Originally posted on anti-aggressionleague.com on January 10, 2017
Policing for Profit, For Profit Prisons, and War Profiteering are all misnomers based on misconceptions about what profits are and what the profit-seeking motive entails. Like all other social ills that leftists blame on the profit motive in particular and capitalism in general, this is a particularly fatal misconception that leads to false conclusions. The fallacy that arises when people talk about the evils of policing for profit, the prison-industrial complex, or the military-industrial complex, is that they conflate profit with rent and thus the profit-seeking motive with the rent-seeking motive. Policing for profit, prison profits, and war profiteering would be more accurately described as policing for rent, prison rents, and war racketeering. What one earns, either in wages, interest or profits, is distinct and polar opposite to what one could appropriate from earnings of other's in rent. The profit-motive drives economic growth, and wealth grows exponentially providing a larger share to everyone even if their proportion of aggregate wealth shrinks. Rent is sum zero; it is set by a monopoly in a fixed supply of some factor of production or asset or by having any power to attain wealth without reciprocating wealth e.g. private property in land for instance.
When the police seize a person's earnings through tickets for petty traffic violations or civil asset forfeiture, they are not generating a profit from the seizure of another person's earnings but imposing a rent. The revenue generated by 'policing for profit' is not wealth, but maintenance costs imposed on the victims to supply the modern highwaymen with a fund for equipment and luxuries. It is the cost of maintaining a police state apparatus.
The same holds true for the private prison industry, though this is less obvious than in the first case because they have all the formalities of any other private business along with shareholders and employees. But private prisons are monopolies since their only customers are governments; prisoners don't get to chose among competing prisons. Private prisons do not generate profits to their shareholders, but rents because they do not create any new wealth; their supposed 'profits' actually represents the maintenance costs of incarceration. The revenues of private prisons, just the same as government owned prisons, are appropriated from the earnings of taxpayers and other industries that do not rely on taxation to survive.
The same principle that holds true for the private prison industry is no less applicable to the defense industry. The revenue that defense contractors generate are no less rents because they produce tangible goods unlike private prisons. The sole customer being the federal government, the revenue generated by producing military weapons and equipment is drawn from taxation on the profits of other industries and individuals' earnings. Furthermore, war not only doesn't create any additional wealth, only additional maintenance costs, it also destroys wealth. Defense spending diverts wealth from other industries to defense contractors. Any technological gains made by the defense industry are inevitably offset by both the monetary and opportunity costs incurred by other industries and the invaluable cost of human life. The return on defense industry production is thus a rent, and the revenue represents the maintenance cost of maintaining the empire.