The Panopticon and monitoring costs

The concept of the Panopticon is associated with names of two major personalities, Michel Foucault and the English economist Jeremy Bentham.

Bentham's Panopticon

incorporates a tower central to an annular building that is divided into cells, each cell extending the entire thickness of the building to allow inner and outer windows. The occupants of the cells . . . are thus backlit, isolated from one another by walls, and subject to scrutiny both collectively and individually by an observer in the tower who remains unseen. Toward this end, Bentham envisioned not only venetian blinds on the tower observation ports but also mazelike connections among tower rooms to avoid glints of light or noise that might betray the presence of an observer.

(Description by Barton and Barton as quoted here.)

That is a vivid description. Together with a picture you can see what being in the Panopticon would be like both from the perspective of a cell occupant and as a tower observer.

Bentham's Panopticon

Bentham's argument is that the Panopticon would lower monitoring costs substantially and when coupled with enforced penalties would control individual behavior.

Potential applications include the design of university examination rooms, faculty office buildings and prisons. Or, as it says on the cover page to Bentham's Panopticon Letters,

PANOPTICON
OR
THE INSPECTION-HOUSE:

CONTAINING THE
IDEA OF A NEW PRINCIPLE OF CONSTRUCTION
APPLICABLE TO
ANY SORT OF ESTABLISHMENT, IN WHICH PERSONS OF
ANY DESCRIPTION ARE TO BE KEPT UNDER INSPECTION;

AND IN PARTICULAR TO

PENITENTIARY-HOUSES,
PRISONS, HOUSES OF INDUSTRY, WORK-HOUSES, POOR-HOUSES, LAZARETTOS, MANUFACTORIES, HOSPITALS, MAD-HOUSES, AND SCHOOLS