Q: What do you envision Koch Industries to be in 10 years?
Mr. Koch: The future is unknown and unknowable. This is the perspective of a book called The Black Swan. The future will be comprised of facts that are outside our present concept of reality, so we have no idea what the future will hold.
I think that this is one of the main lessons that you learn in business that they don't teach in business school. In chess terminology, you are forced out of your opening book very rapidly in business. It's not the moves by your known opponent that surprise you. It's the opponents (competition) that you never knew you had. Or the brand new pieces with new capabilities that suddenly appear on the board (innovations). Or the new rules (government policy changes).
Planning does not enable a business to shape its future. It only serves to help big executives know what is going on now. That's a big deal. Think of military history--there were lots of battles, including Gettysburg and the Battle of the Marne, that were affected by commanders not knowing where their other commanders were at crucial points.
Koch also shows that he understands Douglass North.
For a country to prosper, first, it needs to develop a framework and culture for spontaneous order: people voluntarily cooperate beneficially, without being centrally directed. We must have beneficial rules of just conduct, which is the rule of law uniformly applied. These laws are universally applicable and supersede or obviate the need for bureaucratic rules or instructions. We need cultures in which people don't just tell the boss what he wants to hear. To be successful in a Communist country, you have to bribe, lie, cheat, and steal. These things break down a free market and lead to economic disaster.
A second key to prosperity is private property rights that align costs and benefits...
Finally, incentives in a culture (and business) must reward value creation, not predation.