent, while the number of state prisoners incarcerated privately grew by 40 percent, from 67,380 to 94,365. Today, 30 states maintain some level of privatization, with seven states housing more than a quarter of their prison populations privately.
Libertarians advocate for the privatization of all government “services,” and this includes the prison system. Whenever I mention that “public” utilities and “public” works ought to be done privately, a common retort is to “look at how that has worked in the prison industry.” But how libertarian are private prisons anyways?
The answer to this question is quite nuanced, with many subtleties that are difficult for statists to grasp. Hell, they are pretty difficult for many libertarians to grasp too! In this post, I’d like to set the record straight (while acknowledging that there are differences of opinion among libertarians on this issue).
The Problem With Private Prisons
If you assume that a society based on market anarchist ideals would have a similar system of justice as our current world (an assumption which, as I will argue later, is unlikely), then everything, including prisons, would be privatized.
But the very existence of a state changes the dynamic in very important ways. In a post slamming libertarianism because of the abuses of the private prison industry, Gus DiZeriga writes:
Privatization of prisons creates corporations with a vested interest in maintaining current crimes as illegal even when there is no just reason for doing so, because it guarantees keeping their cells filled and their profits high. They also have a vested interest in criminalizing additional behavior. They demonstrably use some of their profits to support friendly legislators and lobby for legislation they desire. And their political favors are returned.
All libertarians will agree on this point. And this makes things complicated, because in the purely voluntary society envisioned by libertarians, there would be no state influence, which essentially nullifies this problem. To bribe the whole slew of private defense firms and insurance companies in order to maintain these unjust arrangements would be prohibitively expensive (though technically not impossible).
In any case, the state does currently exist. And as such, we are seeing an incredible amount of “public-private partnerships” and corrupt lobbying, with all the perverse incentives that this entails.
According to Think Progress, the lobbying budgets of these private prison companies are significant:
In the past decade, three major private prison companies spent $45 million on campaign donations and lobbyists to push legislation at the state and federal level. At times, this money has gone to truly nefarious legislation. A 2011 report found that the private prison industry spent millions seeking to increase sentences and incarcerate more people in order to increase the industry’s profits. 30 of the 36 legislators who co-sponsored Arizona’s now mostly invalidated immigration law — which would have landed many more people in detention — received campaign contributions from private prison lobbyists or companies, including CCA and GEO. According to a report released last year, CCA spent over $900,000 on federal lobbying and GEO spent between $120,000 to $199,992 in Florida alone during a short three-month span in 2011. $450,000 went to the Republican national and congressional committees, while Democrats received less than half that number. House Speaker John Boehner (R-OH) and Sen. John McCain(R-AZ) were also among the private prison lobby’s top benefactors.
Some more specifics regarding the two biggest players in the for-profit prison industry, Corrections Corporation of America (CCA) and GEO group:
- CCA spent over $1 million in the 2014 election cycle on lobbying, plus an additional $769k on direct political contributions.
- GEO Group spent $650k on lobbying during the 2014 election cycle, plus an additional $1.5 million on direct political contributions.
And this lobbying is for decidedly un-libertarian aims. For instance, CCA proposed to buy prisons from 48 states, with the stipulation that the states agree to maintain a 90% prison bed occupancy rate for at least 20 years! And they lobby for harsh mandatory minimum sentences, “three strikes” laws, and so on.
On the surface, this presents a real problem for libertarians, at least from the perspective of those with an incomplete understanding of the philosophy. After all, isn’t the move toward privatization of prisons exactly what libertarians have been suggesting?
Not quite. The “prison” system envisioned by anarchist libertarians is radically different, and a brief sketch of it will be outlined in the next section. In the meantime, it is important to note that the current prison system, whether administered privately or publically, possesses the same perverse incentives.
Liberals routinely argue that the profit motive creates perverse incentives in the prison industry. This is certainly true. But liberals do not understand what “profit” really means (any individual can profit, not just massive corporations), and ignore the fact that a purely state-run prison system has a similar incentive structure, perhaps to a slightly smaller degree.
There is no reason to believe that a state-run prison would behave differently than any other government bureaucracy. As with all government agencies, administrators will continue to seek larger budgets. And both success and failure, however awkwardly they would be defined for a prison system, would provide justification for increased budgets, hiring more employees, and greater benefits.
Corrections guard unions and police unions are interest groups that, so long as the state apparatus exists, would directly benefit from and lobby for increased criminalization of assorted activities in order to expand the prison population. This is the same kind of rent-seeking behavior that you would see in the private sector.
In addition, public employees face additional perverse incentives related to protecting their members from accountability. We see this all the time with “qualified immunity” for police officers, making it nearly impossible to prosecute them for abuses, but it also happens with corrections officers. One example would be how the guards’ union in Maryland successfully lobbied to pass the Correctional Officers Bill of Rights. This is a law “which made it much harder to discipline bad correctional officers — thus reducing C.O.s’ accountability and facilitating brutality and corruption scandals,” as legal scholar Sasha Volokh explains.
To sum up, Nathan Goodman argues:
Thus, public choice theory suggests that those who benefit have more incentive and ability to influence policy than those who bear the costs, so we see a rise in incarceration, regardless of whether it’s good policy for the general public. The perverse incentives are easy to illustrate when ruthless corporate profiteers are the beneficiaries and rent seekers, but local populations that want jobs as prison guards have the same types of incentive problems. This is why we need to push not just against for-profit prisons, but against all prisons. The economic logic of state financed prisons encourages a growing prison state.
Restitution, Justice, And Anarchist “Prisons”
Under the current state capitalist system, a private prison may be owned privately, but it is still paid by the state using money that is stolen directly from taxpayers. Fundamentally, this makes the private/public distinction a less relevant one from the libertarian standpoint – either way, the system is unjust.
Philosophically, there is a huge difference between the ideals of an anarchist system of incarceration and that which exists under our current state capitalist system. As of right now, justice is about punishment. If you are convicted of a crime, you are expected to be punished with a prison sentence. But does putting criminals in prison do anything to help the original victim of the crime?
Of course not! A more appropriate system would focus on restitution rather than punishment. This means, broadly, attempting to make the victim “whole” again. It is fairly easy to see how this would work in a case of theft. Let’s say I steal $10,000 from you. You are entitled now to those $10,000 plus interest, and perhaps even more than that (but I’ll leave it to the legal scholars and legal entrepreneurs to determine the appropriate amounts). This is covered under your “theft insurance,” so the insurance company pays for the damages right away, and now owns the claim to restitution from the criminal. An investigation is conducted, a criminal is found, and they are tried and convicted. That’s where the anarchist “prisons” come into play, but I will get to that in just a moment.
You may find this plausible in cases of theft, but what about crimes that can’t be compensated for, such as murder or rape? A similar “murder insurance” could be put in place. I can take out a policy stipulating that my next of kin gets $200,000 in case I am murdered. The rest proceeds accordingly, with the murderer needing to pay up.
If you are not an anarchist, you probably are quite skeptical of this explanation, because it is so far removed from our modern system. You likely have many questions. It is not my intent to go into detail on the ins and outs of a completely anarchist legal system, but there is no shortage of explanations out there on the internet, so I suggest you read through a couple of these before blithely assuming it can’t work. Here are a few to help get you started:
- Society Without A State – Murray Rothbard
- Law Without The State
- Private Policing, Law Enforcement, And Adjudication In A Stateless Society
- Crime in an Anarcho-Capitalist Society
- The “Anarchist” Experience In Somalia – What Every Libertarian Needs To Know
Okay, so what about the actual prisons?
For starters, I must get the obligatory disclaimer out of the way: there is no single way that an anarchist society will work. When we talk about free markets, we must admit the fact that due to entrepreneurial alertness, new technologies, and new business models, systems can and will evolve. In addition, the differences between the current system and an anarchist system are so pronounced, it may be hard for some to comprehend. As Brad Spangler notes:
Perhaps no other thing the state does offers so much potential for privatization nightmare stories as prisons do. There’s a reason for this. Prisons themselves, as we understand the term today, are inherently abusive and criminal enterprises — whether managed directly by a state or a state-affiliated monopoly contractor.
Does that mean there will be nothing like prisons in a market anarchist society? Yes and no. Context matters. We’re really talking about two different things — “privatization” under statism is not the same thing as what will likely result in the marketplace if we were to abolish the state and make “law” a free market for consensual dispute resolution with justice understood as restitution rather than punishment.
But amidst the extreme contrast between these systems, it is easy to discern a critical difference: because the system is based on restitution, the criminal will be liable for some specified amount of damages for whatever crime they commit. Chances are, they will owe the money to their own insurance company or “Dispute Resolution Organization,” who will act as a kind of cosigning agent for an individual’s interactions (not unlike insurance companies do today). If they are not insured this way, they will owe the money directly to the victim or their agent.
Either way, the criminal would be held responsible in some way. If insured, their insurance company may simply increase their premium, particularly in cases of less extreme crime. A form of house arrest is another less invasive option. But in more extreme cases (theft of large sums, murder, rape, etc.), or if uninsured, the criminal may then end up in “prison.”
Here, another major difference between anarchist “prisons” and modern prisons comes up. Today, if you are sent to prison, you have no choice in the matter. You become a captive, entirely subject to the will of your captors. If they send you to a horribly abusive prison, too bad. Or you might get lucky. But either way, you have no choice.
Under anarchy, you would get to choose which “prison” you went to. Or, you’re insurance company would choose (or give you options. There are an infinite variety of models here) for you. Of course, insurance companies won’t want to be associated with “prisons” known to have horrid, abusive conditions, and criminals certainly won’t choose to go to them, so these “prisons” have an incentive to have reasonable living conditions. Robert Murphy elaborates:
Consider: No insurance company would vouch for a serial killer if he applied for a job at the local library, but they would deal with him if he agreed to live in a secure building under close scrutiny. The insurance company would make sure that the “jail” that held him was well-run. After all, if the person escaped and killed again, the insurance company would be held liable, since it pledges to make good on any damages its clients commit.
On the other hand, there would be no undue cruelty for the prisoners in such a system. Although they would have no chance of escape (unlike government prisons), they wouldn’t be beaten by sadistic guards. If they were, they’d simply switch to a different jail, just as travelers can switch hotels if they view the staff as discourteous. Again, the insurance company (which vouches for a violent person) doesn’t care which jail its client chooses, so long as its inspectors have determined that the jail will not let its client escape into the general population.
Under anarchy, the criminal becomes the “customer” for detention facilities, rather than the state. This creates a whole different incentive structure. These facilities would resemble something more akin to a high-security hotel than to a modern prison – they would cater to criminals who need a place to stay while working off their debts in order to pay restitution.
In our current, state capitalist system, private prisons have an incentive to cut costs – perhaps by hiring fewer guards, paying less for healthcare and food, and through generally crappier conditions. Under anarchy, prisoner choice provides a countervailing force. And insurance companies may pay for prison upkeep, so there need not be forced labor by prisoners to pay for their expenses.
I certainly haven’t covered all possible contingencies here. But it should be clear from the sketch above that an anarchist prison system need not suffer the same kinds of intolerable abuses that are so prevalent today in both private and state-run prisons.
Prison Labor And The Prison-Industrial Complex
Since 1980 spending on corrections at the local, state, and federal levels has increased about fivefold. What was once a niche business for a handful of companies has become a multibillion-dollar industry with its own trade shows and conventions, its own Web sites, mail-order catalogues, and direct-marketing campaigns. The prison-industrial complex now includes some of the nation’s largest architecture and construction firms, Wall Street investment banks that handle prison bond issues and invest in private prisons, plumbing-supply companies, food-service companies, health-care companies, companies that sell everything from bullet-resistant security cameras to padded cells available in a “vast color selection.” A directory called the Corrections Yellow Pages lists more than a thousand vendors. Among the items now being advertised for sale: a “violent prisoner chair,” a sadomasochist’s fantasy of belts and shackles attached to a metal frame, with special accessories for juveniles; B.O.S.S., a “body-orifice security scanner,” essentially a metal detector that an inmate must sit on; and a diverse line of razor wire, with trade names such as Maze, Supermaze, Detainer Hook Barb, and Silent Swordsman Barbed Tape. – Eric Schlosser
Contrast the humane system above with the thoroughly exploitative system of prison labor that exists now. Currently, prison labor is abused in all the typical ways that crony capitalism is known for.
Big companies will use cheap prison labor to gain a competitive advantage by cutting labor costs significantly. Think about it: there’s no need to worry about the workers going on strike; there’s no need to pay for unemployment insurance, vacation time, or any other benefits; the workers are full-time and never show up late; and if they don’t like how much they are getting paid, too bad! They can just get locked up in isolation.
And compare this with the savings that would be generated from outsourcing. While cheap labor abroad is still quite cheap, there are additional costs associated with transporting goods around the world, which is far less of a concern while using local prison labor. Note that state-run prisons also contract out their prisoners for labor, not just private ones. A prison laborer typically makes between 93 cents and $4.73 per day, often working with toxic substances and without the protections that a normal worker would have.
So, not only do the private prisons make a bunch of money from getting guaranteed payments per prisoner regardless of cost, but other large corporations get to take advantage of what basically amounts to slave labor. What is this exploitation creating, and who benefits? Two informative articles from Global Research help answer these questions (see here and here).
Predictably, the potential profit of the prison labor boom has encouraged the foundations of US corporate society to move their production forces into American prisons. Conglomerates such as IBM, Boeing, Motorola, Microsoft, AT&T, Wireless, Texas Instrument, Dell, Compaq, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies, 3Com, Intel, Northern Telecom, TWA, Nordstrom’s, Revlon, Macy’s, Pierre Cardin, Victoria’s Secret, and Target have all begun mounting production operations in US prisons.
That should give you some idea of the kinds of things these prisoners are making, but here’s some more detail:
According to the Left Business Observer, the federal prison industry produces 100% of all military helmets, ammunition belts, bullet-proof vests, ID tags, shirts, pants, tents, bags, and canteens. Along with war supplies, prison workers supply 98% of the entire market for equipment assembly services; 93% of paints and paintbrushes; 92% of stove assembly; 46% of body armor; 36% of home appliances; 30% of headphones/microphones/speakers; and 21% of office furniture. Airplane parts, medical supplies, and much more: prisoners are even raising seeing-eye dogs for blind people.
Should it really be at all of a surprise that the prison-industrial complex is another cog in the military-industrial complex? Of course the captive labor in prison is being used to make military supplies on the cheap (but don’t worry, the Pentagon will still pay top dollar for crappy weapons projects like the F-35).
The whole system ties together quite nicely. If you take a look at this list of companies that own more than 1 million shares of CCA and GEO Group, you’ll notice many of the big players in the international crony capitalist elite. When you consider the interconnections that tie the whole international system of crony capitalism and American foreign policy together, it starts to make a lot of sense.
Many of these Fortune 500 conglomerates are corporate members of civil society groups such as the Council on Foreign Relations (CFR) and the National Endowment for Democracy (NED). These think tanks are critical toward influencing American foreign policy. Under the guise of democracy promotion, these civil societies fund opposition movements and train dissent groups in countries around the world in the interest of pro-US regime change. With naked insincerity, the same companies that outsource the production of their products to American prisons simultaneously sponsor civil societies that demanded the release of Myanmar’s Aung San Suu Kyi from house arrest – an overly political effort in the on-going attempts to install a compliant regime in that country.
And finally, it should come as no surprise that all the same regulatory problems inherent in a crony capitalist system should be present with respect to the prison-industrial complex as well. Take this example of a state agency being in cahoots with GEO Group, a textbook example of regulatory capture:
The concept of privatizing prisons to reduce expenses comes at great cost to the inmates detained, who are subjected to living in increasingly squalid conditions in jail cells across America. In 2007, the Texas Youth Commission (TYC) was sent to a West Texas juvenile prison run by GEO Group for the purpose of monitoring its quality standards. The monitors sent by the TYC were subsequently fired for failing to report the sordid conditions they witnessed in the facility while they awarded the GEO Group with an overall compliance score of nearly 100%. Independent auditors later visited the facility and discovered that inmates were forced to urinate or defecate in small containers due to a lack of toilets in some of the cells. The independent commission also noted in their list of reported findings that the facility racially segregated prisoners and disciplined Hispanics for speaking Spanish by denying their access to lawyers and medical treatment. It was later discovered that the TYC monitors were employed by the GEO Group.
Let’s take a moment to remember that this horrible system of exploitation is not a product of the free market, but rather a consequence of having a state exist in general. A system of justice based on polycentric law and administered in a non-coercive fashion could never support abuse on such a wide scale.
As a libertarian, I believe there must be real free market solutions to the problems caused by the prison-industrial complex. While many people will no doubt be taken in by the idea of prison reform, we have seen that these problems are inherent in a statist system of justice, and no amount of reform can address those underlying problems.
Nevertheless, while I have doubts about its ability to cause real change in this area, the mantra “voting with your dollars” can apply here. The Prison Divestment Campaign may help curb some of the excesses of the prison profiteers. It may be worthwhile to support this cause, but changing the fundamental problems will require a different kind of solution.
Short of seeing the realization of a fully anarcho-capitalist society, we can look to some new technologies to help cause a fundamental shift in the system, perhaps even within the next decade or so. Some of the functionality of Bitcoin and the blockchain could revolutionize legal practice, and thus indirectly have a powerful effect on the prison system.
As these technologies evolve and become more widely adopted, a parallel legal system will begin to emerge in competition with our current state monopoly system. Basically, a new Common Law. Here’s an example:
The plain, ordinary Common Law developed as the result of competing courts that issued opinions basically as advertisements of how fair and impartial they were. We could see something similar with Bitcoin arbitration. If arbitrators sign their transactions with links to and a cryptographic hash of a PDF that explains why they ruled as they did, we could see real competition in the articulation of rules. Over time, some of these articulations could come to be widely accepted and form a body of Bitcoin precedent.
This kind of arbitration is perfectly doable using a currently existing Bitcoin feature: multi-signature transactions. This is a feature that doesn’t allow a transaction to be fully processed unless m-of-n people have agreed. Most simply, this could mean that two out of three people involved in a transaction must agree to it for it to become valid. That could mean you and me in a business dealing, with a third party arbitrator if one of us is unhappy with the deal as executed.
Over time and once more widely used, these technologies could practically eliminate the need for lawyers and government courts for dealing with the administration of many types of contracts and disputes. For instance, Blockchain Apparatus just released new software that will take care of the administration of estates and wills in a completely decentralized, trustless, cheap, and quick way. And an ex-Rugby player is working on a smart contracts tool to manage third-party endorsement contracts and take a lot of the headache over contract disputes in sports.
For more details on multi-signature transactions and their legal applications, see this.
For more information on smart contracts in general, see this.
By creating a new legal framework outside of the state system, technology may help us get to a stateless system of justice sooner than many people think. And we will not be able to eliminate the statist (in)justice system until this happens.
While libertarians ostensibly support the privatization of government functions, it is more complicated than it sounds in practice. Particularly with regard to prison administration, contracting out these “services” are not what a principled libertarian has in mind. As Bruce Benson explains:
If Hitler had contracted out some of his law enforcement services, the rounding up and extermination of Jews might have been accomplished at a lower per-unit cost and more Jews could have been exterminated, but the fact that more of these politically defined “criminals” could have been exterminated more “efficiently” in a technological sense does not mean that the contracting out of this process would have been desirable. Indeed, if contracting out enhances technological efficiency, as its advocates argue it will, then it may encourage even more intensive law enforcement efforts against victimless crimes, thereby reducing both allocative efficiency and liberty.
Ultimately, the only just system is one based on restitution rather than punishment, and in the context of a purely voluntary society.