The paper analyzes the relationship between neoliberal penalty transformation and prison privatization as part of neoliberal market reform. The neoliberal political and economic project characterized by deregulation, individualization, privatization, and commodification has introduced competition, entrepreneurship, and economic efficiency in areas that previously belonged exclusively to the public sector. The alleged need for greater efficiency has led to an increase in private prisons, and the results of this transformation have shown that it is more about achieving economic efficiency at the expense of quality, competencies, and outcomes of services provided in this sector. In this paper, the starting assumption is that the increase in the number of private prisons does not imply the withdrawal of the state concerning the market. In contrast, it raises the question of the regulatory role of the neoliberal state that enables the market of new fields for profit. As a consequence of the tightening of penal policy, mass incarceration is a mechanism for resolving social conflicts caused by the transformation of social policy. Therefore, private prisons are aimed at making a profit by reflecting the spread of neoliberal rationality throughout society. Withdrawal of assistance and support from the social sector and transfer of exclusive responsibility from the social to the individual responsibility of prisoners as rational neoliberal subjects lead to a reduction of rehabilitation goals. In the context of prison privatization, this transformation leads to turning prisoners into a means of earning or cheap labor.