Morally - and borrowing Michael Sandel's terminology here - there must be some limits to markets; and running a correctional facility is certainly crossing it. Factually: US' private prison system has reduced itself to national shame, and arguments for why it would be any better in New Zealand are not convincing enough.

A 960-bed high security prison, which when fully operational in October this year will be housing 25 percent of New Zealand's prisoners. Built at the cost of $300 million, the Auckland South Corrections Facility (ASCF) is country's largest private public partnership and will be run by Serco, which also manages the Mt Eden prison in Auckland.

So the country's second privately run prison, which opened its door to inmates on May 8, is up and running.

But why is this an ominous sign for the New Zealand society?

One argument is moral, another factual.

*Minister of Corrections Hon Peseta Sam Lotu-Iiga with the Prime Minister John Key, Courtesy: national.org.nz*

Moral

Let's start with the moral one first.

Professor Michael Sandel who teaches his course “Justice” at the Harvard University and has been called one of the most prominent college professors in the US, argues for the moral limits of markets in his recent book, “What Money Can't Buy.”

Writing in his book, Sandel raises the question,”The rampant commodification, commercialization, and privatization of contemporary life gives us good reason to reconsider the moral bounds of markets: Are there some things that money should not buy?”

Because, if we let market decide everything, then, Sandel argues, coercion and corruption invariably creeps in.

“Coercion points to the injustice that can arise when people buy and sell things under conditions of severe inequality or dire economic necessity. While corruption points to the degrading effect of market valuation and exchange on certain goods and practices,” he says.

Sandel's highlighting of corruption, which in other words implies that certain moral and civic goods are diminished or corrupted if bought and sold for money, cannot be argued against by establishing what some may believe to be fair bargaining conditions.

Factual

And that's where the factual argument for opposing private prisons stands merit.

Let's discuss this in detail.

With private prisons in operations in New Zealand now, the welfare and reintegration of inmates in the society has been reduced to financial incentives or monetary punishments.

RadioNZ in its story reports that “the private prison operator Serco will be fined $150,000 if anyone dies in one of its new jail cells in South Auckland”.

Similarly, NZ Herald reports that “Serco will earn bonuses of up to $1.5 million a year if Kohuora (ASCF) prisoners reoffend at rates least 10-15 percent below prisoners released from other New Zealand jails”.

So if we swim through the finer details, it all boils down to one singular undeniable fact – 25 percent of the inmates in New Zealand will be looked after by a company which is in this business for one and only one thing, profit!

And to study the repercussions of this, we just need to look across the Pacific.

The US had already taken this path and now its private prison system has become a matter of national shame.

Or to quote a non-profit working for human rights in the US, the Ella Baker Center calls “prison labour the new slave labour in the US”.

“With wages as low as $0.23 per hour and no unions, safety regulations, pension, social security, sick leave nor overtime, prison labour is a growing and economically competitive sector. With all these economic incentives, it’s no surprise that 37 states have legalized the contracting of prison labour by private corporations who bring their operations inside prison walls,” says the Center.

This has also helped the companies running these private prisons garner huge profits.

A 2012 study by the National Council on Crime and Delinquency (NCCD), Prison Bed Profiteers: How Corporations Are Reshaping Criminal Justice in the US, noted how Nashville-based Corrections Corp of America (CCA) and the Geo Group of Boca Raton have made billions in this business.

These two corporations [CCA and Geo] dominate the private prisons business in America with both operating 66 facilities each.

Some statistics, which may find resonance in New Zealand, are the higher incidents of assaults in US private prisons as mentioned in a 2001 study by NCCD.

Why? Because as reported by RadioNZ in November 2014, Serco-run Mt Eden Corrections Facility “has had more prisoner assaults than any other jail for the last three years”.

The American Civil Liberty Union (ACLU) in its 2011 report, Banking on Bondage: Private Prisons and Mass Incarceration, also noted several studies that suggested greater threats to safety of prisoners in private facilities as against governmentally operated prisons.

“A United States Department of Justice study, based on a national survey of private prisons, reported that 'the privately operated facilities have a much higher rate of inmate-on-inmate and inmate-on-staff assaults and other disturbances' than publicly operated facilities, when institutions of similar security levels are compared,” said the ACLU.

Corrections

To be sure, Corrections do say that “Serco has experience running prisons in New Zealand (Mt Eden Corrections Facility), Australia and the United Kingdom”, and that “ASCF has a major focus on rehabilitation”. Implying that the facility “will support Corrections’ efforts to reduce re-offending by 25 percent by 2017”.

Corrections has also detailed how it plans to ensure that standards are met and maintained at ASCF.

But how much of that actually translates into reality, with New Zealand's private prison system not emulating the US, remains to be seen. This so because the Federal Bureau of Prisons in US also has similar such obligations required of the private sector managing contract prisons there.