The Morality of For-Profit Prison Investments

When Seth Klarman was asked about the ethics of his investments into companies that gave high-interest loans to customers with poor credit histories, he defended his investment on the grounds of personal responsibility and mentioned that no one puts a gun to the head of someone taking out a loan–it is an act of consent between an adult and a financial institution. Klarman also reiterated that people do not enter into commercial transactions unless they believe it is in their interest to do so–if you have never paid off an obligation to creditors in your life, and you need $500 in car repairs to keep your job, then agreeing to 18% interest is an improvement over your status quo otherwise you wouldn’t take out the loan in the first place.

When Charlie Munger was asked about his investments in Wells Fargo and U.S. Bancorp, an interviewer asked him whether his … Read the rest of this article!