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TheAncientGeek comments on A Proposal for Defeating Moloch in the Prison Industrial Complex - Less Wrong Discussion
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There's an incentive you didn't mention, towards smallest prison populations, which is lowering costs and taxes.
You seem to take it for granted that the prison system will be largely private, but in many countries they are directly run by the state, which removes the profit and campaign donation incentives at a stroke.
Except by prison workers' unions.