Late Stage Capitalism
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California actually has no private prisons, for what that's worth. But that doesn't mean state and federal prisons can't be for-profit.
State and federal prisons contract their inmates out to businesses through "work reform" programs to make things like cheap dorm furniture or food products. The business pays the prison for a contract, and the prisoners work for free or for a small credit they can spend at the prison comissary. Or sometimes it reduces the debt they get stuck with when they leave prison, because the government bills people for the cost of their own incarceration.