Foucault builds a case for the idea that prison became part of a larger “carceral system” that has become an all-encompassing sovereign institution in modern society. Prison is one part of a vast network, including schools, military institutions, hospitals, and factories, which build a panoptic society for its members. This system creates “disciplinary careers” for those locked within its corridors. It is operated under the scientific authority of medicine, psychology, and criminology. Moreover, it operates according to principles that ensure that it “cannot fail to produce delinquents.” Delinquency, indeed, is produced when social petty crime (such as taking wood in the lord's lands) is no longer tolerated, creating a class of specialized "delinquents" acting as the police's proxy in surveillance of society.
Panopticon as "a new mode of obtaining power of mind over mind, in a quantity hitherto without example."
Creates a "sentiment of an invisible omniscience."
As the watchmen cannot be seen, they need not be on duty at all times, leaving the watching to the watched.
ALSO SEE : http://cartome.org/panopticon2.htm