You don't see the people that aren't in prison because they do see it as a disincentive. America doesn't have the highest crime rate in the world either, we simply catch more criminals and have vastly expanded the number of things that qualify as crimes, as well as lengthened sentences.

We might have more crime than other first world countries in general, but it's not like prisons are the cause of it. That doesn't mean it doesn't work.

Besides, what are you comparing it to? All other countries use prisons as well, and what would the alternative be anyways?