... why is it you guys have the highest incarceration rate in the world?
Crime.
And especially when it comes to a lot of the supposed freedom loving Southern states (e.g. Texas) which have higher than average incarceration rate relative to the U.S. as a whole?
See above.
It's the crime rate. I doubt you're arguing that criminals should go free....so your question is better framed as "why is the crime rate so high?"
There's a bunch of reasons for that, so realistically it's not a question with one answer. To put things in perspective though....
Back around 2013, 2014, 2015....El Salvador was frequently described as the most dangerous nation in the world that wasn't at war. Although the murder rate has gone up and down...in 2015 it was really bad, they had something like 85 murders per 100k people.
In East St Louis....the murder rate was 96 in 2019 (couldn't find the 2015 numbers) I'd like to tell you that's an anomaly, but that doesn't appear to be the case. In Baltimore it's 55 in 2015. Even if we include the larger part of St Louis....it's still in the mid 60s. Albuquerque is around 15-20. Stockton California is anywhere from 10-20. Detroit, Memphis, New York, Chicago....and many more cities have murder rates anywhere from double to quadruple the national average.
If we just looked at the most violent parts of these cities....like east St Louis or southside Chicago....we'd be looking at some of the most deadly places in the world that aren't at war. The average murder rate of the US is 5 per 100k people. That's still higher than most modern western nations, but it's not ridiculous. That makes it difficult IMO for the average American to understand just how bad some of these places have become.
The other major obstacle is the political/racial component. The racial demographics of these places makes it hard to hold a serious discussion about. Democrats will overemphasize and become outraged by the dozen or so possible murders by police every year...but every time someone tries to discuss the thousands of black on black murders in these places across the nation, they get called a racist or bigot or get accused of trying to distract from the "real issue". In a way, it makes sense because Democrats want to be seen by these communities as defending them from bigotry and racism because they want their votes. In another way though, it's a shame because I don't think we can realistically solve these problems without discussing who they are affecting and their causes...
Causes are complicated and there's no one answer. I think the biggest factor is the creation of the modern criminal gang that took shape in the late 70s and early 80s, and then spread across the nation in the 90s. Sure, things like poverty and population density or the decline of opportunities and proliferation of drugs in these communities also played a part. Those factors are trickier though...because there's also plenty of examples of dense poor populations that have high illegal drug use that don't have the same degree of violence and murder.
Gang culture seems to be the link that takes these other factors and multiplies them to an obscene level. It seems like it creates a level of legitimacy or acceptance to criminal activity that doesn't necessarily exist in other poor, densely populated, drug infested areas.
I know that murder isn't everything when it comes to the prison system. The murder rate does tend to reflect the scope of violent crime in an area though. Violent crime is different from nonviolent crimes...because the prison population tends to stay in prison. Those who committed murder, attempted murder, and assault with a deadly weapon 5 years ago are still in prison today....and will be for many more years. They have a multiplicative effect on crime...they destroy not only their families but the families of their victims and keep the population of a cycle of incarceration.
The problem is, in my opinion, gang culture and it's effects. The same problem happened across the US in the early to mid 1900s...and while prohibition certainly was a big factor in that, it continued well past prohibition because amongst Italians and certainly Sicilians, there was a gang culture.
A culture that created a sense of legitimacy of crime and a level of respect for criminals. In the 80s modern gang culture took root in El Salvador when the illegal El Salvadorans who imitated the gang cultures of the Crips and Bloods of California were deported back to El Salvador.
The gang culture that gives respect and legitimizes the sort of crime that should be shameful and abhorrent needs to change to really solve this issue. If that happens, I think a genuine decrease in the prison population would follow.