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Quotation of the Day…

… is from page 145 of Thomas Sowell’s 2008 volume, Economic Facts and Fallacies (footnote deleted); here Sowell deals with the fallacy upon which rest public and political denunciations of golden parachutes and big-dollar severance packages paid to departing executives of privately owned corporations:

When Sewell Avery was head of U.S. Gypsum from 1905 to 1931 and then head of the Montgomery Ward retail store chain after 1931, he was regarded as one of the premier business leaders in the country.  However, during his later years, when conditions in retailing became quite different, there were complaints about his leadership of Montgomery Ward, and bitter internal struggles to try to get rid of him.  When he finally left [in 1954], the value of Montgomery Ward stock shot up immediately.  It might well have been a bargain for the stockholders, the customers, and the employees to have paid Avery enough to get him to leave earlier, since a badly run company hurts all of these people.

Third party observers may find it galling that some people seem to be rewarded handsomely for failing.  But third parties are neither paying their money nor are in a position to know how much it is worth to be rid of someone.  When an individual pays dearly to divorce a spouse who is impossible to live with, that too might be seen as rewarding failure.  But does any third party presume to say that the decision to divorce was wrong, much less feel entitled to be morally outraged, or to call on government to stop such things?

The lesson, here as in so many other places in life, is to mind your own business and let other individuals mind theirs.

Avery, by the way, was a noted opponent of the New Deal and of U.S. militarism.  When Uncle Sam seized control of Montgomery Ward in December 1944, Avery refused to leave his office and had to be physically carried out by armed agents of the state.