How, according to Foucault, do prisons resemble factories, hospitals, and schools?
Prisons resemble factories, hospitals, and schools in that, since the eighteenth century, they have been designed to condition people to internalize the values of the state (i.e., the values of the people in power). They all do this by using surveillance: people in all of these institutions are constantly watched, measured, and evaluated by others. To "succeed" in any of these environments, an individual has, above all, to demonstrate that they can self-regulate. That means they must exhibit model behavior, without any threat of imminent physical punishment.
Through this method, Foucault argues, the state enforces its will by conditioning people to change themselves. The state infrequently uses physical punishment; instead, Foucault says, the state changes our mode of thought in such a way as to encourage obedience and conformity. This, he says, is more cruel than the punishments of the past that we thought were barbaric. Damaging a person's body leaves them free to think their own thoughts. Molding their thoughts, however, leaves them permanently changed and damaged.
Several issues can be pointed out in Foucault's sweeping histories—or, as he called them, "archeologies"—of knowledge. For instance, he posits a concept of body/mind dualism, when the relationship between the body and the mind is much more complicated. However, his writing is immensely provocative and therefore worth contemplating. His thoughts about how we internalize the will of the state is relevant today in terms of the conversation about internet and electronic surveillance: does the very fact we are being watched cause us to self-censor?
But the larger point addressed in this question is that schools, hospitals, and factories function on the same premises as prisons through use of surveillance and the demand for self-regulation.
All these social institutions resemble each other because they are based on mental control and constant surveillance. The key to effective state administration is training citizens to be obedient and to fear punishment.
At the same time, organizing these institutions into easily manageable segments is essential. Additionally, people should be persuaded that they have submitted voluntarily to such categorization and segmentation; social norms must be made to seem natural to those who uphold them. Effective "correct training" must begin early; that is the main purpose of schools. Disciplining children for disobedience is the antecedent to their effective behavior as workers or soldiers.
Even though incarceration is regarded as negative, Foucault argues, incarceration is different only in degree—not in kind—from confinement in other physical institutions. All are based on the idea of abstract justice and surveillance, which compels people to follow rules because they fear retribution, not because they believe these punishments stem from concepts of goodness or morality.
The mechanisms of enforcement are effective because they are invisible; that means people do not need to see them to fear them because they have already internalized the power of enforcement.
School, factories, hospitals, and prisons are each institutions where discipline and power are exerted on people by gaining information about them. In such institutions, people are subjected to what Foucault calls an "examination" or a "normalizing gaze" through which information about them is then used to classify them, compare them to each other, categorize them, and ultimately subject them to discipline. The individual becomes, Foucault says, the subject of a field of knowledge, a "case." Each of these institutions is a site of a new "scientifico-disciplinary mechanism," assessing individuals in terms of their relationship to other individuals and to various norms of learning, behavior, health, and production capability.
Source: Michel Foucault, Discipine and Punish: The Birth of the Prisons (New York: Vintage Books, 1995) 170-194.