Perspectives - Fall 2013
Perspectives magazine is published by the College of Business at the University of Illinois Urbana-Champaign. ON THE COVER: Online TV is changing how we watch shows, and it is threatening traditional network and cable television companies, says Hayden Noel, assistant professor of business administration.
“Prisons are not public goods, like clean water; they are ‘public bads,’ and a future in which we could move from 2 million to 3 million incarcerated individuals will not be a success story for our country.” Joseph Mahoney perienced a class where there is greater concentration for all three hours. These men have a deeply held sense of purpose and an appreciation that education ‘leads out’ to something beyond themselves.” failed war on drugs and increased mandatory sentences, have resulted in overcrowding. That problem, in turn, has opened the door for the private prison market, a focus of Mahoney’s research. “The number of for-profit detention centers has grown over 35 percent every year for the last 15 years,” he says. “The private prison model is a multibillion-dollar business.” Keating adds: “Prisons have become profit centers, and that in my opinion is a crime. When prisons become businesses—that is, for-profit institutions—they are incentivized to grow their customer base and to expand. That’s a problem because then the penal system is organized to fill the prisons.” An article written by Mahoney and colleagues Peter Klein, Anita McGahan, and Christos Pitelis and published this year in the Strategic Entrepreneurship Journal explores these problems. They write: “Analogous to Eisenhower’s warning of the ‘military industrial complex,’ in which defense contractors push for increased military spending, we now appear to be witnessing a ‘prison corporate complex,’ in which a set of bureaucratic, political, and vested economic interests encourage increased expenditures on imprisonment.” The article also states that private prisons such as the GEO Group and Corrections Corporation of America use “lobbying, direct campaign contributions, and networking to encourage tough-on-crime legislation to ensure an increased supply of prisoners (particularly for nonviolent drug offenders).” Mahoney notes that “just as a hotel has lots of beds and develops strategies to fill them, private prisons have incentives for similar strategies.” “In business, we learn that it’s often better to let the market work,” says Mahoney. “The logic is that being efficient to enable the production of more goods is a positive thing. But I believe that this is one context where the market doesn’t have a place. Efficient private prisons lead to more private prisons, which lead to the need for more incarcerated individuals to fill them. Prisons are not public goods like clean water; they are ‘public bads,’ and a future in which we could move from 2 million to 3 million incarcerated individuals will not be a success story for our country. Indeed, ‘efficiency’ is the wrong emphasis because we know that imprisonment impedes an individual’s social, economic, psychological, and educational development.” Mahoney is trying to assist with that educational development component by teaching his class, the first by a faculty member in the College of Business offered through EJP. What he’s seen in his time “working with inspiring Danville students and some noticeably dedicated correctional officers has been life changing,” he says. “I view the Danville students as heroic in that they are trying to better themselves in a very difficult situation. They do 100 percent of the work that is done in my senior undergraduate business course, and they are every bit as insightful and hard-working as the bright, committed undergraduate students on our campus who are of world-class talent and who have inspired me every day for 25 years at ILLINOIS and continue to do so.” • Cathy Lockman “Higher education at its best helps people think critically about themselves and the world and their role in the world. It encourages self-reflection and questioning.” Rebecca Ginsburg THE RISE OF THE PRIVATE PRISON MODEL Nearly 1,800 men are incarcerated at the Danville Correctional Center, a state of Illinois high-medium security facility. It is one of more than 4,500 prisons across the country that together house more than 2 million men and women, a tenfold increase from the 200,000 behind bars in 1971 and the highest rate of incarceration of any country in the world. Those numbers, which many attribute to a GIVING THEM CREDIT The strategic management class taught by Joseph Mahoney and Jim Keating is just one of the courses oﬀered through the Education Justice Project. In the last six years, EJP students at the Danville Correctional Center have been able to study subjects as diverse as robotics, Shakespeare, linguistics, and the Russian Revolution. The director of EJP is Rebecca Ginsburg, an associate professor of education policy, organization, and leadership, who was involved in a similar program at San Quentin while she was a graduate student at the University of California at Berkeley. She recruits ILLINOIS faculty members to share their expertise with the incarcerated men through these for-credit courses. She also oversees EJP’s extracurricular oﬀerings, which include reading groups, a speaker series, a computer lab, workshops, a theater initiative, and English as a Second Language instruction, among other programs. More than 75 volunteers, including faculty, graduate students, and community members, support EJP as program coordinators, instructors, and program evaluators. “Higher education at its best helps people to think critically about themselves and the world and their role in the world,” says Ginsburg. “It encourages self-reﬂection and questioning, and EJP promotes those skills.” But there’s a broader goal beyond serving each individual student. “We don’t see the program as just educating a few men who then feel better and get smarter,” she says. “We’re a research-oriented university. This gives us the opportunity and the responsibility to produce scholarship that makes the case for providing higher education to incarcerated people and to developing best practices.” For more information on EJP, visit www.educationjustice.net. • Cathy Lockman “Prisons have become profit centers, and that in my opinion is a crime. When prisons become businesses—that is, for-profit institutions—they are incentivized to grow their customer base and to expand.” Jim Keating 14 P e r s p e c t i v e s FA L L 2 0 1 3 His class is part of the Education Justice Project (EJP) at the University of Illinois, an initiative that focuses on building a model college-inprison program as a way to positively impact incarcerated individuals, their families, and their communities. It’s a program that Mahoney became aware of as an unanticipated result of his academic research into firms, markets, and government. “For 25 years, I’ve been thinking about how to allocate resources and when it’s better for firms to conduct activities themselves and when those activities are better done by a price system and markets,” says Mahoney, the Caterpillar Chair of Business. “More recently, I’ve also started thinking about when it’s better for certain activities to be carried out by government vis-à-vis markets and firms.” And that work led Mahoney to explore the effectiveness of public versus private prison models, which led him to EJP. There he connected with Rebecca Ginsburg, the program’s director, and Jim Keating, a venture capitalist and a 2006 ILLINOIS MBA graduate, who is co-teaching the strategic management class. “In conversations with Jim, it became apparent to me that in combination we could do something special by joining academic theory and real-world practice. Jim and I had a vision that together we could teach the Danville students the skills that would allow them to be successful as entrepreneurs when they’re released.” He explains, for example, that by learning how to develop and maintain a customer base a Danville student who decides to start a lawn service would have important skills that could translate into success. “We want to give the students the tools they need to earn a living once they leave prison, most likely by doing something entrepreneurial,” says Keating. So for three hours every Friday, Mahoney and Keating do just that. Their 15 students have already completed 60 hours of community college credit before they can take the strategic management class. They’re serious students, says Mahoney. “In my 25 years of teaching, I’ve never ex- FOR PROFIT PROBLEMS Mahoney explains that while it is tempting for the government to have private companies stepping in to handle some of the overcrowding problem, it isn’t a solution for several reasons. One is transparency. Private prisons are not subject to the same oversight as the state and federal prisons, explains Mahoney. Plus, he says, there’s also the potential for greater exploitation, as the users of the products and services supplied have little voice and no exit when there is severe quality shading and/or exorbitant prices. 15