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 I think the issue (in this case, at least) is more an improper application of capitalism. Capitalism requires the pressures of a free market to function effectively. There are no market pressures with a privatized prison system because the prisoners are not the ones selecting or purchasing the product. Prisoners that are treated poorly are not free to select a different prison, and thus the system fails to incentivize innovation for the sake of the inmates but rather optimizes cost at the expense of their wellbeing. Over 90% of prisoners are in government run prisons in the US. Half the states don't have any private prisons at all.

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