The failure of prison privatization

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Perhaps Gov. Rick Scott needs to realize that privatizing prisonshasn? been the boon that was promised (via Matt Yglesias):

The conviction that private prisons save money helped drive more than 30 states to turn to them for housing inmates.But Arizona shows that popular wisdom might be wrong: Data there suggest that privately operated prisons can cost more to operate than state-run prisons ?even though they often steer clear of the sickest, costliest inmates.

The state? experience has particular relevance now, as many politicians have promised to ease budget problems by trimming state agencies.Florida and Ohio are planning major shifts toward private prisons, and Arizona is expected to sign deals doubling its private-inmate population.

There are important general lessons here. The genius of the real private economy is that firms that are really poorly run go out of business. It? not that some magic private sector fairy dust makes the firms all be runs soundly. Lots of bad businesses are out there. But they tend to lose money and close. Meanwhile, well-run firms tend to earn profits and expand. The public sector doesn? have this feature. Just because a public agency is inept is no guarantee that it will go out of business. Resources are allocating according to political clout rather than any criteria of merit. It? a problem. But it? not a problem that ?rivatizing?public services actually solves. There? no magic private sector fairy dust.

That? not to say government services should never be contracted out. As an extreme example, public agencies don? manufacture their own printer toner. DC contracts out its Circulator buses toFirst Transit and it? very successful. There are some very good charter schools. But there? no fairy dust. Not in prisons and not elsewhere.

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including,,, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.