Private prisons exist in the Netherlands, but they are not allowed to make a profit. How and why do they exist?
In: Economics
Think of them like a charity, they have all the running costs covered but the ultimate aim of them is to rehabilitate offenders which in the long run saves the government money with no re-offending.
They’ll be private company run as the government is already busy with running the country so agreeing a contract and paying the invoice every month works out easier
Private prisons are a form of government outsourcing. As when all companies outsource, it’s sometimes more efficient to do that then to do it inhouse, private prisons are no different.
“Nonprofit” doesn’t mean “free”. It means they charge enough to maintain their buildings, pay their employees and buy paper for the printer, etc, but that’s it. They don’t have investors standing behind them, screaming for them to raise prices and cut costs all the time to increase profits.
It’s good that they exist because they provide a secure box where you can lock up (and hopefully, reform) bad guys. Secondarily, they employ guards, counselors, maintainers and admins.
Non-profit is not the same as unprofitable.
A non-profit organisation is one which is expressly set up such that any surplus made is ploughed back into the organisation. It’s essentially the business model of every charity that exists.
The only difference between a non-profit endeavour and a capitalist endeavour is that in the capitalist endeavour, money gets withdrawn from the business into the bank accounts of the shareholders. In a non-profit, that same money goes back into improving the business.
So in the case of a non-profit private prison, instead of relentlessly trying to drive down costs (e.g. by reducing the quality of prisoners’ food) so as to boost shareholders’ profits, the emphasis will be on using any surplus money to restock the prison library, add extra educational classes for the prisoners, and so on.
As to why such a thing exists? Presumably there are people out there who believe that the rehabilitation and welfare of prisoners is important, and this is how they are trying to achieve that goal.
Rule 2.
Better to check r/answers.
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