Category — Koch, Charles
“Today, many governments give special treatment to a favored few businesses that eagerly accept those favors. This is the essence of cronyism…. One obvious example of this involves wind farms. Most cannot turn a profit without the costly subsidies the government provides.”
- Charles G. Koch, “The Importance of Economic Freedom.” August 17, 2012.
William Simon, the top energy regulator in the Nixon Administration’s Federal Energy Administration, was surprised. Oil company head after head was visiting his office to demand this or that to alleviate their shortages of oil or get more entitlements credit for their refineries. But Koch Industries had come by to just ask the federal government to leave them alone—to allow price signals to allocate crude oil and petroleum products. It was a meeting that Simon would not forget. 
For Charles Koch, it was lonely. Just about every fellow CEO talked about capitalism and freedom but did not practice it when the bottom line was affected. Instead of capitalism in principle, he wrote in 1980, they practiced capitalism a la carte. 
Fast forward to today. Business-government and government-business cronyism is rampant. Yet reducing and eliminating such political capitalism is a cause for both ends of the political spectrum as indicated in the graphic below. [Read more →]
March 10, 2014 1 Comment
[Editor note: Robert L. Bradley Jr.'s book review of Charles Koch's The Science of Success (New York: John Wiley & Sons, 2007) appeared in the August/September 2008 issue of The New Individualist (Atlas Society). It is reprinted below to better publicize the worldview of the individual who has been behind a number of free-society initiatives across the country for several decades--and is now a target of Al Gore and the anti-free-market Left).
In 1859, the first treatise on “best practices” appeared: Self-Help, With Illustrations of Character, Conduct, and Perseverance, by Samuel Smiles. Motivational self-improvement books were not new, but Smiles’s 400-page opus was persuasive. Profusely illustrated with stories of men-made-good in industry, engineering, the arts, and music, Self-Help combined age-tested wisdom with knowledge of the industrial present.
From Self-Help to Organizational Success
Nearly 150 years later, the most recent addition to the self-help literature is The Science of Success by Charles G. Koch: businessman, philanthropist, and applied intellectual. Koch’s book has all the earmarks of a classic, but not because it is a tome (the 166-page main text is quite brief for the material covered) or because it is the last word on the subject (it is really just the beginning, despite two monographs published by Koch disciples a decade or more ago). The book’s seminal potential is that it presents what could be the most logical, systematic framework for organizational success articulated to date.
Applying primarily to business but also to nonprofits and government, the book offers the outlines of a tested framework for organizational success. Koch draws upon his forty years of experience in building what Forbes calls America’s largest privately held business (80,000 employees, $90 billion in annual revenue), studying and applying what is called “The Science of Liberty,” and founding and nurturing dozens of libertarian-related nonprofits.
Charles Koch deserves an audience. The family company he took over in the 1960s that had an enterprise value of perhaps tens of millions of dollars (inflation-adjusted) is worth, again according to Forbes, tens of billions. Koch Industries has never suffered a yearly loss. And in relative terms, a dollar invested in Koch in 1967 (the year Charles took over from his father) would be worth $2,000 today, outdistancing the same investment in the S&P 500 index ($500 today) or Warren Buffett’s Berkshire Hathaway ($1,400). [Read more →]
December 2, 2010 4 Comments
“The majority of businessmen prefer power and government-guaranteed profits to philosophical consistency; they are more than willing to trade off market principles for a system that promises less competition and more security…. Almost every major piece of interventionist legislation since 1887 has had important business support, and certainly regulation in the oil and gas industry is no exception.”
“Economic planning by its very nature is people planning. It is part of a misguided policy that would return us to the dark ages of political economy where the State controlled the entire economy and society in its own political interests. To return to that system is to finally abandon the American experiment and the American dream.”
- – Charles G. Koch (1977)
[Part I: Yesterday]
I would now like to turn to the more subtle historical and political implications of Thornton Bradshaw’s call for planning in oil. Bradshaw would have us believe that his stance on government planning is an unorthodox, even radical political position for a prominent business leader to take, and a sharp break with tradition. This is a totally misleading impression, however. Important and influential business leaders have always been anxious to convince the public and the Congress that the free market cannot work efficiently (in their industry), and that some governmental planning and regulation would be more rational and in the public interest. They have told us repeatedly that the free market cannot work, that it is often “irrational”, and that it is incapable of planning and investing long-range. [Read more →]
October 8, 2010 8 Comments
“Let’s Try a Free Market in Energy” (Letter from Charles Koch to FORTUNE Magazine in 1977 in Response to ARCO’s Thornton Bradshaw’s ‘My Case for National Planning’)
[Editor Note: This letter by Koch Industries's CEO Charles G. Koch, addressed to Fortune Editor-in-Chief Hedley Donovan, provides a pro-free market rebuttal to ARCO's CEO Thornton Bradshaw's "My Case for National Planning" (Fortune, February 1977).
Koch's scholarly effort is reproduced below as a historically important document in the energy debate. It is authored by a rarity of rarities, a principled free-market capitalist. The context and timeliness of the rebuttal was stated in the Libertarian Review at the time:
While this essay was only the latest in a series of attacks on a free market economy and defenses of National Economic Planning to appear over the past few years by intellectuals, businessmen and labor leaders alike, Bradshaw's piece deserves special scrutiny. For it comes to us from a man who both is a leading representative of American major oil companies, and was a member of Jimmy Carter's task force on energy during the 1976 presidential campaign. Moreover, it has been published at a time when both oil and government energy policy are getting widespread public attention.
"Let's Try a Free Market in Energy" by Charles Koch
This article is a reply to Thornton Bradshaw's provocative "My Case for National Planning" which appeared in the February, 1977 issue of Fortune. In that essay, Bradshaw asserted that a free market has never worked efficiently in crude oil, that it never could work efficiently in oil (or in the more exotic energy sources that must be developed), and that the only solution to our present crisis is to adopt governmental planning and pricing in certain energy raw materials. I will maintain, in rebuttal, that most of Thornton Bradshaw's major contentions are wrong-headed and blatantly self-serving, and that his proposal for planning and pricing can only make matters far worse than they already are. [Read more →]
October 7, 2010 3 Comments