It’s been in fashion for a while to make fun of the government’s ability to get things done. Milton Friedman, for example, once said that “the government solution to a problem is usually as bad as the problem.” And according to Ayn Rand and other Tea Party philosophers, the basic philosophy has been that government is generally terrible at getting things done, and that private enterprise is the solution to any problem.

This chestnut has been repeated so often that most of us believe it now at some instinctual level. But few people actually know what happens when government does outsource some basic functions. Let’s take a look, and why not start with jails?

You got to start somewhere.


Jailing people is usually the prerogative of the state, but over the years several groups (like Corrections Corporation of America) have sprung up, building jails and offering to house inmates at a fraction of the cost of public jails (because it’s private and therefore more efficient, see?). There are now over 260 of these private jails in the US.

The organizations that have built these jails have provided compelling arguments to the towns to convince them to outsource their jailing needs to private corporations. Industry studies like this one, for example, argue that private jails save money ($35/day  per inmate for private jail, $42/day for public ones, thanks to the magic of private enterprise), bring jobs to the small towns they are targeting, and are safer than the public jails.

Sign at the bottom, please, and all your troubles will be over.

Now, it turns out that none of this is true. But that’s not the point of this post. What’s more interesting to consider is how these corporations manipulate these small towns into believing that handing over the power to incarcerate people to a corporation is a good thing… and have actually gone significantly further.

First, on costs. It turns out that private jails are roughly just as expensive to run as public ones. You can check primary reports from various states (warning: PDF), which show that the costs are within 1% of each other. You can also find many independent studies that show that there is no difference between private and public prisons. So how do private jails show lower numbers to the municipalities they are pitching?

The answer is a number of simple manipulations. The most interesting one, for example, is that private prisons have essentially figured out a simple way to show lower costs – they refuse to accept dangerous or violent inmates, sending those to public prisons instead. Housing dangerous inmates is a lot more expensive than non-dangerous inmate (you can’t put as many of them in the same area, for example, and you need more staff to supervise them). So private jails simply shift those inmates to public jails, and then show the municipalities and towns how much more efficient they are at housing inmates. Most private jails house mostly non-violent, non-dangerous offenders, and those are relatively cheap to house – and of course, private jail corporations do not show this in their marketing materials.

Another trick that private jailers use concerns that whole ‘safer’ business. It turns out that private prisons don’t actually do much differently than public jails. They just do it with less staff (the savings are not passed on to the municipalities, but they do show up as the profits of these corporations). Since these corporations have a strong incentive to cut costs, they usually reduce staff to the maximum, and even with a less dangerous inmate population, the result is usually a lot more incidents in private jails than in public ones (almost double the rate of violent incidents in private jails than in public ones). So how do private jails claim a safer environment? It’s all in the statistics that they choose to report – most private jails raise the bar for what is a ‘violent incident’ to ridiculous levels, so that they can report fewer incidents. Others use complex comparisons using ‘cost of safety incidents’ (which are always lower in private jails since they use fewer staff).

"As this simple chart shows, we're safer than public jails. And handsomer."

And yet, if that was the only thing that private jails did, it would fall into the category of ‘deceitful marketing’ and we could leave it at that. But the problem is that private jail corporations realized, a while back, that they essentially have a built-in incentive to ensure that jails remain full. Full jails meant that municipalities and towns would have no budget to build new jails, and would more likely decide to outsource jailing to private corporations. But how to ensure full jails?

Some corporations decided to go the direct route, and simply bribe judges to send people to court. The trick was to decide who to send to jail – victims that had money or power could be problematic, so PA Child Care, a private prison company, decided to simply bribe two judges to send juveniles to jail. For $2.6M, two judges agreed to send most of the juveniles that came before them to PA Child Care facilities, no matter how trivial the offense. This became known as the “kids for cash” scandal. Interestingly enough, even though the judges were charged, the developer who bribed them, Robert Mericle, only faces a maximum of 3 years for sending thousand of kids to jail unjustly.

What the developer in question could actually look like.

Again, though, on the manipulation scale, bribing judges to send kids to jail so that you can build more jails and charge the municipality for it ranks fairly low in terms of sophistication of manipulation. To get to the really juicy stuff, you need to look at CCA and ALEC.

What are those? ALEC is the American Legislative Exchange Council. It’s a non-profit conservative group that is funded by groups like the NRA and others, which also includes CCA, the largest private jail company in the US.

So what does ALEC do? Well, for one thing, a couple of years ago, it began to draft legislation to address illegal immigration. More specifically, it created a template for legislation (named “Support Our Law Enforcement and Safe Neighborhoods Act”. I mean, come on, how can you not support that??) that would essentially jail illegal immigrants in Arizona. This template became, almost word for word, the controversial Arizona immigration law SB1070. At the same time, private jail salesmen began to visit towns like Benson and pitching private prisons for illegal immigrant women and children (because the men might be more difficult to manage, and hence more expensive). Essentially, companies like CCA essentially wrote legislation that eventually could create a massive jail population – which would directly benefit them. NPR has a nice rundown of how the bill went from an idea to actual legislation (and the role played by ALEC) here – and it has a nice graphic!

This is not an isolated pattern. Private jail companies have traditionally been big spenders in terms of campaign contribution. But they are careful to channel their money to states and policy-makers that encourage tough sentencing laws like three strikes or mandatory sentencing minimums. A study found that those companies channeled two thirds of their contribution to states with the toughest sentencing laws.

Do you see the link there?

Remember WATOC? Tough sentencing laws are good example of WATOC laws – who would be against punishing violent offenders? The trouble is that tough sentencing laws more often than not do little on violent crime, and tend to punish disproportionately the small-time criminal: he tends to a) get caught easily, b) have a series of relatively minor offenses, and c) very few advocates. The combination is gold for private jail companies: jailing a large number of small-time criminals for long periods of time is a way to print money for these companies, and so they continuously push for “tough-on-crime” legislation, even as crime rates fall across the country.

This is the problem when governments outsource basic functions like jailing. Not only do these efforts rarely actually save money, they provide a perverse incentive for those companies to perpetuate the problems that they were ostensibly hired to solve. And, to do this, they will resort to manipulations which range from the basic (hiding costs) to the fairly sophisticated – even if a few thousand people have to lose their basic freedom as collateral damage.