Neoliberalism, Capitalism, and Prisons

The advent of the neoliberal period has lead many to assert that we are living in an entirely new historical epoch, for which Marx is inadequate. I have argued previously that neoliberalism is primarily in continuity with capitalism, rather than rupture with it. Given the role of mass incarceration in the neoliberal era, I believe it is worth examining private prisons in order to drive this point home.

The institution of private prison is the subject of much debate. Proponents argue that the system is a cost-effective option. It allows the government to conserve tax dollars and allows cash-starved states to reallocate the funds. However, these assertions run counter to the vast majority of data. In this essay, I will argue that private prisons are not in fact cost effective. Instead, they serve only to incentivize criminalization and exploit the labor of inmates. Further, their function is one that capitalism-and especially neoliberal capitalism-cannot do without. As such, the abolition of private prisons is impossible under capitalism.

The most important argument offered up by the pro-privatization camp is that for-profit prisons are cheaper than publicly owned correctional facilities. This argument rests on the assumption that cost-cutting is important enough to overlook the violence and exploitation that occurs in private prisons, which strikes me as spurious. A great many activities that harm humanity, such as the cutting of environmental safety regulations, result in greater profits. Despite this, no one (except perhaps a particularly unscrupulous capitalist) would say that profit stands above the wellbeing of the environment. Why, then, should this logic apply to prison privatization? Regardless, this is a myth that has been employed time and again in defense of private prisons, so it is worth taking the time to deconstruct it.

It is true that there is no database of public and private prisons through which it would be possible to control for things like size, jurisdiction, and so on. This makes a comparative cost analysis admittedly difficult. However, the data that does exist does not support the idea that private prisons are more cost effective than public ones. Data from the Arizona Department of Corrections show that private prisons can cost as much as $1,600 more per year, while many cost about the same as they do in state-run prisons [1].  Further, researchers at the University of Utah concluded in 2007 “cost savings from privatizing prisons are not guaranteed and appear minimal” [2]. Finally, a review of the 24 studies on the cost effectiveness of private prisons revealed inconclusive results regarding cost savings. They also found no considerable difference in cost effectiveness [3]. These studies all show that the myth of the cost-effective private prison is just that: a myth. At best, the data are inconclusive. There is simply no credible way to assert that private prisons are more cost effective than their public counterparts.

There have been several studies that claim to prove this point, however. One was conducted at Temple University by two researchers who claim to be independent. However, the study received funding from Correctional Corporation of America, the United State’s largest private prison company [4]. Clearly, studies that are paid for by the very industry they seek to expose cannot be considered credible. There have been very few truly independent studies that have found that private prisons provide a monetary gain to taxpayers. As such, there is no economic justification for the proliferation of private prisons.

If private prisons do not justify themselves from a monetary standpoint, as I have just argued, what exactly do they do? Their purpose cannot be saving taxpayers money, but neither could they exist without a purpose. It must be the case that private prisons perform some function. The question now is, which function? They are certainly not concerned with rehabilitation, and may even incentivize criminalization. Data from one Minnesota report confirm, “that privatization significantly lowers the level of correctional effectiveness, facility security, and public safety compared to what is now provided by the public system” [5]. Private prisons, therefore, cannot be considered more effective or safer than public facilities. Their purpose must be something other than the rehabilitation of criminals.

As Angela Davis has argued, the true purpose of private prisons is the exploitation of labor. According to Davis, the use of prison as a source of labor began earnestly in the 1980’s. She writes, “Companies such as Correctional Corporation of America (CCA) and the GEO Group reaped the profits attracting investments from household names, including the Bank of America, Fidelity Investments and Wells Fargo and also from many universities around the nation” [6]. They gained these profits by forcing their inmates to engage in labor. The inmates are well aware of this. According to one report, as many as 60,000 detained immigrants have engaged in “forced labor” for profit-driven correctional facilities [7]. Private prisons, to put it bluntly, are sites of a new American slavery.

This slavery is completely legal. The 13th amendment prohibited slavery-with one exception. The so-called “punishment clause” mandates that forced labor shall be prohibited “except as a punishment for crime” [8]. This clause was taken directly from the Northwest Ordinance of 1787. The clause reflected a common belief that hard work was essential to the rehabilitation of criminals. From its inception, however, the clause was used to police black citizens and restrict their rights. Frederick Douglass described it this way at the time: “[States] claim to be too poor to maintain state convicts within prison walls. Hence the convicts are leased out to work for railway contractors, mining companies and those who farm large plantations. These companies assume charge of the convicts, work them as cheap labor and pay the states handsome revenue for their labor. Nine-tenths of these convicts are negroes” [9]. Douglass also notes that so many blacks were behind bars because law enforcement tended to target them. This insight remains relevant to discussions of private prisons today. Law enforcement targets vulnerable populations-immigrants and people of color-and force them to labor for the profit of the owners. This is not fundamentally different from the institution of slavery of centuries past. Correctional corporations have used the specter of economic efficiency to perpetuate a barbaric and inhuman institution. For this, there is no excuse.

It is true that criminals should be expected to forfeit some portion of their freedom when they commit crimes. However, many of the aforementioned detained immigrants have committed no offenses beyond entering the country illegally. Many immigrants must contend with immense poverty in their home countries, oftentimes imposed by the United States. The North American Free Trade Agreement, or NAFTA, was intended to promote economic development for the United States and Mexico. According to a report from the CPER, however, “Mexican poverty has risen since the deal’s implementation in 1994 as economic growth and real wages stagnated while nearly 5 million family farmers were displaced, propelling Mexico’s poor toward migration to the United States” [10]. Immigration is directly attributable to the poverty imposed upon Mexico by NAFTA. Private prisons do not generally house dangerous elements that must be cut off from wider society. They are used to pen in desperate workers who believe they have no other choice.

This is remarkably similar to the processes that beget the development of capitalism in Europe. European capitalism arose out of feudalism, but this was not a natural occurrence. Rather, it came about through the enforced transformation of the peasant masses and feudal retinues into an industrial working class. Peasants were driven off their land and into the cities to work in factories. Drunkenness, pauperism, and vagrancy-the cardinal sin of existing while homeless-these became criminal offences. Prisons began as a means by which to discipline an emergent working class [11].  Even the classical political economists of the time understood the integral role of prison in the exploitation of labor. Bentham, a celebrated economist, detailed plans for a structure he called the Panopticon. In the words of author Michael Perelman, this was, “a prison engineered for the maximum control of inmates in order to profit from their labor” [12]. Although the Panopticon never materialized, the prison system continued to be a weapon for the repression of the workers during this period. This system was widely considered a success at the time, so it is no wonder that the American ruling class has seen fit to replicate it today.

A predictable rebuttal would be that this is an unfair comparison, since there is not a developing working class in the United States as was the case in England. Granted, Mexican farmers and English peasants in the feudal era have very different experiences of day-to-day life. In a broad sense, however, parallels can be drawn between them. Both worked land, often communally, until capitalist states forced them off this land and into poverty. Faced with starvation, both migrated to other areas to work for bosses in exploitative conditions. Many Mexican farmers still perform agricultural labor, while feudal peasants often worked in then-new factories. Further, feudal peasants migrated within England, whereas Mexican immigrants have been forced to leave their home country entirely. Despite these differences, however, both instances have meant mass migration and an increase in the amount of exploitable labor in a particular area. As such, the characterization of Mexicans displaced by NAFTA as a “developing working class” or an “emergent proletariat” is accurate, at least in the American context.

Private prisons are not about rehabilitation. They are not even about crime. Like the prisons of the industrial revolution, they are about disciplining the working class. They serve a purpose that is necessary for the perpetuation of capitalism at this particular moment. The experience of capitalism’s beginnings shows that prisons themselves have always been a tool of the ruling class. The privatization of prisons was inevitable, brought about by changes in the relations of production (the movement from feudalism to capitalism). It therefore follows that private prisons cannot be done away with without the abolition of capitalism.

The prison industrial complex, as Davis has termed it, can only be understood in a dialectical sense [13]. Prison profiteering is both the cause and effect of mass incarceration. Capitalism’s contradictions spawned the prison system. One of the many causes of crime under capitalism is poverty. The results of one study “imply that if there is a culture of violence, its roots are pronounced economic inequalities” [14]. Capitalism, as a system that pits workers in competition with one another, requires poverty in order to function. Poverty allows capitalists to drive down wages and worsen conditions. If one worker will not accept a particular job, poverty ensures that some other worker will. In this sense, capitalism uses poverty as a tool to perpetuate itself.

German political economist Karl Marx elucidated a similar point in his book The Economic and Philosophical Manuscripts of 1844, in which he wrote, “When society is in a state of progress, the ruin and impoverishment of the worker is the product of his labor and of the wealth produced by him” [15]. Because workers under capitalism produce wealth that does not belong to them, the very process of production ensures that workers will be poor. The principle of exploitation states that workers are only ever paid enough money to enable them to continue working, nothing more. This means that the vast majority of workers will be poor. Even if poverty did not serve the function mentioned above, it would still be an unavoidable aspect of capitalism. This being the case, capitalism is structurally incapable of addressing the root of crime. The system must, therefore, find a way to profit from it. The prison system, as a result, is now a lucrative investment opportunity for innumerable corporations.

Microsoft, Wal-Mart, and Dell, among others, have adopted a system that bares a striking resemblance to the convict-leasing system described by Douglass. In prisons across the country, work sunup to sundown for major corporations. They produce or package every kind of commodity, from weapons intended for military use to Starbucks coffee. According to the Federal Bureau of Prisons, “Sentenced inmates are required to work if they are medically able. Institution work assignments include employment in areas like food service or the warehouse, or work as an inmate orderly, plumber, painter, or groundskeeper. Inmates earn 12¢ to 40¢ per hour for these work assignments. Approximately sixteen percent (16%) of work-eligible inmates work in Federal Prison Industries (FPI) factories. They gain marketable job skills while working in factory operations, such as metals, furniture, electronics, textiles, and graphic arts. FPI work assignments pay from 23¢ to $1.15 per hour” [16].

In addition to private prisons getting away with paying lower wages than private corporations, they also subject their inmates to atrocious conditions. A prisoner forced into agricultural labor describes her experience this way: “They wake us up between 2:30 and three AM and kick us out of our housing unit by 3:30AM. We get fed at four AM. Our work supervisors show up between 5AM and 8AM. Then it’s an hour to a one and a half hour drive to the job site. Then we work eight hours regardless of conditions . . .. We work in the fields hoeing weeds and thinning plants . . . Currently we are forced to work in the blazing sun for eight hours. We run out of water several times a day. We ran out of sunscreen several times a week. They don’t check medical backgrounds or ages before they pull women for these jobs. Many of us cannot do it! If we stop working and sit on the bus or even just take an unauthorized break we get a major ticket which takes away our ‘good time'” [17].

Here, we see the true purpose of private prisons. They are intended to create an easily manipulated workforce who can legally be paid wages that are below the value of their labor power. The exploitation and disciplining of the working class represented the impetus for prisons to exist in the first place, and the same logic is being used to promote their privatization today.

It should be noted that the function of prisons as a method of social control-a tool to discipline the woirking class-is the primary function of prisons, both public and private, in the United States. While private prisons are in many cases a money-making venture for capitalists, their major function is to control the working class of oppressed nations. When we look at prison populations (whether private or public), we can see where mass incarceration gets its impetus. The vast majority of prisoners are New Afrikans, Chicanxs, and peoples of the First Nations (even though euro-Americans are the majority of the U.S. population). The prison is not primarily a revenue racket, but an instrument of social control. Although profit-making (and thus exploitation) is a motivating factor in their proliferation, they should be seen as tools to beat the working class into submission [18].

Scholars Wagner and Rabuy support this idea in their paper “Following the Money of Mass Incarceration”. The paper presents the division of costs within the prison industry as the judicial and legal costs, policing expenditures, civil asset forfeiture, bail fees, commissary expenditures, telephone call charges, “public correction agencies” (like public employees and health care), construction costs, interest payments, and food/utility costs [19].

The authors outline their methodology for arriving at their statistics and admit that “[t]here are many items for which there are no national statistics available and no straightforward way to develop a national figure from the limited state and local data” [20]. Despite these obvious weaknesses in obtaining concrete reliable data, the overwhelming correctness of this analysis stands.

Wagner and Rabuy discuss the private prison industry at the end of the article. Here, they write:

“To illustrate both the scale of the private prison industry and the critical fact that this industry works under contract for government agencies — rather than arresting, prosecuting, convicting and incarcerating people on its own — we displayed these companies as a subset of the public corrections system [21].”

Private prisons have been justified on the basis that they are more cost-effective than the alternative. Data show that this is incorrect. Even if this were the case, however, that would not justify the rank exploitation of the inmates. Chattel slavery is no longer justified by this logic, so there is no reason that slavery behind bars should be subject to this argument either.

Private prisons, contrary to what proponents argue, have nothing to do with rehabilitation. They are about amassing profits for wealthy corporate owners and, chiefly, controlling undesirable populations. There is no argument, economic or otherwise, that can be used to justify their continued use. Private prisons and the capitalist system that necessitates them must be abolished. What this shows is that neoliberalism is simply a new era of capitalist development. In our struggle against it, we should continue to look to Marx and those who came after him.

  1. Oppel, Richard A. “Private Prisons Found to Offer Little in Savings.” The New York Times, The New York Times, 18 May 2011, 
  2. Lundahl, Brad, et. al. MSW “Prison Privatization: A Meta-Analysis of Cost Effectiveness and Quality of Confinement Indicators” Utah Criminal Justice Center, College of social work, University of Utah. April 26, 2007. 
  3. Oppel, Richard A. “Private Prisons Found to Offer Little in Savings.” The New York Times, The New York Times, 18 May 2011, 
  4. Petrella, Christopher. “CCA Continues to Cite Misleading Study It Funded.” American Civil Liberties Union. American Civil Liberties Union, 26 Apr. 2015
  5. Austin and G. Coventry, “Emerging Issues on Privatized Prisons,” Bureau of Justice Assistance, February 2001.
  6. “Dr. Angela Davis – The Voice of the Oppressed.” Center for the Study of Democracy, 9 Nov. 2015.
  7. Short, April M. “As many as 60,000 detained immigrants may have engaged in forced labor for private prison companies.” Salon
  8. Kamal, Ghali. “No Slavery Except as a Punishment for Crime: The Punishment Clause and Sexual Slavery.” UCLA Law Review, 22 Oct. 2009, 
  9. “The Convict Lease System by Frederick Douglass.” The Reason why the colored American is not in the World’s Columbian Exposition, 1893.
  10. TeleSUR et al. “NAFTA Plunges 20M Mexicans into Poverty: Report.” News | teleSUR English,
  11. “Poverty and the workhouse.” The British Library – The British Library,
  12. Michael Perelman, The Invention of Capitalism. Duke University Press, 2000, p. 21
  13. “Dr. Angela Davis – The Voice of the Oppressed.” Center for the Study of Democracy, 9 Nov. 2015. Op. Cit.
  14. Judith R. Blau and Peter M. Blau, American Sociological Review Vol. 47, No. 1 (Feb., 1982), p.114-129
  15. Karl Marx, “Marx 1844: Wages of Labor.” Marxists Internet Archive 
  16. “Federal Bureau of Prisons.” BOP: Work Programs,
  17. Victoria Law, Truthout. “Martori Farms: Abusive Conditions at a Key Wal-Mart Supplier.” Truthout, 2011.
  18. Peter Wagner and Bernadette Rabuy, Following the Money of Mass Incarceration (Prison Policy Initiative), 25 January 2017. 
  19. Ibid
  20. Ibid.
  21. Peter Wagner, Are Private Prisons Driving Mass Incarceration? (Prison Policy Initiative), October 7, 2017. 
  22. Ibid.

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