Earlier quoted context omitted.
Moral hazard is thick as molasses in this situation. You are making a distinction without a difference.
Have you ever noticed how the government and the police keep attacking the poor ? There's no more to it than that. They can attack these people for personal gain. They, in this case, of course is the government. The people that make up the law, the government, the police. If you think this is bad, wait until you see what child services or mental care departments do to people, which is a much worse example of how gove…
I agree with this part. I disagree, however, with your implicit suggestion that fewer laws will help.
The purpose of the government is to protect people, and it's obviously failing at that in the current prison system. But simply punting the problem to the "free market" won't help either - corporations are arguably even worse offenders of exploiting unfair power dynamics.
The real answer, in my opinion, is fixing the broken power structure. After all, the government gets its power from us, and it's one of the few ways people can affect positive change.
Maybe if we all voted responsibly, prisons wouldn't have the power to exploit prisoners like this.