A year inside the ‘Kochtopus’

I have seen the nerve-center of the “Kochtopus” and lived to tell about it

I have seen the nerve-center of the “Kochtopus” and lived to tell about it.  For almost a year, I was exposed to the radical philosophy of scheming billionaires–at least that’s how the New Yorker would tell it. Unfortunately for author Jane Mayer and the army of netroots running with her “exposé,” the truth is far stranger.

In 2008-09, I participated in non-profit management program at the Charles G. Koch Charitable Foundation. Let’s just say it looks more like Dilbert than the Death Star. You may now realize, Koch Industries is an incredibly successful company. A few years ago, Charles Koch committed several million dollars to help tomorrow’s non-profit leaders. They’d learn to apply Market-Based Management—the organizational philosophy to which Mr. Koch attributes his company’s astonishing long-term performance. My fellow participants and I spent a day each week discussing how the principles that make a free society prosper can be adapted to help public-policy organizations succeed.

I snorted to myself when the Foundation staff told us that all Koch organizations look for integrity and humility over all other traits when considering prospective employees. “This bias comes straight from Mr. Koch,” they said. Corporate fluff?

Companies like Koch have good reasons to put values first. Just one corner-cutting employee can cost millions in lawsuits. Just one Jeff Skilling can bring everything down. But integrity is not just about the bottom line. Virtuous people are better collaborators. Trust is the lubricant of any good organization.

But I learned something else: Koch – Charles, David and the rank-and-file — actually seem to practice what they preach (and I had plenty of access to the top brass). Not only do they believe that liberty is fundamental to a peaceful, prosperous society, they believe that creating real value for people is the only reason any company should exist. And they are true believers.

That’s why the recent New Yorker piece struck me as more than a misfire. If you look beyond all the ad hominem, innuendo and hearsay, the article boils down to this: Jane Mayer is mad.

The center-right has become almost as well-funded and well-organized as the Soros-lubricated left. With “progressives” holding the House, Senate and Presidency, the only explanation for pushback on President Obama’s agenda can be billionaire chicanery. The center-right cabal must now be so well-funded and well-organized that they can dupe millions of Americans into opposing sensible progressive policies. (Mayer never entertains the notion that a basic clash of worldviews has emerged.)

Do Koch resources fertilize Tea Parties? I hope so. But their funds are neither necessary nor sufficient for a majority of Americans to think the country is on the wrong track. To make the Kochs’ involvement in public policy seem sinister, Mayer sprinkles fragments of the truth among hyperbole and conspiracy theories. Such leads readers to that hackneyed Darth Vader narrative. The irony is the Kochs are anti-elitists. Jeffersonians. Sprinkle in some Hayek and Mises and you have libertarians leading the charge against the very corporatist mingling of business and government that constitutes the real Dark Side (Read: GE, GM, Fannie/Freddie and Big Agribusiness). See? The truth is stranger than fiction.

Koch’s worldview may seem quaint or crazy to progressive elites who fancy themselves as stewards of the great unwashed. It may seem weird even to readers who have forgotten the ethos of the American Founding. But to most libertarians, the Kochs represent a bulwark against what they see as a statist juggernaut. While Charles and David are human beings who have made mistakes, they have consciously created a culture of virtue within their organizations–a culture that is rooted in the principle of non-coercion. And they are only “anti-government” to the extent that government is unjustifiably coercive, be it R- or D-controlled.

But let’s get to the point. With 10,000 words strung together with thread soaked in yellow journalism, Jane Mayer didn’t manage to tell a compelling Vader story. Why? Because the real test of whether the Kochs are Vaders would come not from looking at what studies they fund or what think-tanks confirm their worldview. The test would be to find they support something – a regulation or bill — that both runs counter to their free-market principles and adds to their bottom line.

I remember sitting at a Koch Foundation lecture by economist Bruce Yandle who reminded us that top-down regulation in society comes from two distinctly different groups in an unholy alliance:

“Baptists” point to the moral high ground and give vital and vocal endorsement of laudable public benefits promised by a desired regulation. … “Bootleggers” are much less visible but no less vital. Bootleggers, who expect to profit from the very regulatory restrictions desired by Baptists, grease the political machinery with some of their expected proceeds. They are simply in it for the money.

Any large company has to engage in defensive lobbying. But I doubt you’ll an example of Koch Industries being Bootleggers. If you did, I’d have to eat what I said about the men, the organization and integrity. But know this: even if you found such an example, it wouldn’t change what I learned or the kind of man I have become since I trained at the center of the Kochtopus.

Max Borders is a writier living in Austin, TX. He blogs at Ideas Matter and maxborders.com.

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