One might be tempted to comment on the irony of your chiding "Libertarians" [NB: TFA is of unionist if not Marxist perspective] for their poor history, if one were not distracted by the implication that "entrenched corruption" is a rarity in the current regime.
As for the corruption bit, with private security forces we know the weakness from the historical example already. With public police, public oversight puts a limit on corruption, at least in theory. Certainly London saw an improvement with the government providing police service.
30 years is a long time. Is Iran-Contra still on everyone's minds when it comes to discussions over geopolitics? I suppose it's still a factor.
I don't think the timescale was the same in 18th century England, but we're still talking about a generation-level gap here--I don't think you could just automatically assume a connection without some evidence.
Government police forces are policed by the government.
Private police forces are also policed by the government, but since they're different organizations, perhaps in reality it would be better.
Private police, though ... in an era where early death is relatively uncommon vs. omnipresent, what's their incentive to take risks beyond what they're paid for? That what can be problematic, there's many reasons self-help is outlawed, but in the examples you give there's no immediately obvious problem.
The customer of the privatized prison is not you but the state. As a result, they compete with each other to do the best "prisoning" (ie punishing bs rehabilitation, using them as almost-slave labor) for thirst cost. If you were the customer, (as in you directly picked your prison provider), the incentives would be much different: http://youtube.com/watch?v=SzYJYSm-MfI
The video presenter presumes people will follow rules --even violent people will follow rules --what force is going to enforce those rules 'not being on someone's property', for example. And unless all communities are run similarly, this will create 'outcasts'. Bad actors would just find another place to lay low.
http://www.etymonline.com/index.php?&search=police police (n.) c.1530, at first essentially the same word as policy (n.1); from Middle French police (late 15c.), from Latin politia "civil administration," from Greek polis "city" (see polis). Until mid-19c. used in England for "civil administration;" application to "administration of public order" (1716) is from French (late 17c.), and originally in English referred to France or other foreign nations. The first force so-named in England was the Marine Police, set up 1798 to protect merchandise at the Port of London.
Thanks for the pointer. The Wikipedia text seems way more of a movie script (daring escape after daring escape (if I had to guess, most of them involving bribes), tickets sold to a hanging, etc) than the very loose adaptation at http://www.imdb.com/title/tt0065209/, but I guess the movie makers wanted a happy ending.
Maybe the director of Game of Thrones should have a go at this story?
Somehow Libertarian circles manage to ignore this history lesson and expect that this time around private police and the attendant power imbalance won't lead to entrenched corruption.