Inefficiency of Privatizing – Outsourcing Prisons, Public Services, Education and Justice

Flickr - Alcatraz - macinateMichael Thomas, Guest
Waking Times

Many nations, including the US, have taken to the idea of “privatisation”, which really means giving the ownership or responsibility of a certain service to a privately owned institution -corporation- instead of opting for a transparent representative or democratic control.

The argument most often given in support of these privatisation efforts is cost-reduction: stating that costs will be lowered by forcing private corporations to compete with government in areas like prisons and education and forcing them to find more cost-effective or innovative means of managing responsibilities .

But, do we really want to strive for cost-reduction independent of the quality we are given? Are we willing to sacrifice transparency in areas as important as law and education, just so that we can save a few cents?

Luckily, the dilemma is actually simpler than my questions, and industry pundits, would lead you to believe. Often, privatisation does not reduce costs, nor does it create more efficiency within the system. We need merely to look at costs since 2000, as the Justice Policy’s “Gaming the System” report writes:

“Since  2000, private prisons have increased their share of the ‘market’ substantially: the number of people held in private federal facilities increased approximately 120 percent, while the number held in private state facilities increased approximately 33 percent. During this same period, the total number of people in prison increased less than 16 percent. Meanwhile, spending on corrections has increased 72 percent since 1997, to $74 billion in 2007.”

The first and largest private prison company in the US (Corrections Corporation of America) was founded in 1983 when the total US prison population was around 400,000 and the US population approximately (according to the US Census) 240,000,000 people (so 0.17% of the population).

  • Contrast these numbers with data from June 2009 when the US prison population was around 1,620,000 people compared with approximately 305,000,000 US citizens: 0.53% of the population. This means that the relative number of incarcerated Americans has more than tripled since the birth of private prisons.

    Some sources dispute the official statistics I just cited, for instance the International Center for Prison Studies at King’s College London, and say that the current rate is actually 0.75%. This represents a 441% increase since 1983.  For comparison: Germany’s rate is about 0.08% and England’s 0.15%.

    In terms of absolute numbers the US prison population increased 722% between 1970 and 2009.  It has increased 405% between 1983 and 2009. The prison industrial complex is just exacerbating the police state/mass incarceration problem by adding a financial incentive for depriving Americans of their freedom. It also provides a financial incentive to not rehabilitate prisoners.

    The most glaring question is: why do governments keep granting control of things that effect us all (like law, rehabilitation, education, or our water, to mention only a few) to those who are sworn to serve the profit-margin?

    The answer is saddeningly simple: because their increased profits allow them to lobby and finance politicians to help them increase their profits. This includes keeping relatively mundane things (like marijuana) illegal and pushing for harsher sentencing.

    As most of us know, their profits are also not just taken from the pocket of the state, but are also inflated by prison labor, which they use to produce merchandise to be sold for pennies on the dollar. Not to mention often cutting costs in regard to quality (more inmates per cell, lower quality food, lower quality personnel/guards) to increase profits.

    Things like the criminal justice system, or public schools, or the fire department, exist as mechanisms of cultural stability. They have a greater impact on how children in our society develop and how they see the world because these institutions can be used and accessed regardless of class or location.

    Whether we agree these institutions should be decentralized, centralized, dynamically or government run, it doesn’t change the fact that the importance of their roles makes it imperative that they be transparent. But, the problem with competitive markets is that they demand the ability to get an advantage over competitors: keeping secrets.

    Is it really smart to mix our necessities with competition, where the cheapest instead of the best product often dominates, and products are designed to break in order to force new purchases and increase profits (planned obsolescence)?

    Until now this discussion has remained in the realm of social institutions. But, what about undeveloped land and resources (nature): mountains, streams, forests, even the water we drink? Should or can these be privately owned? In almost all nations they are or are being privatized. Since these are things which effect not only all of us, but future generations and other organisms, it seems adviseable to not be so quick to sell them off for short term profit.

    What that means is a form of public ownership of non-developed land. When I write public ownership here I do not mean for it to be under the control of a bureaucrat, but instead subject to the informed choices of the people living there who will personally have to deal with the consequences of the choices.

    If people never see the consequences of their decisions then they are far less responsible in making them. This is why putting private enterprise (often run by a board of directors who answer to stock holders), instead of people and communities, in control of vital social organs is dangerous.

    The goal of a profit oriented institution is not to do the job as effectively as possible or to be creative or innovative in developing new techniques. But instead their job has been to cater to and help form the current political paradigm to ensure funding, while also cutting corners to ensure profits.

    And they continue to cut corners because there is no transparency, and the politicians and officials they supported have no interest in investigating them. It is a self-reinforcing cycle powered by self-interest.

    Are we really going to let this continue?




    This article was originally featured at Exposing The Truth

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