Business Insider is not one of the usual places where I go for news, but I got there this morning via the Prison Law Blog. The newssite suggests that hedge funders like Bill Ackman might be displeased with the recently dropping prison rates. The reason? Counting on growing imprisonment rates, Ackman has invested heavily in Corrections Corporations of America. Here is his presentation on the company. One of the slides bears the title, “Tenants Unlikely to Default”.
Bill Ackman’s Presentation on Corrections Corp of America (CXW) @ the Value Investing Congress
Much has been written about the business aspect of prisons, and especially on privatization. The broader context is discussed in Nils Christie’s Crime Control as Industry, which defines the prison system as a mechanism of “depersonalized pain delivery”. A more personal-political statement, highlighting racial differences as well as the economic angle, can be found in Angela Davis’ The Prison Industrial Complex. For our purposes, this is an important discussion to have when policymakers are contemplating contracts with CCA for out-of-state institutions as overcrowding relief. The question is whether it is accurate to see Bill Ackman’s cost-benefit calculation as proof of an intentional conspiracy to keep the prison industry alive and well. And if so, who’s in on the conspiracy?
My sense is that a more subtle and nuanced description will do better. While CDCR employment depends on prisons, not all CDCR employees cynically hope for overcrowded prisons. If anything, CCPOA decry prison overcrowding, if only because it makes the correctional staff’s job more difficult. Yes, there are those who make profit off the size of our correctional apparatus. But it’s important to distinguish actors with financial interests from actors within large bureaucracies who operate out of inertia, and some of whom probably rejoice in the news of population decline.
2 Comments
Closing the circuit of a conspiracy theory requires some plausible theory by which an interested party could keep the prison industry alive and well and the numbers high. I guess we could watch to see if CCPOA or its members are invested in his hedge fund, and maybe thus have an incentive to goose the parole violation rate or something. But Mr. Ackman is hardly the only person on Wall Street to have made some bad calls over the last few years, to say the least, and I'd dare to say that that history might look somewhat different if big, complex conspiracies were that easy to pull off in the real world.
I agree. Correlations between imprisonment rates and profits would not be coincidental, but there's an issue of causality. Clearly, there are plenty of people making huge profits off of the prison industry. But there are plenty of people who, just by going about their workdays, are part of a profit system not of their making.