Foucault first examines power in the Middle Ages, which involved corporal punishment, torture, and making transgressions visible to the public. A sovereign power demanded retribution on the criminal's body for wrongs against him. These tortures were varied and merciless.

In the modern day, however, the penal is more subtle. Over the past 250 years, punishment has moved farther from the public eye, and and it has become mental punishment rather than corporal. The pretext is that the justice system is meant to reform criminals rather than strictly punish them. However, Foucault argues that there are various systems in place that make this punishment unequal.

According to Foucault, the penal system recycles lower classes via the prison system in order to make these individuals useful to the ruling classes. Thus, the prison system is (according to Foucault) a means of shoring up power for the ruling class.

Foucault's central argument is that the ruling class has moved from a form of physical control to a psychological one. He uses philosopher and British social reformer Jeremy Bentham's panopticon—a building with several inward-looking cells and a watchtower in the center. He also uses the concept of a "carceral archipelago"—a prison consisting of a series of islands—to show how the ruling class can take control of public space and reduce infractions on the part of inmates. The idea behind these structures is that there would be a minimized need for prison guards, as inmates would assume they were watched at all times and behave accordingly.

Foucault calls one's understanding of being constantly watched "dynamic normalization." This happens in prisons as well as society. Eventually, being watched will make all individuals conform and reduce individuality. Dynamic normalization is a means of effecting maximum control with minimal force. He calls this agenda and mechanism "disciplinary power." This normalizing disciplinary power has as its aim making citizens want to do that which is beneficial to the state (as opposed to repressive power, which forcibly prevents people from doing wrong).