While private prisons account for a relatively small percentage of total prisons in America, they're a multi-billion dollar industry, and they lobby for laws that affect all prison populations. So, in that sense, we do have a highly privatized prison system.
And it is highly privatized in the sense that the amount of privatization in that sector should probably be zero. When incarceration is a burden rather than a business, incentives exist to prevent crime and reduce recidivism. Otherwise, there are incentives to invent crimes that did not previously exist and turn ex-convicts into "repeat customers".
