Profit and Privatization: The Prison Industrial Complex in the United States

Owen Saunders

 2 April, 2018

Entrance to the Guantanamo Bay Prison Complex, Cuba.

Entrance to the Guantanamo Bay Prison Complex, Cuba.


The Prison Industrial Complex (PIC), the profitization and privatization of prisons in the United States has presented increasingly difficult challenges in the last two decades with incarceration rates higher than any country in the world. The problem has become particularly acute since 1980 when incarceration rates began to soar. For example, by 2001 the number of inmates skyrocketed from 474,386 to 2,041,479.

With the number of incarcerations consistently on the rise, prisons are able to use inmates for factory work, manual labour, direct marketing to local communities, and service sector work to generate profit.

The United States is unlike any other country, with a profit motive being intertwined with the criminal justice system. Profit and incarceration go hand in hand, and if incarceration rates are higher, profit is undoubtedly higher as well. Therefore, prison corporations have an incentive to overcrowd prisons, and lobby the government in favour of a policy agenda that is ‘tougher on crime’.

Mass incarceration began in the 1970s, as the era of ‘law and order’ politics and the war on drugs began to be the focal point of policy in congress. In the 1970s into the 1980s, Richard Nixon and Ronald Regan were the respective Presidents, who both had firm conservative policy to further target and discriminate against minorities, which is reflected in incarceration statistics. Thereafter, a spike in incarceration rates occurred throughout the 1970s. The rates of private prisons doubled and have been on the rise since 1980.

The higher incarceration rates raise numerous questions on what effects it may have including on the prisoner, race statistics, private prison owners, the economy, and on the global political economy as a whole. In addition – the question of how to mitigate the problem of higher incarceration is a natural response to its complexity.The effects that the PIC has on the individual prisoner is shocking considering the minimum wage is $7.25. Prisoners earn as low as $0.13 per hour of work because states such as South Carolina do not need to adhere to the federal minimum wage requirements.

An issue must be addressed is the overwhelming overrepresentation of African Americans in prisons across the country. The African American population bears the brunt of much of this maltreatment while working in these prison conditions. In a 2003 statistic, a total of 1.3 million men were sentenced in prisons under the state or federal jurisdictions, of that 583, 300 were black, resulting in 45% of those inmates being of African American dissent. This has allowed the Prison Industrial Complex to easily and legally exploit minorities.

The next issue that needs to be addressed is how much are private prison companies profiting from putting their prisoners to work? Corrections Corporation of America (CCA) and GEO have profited a total of $2.9 Billion in 2010. These corporations garnered that money through the lobbying within the government to push policies to increase the flow of prisoners into the hands of the private prisons. These corporations have spent $22 million this century on lobbying, spanning 32 states.

What has to be addressed is how the PIC has affected the Political economy within the United States. The increased rates of incarceration and private prisons have contributed to a larger conservative trend toward less federally funded prisons, and kept the power at the state level, where individual corporations have more autonomy over policies within the prisons. This privatization encourages the profit motive of incarceration, driven by capitalist elites. The Prison Industrial Complex is also closely tied to the economy as it is a huge burden to the United States federal tax system. The complex consists of 1500 state prisons, 300 of which are private. In order to sustain and run prisons of that capacity, it costs the United States $146 billion.

The PIC’s relation to the global political economy is simple, it is one of America’s largest economies. Internationally, the United States has attempted to expand both via the Military Industrial Complex, but also through private companies to implement prisons in places such as Basra, Abu Ghraib, Guantanamo Bay and other locations. Three decades of globalization have also produced competition between global markets and labour power. Countries such as the United States. have focused heavily on market efficiency, resulting in more conservative correctional policies such as privatization.

This is truly a global issue as well because the United States compared to other countries such as Scandinavia or Canada has a very different ideology for correctional facilities and punishment. While studying the Prison Industrial Complex in the United States, global hegemony is important as they influence the entire world through its military, economy, and culture. If the United States is clearly the outlier regarding correctional practices, then other countries can be used as examples to influence legislation to reverse privatization, and create a culture that is less profit motive oriented regarding the prison system.

Possible legislation could appear as multifaceted educational curriculum that promotes inclusiveness around classrooms and campuses. Secondly, an investment of crime prevention instead of direct incarceration. Building equal partnerships within local communities and investing on longer tem projects to support community mobilization to recognize crime and victimization to reduce crime rates. The ‘capacity to build local capacity’ is another important aspect which would identify how to properly and equally distribute resources to communities most affected. Finally, a focus on local governmental or grassroots action is another key element to reduce and prevent crime.

In conclusion, there has been a substantial increase in incarceration rates since the early 1980’s due to traditional conservative values of being tough on crime. As a result, the profit motive of the Prison Industrial Complex and the increase of privatization have become an incredibly serious issue. Further, the Justice system has become inherently exploitive to minorities. That is why there are a number of ways to begin to think about how the broken United States’ system may begin to take actions to redress some of damage made from poor political decisions.