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Prisons of Profit: Turning a Buck on America's Incarceration Frenzy

The American Correctional Association has no qualms about defining itself as a businessman's dream: an organization whose main goal is to turn a profit for its members. But unlike most capitalist corporations, the vendors who will arrive this week to hawk their wares are making money off of people who are kept behind bars.
The American Correctional Association has no qualms about defining itself as a businessman's dream: an organization whose main goal is to turn a profit for its members. But unlike most capitalist corporations, the vendors who will arrive this week to hawk their wares are making money off of people who are kept behind bars. "Don't let your company miss out on this prime, revenue-generating opportunity!" the ACA says on their webpage, just after reminding us that nearly two million Americans are incarcerated, with "dramatic increases' forecasted for the years ahead. Not only does the ACA organize two conventions like every year, but it also sells "records of corrections practitioners, buyers, and users" to corporations for direct mailings, "one of the most targeted, measurable and cost-effective ways to sell your products and services to the growing corrections and criminal justice markets."(

But the ACA, like any business convention organizer, is only as powerful and profitable as its members. And the vast enterprise of privatization and profiteering in American prisons is growing as fast as the inmate population. A dangerous cycle of incarceration and privatization has been building over the past two decades. With the national annual cost of corrections facilities coming in around the $50 million mark, prisons and prisoners have become a growth market. 81% of sales of prison goods take place at conventions like the ACA's.

From products like the B.O.S.S., the body orifice safety scanner, to the Tasertron, a "less-lethal handheld electronic immobilization weapon" there are an increasing number of specialized products designed to restrain and subdue inmates. Besides these control devices, there is also a huge market for general care and services prisoners need, like food, clothes, telephones, and health care. Here as well prisoners' needs are sacrificed to the bottom line of profit. MCI, for example, supplies pay phones to prisons, where the pay-per-call phones make three times as much as payphones on the street, since this is the only way prisoners have of contacting people on outside. MCI installed its phones in Californian prisons through a program called Maximum Security, free of charge to the state, along with 32% of the profits thrown in for good measure. They then went on to charge a $3 surcharge on every call prisoners made. In one state MCI Maximum security was caught tacking an extra minute onto each call. (

Unfortunately, these are only small pieces of a much larger picture. States are overwhelmed by the cost of incarcerating so many people every year. The current climate of our justice system, namely the enthusiasm for harsh mandatory sentences for non-violent offenders, continues to exacerbate the problem. The story of how these mandatory sentences get tied up with a booming corrections market reveals the systematic classism and racism that dominate American capitalism.

The History of Private Prisons

In 1973, Nelson Rockefeller, then governor of New York State, established the first mandatory sentences for drug offenders in the nation, and saw his prison population explode. At about the same time, governor of California, Ronald Reagan, opened the first privately owned and operated prisons to hold illegal immigrants. Most for-profit prisons are minimum security, so they soon became an ideal solution for housing prisoners who weren't particularly violent. Today roughly two-thirds of our prison population are non-violent offenders.

After Reagan became President, the Drug War took over American consciousness. Not only mandatory sentences, but also the "Three Strikes" rule came into play. Penalties and sentences for possession of certain substances soon came to reflect deep racial differences in the justice system. For example, sentences for possession of crack cocaine, used mainly by African Americans, are five times longer than the charges for a similar amount of powdered cocaine, which is mostly used by whites. This trend has become so extreme that today the ratio of blacks to whites in prison in 6 to 1. (

As the prison population grew, so did the private prison industry. Private prisons today hold about 100,000 prisoners, about 5% of the total population, yet the largest of the corporations who own these prisons turn a pretty profit and are heavily invested in on Wall Street. The Corrections Corporation of American, a multinational business that operates prisons in Puerto Rico, Australia and the United Kingdom, has been called a 'theme stock' for the nineties.(

As with the military industrial complex, many of the leaders of the private prison industry are former government big-wigs, blurring the line between national and private interests. Wakenhut Corrections, the second largest private prison operator, was founded and headed by George Wakenhut, a former FBI agent. Wakenhut has worked closely with the Federal government for years, selling its private security services at home and abroad. Its annual profits exceed $1 billion dollars, and its board of directors includes a former head of the FBI, a former head of the Defense Intelligence Agency, a former CIA director, a former CIA deputy director, a former head of the Secret Service, a former head of the Marine Corps, and a former Attorney General. ( It should come as no surprise then, that these corporations established a great deal of influence on national security, on investors, and on public opinion. They pour thousands of dollars into lobbying for influence in state and national policy. They also court the press relentlessly, keeping consciousness of private prisons high in the public's mind.

These private prisons operate on the principles of good old-fashioned American capitalism. Prisoners are commodities, and the buying and selling of them is the business. The national average cost per day for holding one prisoner is about $43 dollars. Private prisons will bid for prisoners by undercutting each other, asking for $39, or $35 per day to house the state's inmate. This profit mongering results in lower standards of living for the prisoners, as the costs of housing and supporting them gets whittled down to the bottom line.

Supporters of private prisons endorse them as being a good source of labor for communities, especially in rural areas, where jobs are scant. Yet the conditions that rank and file employees are forced to work in are also reflective of purely corporate interests. Whereas in state-run facilities guards are unionized and provided with a retirement fund, private guards are underpaid, prevented from organizing, offered fewer benefits, and are frequently understaffed and overwhelmed. Private prison guards receive little training and preparation for a high-stress job. The combination of these factors often leads to higher levels of violence in private prisons; prisoners against prisoners, prisoners against guards, and guards against prisoners. There are also continuing problems with escapes and riots. In one year at a Bobby Ross Group private prison in Montana three people escaped and one was murdered. "We really hate to lose a customer," a lawyer from the group said.

But the prisoners are not so much customers, as they are commodities. Because private prisons are businesses and not state-run organizations, there is no controlling authority to oversee what happens to them. And since private prisons bid for prisoners, a nation-wide trade in inmates has developed, called bed brokering. States with too many prisoners literally sell them to states with room in their prisons. This has strange but devastating side effects, for example one Bobby Ross Group prison in Texas, the Newton County Correctional Center, was Hawaii's third largest prison. This means that prisoners are even further detached from their families and homes. Guards feel no sense of responsibility or accountability in dealing with another state's inmate. And amongst prisoners, already divisive cultural differences often result in violent conflicts. To transport inmates between states, prisons will subcontract another security firm to drive them across country. Again, the employees of these organizations are often not sufficiently trained or prepared for the job. Inmates who get on the van in one state may be forced to go along for the ride as the bus traverses the country, picking up more people. Sometimes they may spend as much as a month on the road. Again, assaults and escapes are common. (

Prison Labor

Private prisons will turn a profit on a prisoner even if he spends every day in solitary confinement, but another aspect of the privatization of prison is prison labor. White bread American corporations like Microsoft, Victoria's Secret, TWA and Starbucks have all used prisoners as laborers. A state-subsidized organization called UNICOR employs about 20,000 prisoners nationwide making everything from military uniforms to office furniture. Inmates are paid about $40 per month for their labor.

There is some disagreement about how much of affect prison labor has on other labor markets both in this country and internationally. Christian Parenti agrees that 'politically and ideologically' its very important but not necessarily an incentive for locking people up. He quotes a Navy source who says Unicor's "product is inferior, costs more and takes longer to procure." Parenti also states that without the subsidies UNICOR receives from the government, they would go under. In 1999, UNICOR made about $281 million.

On the other side of the debate, Eva Goldberg and Linda Evans write in an article called "The Prison Industrial Complex and the Global Economy" ( that "the growth of the prison industrial complex is inextricably tied to the fortunes of labor. Ever since the onset of the Reagan-Bush years in 1980, workers in the United States have been under siege. Aggressive union busting, corporate deregulation, and especially the flight of capital in search of cheaper labor markets, have been crucial factors in the downward plight of American workers."

Whether or not prison labor is an actual competitor with other labor markets seems to matter less than the perception that it is. Certainly American wages have been driven down by forced competition with cheaper markets. And UNICOR states that its program "makes a significant contribution to our nations economy by lowering the cost of producing domestic goods in the face of increasing foreign competition."(

These facts become most disturbing in light of the fact that recidivism, the rate at which people commit more crimes and return to jail, is closely tied to whether or not the person can find employment. For example, one study showed that the rates of youth violence were roughly the same for both white and black men between the ages of 16 and 18. After the teen years, two things become clear; one, most of these men stop committing crimes. Of those who do commit more crimes, twice as many are African American. The significant exception is black men who are employed; their rates of recidivism are comparable to whites. (

Clearly there is a connection between employment and incarceration. Denying people jobs and living wages contributes to the frustration that leads to drug abuse. And keeping people out of legitimate labor could be said to encourage finding alternate means of support in a black market trade like narcotics. What is perhaps most frustrating is the connection between the loss of jobs to foreign markets, which creates the conditions for crime, which in turn lead to incarceration and forced labor. American prison workers would then be competing on the same level with Third World economies, to which they'd lost potential jobs in the first place.

Parenti writes, that "the answer in the 1990's is clear: radicalize poverty via criminal codes, such as drug laws and mandatory minimum sentences that disproportionately affect poor people of color. Then lock up as many people as possible for as long as possible. In this way criminal justice regulates, absorbs, terrorizes and disorganizes the poor."

These are just a few of the facts and factors surrounding the prison-industrial complex. Please follow these links and read the articles mentioned here. As far as solutions to these problems, our first steps would be in abolishing mandatory sentences and private prisons. But these are only the symptoms of the deeper diseases of poverty, racism, classism, and multinational capitalism. Until we break out of those prisons, none of us will be free.




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