I think the obvious problem with the prison system is that nearly its entire focus is on captivity and incarceration, and not education. (And the word "rehabilitation" is just a fat fucking joke, just like Redd said.)
I think, at its core, this issue is about education and who has access to it.
I also think that at last check the government spends about six times as a much money on prisions than on education.
I say instead of being institutions of captivity prisons should be a hybrid of military-style disciplinary training systems - martial arts teachers, yoga instructors, professors, social scientists, anthropologists and philosophers; athletic trainers, lifestyle coaches, and therapists should be employed there, as they are who prisoners should be exposed to on a daily basis; not a bunch of 250-pound buldogs dressed like police.
Teach them Tai Chi, Nietzsche and Lau-Tzu.
People sentenced to more than fifteen years are mandated to produce a PhD equivalency.
Ex-cons Graduates are all of a sudden re-entering society with degrees in Accounting, Computer Programming, Philosophy, black belts in Kung Fu, and MAs in World History.
People who spend 20 years or more start coming out like fucking monks - devoted to every single breath, and to every living thing on earth, packing four PhDs, a JD, and finding themselves among the national leaders in political theory and analysis, having published seven books while "inside," (also given a percentage of the sales revenue upon graduation).
Graduates are also immediately qualified for employment within the prison system - which is now a modestly lucrative job.
Ain't nobody going back to slangin crack rock after something like that; nor are they forced to look at manual labor jobs and fucking McDonald's; they literally emerge qualified for at minimum middle-class wages (say anywhere from $35k for the guy who coaches chess and the guy who teaches Remedial English, to $250k for the Tai Chi masters and the professors of computer science, NASA types, whatever).
Basic prison concepts like repeat offenders getting 10 extra years, 50+ year sentences for heinous acts, etc., wouldn't really change. But nonetheless, "criminals" would be forced into a system of higher education and therapy, life-coaching, athletic training and the lot of that, instead of into a system of rigid incarceration.