Jailing Americans for Profit: The Rise of the Prison Industrial Complex
“Mass incarceration on a scale almost unexampled in human history is a fundamental fact of our country today—perhaps the fundamental fact, as slavery was the fundamental fact of 1850. In truth, there are more black men in the grip of the criminal-justice system—in prison, on probation, or on parole—than were in slavery then. Over all, there are now more people under ‘correctional supervision’ in America—more than six million—than were in the Gulag Archipelago under Stalin at its height.”—Adam Gopnik, “The Caging of America”
In an age when freedom is fast becoming the exception rather than the rule, imprisoning Americans in private prisons run by mega-corporations has turned into a cash cow for big business. At one time, the American penal system operated under the idea that dangerous criminals needed to be put under lock and key in order to protect society. Today, as states attempt to save money by outsourcing prisons to private corporations, the flawed yet retributive American “system of justice” is being replaced by an even more flawed and insidious form of mass punishment based upon profit and expediency.
As author Adam Gopnik reports for the New Yorker:
[A] growing number of American prisons are now contracted out as for-profit businesses to for-profit companies. The companies are paid by the state, and their profit depends on spending as little as possible on the prisoners and the prisons. It’s hard to imagine any greater disconnect between public good and private profit: the interest of private prisons lies not in the obvious social good of having the minimum necessary number of inmates but in having as many as possible, housed as cheaply as possible.
Consider this: despite the fact that violent crime in America has been on the decline, the nation’s incarceration rate has tripled since 1980. Approximately 13 million people are introduced to American jails in any given year. Incredibly, more than six million people are under “correctional supervision” in America, meaning that one in fifty Americans are working their way through the prison system, either as inmates, or while on parole or probation. According to the Federal Bureau of Prisons, the majority of those being held in federal prisons are convicted of drug offenses—namely, marijuana. Presently, one out of every 100 Americans is serving time behind bars.
Little wonder, then, that public prisons are overcrowded. Yet while providing security, housing, food, medical care, etc., for six million Americans is a hardship for cash-strapped states, to profit-hungry corporations such as Corrections Corp of America (CCA) and GEO Group, the leaders in the partnership corrections industry, it’s a $70 billion gold mine. Thus, with an eye toward increasing its bottom line, CCA has floated a proposal to prison officials in 48 states offering to buy and manage public prisons at a substantial cost savings to the states. In exchange, and here’s the kicker, the prisons would have to contain at least 1,000 beds and states would have agree to maintain a 90% occupancy rate in the privately run prisons for at least 20 years.
AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.
The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.
The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere (see photo). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs).
“Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market,” says James Glattfelder. “Our analysis is reality-based.”
Previous studies have found that a few TNCs own large chunks of the world’s economy, but they included only a limited number of companies and omitted indirect ownerships, so could not say how this affected the global economy - whether it made it more or less stable, for instance.
The Zurich team can. From Orbis 2007, a database listing 37 million companies and investors worldwide, they pulled out all 43,060 TNCs and the share ownerships linking them. Then they constructed a model of which companies controlled others through shareholding networks, coupled with each company’s operating revenues, to map the structure of economic power.
The work, to be published in PloS One, revealed a core of 1318 companies with interlocking ownerships (see image). Each of the 1318 had ties to two or more other companies, and on average they were connected to 20. What’s more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world’s large blue chip and manufacturing firms - the “real” economy - representing a further 60 per cent of global revenues.
When the team further untangled the web of ownership, it found much of it tracked back to a “super-entity” of 147 even more tightly knit companies - all of their ownership was held by other members of the super-entity - that controlled 40 per cent of the total wealth in the network. “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network,” says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.