In 1844, Louisiana did something that seems almost quaint in retrospect: it privatized its penitentiary just nine years after opening it. McHatton, Pratt, and Ward ran the prison as a factory, using inmates to produce cheap clothes for enslaved people. The experiment didn't last long—the state took it back after the arrangement proved too corrupt even by 19th-century standards. What's less quaint is that we're still running versions of the same experiment today, except now it's a multi-billion-dollar industry.

The Loophole That Built an Industry

The 13th Amendment abolished slavery in 1865, but it included sixteen words that would reshape American incarceration: "except as punishment for a crime." That exception wasn't an oversight. It was a feature.

Southern states immediately exploited it through convict leasing—renting prisoners to private companies for labor. Between 1880 and 1904, Alabama made 10% of its state budget from leasing convicts. The system was more lethal than slavery itself. Annual death rates ranged from 16% to 25%, rivaling Soviet gulag mortality. Slaveholders at least had financial incentive to keep their "property" alive. Lessees could just get new prisoners.

Between 1870 and 1901, roughly 3,000 Louisiana convicts died under the lease of Samuel Lawrence James. The brutality eventually sparked enough outrage that most states ended convict leasing by the 1920s. The practice went dormant, but the legal framework remained intact.

The Modern Revival

In 1983, Corrections Corporation of America opened for business. The timing wasn't coincidental. President Reagan's War on Drugs was flooding prisons with inmates, mostly for nonviolent offenses. States faced a choice: build more prisons or find someone else to do it.

CCA's founder, Terrell Don Hutto, had previously run prison plantations in Texas and Arkansas where mostly Black convicts picked cotton for no pay. He understood the business model. By 2016, CCA—rebranded as CoreCivic—was generating $1.8 billion annually.

The pitch to states was simple: we'll house your prisoners cheaper than you can. The reality was more complicated. Private prisons cut costs by paying guards less and offering fewer programs. In a 2014 undercover investigation, guards at one facility earned $9 an hour. Predictably, this led to understaffing, violence, and chaos. During four months in 2015, one CoreCivic facility found 200 weapons—23 times more than the state's maximum security prison discovered in the same period.

The Perverse Math of Profit

Private prisons answer to shareholders, not the public. This creates incentives that run counter to everything prisons theoretically exist to do.

Rehabilitation programs cost money. So do hospital visits—many contracts require private prison companies to fund outside medical care. The solution? Cut educational programs and resist sending prisoners to hospitals. One study found inmates in private facilities are 15% more likely to receive infractions than those in public prisons, partly because less experienced staff struggle to maintain order, but also because violations extend sentences.

That matters because longer sentences mean more revenue. Prisoners with violations are less likely to receive parole. The cycle feeds itself: understaffed facilities breed violence, violence generates infractions, infractions delay release, delayed release maintains occupancy rates.

A 2016 Department of Justice study found private prisons consistently more violent than public counterparts. The violence isn't a bug in the system. It's what happens when you optimize for profit rather than safety.

Who Fills the Beds

The United States incarcerates 655 of every 100,000 people—nearly six times Canada's rate of 114. Over 2 million people sit in state and federal prisons. People of color make up 37% of the nation's population but two-thirds of the prison population. Black men face incarceration rates six times higher than white men.

Private prisons amplify these disparities. People of color are overrepresented in for-profit facilities compared to public ones. The reasons are complex and contested, but the pattern holds across states.

As of 2022, 90,873 people were locked in private prisons—8% of the total prison population across 27 states. Montana leads with 49% of its prisoners in private facilities. Arizona's private prison population increased 581% between 2000 and 2021. The federal government operates 12 private facilities out of 142 total.

The industry concentrates in specific regions. Arizona, Florida, Georgia, Ohio, and Tennessee house the most people in private prisons. Arizona alone holds 9,738 people—29% of its prison population—in for-profit facilities.

The Political Equation

Private prison companies spend millions lobbying for policies that keep beds full. They don't need to explicitly advocate for harsher sentences—they just need to support "tough on crime" politicians and oppose sentencing reform.

The industry also benefits from a basic political reality: closing prisons costs jobs. In rural communities where private prisons operate, they're often major employers. Legislators representing those districts face constituent pressure to keep facilities open, even when incarceration rates drop.

Some states have pushed back. In 2019, California passed legislation phasing out private prisons and immigrant detention centers. The federal government announced plans in 2021 to stop renewing private prison contracts, though implementation has been uneven.

The Stubborn Persistence of a Bad Idea

Louisiana's 1844 experiment with private prisons failed because it was too corrupt. We brought the model back 140 years later and discovered the same problems, just with better PR.

The fundamental contradiction remains: you cannot simultaneously run prisons for profit and run them humanely. Every dollar spent on rehabilitation, healthcare, or safety is a dollar not returned to shareholders. The 13th Amendment's exception clause still provides legal cover. The demand for beds still exists.

Private prisons house a relatively small percentage of America's incarcerated population, but their influence extends beyond their walls. They've normalized the idea that incarceration is a market opportunity, that human captivity can be a line item on a quarterly earnings report. That normalization makes it harder to question the system as a whole—why we incarcerate so many people, for so long, at such cost.

The industry persists not because it works better than public prisons, but because it's profitable. And in America, that's often reason enough.