If you had asked me a few days ago who I would suggest you open a retirement account with, I would have said Vanguard. I have a Roth IRA account with them, and was super happy with their low cost investing approach. I’m now in the midst of an ethical dilemma because I learned this week that Vanguard is the largest supporter of modern slavery, or for-profit prisons.
History of For-Profit Prisons
The first privatized prison was started in Louisiana in 1844. The company that owned the prison used it as a factory and “employed” the inmates to make cheap clothing for slaves. Seeing the Louisiana company’s success using this new labor pool, Texas followed suit and opened their own private prison. Five years later, the Texas penitentiary was the states largest factory, and they became the main southern textile supplier west of the Mississippi.
In 1860, slavery was abolished by the 13th amendment, but there was a loophole. Slavery was no longer legal “except as punishment for a crime.” Thus, the private prison boom began in the South. The state would lease the inmates (like property) to companies. Prisoners (mostly black) were kept on these companies’ private plantations and labor camps, and forced to perform hard labor such as mining coal and laying railroads. The companies would then give a portion of their profits to the state for leasing…
