For what it's worth, this was Michel Foucault's take on prison labor in the 1970s, in _Discipline & Punish_:
"What, then, is the use of penal labour? Not profit; nor even the formation of a useful skill; but the constitution of a power relation, an empty economic form, a schema of individual submission and of adjustment to a production apparatus.
[...]
If, in the final analysis, the work of prison has an economic effect, it is by producing individuals mechanized according to the general norms of an industrial society: 'Work is the providence of the modern peoples; it replaces morality, fills the gap left by beliefs and is regarded as the principle of all good. Work must be the religion of the prisons. For a machine-society, purely mechanical means of reform are required' (Faucher, 64; in England the 'treadmill' and the pump provided a disciplinary mechanism for the inamtes, with no end product)."
-B.
Dennis Claxton quoted Christian Parenti, who wrote:
"[T]he main point of prison labor is not extracting wealth; it's about making prison look efficient. There are only 2500 prisoners that work for private corporations. And it's not for lack of effort. there's been enormous effort to try and draw capital into prison, but the thing is private corporations don't want to exploit prison labor for a number of reasons.one, which we on the left should keep in mind there is still a moral stigma attached to using convict labor. two, there's so much cheap labor everywhere in the world, including the United States, and much of it militarily disciplined, why would you ever need prison labor?"