The article considers accountability, feasibility, social impact and subjective social costs of prison privatization. It claims that the American prison system already functions as a surrogate national public health system, national job training and literacy program, and second-rate mental hospital. It is time to peel away the social engineering tasks the prisons are assuming and let the prisons become a penal system for long-term and dangerous inmates; turn remaining custodial control into a restructured system of correctional programs leading to positive behavior, such as community service and boot camp programs. The United States can serve as a laboratory for the development of a new “social contract” with private correctional entrepreneurs. Government can seek new modes for custodial care of geriatric prisoners, prisoners with alcohol- and drug-related problems, and prisoners with emotional and mental problems. These partnerships will stimulate new forms of oversight responsibility by both government and private agencies. Figure, appendix, references, case cited