While the Obama administration’s decision may seem antithetical to conservative beliefs, those who favor small government – who favor true privatization – should support the impending policy change.
Conservatives do not support privatization for the sake of privatization; they support it because it works. Conservatives believe when the government monopolizes a service (like roads), quality and efficiency fall while costs increase.
Compare this to the private marketplace, where inefficient enterprises go out of business (unless they’re bailed out by the government, of course). These market forces cause businesses to innovate, slash costs wherever possible (without reducing quality), and fire unproductive workers and administrators.
The government, however, rarely fires itself – it has no incentive to do so. Unlike business in a free market, where competition can force companies to go under if they give bad service, a government agency has nothing to fear. Government agencies can afford to provide low-quality products at high prices because they are the ultimate monopoly. Who can compete with the government?
Private companies, on the other hand, cannot afford to provide low-quality products at a high price. They provide high-quality products at the lowest price possible.
That’s why conservatives have favored the privatization of different government services. But this all begs the question: Why should conservatives be happy about the un-privatization of prisons?
Unlike other privatization efforts, private prisons are not operating in a free market. Private prisons are an affront to everything conservatives have fought for.
The current private prison complex is as crony as crony capitalism can get. The system has simply moved the monopolies around: Instead of a public monopoly, we now have private monopolies. Both are equally bad!
Private businesses receive legal and economic advantages conferred by the state a normal business would not – or, at least, should not – get in a free and open market.
Private prisons receive X amount of tax dollars for each prisoner, which generally does not cover the full cost of care. As a result, private prisons have incentives to cut costs where it matters most: food, medical care and, disturbingly, security.
Yes, you read that right – the current private prison system encourages private prison administrators to trim security.
It gets worse. According to a report by In The Public Interest, a Washington, D.C.-based research organization, 65 percent of private prison contracts include occupancy guarantee quotas called “low-crime taxes.” Essentially, these quotas require prisons to fill a certain percentage of their cells, the average quota being 90 percent.
If this requirement is not met, taxpayers are forced to compensate for the empty prison cells. If the quota is 100 percent, and only 80 percent of the cells are full, the taxpayer has to reimburse the corporation for the 20 percent of the cells that are empty. Indeed, these quotas punish citizens for low crime rates, which is simply outrageous. If private prisons operated in a free market, they wouldn’t have these asinine advantages.
The private prison industry runs counter to everything privatization is supposed to be about. The private prison complex doesn’t deliver market incentives. Instead, it offers more of the same. Conservatives shouldn’t support transforming public monopolies into private ones; rather, public monopolies should be privatized and then exposed to market forces that increase efficiency and reduce costs.
Private prisons don’t promote free markets; they are the embodiment of crony capitalism. If there is any way to properly privatize prisons, conservatives should be open to the idea. But the status quo is unacceptable. The Obama administration was right to shut them down for federal inmates.
K. Alexander Adams recently graduated from Sandia Prep School and is an incoming freshman at American University.