system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5 how private prisons generate revenue.
gpt
The state has a budget for the prisons that is X. The state wants to save money so it takes bids on taking over the operation of said prisons. Whomever has the lowest bid usually gets the contract. The state saves whatever X - winning bid equals.

The company then looks at the books and shaves off whatever they can. Exercise facilities, libraries, food, ect tend to get cut. Then they charge a huge markup on commissary items which is sort of like an in prison store that inmates can purchase items from, like clothes, food, ect. Add to that the profits made from prison labor where the inmates are paid pennies a day to make various things and it starts to become a VERY profitable business. You have a stable cheap workforce whom can only spend their money at your overpriced store.

TLDR: Slavery.