Charles G. Koch
Encyclopedia
Charles de Ganahl Koch is co-owner, chairman of the board and chief executive officer
of Koch Industries
Inc., the second-largest privately held company by revenue in the United States according to a 2010 Forbes survey. He was ranked 18th on Forbes World's Billionaires list of 2011 (and 4th on the Forbes 400), with an estimated net worth of $25 billion, deriving from his 42% stake in Koch Industries. His brother David H. Koch
, also owns 42% of Koch Industries, and serves as Executive Vice President. The brothers inherited the business from their father, Fred C. Koch
, and have since expanded the business to 2,600 times its inherited size. Originally involved exclusively in the oil refining
and chemical business, Koch Industries has expanded to include process and pollution control equipment and technologies, polymers and fibers, minerals, fertilizers, commodity trading and services, forest and consumer products, and ranching, producing a wide variety of well-known brands, such as Stainmaster carpet, Lycra fiber, Quilted Northern tissue and Dixie paper products.
Koch provides financial support for a number of libertarian
organisations, including the Institute for Humane Studies
and the Mercatus Center
at George Mason University
. He also co-founded the Cato Institute
.
In 2007, Koch's book The Science of Success was published. The book describes his management philosophy, which is referred to as "Market-Based Management".
, one of four sons of Mary Robinson and Fred C. Koch
; Koch's grandfather, Harry Koch
, was a Dutch
immigrant who settled in West Texas. Koch's academic life was spent at the Massachusetts Institute of Technology
. He is a member of the Beta Theta Pi
Fraternity. He received a Bachelor of Science
in general engineering
in 1957, a Master of Science
in mechanical engineering
in 1958, and a second Master of Science
in chemical engineering
in 1960. After college, Koch started work at Arthur D. Little, Inc. In 1961 he moved back to Wichita to join his father's business, Rock Island Oil & Refining Company. In 1967 he became president of the business, which was then a medium-sized oil firm. In the same year, he renamed the firm Koch Industries in honor of his father. By 2006, Koch Industries generated $90 billion in revenue, a growth of 2000 times over, which represents an annual compounded return of 18%.
Koch has been a Director of Intrust Financial Corp. since 1982, a Director of Koch Industries
Inc. since 1982, Director of Invista, and is a Director of Georgia Pacific Corp. Koch founded, or help found several organizations, including the Cato Institute, the Institute for Humane Studies
and the Mercatus Center
at George Mason University
, the Bill of Rights Institute
, and the Market-Based Management Institute.
, in order to give new employees a "comprehensive picture" of MBM. According to the website of the Market-Based Management Institute, which Koch founded in 2005, MBM is "based on rules of just conduct, economic thinking, and sound mental models which harnesses [sic] the dispersed knowledge of employees, just as markets harness knowledge in society. It is organized in and interpreted through five dimensions: vision, virtue and talents, decision rights, incentives, and knowledge processes." In the book, Koch attempts to apply F. A. Hayek's spontaneous order
theory and Austrian entrepreneurial theory, such as that of Mises and Israel Kirzner
, to organizational management. T. Boone Pickens argues that Koch's business success lends credibility to the book's concept.
, Grover Cleveland
, and Calvin Coolidge
.
He told the National Journal
that his "overall concept is to minimize the role of government and to maximize the role of private economy and to maximize personal freedoms." Today, he worries about too much governmental regulation, writing, "We could be facing the greatest loss of liberty and prosperity since the 1930s.".
In an interview with the American Journal of Business, Koch said he owes "a huge debt of gratitude to the giants who created the Austrian School
[of economics]. They developed principles that enabled me to gain an understanding of how the world works, and these ideas were a catalyst in the development of Market-Based Management." In particular, he expresses admiration for Ludwig von Mises
’ book Human Action
, as well as the writings of Friedrich von Hayek.
Other influences on Koch include Alexis de Tocqueville
, Adam Smith
, Michael Polanyi
, Joseph Schumpeter
, Julian Simon
, Paul Johnson, Thomas Sowell
, Charles Murray
, Leonard Read
, and F.A. Harper. Brian Doherty
, author of Radicals for Capitalism
, and an editor of Reason
, stated Robert LeFevre
was an anarchist (autarchist) figure who won Koch's approval. He also read Maslow on Management.
To Koch, "the short-term infatuation with quarterly earnings on Wall Street restricts the earnings potential of Fortune 500 publicly traded firms". Koch also considers public firms to be "feeding grounds for lawyers and lawsuits", with regulations like Sarbanes–Oxley only increasing the earnings potential of private firms.
In an interview article for the Wall Street Journal, Stephen Moore writes "Charles Koch—no surprise—disdains government and the political class." Koch thinks the billionaires Warren Buffett
and George Soros
, who fund organizations with different ideologies, "simply haven't been sufficiently exposed to the ideas of liberty". Koch thinks "prosperity is under attack" by the Obama administration and "warns of policies that 'threaten to erode our economic freedom and transfer vast sums of money to the state'".
In an op-ed for the Wall Street Journal Koch said:
“Government spending on business only aggravates the problem. Too many business have successfully lobbied for special favors and treatment by seeking mandates for their products, subsidies (in the form of cash payments from the government), and regulations and tariffs to keep more efficient competitors at bay.
Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want.”
Regarding government regulation, Koch has written that he expects his employees to cooperate fully with the law, regardless of personal views:
and free-market policy and advocacy organizations such as the Cato Institute
, which he co-founded with Edward H. Crane and Murray Rothbard
in 1977, and is a board member at the Mercatus Center, a market-oriented research think tank
at George Mason University
. Koch was awarded an Honorary Doctorate from George Mason University
in recognition of his financial support "through scholarships, faculty recruitment and research grants". Since the 1980s the Koch foundations have "given more than $100 million” to such organizations, among these other conservative think tanks like the Heritage Foundation
, as well as more recently funding tea party
groups like Americans for Prosperity
. Koch supported his brother's candidacy for vice president on the Libertarian Party ticket in 1980. After the bid, Koch told a reporter that conventional politics "tends to be a nasty, corrupting business ... I’m interested in advancing libertarian ideas". In addition to funding think tanks, Charles and David also support libertarian academics and Koch funds the Charles G. Koch Summer Fellow Program through the Institute for Humane Studies
which recruits and mentors young libertarians. Koch also organizes twice yearly meetings of Republican
donors.
On reason.com, Radley Balko
commented that Charles and David donated a combined $20 million to the American Civil Liberties Union
, a non-partisan organization, seeking to defeat the Patriot Act. Such a contribution "appears to be substantially more than the Kochs have contributed to all political candidates combined for at least the last 15 years" according to Balko.
Charles Koch looks upon the Tea Party movement
favorably. "The way it's grown, the passion, and the intensity, was beyond what I had anticipated," he told an interviewer.
, Jane Mayer
writes that "As their fortunes grew, Charles and David Koch became the primary underwriters of hard-line libertarian politics in America." The article states the Koch brothers fund a multitude of groups opposed to government in general and Obama administration policies in particular.
Koch Industries posted an extensive reply on their website. They acknowledged funding libertarian and conservative causes, but they said that there were several inaccuracies and distortions in the Mayer article, and that Mayer failed to identify alleged conflicts of interest among several people she quoted. Koch Industries
responded to the allegations in Mayer's article saying that "the story dredges up issues resolved long ago and mischaracterizes our business philosophy and principles, our practices and performance record, and the education efforts and policies we support."
The conservative Weekly Standard also published a critical response to Mayer's article, in the form of an opinion piece by Matthew Continetti
. He wrote:
Matt Lewis, columnist of Politics Daily
, also posted a critical response to Mayer's article:
, Obama senior adviser David Axelrod
accused Americans for Prosperity
of being a "front group" that was "hijacking our elections" by "promot[ing] Republican candidates who support their right-wing agenda and corporate interests." The article also compared the brothers unfavorably to past robber barons
.
. He has also given to the Youth Entrepreneurs Kansas, an organization that teaches business skills to at-risk youth in Kansas schools, and to the Berkeley Earth Surface Temperature
project, a scientific effort to compile an open database of the Earth's surface temperature records.
In 2008, Koch was included in Businessweek
's list of top 50 American givers. Between 2004-2008, Koch gave $246 million, focusing on "libertarian causes, giving money for academic and public policy research and social welfare around strict conservative ideals".
In 2011, Koch was awarded the William E. Simon Prize for Philanthropic Leadership. The award honors "the ideals and principles which guided William E. Simon’s giving, including personal responsibility, resourcefulness, volunteerism, scholarship, individual freedom, faith in God, and helping people to help themselves."
21.5 billion according to the Forbes 400
list. Koch "rarely grants media interviews and prefers to keep a low profile". Koch has been married to his wife Liz for 38 years and has two children.Charles and his three brothers have all suffered from prostate cancer.
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of Koch Industries
Koch Industries
Koch Industries, Inc. , is an American private energy conglomerate based in Wichita, Kansas, with subsidiaries involved in manufacturing, trading and investments. Koch also owns Invista, Georgia-Pacific, Flint Hills Resources, Koch Pipeline, Koch Fertilizer, Koch Minerals and Matador Cattle Company...
Inc., the second-largest privately held company by revenue in the United States according to a 2010 Forbes survey. He was ranked 18th on Forbes World's Billionaires list of 2011 (and 4th on the Forbes 400), with an estimated net worth of $25 billion, deriving from his 42% stake in Koch Industries. His brother David H. Koch
David H. Koch
David Hamilton Koch is an American businessman, philanthropist, political activist, and chemical engineer. He is a co-owner and an executive vice president of Koch Industries, a conglomerate that is the second-largest privately held company in the U.S...
, also owns 42% of Koch Industries, and serves as Executive Vice President. The brothers inherited the business from their father, Fred C. Koch
Fred C. Koch
Fred Chase Koch was an American chemical engineer and entrepreneur who founded the oil refinery firm that later became Koch Industries, the second-largest privately-held company in the United States....
, and have since expanded the business to 2,600 times its inherited size. Originally involved exclusively in the oil refining
Oil refinery
An oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas...
and chemical business, Koch Industries has expanded to include process and pollution control equipment and technologies, polymers and fibers, minerals, fertilizers, commodity trading and services, forest and consumer products, and ranching, producing a wide variety of well-known brands, such as Stainmaster carpet, Lycra fiber, Quilted Northern tissue and Dixie paper products.
Koch provides financial support for a number of libertarian
Libertarianism
Libertarianism, in the strictest sense, is the political philosophy that holds individual liberty as the basic moral principle of society. In the broadest sense, it is any political philosophy which approximates this view...
organisations, including the Institute for Humane Studies
Institute for Humane Studies
The Institute for Humane Studies is a classical liberal non-profit organization whose stated mission is “to support the achievement of a freer society by discovering and facilitating the development of talented students, scholars, and other intellectuals who share an interest in liberty and in...
and the Mercatus Center
Mercatus Center
The Mercatus Center at George Mason University in the United States is a non-profit market-oriented research, education, and outreach think tank affiliated with the Koch family. It works with policy experts, lobbyists, and government officials to connect academic learning and real-world practice...
at George Mason University
George Mason University
George Mason University is a public university based in unincorporated Fairfax County, Virginia, United States, south of and adjacent to the city of Fairfax. Additional campuses are located nearby in Arlington County, Prince William County, and Loudoun County...
. He also co-founded the Cato Institute
Cato Institute
The Cato Institute is a libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Edward H. Crane, who remains president and CEO, and Charles Koch, chairman of the board and chief executive officer of the conglomerate Koch Industries, Inc., the largest privately held...
.
In 2007, Koch's book The Science of Success was published. The book describes his management philosophy, which is referred to as "Market-Based Management".
Early life, education, and career
Koch was born and lives in Wichita, KansasWichita, Kansas
Wichita is the largest city in the U.S. state of Kansas.As of the 2010 census, the city population was 382,368. Located in south-central Kansas on the Arkansas River, Wichita is the county seat of Sedgwick County and the principal city of the Wichita metropolitan area...
, one of four sons of Mary Robinson and Fred C. Koch
Fred C. Koch
Fred Chase Koch was an American chemical engineer and entrepreneur who founded the oil refinery firm that later became Koch Industries, the second-largest privately-held company in the United States....
; Koch's grandfather, Harry Koch
Harry Koch (businessman)
Harry Koch was a Dutch immigrant to the US who settled in Quanah, Texas in 1888. He is the founder of the newspaper, Quanah Tribune-Chief. He was a founding shareholder of the Quanah, Acme and Pacific Railway. He was father of Fred C. Koch , founder of Koch Industries.External links*References...
, was a Dutch
Dutch people
The Dutch people are an ethnic group native to the Netherlands. They share a common culture and speak the Dutch language. Dutch people and their descendants are found in migrant communities worldwide, notably in Suriname, Chile, Brazil, Canada, Australia, South Africa, New Zealand, and the United...
immigrant who settled in West Texas. Koch's academic life was spent at the Massachusetts Institute of Technology
Massachusetts Institute of Technology
The Massachusetts Institute of Technology is a private research university located in Cambridge, Massachusetts. MIT has five schools and one college, containing a total of 32 academic departments, with a strong emphasis on scientific and technological education and research.Founded in 1861 in...
. He is a member of the Beta Theta Pi
Beta Theta Pi
Beta Theta Pi , often just called Beta, is a social collegiate fraternity that was founded in 1839 at Miami University in Oxford, Ohio, USA, where it is part of the Miami Triad which includes Phi Delta Theta and Sigma Chi. It has over 138 active chapters and colonies in the United States and Canada...
Fraternity. He received a Bachelor of Science
Bachelor of Science
A Bachelor of Science is an undergraduate academic degree awarded for completed courses that generally last three to five years .-Australia:In Australia, the BSc is a 3 year degree, offered from 1st year on...
in general engineering
Engineering
Engineering is the discipline, art, skill and profession of acquiring and applying scientific, mathematical, economic, social, and practical knowledge, in order to design and build structures, machines, devices, systems, materials and processes that safely realize improvements to the lives of...
in 1957, a Master of Science
Master of Science
A Master of Science is a postgraduate academic master's degree awarded by universities in many countries. The degree is typically studied for in the sciences including the social sciences.-Brazil, Argentina and Uruguay:...
in mechanical engineering
Mechanical engineering
Mechanical engineering is a discipline of engineering that applies the principles of physics and materials science for analysis, design, manufacturing, and maintenance of mechanical systems. It is the branch of engineering that involves the production and usage of heat and mechanical power for the...
in 1958, and a second Master of Science
Master of Science
A Master of Science is a postgraduate academic master's degree awarded by universities in many countries. The degree is typically studied for in the sciences including the social sciences.-Brazil, Argentina and Uruguay:...
in chemical engineering
Chemical engineering
Chemical engineering is the branch of engineering that deals with physical science , and life sciences with mathematics and economics, to the process of converting raw materials or chemicals into more useful or valuable forms...
in 1960. After college, Koch started work at Arthur D. Little, Inc. In 1961 he moved back to Wichita to join his father's business, Rock Island Oil & Refining Company. In 1967 he became president of the business, which was then a medium-sized oil firm. In the same year, he renamed the firm Koch Industries in honor of his father. By 2006, Koch Industries generated $90 billion in revenue, a growth of 2000 times over, which represents an annual compounded return of 18%.
Koch has been a Director of Intrust Financial Corp. since 1982, a Director of Koch Industries
Koch Industries
Koch Industries, Inc. , is an American private energy conglomerate based in Wichita, Kansas, with subsidiaries involved in manufacturing, trading and investments. Koch also owns Invista, Georgia-Pacific, Flint Hills Resources, Koch Pipeline, Koch Fertilizer, Koch Minerals and Matador Cattle Company...
Inc. since 1982, Director of Invista, and is a Director of Georgia Pacific Corp. Koch founded, or help found several organizations, including the Cato Institute, the Institute for Humane Studies
Institute for Humane Studies
The Institute for Humane Studies is a classical liberal non-profit organization whose stated mission is “to support the achievement of a freer society by discovering and facilitating the development of talented students, scholars, and other intellectuals who share an interest in liberty and in...
and the Mercatus Center
Mercatus Center
The Mercatus Center at George Mason University in the United States is a non-profit market-oriented research, education, and outreach think tank affiliated with the Koch family. It works with policy experts, lobbyists, and government officials to connect academic learning and real-world practice...
at George Mason University
George Mason University
George Mason University is a public university based in unincorporated Fairfax County, Virginia, United States, south of and adjacent to the city of Fairfax. Additional campuses are located nearby in Arlington County, Prince William County, and Loudoun County...
, the Bill of Rights Institute
Bill of Rights Institute
Bill of Rights Institute is a non-profit organization located in Arlington, Virginia, which produces instructional materials and conducts educational programs around the United States for teachers and students...
, and the Market-Based Management Institute.
Awards
Koch has also received the following awards:- Honorary Doctor of Science, from George Mason UniversityGeorge Mason UniversityGeorge Mason University is a public university based in unincorporated Fairfax County, Virginia, United States, south of and adjacent to the city of Fairfax. Additional campuses are located nearby in Arlington County, Prince William County, and Loudoun County...
, for his continued support of the economics program at GMU, - Honorary Doctor of Commerce from Washburn UniversityWashburn UniversityWashburn University is a co-educational, public institution of higher learning in Topeka, Kansas, USA. It offers undergraduate and graduate programs, as well as professional programs in law and business. Washburn has 550 faculty members, who teach more than 6,400 undergraduate students and...
, - Honorary Doctor of Laws from Babson CollegeBabson CollegeBabson College is a private business school located in Wellesley, Massachusetts near Boston.- History :Babson College was founded by Roger Babson on September 3, 1919, as the Babson Institute. It was renamed "Babson College" in 1969...
, - President's Medal from Wichita State UniversityWichita State UniversityWichita State University is a NCAA Division I public university in Wichita, Kansas with selective admissions. WSU is one of six state universities governed by the Kansas Board of Regents. The current president is Dr. Donald Beggs....
in 2004, - The Adam Smith Award from the American Legislative Exchange CouncilAmerican Legislative Exchange CouncilThe American Legislative Exchange Council is a politically conservative 501 non-profit Policy Organization, consisting of both state legislators and members of the private sector. ALEC's mission statement describes the organization's purpose as the advancement of free-market principles, limited...
, - The 1999 Directors' Award for Global Vision in Energy from the New York Mercantile ExchangeNew York Mercantile ExchangeThe New York Mercantile Exchange is the world's largest physical commodity futures exchange. It is located at One North End Avenue in the World Financial Center in the Battery Park City section of Manhattan, New York City...
, - The 1999 Governor's Arts Patrons Award from the Kansas Arts Commission,
- The 2000 National Distinguished Service Award from The Tax Foundation,
- The Spirit of Justice Award from The Heritage FoundationThe Heritage FoundationThe Heritage Foundation is a conservative American think tank based in Washington, D.C. Heritage's stated mission is to "formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong...
, - The Entrepreneurial Leadership Award from the National Foundation for Teaching EntrepreneurshipNational Foundation for Teaching EntrepreneurshipThe Network for Teaching Entrepreneurship , also referred to as NFTE , is an international non-profit organization providing entrepreneurship education programs to young people from low-income communities.Through entrepreneurship education NFTE helps young people from low-income communities build...
, - The Brotherhood/Sisterhood Award from the National Conference of Christians and Jews,
- The Distinguished Citizen Award from the Boy Scouts of AmericaBoy Scouts of AmericaThe Boy Scouts of America is one of the largest youth organizations in the United States, with over 4.5 million youth members in its age-related divisions...
, - The Free Enterprise Award from The Council for National Policy,
- The Herman W. Lay Memorial Award from The Association of Private Enterprise Education,
- The Distinguished Service Citation from the University of KansasUniversity of KansasThe University of Kansas is a public research university and the largest university in the state of Kansas. KU campuses are located in Lawrence, Wichita, Overland Park, and Kansas City, Kansas with the main campus being located in Lawrence on Mount Oread, the highest point in Lawrence. The...
, - Honorary Life Member in the Washburn Law School Association,
- The Distinguished Citizen Award from Kansas State UniversityKansas State UniversityKansas State University, commonly shortened to K-State, is an institution of higher learning located in Manhattan, Kansas, in the United States...
, - Induction into the Kansas Oil and Gas Hall of Fame,
- Induction into the Wichita and Kansas Business Halls of Fame,
- Spirit of Excellence Award from The Urban League of Wichita,
- Outstanding Humanitarian Award from the Greater Wichita Chapter of the National Society of Fundraising Executives,
- Wichita City Medallion,
- Wichita State University Entrepreneur in Residence,
- Wichita District Minority Small Business Advocate of the Year,
- The Individual Recognition Award from the Wichita/Sedgwick County Arts and Humanities Council,
- The Uncommon Citizen Award from the Wichita Chamber of Commerce,
- The 2011 William E. Simon Prize for Philanthropic Leadership from the Philanthropy RoundtablePhilanthropy RoundtableThe Philanthropy Roundtable is a private, non-partisan, 501 organization. Its stated mission is "to foster excellence in philanthropy, to protect philanthropic freedom, to assist donors in achieving their philanthropic intent, and to help donors advance liberty, opportunity, and personal...
.
Market-Based Management
Koch's business philosophy, Market-Based Management (MBM), is described in his 2007 book The Science of Success. In an interview with the Wichita Eagle, he said that he was motivated to write the book by Koch Industries' 2004 acquisition of InvistaINVISTA
Invista, headquartered in Wichita, Kansas, is the world's largest integrated fiber, resin and intermediates company. DuPont originally formed the company as a subsidiary in 2003 from its textile fibers division and named it DuPont Textiles and Interiors while a permanent identity was established...
, in order to give new employees a "comprehensive picture" of MBM. According to the website of the Market-Based Management Institute, which Koch founded in 2005, MBM is "based on rules of just conduct, economic thinking, and sound mental models which harnesses [sic] the dispersed knowledge of employees, just as markets harness knowledge in society. It is organized in and interpreted through five dimensions: vision, virtue and talents, decision rights, incentives, and knowledge processes." In the book, Koch attempts to apply F. A. Hayek's spontaneous order
Spontaneous order
Spontaneous order, also known as "self-organization", is the spontaneous emergence of order out of seeming chaos. It is a process found in physical, biological, and social networks, as well as economics, though the term "self-organization" is more often used for physical and biological processes,...
theory and Austrian entrepreneurial theory, such as that of Mises and Israel Kirzner
Israel Kirzner
Israel Meir Kirzner is a leading economist in the Austrian School.-Early life:The son of a well-known rabbi and Talmudist, Kirzner was born in London, England and came to the United States via South Africa.-Education:After studying with the University of Cape Town, South Africa in 1947-48 and...
, to organizational management. T. Boone Pickens argues that Koch's business success lends credibility to the book's concept.
Views and intellectual development
Koch's views are described as libertarian. He disliked George W. Bush's presidency. His favorite presidents are George WashingtonGeorge Washington
George Washington was the dominant military and political leader of the new United States of America from 1775 to 1799. He led the American victory over Great Britain in the American Revolutionary War as commander-in-chief of the Continental Army from 1775 to 1783, and presided over the writing of...
, Grover Cleveland
Grover Cleveland
Stephen Grover Cleveland was the 22nd and 24th president of the United States. Cleveland is the only president to serve two non-consecutive terms and therefore is the only individual to be counted twice in the numbering of the presidents...
, and Calvin Coolidge
Calvin Coolidge
John Calvin Coolidge, Jr. was the 30th President of the United States . A Republican lawyer from Vermont, Coolidge worked his way up the ladder of Massachusetts state politics, eventually becoming governor of that state...
.
He told the National Journal
National Journal
National Journal is a nonpartisan American weekly magazine that reports on the current political environment and emerging political and policy trends. National Journal was first published in 1969. Times Mirror owned the magazine from 1986 to 1997, when it was purchased by David G. Bradley...
that his "overall concept is to minimize the role of government and to maximize the role of private economy and to maximize personal freedoms." Today, he worries about too much governmental regulation, writing, "We could be facing the greatest loss of liberty and prosperity since the 1930s.".
In an interview with the American Journal of Business, Koch said he owes "a huge debt of gratitude to the giants who created the Austrian School
Austrian School
The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...
[of economics]. They developed principles that enabled me to gain an understanding of how the world works, and these ideas were a catalyst in the development of Market-Based Management." In particular, he expresses admiration for Ludwig von Mises
Ludwig von Mises
Ludwig Heinrich Edler von Mises was an Austrian economist, philosopher, and classical liberal who had a significant influence on the modern Libertarian movement and the "Austrian School" of economic thought.-Biography:-Early life:...
’ book Human Action
Human Action
Human Action: A Treatise on Economics is the magnum opus of the Austrian economist Ludwig von Mises. It presents a case for laissez-faire capitalism based on Mises' praxeology, or rational investigation of human decision-making. It rejects positivism within economics...
, as well as the writings of Friedrich von Hayek.
Other influences on Koch include Alexis de Tocqueville
Alexis de Tocqueville
Alexis-Charles-Henri Clérel de Tocqueville was a French political thinker and historian best known for his Democracy in America and The Old Regime and the Revolution . In both of these works, he explored the effects of the rising equality of social conditions on the individual and the state in...
, Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...
, Michael Polanyi
Michael Polanyi
Michael Polanyi, FRS was a Hungarian–British polymath, who made important theoretical contributions to physical chemistry, economics, and the theory of knowledge...
, Joseph Schumpeter
Joseph Schumpeter
Joseph Alois Schumpeter was an Austrian-Hungarian-American economist and political scientist. He popularized the term "creative destruction" in economics.-Life:...
, Julian Simon
Julian Simon
Julian Simon is the American economist.Julian Simon also may refer to:* Julián Simón , Spanish motorcycle racer...
, Paul Johnson, Thomas Sowell
Thomas Sowell
Thomas Sowell is an American economist, social theorist, political philosopher, and author. A National Humanities Medal winner, he advocates laissez-faire economics and writes from a libertarian perspective...
, Charles Murray
Charles Murray (author)
Charles Alan Murray is an American libertarian political scientist, author, columnist, and pundit working as a fellow at the American Enterprise Institute, a conservative think tank in Washington, DC...
, Leonard Read
Leonard Read
Leonard E. Read was an American economist and the founder of the Foundation for Economic Education, which was the first modern free market think tank in the United States....
, and F.A. Harper. Brian Doherty
Brian Doherty (journalist)
Brian Doherty is an American journalist. He is a Senior Editor at Reason magazine. He is the author of This Is Burning Man: The Rise of a New American Underground , Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement and Gun Control on Trial: Inside the...
, author of Radicals for Capitalism
Radicals for Capitalism
Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement is a book by American journalist and Reason senior editor Brian Doherty. It is about the history of libertarianism in the 20th century. It traces the evolution of the movement, as well as the life stories...
, and an editor of Reason
Reason (magazine)
Reason is a libertarian monthly magazine published by the Reason Foundation. The magazine has a circulation of around 60,000 and was named one of the 50 best magazines in 2003 and 2004 by the Chicago Tribune.- History :...
, stated Robert LeFevre
Robert LeFevre
Robert LeFevre was an American libertarian businessman, radio personality, and primary theorist of autarchism.-Early life:...
was an anarchist (autarchist) figure who won Koch's approval. He also read Maslow on Management.
To Koch, "the short-term infatuation with quarterly earnings on Wall Street restricts the earnings potential of Fortune 500 publicly traded firms". Koch also considers public firms to be "feeding grounds for lawyers and lawsuits", with regulations like Sarbanes–Oxley only increasing the earnings potential of private firms.
In an interview article for the Wall Street Journal, Stephen Moore writes "Charles Koch—no surprise—disdains government and the political class." Koch thinks the billionaires Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
and George Soros
George Soros
George Soros is a Hungarian-American business magnate, investor, philosopher, and philanthropist. He is the chairman of Soros Fund Management. Soros supports progressive-liberal causes...
, who fund organizations with different ideologies, "simply haven't been sufficiently exposed to the ideas of liberty". Koch thinks "prosperity is under attack" by the Obama administration and "warns of policies that 'threaten to erode our economic freedom and transfer vast sums of money to the state'".
In an op-ed for the Wall Street Journal Koch said:
“Government spending on business only aggravates the problem. Too many business have successfully lobbied for special favors and treatment by seeking mandates for their products, subsidies (in the form of cash payments from the government), and regulations and tariffs to keep more efficient competitors at bay.
Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want.”
Regarding government regulation, Koch has written that he expects his employees to cooperate fully with the law, regardless of personal views:
We needed to be uncompromising [with our workforce], to expect 100 percent of our employees to comply 100 percent of the time with complex and ever-changing government mandates. Striving to comply with every law does not mean agreeing with every law. But, even when faced with laws we think are counter-productive, we must first comply. Only then, from a credible position, can we enter into a dialogue with regulatory agencies to demonstrate alternatives that are more beneficial. If these efforts fail, we can then join with others in using education and/or political efforts to change the law.
Political activities
Koch funds and supports libertarianLibertarianism
Libertarianism, in the strictest sense, is the political philosophy that holds individual liberty as the basic moral principle of society. In the broadest sense, it is any political philosophy which approximates this view...
and free-market policy and advocacy organizations such as the Cato Institute
Cato Institute
The Cato Institute is a libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Edward H. Crane, who remains president and CEO, and Charles Koch, chairman of the board and chief executive officer of the conglomerate Koch Industries, Inc., the largest privately held...
, which he co-founded with Edward H. Crane and Murray Rothbard
Murray Rothbard
Murray Newton Rothbard was an American author and economist of the Austrian School who helped define capitalist libertarianism and popularized a form of free-market anarchism he termed "anarcho-capitalism." Rothbard wrote over twenty books and is considered a centrally important figure in the...
in 1977, and is a board member at the Mercatus Center, a market-oriented research think tank
Think tank
A think tank is an organization that conducts research and engages in advocacy in areas such as social policy, political strategy, economics, military, and technology issues. Most think tanks are non-profit organizations, which some countries such as the United States and Canada provide with tax...
at George Mason University
George Mason University
George Mason University is a public university based in unincorporated Fairfax County, Virginia, United States, south of and adjacent to the city of Fairfax. Additional campuses are located nearby in Arlington County, Prince William County, and Loudoun County...
. Koch was awarded an Honorary Doctorate from George Mason University
George Mason University
George Mason University is a public university based in unincorporated Fairfax County, Virginia, United States, south of and adjacent to the city of Fairfax. Additional campuses are located nearby in Arlington County, Prince William County, and Loudoun County...
in recognition of his financial support "through scholarships, faculty recruitment and research grants". Since the 1980s the Koch foundations have "given more than $100 million” to such organizations, among these other conservative think tanks like the Heritage Foundation
Heritage Foundation
The Heritage Foundation is a conservative American think tank based in Washington, D.C. Heritage's stated mission is to "formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong...
, as well as more recently funding tea party
Tea Party movement
The Tea Party movement is an American populist political movement that is generally recognized as conservative and libertarian, and has sponsored protests and supported political candidates since 2009...
groups like Americans for Prosperity
Americans for Prosperity
Americans for Prosperity is a Washington, D.C.–based political advocacy group. According to their literature, they promote economic policy that supports business, and restrains regulation by government...
. Koch supported his brother's candidacy for vice president on the Libertarian Party ticket in 1980. After the bid, Koch told a reporter that conventional politics "tends to be a nasty, corrupting business ... I’m interested in advancing libertarian ideas". In addition to funding think tanks, Charles and David also support libertarian academics and Koch funds the Charles G. Koch Summer Fellow Program through the Institute for Humane Studies
Institute for Humane Studies
The Institute for Humane Studies is a classical liberal non-profit organization whose stated mission is “to support the achievement of a freer society by discovering and facilitating the development of talented students, scholars, and other intellectuals who share an interest in liberty and in...
which recruits and mentors young libertarians. Koch also organizes twice yearly meetings of Republican
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
donors.
On reason.com, Radley Balko
Radley Balko
Radley Balko is an American libertarian journalist, blogger, and speaker.- Education :Balko earned a B.A. in journalism and political science in 1997 from Indiana University.- Employment and publications :...
commented that Charles and David donated a combined $20 million to the American Civil Liberties Union
American Civil Liberties Union
The American Civil Liberties Union is a U.S. non-profit organization whose stated mission is "to defend and preserve the individual rights and liberties guaranteed to every person in this country by the Constitution and laws of the United States." It works through litigation, legislation, and...
, a non-partisan organization, seeking to defeat the Patriot Act. Such a contribution "appears to be substantially more than the Kochs have contributed to all political candidates combined for at least the last 15 years" according to Balko.
Charles Koch looks upon the Tea Party movement
Tea Party movement
The Tea Party movement is an American populist political movement that is generally recognized as conservative and libertarian, and has sponsored protests and supported political candidates since 2009...
favorably. "The way it's grown, the passion, and the intensity, was beyond what I had anticipated," he told an interviewer.
New Yorker article by Jane Mayer
In the August 30, 2010, New YorkerThe New Yorker
The New Yorker is an American magazine of reportage, commentary, criticism, essays, fiction, satire, cartoons and poetry published by Condé Nast...
, Jane Mayer
Jane Mayer
Jane Mayer is an American investigative journalist who has been a staff writer for The New Yorker magazine since 1995...
writes that "As their fortunes grew, Charles and David Koch became the primary underwriters of hard-line libertarian politics in America." The article states the Koch brothers fund a multitude of groups opposed to government in general and Obama administration policies in particular.
Responses to Mayer article
Conor Friedersdorf, writing for the Daily Dish at The Atlantic magazine, wrote that while he respected Mayer, "as best I can tell, the Koch brothers are legitimately upset by some aspects of the piece, and anyone who reads it should also look at the rebuttals from libertarians who are persuasively pushing back against some of its conclusions."Koch Industries posted an extensive reply on their website. They acknowledged funding libertarian and conservative causes, but they said that there were several inaccuracies and distortions in the Mayer article, and that Mayer failed to identify alleged conflicts of interest among several people she quoted. Koch Industries
Koch Industries
Koch Industries, Inc. , is an American private energy conglomerate based in Wichita, Kansas, with subsidiaries involved in manufacturing, trading and investments. Koch also owns Invista, Georgia-Pacific, Flint Hills Resources, Koch Pipeline, Koch Fertilizer, Koch Minerals and Matador Cattle Company...
responded to the allegations in Mayer's article saying that "the story dredges up issues resolved long ago and mischaracterizes our business philosophy and principles, our practices and performance record, and the education efforts and policies we support."
The conservative Weekly Standard also published a critical response to Mayer's article, in the form of an opinion piece by Matthew Continetti
Matthew Continetti
Matthew Continetti is a conservative journalist and associate editor at The Weekly Standard.-Biography:He graduated from Columbia University in 2003. While in college he wrote for the Columbia Spectator and the Intercollegiate Studies Institute's magazine, CAMPUS...
. He wrote:
Mayer drew heavily from the writings of the Center for American Progress Action Fund, the Greenpeace report, and public tax records. For several thousand words, relying on interviews with anonymous sources, Democratic operatives, a disgruntled conservative, a historian of libertarianism, and the author of “A Pagan’s Blog,” Mayer unspooled a fantastic tale of manipulation and malpractice.
Matt Lewis, columnist of Politics Daily
Politics Daily
Politics Daily was an American political journalism web site launched by AOL News in April 2009. It described itself as a "political news magazine for the general reader."Melinda Henneberger, a former Newsweek and New York Times reporter,...
, also posted a critical response to Mayer's article:
To be sure, the Kochs have given "more than a hundred million dollars to right wing causes" (which is their right, by the way). But in the last decade, it's also worth noting the Kochs have given more than $600 million in pledged or donated money to arts, education, and medical research, including (but not limited to):
New York-Presbyterian Hospital Weill Cornell: $15 million,
M.D. Anderson Cancer Center: $25 million,
The Hospital for Special Surgery: $26 million,
Memorial Sloan-Kettering Cancer Center: $30 million,
Prostate Cancer Foundation: $41 million,
Deerfield Academy: $68 million,
Lincoln Center's NY State Theater: $100 million,
Massachusetts Institute of Technology: $139 million
Criticism by Obama administration
Charles, along with his brother, David, have been criticised by members of the Obama administration for their political spending. In August 2010, economist Austan Goolsbee, an administration official, falsely accused Koch Industries of paying no corporate income tax during a background briefing he delivered to reporters. In a September 23, 2010 op-ed in The Washington PostThe Washington Post
The Washington Post is Washington, D.C.'s largest newspaper and its oldest still-existing paper, founded in 1877. Located in the capital of the United States, The Post has a particular emphasis on national politics. D.C., Maryland, and Virginia editions are printed for daily circulation...
, Obama senior adviser David Axelrod
David Axelrod
David Axelrod may refer to:* David Axelrod * David Axelrod , Senior Advisor to U.S. President Barack Obama* David B. Axelrod , poet and educator...
accused Americans for Prosperity
Americans for Prosperity
Americans for Prosperity is a Washington, D.C.–based political advocacy group. According to their literature, they promote economic policy that supports business, and restrains regulation by government...
of being a "front group" that was "hijacking our elections" by "promot[ing] Republican candidates who support their right-wing agenda and corporate interests." The article also compared the brothers unfavorably to past robber barons
Robber baron (industrialist)
Robber baron is a pejorative term used for a powerful 19th century American businessman. By the 1890s the term was used to attack any businessman who used questionable practices to become wealthy...
.
Praise by Obama administration
With the criticism has also come praise from the Obama administration for companies owned by the Koch Brothers. In Fall of 2010, Koch-owned Flint Hills Resources built an agreement between the EPA and the Texas Commission on Environmental Quality in a regulation dispute. "The EPA under President Obama has also praised Koch subsidiaries Georgia-Pacific and Invista for their cooperation with the agency. Georgia-Pacific even won an award from the EPA in 2009.".Praise by Searle Freedom Trust
Kimberly O. Dennis, of the Searle Freedom Trust, a libertarian foundation, suggests that the Kochs are acting against their economic interest in promoting "getting government out of the business of running the economy. If they were truly interested in protecting their profits, they wouldn’t be spending so much to shrink government; they’d be looking for a bigger slice of the pie for themselves. Their funding is devoted to promoting free-market capitalism, not crony capitalism."Philanthropy
Koch has given money to support public policy research focused on "developing voluntary, market-based solutions to social problems." He has given to the Bill of Rights Institute, a non-profit that educates teachers, students, and others about the Bill of RightsBill of rights
A bill of rights is a list of the most important rights of the citizens of a country. The purpose of these bills is to protect those rights against infringement. The term "bill of rights" originates from England, where it referred to the Bill of Rights 1689. Bills of rights may be entrenched or...
. He has also given to the Youth Entrepreneurs Kansas, an organization that teaches business skills to at-risk youth in Kansas schools, and to the Berkeley Earth Surface Temperature
Berkeley Earth Surface Temperature
The Berkeley Earth Surface Temperature project is an effort to resolve criticism of the current records of the Earth's surface temperatures by preparing an open database and analysis of these temperatures and temperature trends, to be available online, with all calculations, methods and results...
project, a scientific effort to compile an open database of the Earth's surface temperature records.
In 2008, Koch was included in Businessweek
BusinessWeek
Bloomberg Businessweek, commonly and formerly known as BusinessWeek, is a weekly business magazine published by Bloomberg L.P. It is currently headquartered in New York City.- History :...
's list of top 50 American givers. Between 2004-2008, Koch gave $246 million, focusing on "libertarian causes, giving money for academic and public policy research and social welfare around strict conservative ideals".
In 2011, Koch was awarded the William E. Simon Prize for Philanthropic Leadership. The award honors "the ideals and principles which guided William E. Simon’s giving, including personal responsibility, resourcefulness, volunteerism, scholarship, individual freedom, faith in God, and helping people to help themselves."
Personal life
As of 2010, Koch was worth approximately $United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
21.5 billion according to the Forbes 400
Forbes 400
The Forbes 400 or 400 Richest Americans is a list published by Forbes Magazine magazine of the wealthiest 400 Americans, ranked by net worth. The list is published annually in September, and 2010 marks the 29th issue. The 400 was started by Malcom Forbes in 1982 and treats those in the list like...
list. Koch "rarely grants media interviews and prefers to keep a low profile". Koch has been married to his wife Liz for 38 years and has two children.Charles and his three brothers have all suffered from prostate cancer.
TIME 100 Most Influential of 2011
TIME magazine included Charles and David Koch among the most influential of 2011. According to the magazine, the list includes "activists, reformers and researchers, heads of state and captains of industry." The article touts the brothers commitment to free-market principles, the growth and development of their business, their passion for philanthropy, and their support for liberty minded organizations and political candidates.External links
- Profile at Koch IndustriesKoch IndustriesKoch Industries, Inc. , is an American private energy conglomerate based in Wichita, Kansas, with subsidiaries involved in manufacturing, trading and investments. Koch also owns Invista, Georgia-Pacific, Flint Hills Resources, Koch Pipeline, Koch Fertilizer, Koch Minerals and Matador Cattle Company...
- Charles G. Koch Charitable Foundation
- Profile at Philanthropy RoundtablePhilanthropy RoundtableThe Philanthropy Roundtable is a private, non-partisan, 501 organization. Its stated mission is "to foster excellence in philanthropy, to protect philanthropic freedom, to assist donors in achieving their philanthropic intent, and to help donors advance liberty, opportunity, and personal...
- Charles G. Koch Summer Fellow Program at the Institute for Humane StudiesInstitute for Humane StudiesThe Institute for Humane Studies is a classical liberal non-profit organization whose stated mission is “to support the achievement of a freer society by discovering and facilitating the development of talented students, scholars, and other intellectuals who share an interest in liberty and in...
at George Mason UniversityGeorge Mason UniversityGeorge Mason University is a public university based in unincorporated Fairfax County, Virginia, United States, south of and adjacent to the city of Fairfax. Additional campuses are located nearby in Arlington County, Prince William County, and Loudoun County... - Names in the News: David and Charles Koch at FollowTheMoney.org
- Political contributions from Influence Explorer at the Sunlight FoundationSunlight FoundationThe Sunlight Foundation is a 501 educational organization founded in April 2006 with the goal of increasing transparency and accountability in the United States government....