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Imagine "someone two hundred years ago said it was OK" being valid ethical justification.

Criminals need to be isolated from peaceful society anyway, and if we’re going to the expense of warehousing them, the least we can expect is for them to contribute something back. The ethical justification for prison labor is obvious and the analogy to heritable chattel slavery is ludicrous.
A "peaceful society" that reserves the right to enslave a part of itself doesn't sound very peaceful to me.
You don’t really want perverse incentives, like that example where American judges were given kickbacks to imprison kids, so they found innocent kids guilty.

I think when money is involved that sort of stuff is much more likely.

That’s fine. Prison guards, like all public employees, shouldn’t be unionized and prison labor should be earmarked either for restitution or public use (picking up highway litter, manual construction labor for roads and government buildings, etc.)
Society is not peaceful. It’s just that certain kinds of violence are legal.
ethical - no. legal - yes.

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