Tuesday, 10 March 2009

The aristocracy of prison management [updated]

To say I’m in favour of privatisation would be somewhat of an understatement.  As far as I’m concerned, if the Beehive was sold off tomorrow and the whole government run out of a prefab in Pigeon Park, then I’d be a happy man.

But I’m not convinced about privatising prisons, or more accurately “contracting out” of prison management, any more than I would be about privatising (or “contracting out”) policemen.

To say it again in case you thought you misread that: I’m not in favour of private prisons.

As always, there’s both a moral and a practical point to make.

The first point to make comes from the very reason we have governments, a point remembered these days more in the breach than the observance: that, for very good reasons, governments have a monopoly on the use of force.

    If physical force is to be barred from social relationships, men need an institution charged with the task of protecting their rights under an objective code of rules.
    This is the task of government–of a proper government—it’s basic task, its only moral justification and the reason why mean do need a government.
    A government is the means of placing the retaliatory use of physical force under objective control—ie., under objectively defined laws. [Ayn Rand]

This is the difference between private business and the government: it’s the difference between the dollar and the gun.

So what’s morally wrong with private prisons then?  Because, to my mind, it puts the gun in the service of the dollar.  Privatise as much of the existing government as you can, but when you start privatising force, then I’m agin’ you.

That’s the moral argument against private prisons, that it puts the gun in the service of the dollar.  The practical argument is related: that it puts profits at the whim of bureaucratic management.

As Ludwig von Mises points out, profit management is a very different animal to bureaucratic management –- with public-private partnerships we get the worst of both.  As he explains, “the only appropriate method for handling governmental affairs, for which market processes, economic calculation and the profit motive are unable to provide sufficient guidelines … is the employment of bureaucrats and bureaucratic management.”  And it’s true.  When there’s no market, there’s no genuine way to use the profit motive appropriately – and when you do try to use it, by whatever system of contracting out you devise, you still inevitably invite corruption.

We've all heard the stories of the American defence department’s $400 hammers and $640 toilet seats; and we’re all aware that private contractors know how to milk these systems that govt procurement agencies put in place.

No one knows this better than the crony-phony capitalists who survive by leeching off the public purse, those who Rand called the “aristocracy of pull.”

Who knew this better than the mortgage giants Fannie Mae and Freddie Mac, created and nurtured by the politicians, who then received back some of the profits - “sometimes directly, as campaign funds; sometimes as ‘contributions’ to favored constituents.”

Who knows this better than lawyers, some of the country’s most highly-paid parasites, whose true speciality is in milking the taxpayers' pockets for their own lucrative ends.

And who would know this better than contractors for the management of prisons, whose speciality is to use the power of the gun to their own dollar advantage.

Yes, I agree with competition, and it's true that private prisons can operate more efficiently, and have done.   But if government is inefficient at managing prisons themselves –- and no one knows this better than Barry Matthews himself -– then why should we expect it to be any more efficient at producing the contracts to run private prisons?  As Cato’s Bruce Benson points out, “In anarchy (and indeed, any private market) the good or service is being supplied in response to the demands of private individuals,” whereas when the demand comes wholly from monopsonistic bureaucratic management financed out of the taxpayers’ pocket, the services provided are quite different.

But even when they do mange to efficiently write and supervise a prison contract without a private contractor running rings around them, and let’s concede that some have done, it’s not right. Efficiency is not the primary aim of government, and in any case, it crucially depends on accurately answering the question ‘efficient at what?’.  If Hitler had “contracted out” the management of the Holocaust, undoubtedly the killing would have been more efficient, but it wouldn’t have made it any less horrific.

Too say it again, efficiency is not the primary aim of government; protection of individual rights is. That’s too important to be bought and sold at the whim of a bureaucrat and the behest of an aristocrat of pull.

[And let me leave you with this last question: given all the problems I’ve identified with ‘privatising’ prisons, why is this the only privatisation that’s even on the horizon of this new government -- when there’s so many other parts of government just crying out to be sold off or canned?  Answer that one for me, and I’ll be an even happier man.]

UPDATEAnti Dismal links to most of the blogs who’ve handled this topic, and reckons “much heat” has been shed on the topic, but “very little light.”  That includes the contribution of yours truly.  Oh well. Anti Dismal offers a substantial contribution to the debate, concluding,

there is a case to be made for private prisons, but it may not be as strong as for other services currently provided by the government, and it is at its weakest for the case of maximum security prisons.


  1. Indeed, private prisons, but the government HAS to own an airline, a railway/coastal shipping company, FIVE TV channels, THREE power generating and retail companies, THREE radio stations, a postal/courier company, a coal mining company etc etc.

  2. I don't think your argument stacks up. Ultimately, everything that government wishes to achieve has to be contracted out to the private sector, namely private citizens working for a profit for themselves. It seems hardly relevant philosophically whether those private citizens are employed directly by the government, or slightly less directly by a private company contracted by the government.

    What does matter however is the quality of the service provided, and as we all know, in the real world private managers tend to perform better overall than bureaucrats at actually providing services at the lowest level.

    The contracts would need to be drawn up appropriately to include strict performance criteria, but once this is done, it is much easier to enforce standards than it would be if the usual government arse covering was allowed to proliferate.

  3. "why is the only privatisations on the horizon with this new government " So they can afford the extra costs imposed by pandering to the SSTs rabid "Back to the dark ages" law policy......

  4. Very good comments PC. Thanks for this clarifying perspective.

  5. Interesting perspective PC.

    As an example of the sort of incentives privatised prisons must be set up to avoid, there is the example of the prison contractors in the US who bribed two judges to boost the number of juvenile detainees by 5000, thereby guaranteeing them work building new facilities. The judges sentenced thousands of young people unfairly for things as minor as making fun of school principals on Facebook.


    I'm generally in favour of private prisons myself, but they far down on the list of things to privatise.

  6. Now PC, I did say little, not zero light! And I think we come to the same conclusion, there is a down side to contracting out in this case. And the trade-off has to be thought about carefully.

  7. But I’m not convinced about privatising prisons, or more accurately “contracting out” of prison management, any more than I would be about privatising (or “contracting out”) policemen.

    Both would be good, but there's a condition: no special privileges. The comparison you're looking for is contracting out tax collection - obviously a losing proposition, because without the special privilege granted at gunpoint by the state, collecting taxes is just robbery, and a crime. But both police and prison management can be provided (albeit in a more restricted way: e.g., privatized police wouldn't be able to bother people for victimless "crimes", and prison would be a last resort for only the very worst of criminals, etc.) without committing any crimes, and would be better provided privately.

  8. PC,

    For a critical rationalist's perspective on private security, you might be interested in this post on Elliot Temple's blog.


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