David R. Henderson  

The Ethics of Charles Koch

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Sons of Wichita... War Crimes and the Long Run...
Charles [Koch] is a true believer, whose free-market beliefs are unquestionably self-interested--but also undeniably sincere. His value system is apparent in all aspects of his company, including Koch's lobbying operation. Until the early 1990s, the company didn't have a Washington presence; this, one former Koch lobbyist said, reflected Charles's inherent distrust of politicians and his anti-government bent. Once it did open a Washington office, prompted by the wave of government investigations and the bad PR stirred up by Bill Koch, the company's lobbyists operated differently than the K street-hired guns that stalk the halls of Congress for their corporate clients.

Koch lobbyists don't shift their positions based on the political headwinds. According to one Senate Republican leadership aide, they won't be found pressing for subsidies in one bill and opposing them in another. "They're not rent seekers," he said. The overriding factor guiding the company's lobbying agenda is not whether a legislative proposal will be good or bad for Koch Industries, but whether it is consistent with Charles's libertarian beliefs.

Richard Fink, Charles's top advisor, enforces ideological consistency across the spectrum of Koch business units, and he frequently intercedes to prevent them from inadvertently transgressing Charles's free-market creed. Such was the case when one Koch business unit, which had developed an environmentally sensitive incinerator, sought permission to work with regulators to strengthen environmental rules. This might have improved the company's competitive position, but it went against Charles's overarching philosophy. Fink spiked the idea.


This is from Daniel Schulman, Sons of Wichita. I posted about it yesterday.

It speaks for itself.

I'm a footnote and endnote reader. When I read something interesting, I want to see the source. Unfortunately, in this heavily endnoted book, there are huge holes. There are lots of interesting stories and stated facts without any endnote telling the source.


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COMMENTS (14 to date)
Philo writes:

Rent-seeking often works, so Charles Koch's free-market ideology, which prevents him from rent-seeking, is not simply "self-interested."

James Hanley writes:

Not to be contrarian, but a sincere question. One of the criticisms of the Kochs is that their businesses do receive a lot of subsidies. Is there truth to that, and if so, does that undermine the claim to integrity?

David R Henderson writes:

@James Hanley,
One of the criticisms of the Kochs is that their businesses do receive a lot of subsidies.
I’ve heard that criticism too. Interestingly, though, I’ve never heard anyone specify the particular subsidies. One would think that a careful Mother Jones author such as Schulman, would have looked for them and been able to find them, if they existed.
Is there truth to that, and if so, does that undermine the claim to integrity?
I don’t think it would undermine the claim to integrity. The key is whether they advocate and/or lobby for such subsidies. To take a personal example, I will start receiving a substantial subsidy from the Social Security Administration in November. I also advocate ending Social Security. I don’t think my claim to be ethical is undermined.

Thaomas writes:
Such was the case when one Koch business unit, which had developed an environmentally sensitive incinerator, sought permission to work with regulators to strengthen environmental rules. This might have improved the company's competitive position, but it went against Charles's overarching philosophy. Fink spiked the idea.

While this is admirable that a business owner would be willing to forego income rather than violate their ethical principles, whether it was actually an admirable action in this case depends on the environmental rule. Was the rule one that reduced the value of environmental damage by more than the cost of making and enforcing it or not?

Mark Bahner writes:
Not to be contrarian, but a sincere question. One of the criticisms of the Kochs is that their businesses do receive a lot of subsidies. Is there truth to that, and if so, does that undermine the claim to integrity

From the article referenced in Alan Goldhammer's comment on "Sons of Wichita":

Karen Cole, a Georgia-Pacific spokeswoman, said: "We did not advocate for this tax credit, but ultimately we did participate in it - not doing so would have put us at a competitive disadvantage. We have consistently opposed all subsidies, mandates and programs that distort the market and will continue to do so, even when they benefit us."
Manfred writes:

I always wondered why exactly the Koch Brothers and Koch Industries are so controversial, in a country that supposedly loves freedom. They stand for free markets, competition, non-cronyism and liberty. These things are controversial? Really?
Not even the Wall Street gods, who allegedly love capitalism, do not stand for these things. They are the croniest of cronies, and want to keep competition out (see how the big Wall Street banks defend Dodd-Frank).

Seth writes:

@Manfred - They aren't on the left and they donate to organizations that the left ideologically opposes.

See Buffett for a counterexample.

Manfred writes:

@Seth - Ok. The left opposes liberty? The left opposes non-cronyism? The left opposes competition and free markets? I thought that the left (Democrats) were all in favor of competitive markets so that the "little guy" can have access to stuff that richer guys have.
Or, in other words, why would the left oppose liberty?
You mention Buffett... this guy has puzzled me since long ago. This guy made his gazillions in the private sector, by investing and competing in the freest market in the world, but still funds left of center causes. Why?

Andrew writes:

@Manfred- that's a pretty uncharitable way of phrasing the political spectrum. I think most people on the left support liberty in the abstract, but are willing to compromise on that to achieve goals that they also feel are important (protecting the environment, providing a social safety net, dealing with specific market failures that they believe-possibly incorrectly- they can identify). You can disagree on these about this trade off, but just stating their position as 'opposing liberty' and 'being pro cronyism' certainly wont help you to understand their views...

I could make similar comments about many non-libertarians on the right as well.

I think that Buffet understands that not everyone can repeat his success. Supporting the social safety net doesn't mean that you have to completely turn your back on free markets and vice versa.

Hazel Meade writes:

@Manfred,

The left - understood as the economic left, forces favorable to government control of the economy - correctly understands that libertarianism, rather than Christian conservatism, is their main intellectual enemy. It's not that the "oppose liberty" per se, but that they oppose an unregulated market and believe that the government should be firmly in control, directing resources, dictating prices, redistributing wealth according to overarching social goals.
They target libertarian thinkers and advocates of libertarian philosophy because libertarians are the group making the most powerful arguments and thus wielding the greatest influence against their desired policies.

Hazel Meade writes:

@Andrew,
That's true of the center-left, but the attacks on the Koch's haven't come from the center left really. Bernie territory as opposed to Hillary so to speak.

Andrew writes:

@Hazel:

I doubt you will find many on the (american) far-left who consider themselves 'anti-liberty,' or where that is a useful description of their views (anti-market possibly).

A lot of them just fundamentally don't understand the Koch brothers views in the first place, and won't be bothered to try to understand them. There is essentially an echo chamber of unfair press coverage of the Koch's.

I see these two statements as sort of the same, in that they both willfully misrepresent opposing views:
"the left often supports policies that restrict liberty, so they must hate liberty'

or "the Koch brothers often oppose specific measures intended to preserve the environment, and to help the poor, so they must be selfishly cynical and evil, willing to destroy the environment and throw everyone out of the street to make more money for themselves"

the first is similar to manfred's statement, the second to views expressed by many on the left

in either case, its pretty counterproductive.

Hazel Meade writes:

@Andrew, yes, that's why I said they aren't "anti-liberty" per se, they support policies which libertarians would consider anti-liberty, but it's more that they want government control of the economy.

IronSig writes:

I've been skimming the 2016 Clinton campaign autopsy report book "Shattered," one of the latest offerings by today's "personality journalism" remaining in print. Essentially, the integrity of anonymous sourcing relies on the overarching claim to either be so obvious about, or so embarrassing for, the discussed personality that media reaction to the claim never contests the substance of what it advanced. While this particular book uses and carefully organizes footnotes, the book is substantiated by news stories, the veracity events that news junkies all know about and otherwise anonymous sources.

While secondary sources are always reliant on broader reality to verify their claims, this style of ... "biography" ( it seems like a dismissive description, but it's the best I got) is sort of an A/B test, perhaps a dialectic approach to rhetoric. Take one of my favorite claims from the 2008 Election book "Game Change:" when most of the primary Republican candidates are all hanging out by the restroom before an event, the candidates tacitly agree that the best subject of conversation is how much none of them like a missing candidate, Mitt Romney. To my understanding, no one from the dens of ,say, John McCain or Mike Huckabee ever came riding out to combat that claim, so its presumed truth stands and the author's perceived credibility remains correlated with their paychecks.

I don't know all that much about the Kochs, but I was interested in Koch Industies' public HR policy, enunciated last year, that the criminal history related to drug use of future hires would be discounted, if not left on the hiring room floor. To me, a willingness to dismiss concerns outlined by the DARE society and instead examine the variety of people is both an empathetic and libertarian approach to life.

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