To understand America's epidemic of over-incarceration, it helps to look to countries that don't having our problem. In Germany and the Netherlands, for example, incarceration rates per capita are nearly 90 percent lower than in the U.S.: 79 per 100,000 residents in Germany and 82 per 100,000 residents in the Netherlands, compared to 716 per 100,000 residents in the United States.
As those numbers suggest, Germany and the Netherlands do things a bit differently. A recent report [PDF] from the Vera Institute of Justice explains that the differences are both philosophical and practical. "Resocialization" and rehabilitation are central to the Dutch and German models, whereas the American model focuses on retribution and isolation from society. In Germany and the Netherlands, this means prison conditions are more humane, fines are preferred over incarceration, solitary confinement is rarely used, and sentences are far shorter than in the U.S. Both European countries even have laws governing solitary confinement: it "cannot exceed in any given year four weeks in Germany and two weeks in the Netherlands per individual offender."
The difference is especially stark if you look at how much more severely the U.S. punishes people:
While Germany and the Netherlands prefer to hand out fines in place of time behind bars, America basically has a dog-pile system. We give offenders time behind bars and probation and court costs and restitution/fines, while drastically reducing their opportunities for legal employment.
[L]ife in prison aims to inculcate fundamental skills that offenders will need in the community. For example, prisoners are allowed individual expression and a fair amount of control over their daily lives, including the opportunity to wear their own clothes and prepare their own meals; and, in order to instill selfworth, both work and education are required and remunerated. In addition, respect for prisoners’ privacy is practiced as a matter of human dignity. One American participant viewed this practice as a matter of common sense, commenting while visiting a German prison, “If you treat inmates like humans, they will act like humans.”