Thursday, 29 May 2014

Are the Kochs evil?...No! But they say a lot about the Libertarian Movement.

Just over a month ago Charles Koch wrote an editorial in the Wall Street Journal. Here one of the worlds most recognised businessmen outlined his vision for a better society (Link to editorial: The Koch brothers (David & Charles) and their involvement in politics makes them some of the most controversial figures in contemporary America. For many, the Kochs are the very face of Libertarianism. They are present in scores of Libertarian think-tanks and foundations, spend vast amounts of money backing Libertarian policies and champion the debate against man made climate change. However the truth about the Koch's relation to the Libertarian movement is more complex than this. There are those on the left who decry the Kochs and their views. Pam Martens, writing in Counterpunch magazine explains how, 'A review of documents and tax records for the dizzying, interconnected web of corporate front groups, frequently created, supported and influenced by Charles or David Koch, shows just how dangerous these groups espousing free markets and liberty have become to a free society. 'The game plan is to devalue the rights of actual citizens by seeking human voices dangling from a corporate marionette string, that might be willing for the right amount of cash incentive to broadcast the Orwellian reverse-speak: liberty means more liberty for corporations'- Pam Martens. Yet for many within the Libertarian movement the issue of the Kochtopus is benign, Tibor Machan wrote of the Koch brothers. 'Now it is true that even some libertarian economists are reductionists and hold that everything someone does comes from the belief that it will promote one’s economic advantages. On this score Marxists and some free market theorists see eye to eye. But whatever the source of the idea, it is bunk. Most of us haven’t much of a clue about whether holding certain beliefs will advance our prosperity.'- Tibor Machan. Here Machan highlights an important point, unlike the left, it is unfair to dismiss the Kochs as inherently 'evil'. Truth cannot be reduced to a technical morass of neatly fitting coincidences and connections. This purpose of this article is not to establish any objective 'truth' about the Koch brothers, but to make sense of the interpretations and assess the effects these have on the Libertarian movement as a whole.
The presence of the Koch brothers in politics is clearly a divisive issue. However in reality the role of the Kochs involvement in American politics transcends the traditional left- right paradigm. A thorough assessment of the story of the Koch brothers forces us to confront important aspects of our movement. Our relation to the current political system, internecine divisions and ultimately how history will judge us. In the past few decades the libertarian movement has grown exponentially. Essentially any attempt by me (or anyone) to 'define' Libertarian ideology is bound to be controversial.  Yet it is amazing to see an expansive and varied coalition of freedom loving individuals coming together under the same banner.

'Now, accepting that you want more people to be freedom-lovers, the questions become: Which do you care more about? How people arrive? Or that they arrive at all? If you care only about the former, you might be a one-trick pony. That is, your only approach to persuasion might be to tell people to read Human Action. And there is nothing wrong with that approach, per se. I’ve suggested Mises to many. But I also realize that a lot of people might not be willing to take such a long detour through Vienna to get to our picnic—and that’s assuming they’re curious about our ideas at all. That means it may be time to expand outward from single starting points. Your liberalism or mine works great when we can agree on a starting point. But we must first acknowledge that people don’t always start from the same point- The Freeman

Yet for the movement to last the test of time, it is essential that it is able to self-evaluate and come to terms with itself. It is for this reason why the Koch brothers matter. Ultimately they are a powerful force and need to be understood. Although virtually all of the activities of the Kochs are restricted to the USA; Coming to terms with the Kochtopus will be of great help to the UK movement.
Firstly this article will address a brief history of the Libertarian movement in the USA and outline divisions and debates that the Kochs are central to. Secondly the facts about the Koch's political activities will be outlined and analysed. Lastly, this essay will look at the wide ranging implications of the Koch brothers' relation to the Libertarian movement.

Kochs, Cato and Capitalism: A brief history of the Kochtopus

It is essential that we are aware of the history of the Koch Brothers' involvement in the Libertarian movement to fully understand the controversies it creates today. It might be worth noting here that inevitably many will find this 'history' unsatisfactory. Names unmentioned, events passed by and ideas undiscussed. However in the interest of pertinence, this article will focus only on issues directly relevant to the Koch brothers and their political activities.
It is often understood the Kochs founded the Cato Institute, arguably the most recognised and respected free-market organisation in the world. However this is wrong, the Cato Institute was founded in 1977 by Charles Koch, Edward Crane and Murray Rothbard. According to David Gordon, a senior fellow at the Mises Institute Cato was originally a platform to disseminate Rothbard's views to a wider audience. Interestingly it was Rothbard that came up with the term Cato Institute. Yet it wasn't long before the union went sour, David Koch & Ed Crane (Libertarian Party chairman from 1974-1977) clashed with Rothbard over the direction of the Cato Institute. Rothbard said of Crane:

'Consider for a moment: surely you must know in your heart that your Boss [Crane] has contempt for you just as he has for the entire human race…. I don’t care if your Boss is backed by a billion dollars. The Libertarian movement and the Libertarian party are not a corporation or a military machine. They are not for sale…. Crane is not smart enough to even try to mask his contempt for his fellow libertarians and LP members, so people cotton to him very quickly. How can a person like that succeed in politics?'- David Gordon, Mises Institute

Since then the Mises Institute (Founded 1982 between Rothbard and Lew Rockwell) has held the Kochs and the Cato institute as rivals. According to Rockwell, attempts have been made by the Kochs to stamp out Rothbard and the Mises Institute. ‘As he [Rockwell] recalls the conversation, Koch told him: "'Do you realize how much money we have spent purging Mises from Austrian economics? Everyone hates him'-Daily Bell. However the marriage between David Koch and Ed Crane didn't last long either, by the mid- 80s the Koch brothers had virtually nothing to do with the Cato Institute. This point was highlighted in a recent interview with Cato Institute chairman Robert Levy, he highlighted that throughout the 1980s and 1990s the Kochs had virtually nothing to do with Cato. 'Since Cato was formed, the Kochs have donated about $30 million, officials said, but the bulk came in its first decade; by last year [2011], the Kochs gave no money at all'- SLATE. This is revealing considering that the Koch borthers gave the Tea-Party a buget of $40 million for 2010 alone and have since given $400 million to support candidates in the 2012 presidential election.
In the past decade the Kochs have built up a huge web of influence that can justifiably be called the 'Kochtopus'. Numerous foundations and think-tanks have been embellished with Koch money. The Mercatus Centre, the Heritage Foundation, the Heartland Institute, the Tea-Party and Americans for Prosperity are a handful of the 34 organisations that are affiliated with the Kochs. This lamentable history of division within the Libertarian movement is significant, because it will help us fully appreciate that this is more than just a Left- Right issue, it creates conflict within the movement as well. It will also help us to change the free-society cause from a church of ideas to a truly potent political force.

'Beltway Libertarians?'

For us in the UK, the byzantine workings of Washington D.C may seem a million miles away. Yet these issues matter immensely to us. As the Libertarian movement grows in the UK it will become increasingly important to understand the difficulties involved in turning ideology into genuine political force. The relationship between the Koch brothers-the American Libertarian movement and Washington D.C should be of great interest to us in the UK. Lew Rockwell described the Koch's as 'Beltway Libertarians'. The Beltway being the motor-way that circles Washington D.C., Rockwell suggests that the Kochs are part of the corrupt American political establishment, rather than being genuinely committed to the free-society cause. On the other hand, it is important to note that ideological purity is not the single measure of how successful a political movement will be. Yet the Kochs connection to Capitol Hill matters, not because their presence there is a sin. But as a result of recent efforts to spread their influence (which already made many uncomfortable), the movement could look increasingly fragile and able to be co-opted by existing political powers.
Ultimately, the Kochs exists as a governmental force not a revolutionary one. As a result of the immense influence of the Koch Brothers, their presence in the Libertarian movement is controversial. This point is perfectly displayed when we look at the recent Koch activity within the Cato Institute. As has been mentioned previously despite initial involvement with Cato, since the mid-80s the Kochs had largely left the organisation to its own devices. However that all changed in 2011 when the long-term chairman of the Cato Institute William Niskansen passed away. By this time the Koch's where already a potent force in American politics 'The rift has its roots, Cato officials said, in a long-simmering feud over efforts by Mr. Koch and his brother David Koch to install their own people on the institute’s 16-member board and to establish a more direct pipeline between Cato and the family’s Republican political outlets'-New York Times. Arguably these concerns where justified, as soon after Charles Koch (the most politically involved of the two brothers) pushed for a greater presence in the organisation he soon began trying to install his own candidates including Tony Woodlief a man who had historically been cynical about most Libertarian ideas and John Hinderacker who supported the Iraq war in the early 2000s. 'Cato is the gold standard of libertarian organizations around the world,” wrote [Ed] Crane. “We are respected and admired for our commitment to libertarian principles, integrity, independence and non-partisanship. That respect encompasses traditional liberals and conservatives. That would all end with a Koch takeover, despite Charles Koch's protestations to the contrary.'-SLATE. Robert Levy said in an interview in 2012 that he had concerns over:

'Weather Cato can successfully function if it's being perceived as a partisan or an aligned or an arm of a special interest. Our argument is that Cato must be non-aligned, non-partisan and strictly independent of all special interests and so the stockholder structure in and of itself is a problem for the Cato institute. Because even if it does not compromise our independence. It could be perceived as compromising our independence. We would be perceived as a mouthpiece for special interests. And we cannot function effectively if we are perceived in that manner' – Robert Levy

Since the interview, Ed Crane has stepped down from the Cato Institute. Clearly the presence of the Koch brothers is significant due to their Washington relationships and huge financial power, no matter where you stand in the wider political nexus.
It is important at this stage to examine the broad reach of the Koch brothers into the heart of the American political establishment. Their connection to the Tea-Party is well known, large part of the wider Americans for prosperity programme.  Koch Industries and its subsidiaries spent more than $20 million on lobbying in 2008 and $12.3 million in 2009, according to the Centre for Responsive Politics, a nonpartisan research group. They clearly have huge sway on Capitol Hill, according to a report on the Real News Network republicans that try to raise concern over Koch industries illegal drilling practices were told to back off. This vicious criticism of the Koch Industries as malignant is the most substantial criticism made against the Brothers; Pam Martens describes Koch industries as

'a private, dark curtain corporation. Its own stock has never been subjected to price discovery in a free market; the public can’t get a peek at the financials of this firm; there is no means of determining how much debt is on the corporate balance sheet or if, as with AIG and Citigroup, we, the sheared sheep, might have to bail the corporation out some day to save some too-big-to-fail bank that holds its debt'.- Pam Martens

Despite expressing Libertarian sympathies, a brief look at some of the organisations the Kochs fund illustrates that far from a coherent set of values and beliefs. The kochtopus extends to a plethora of institutions that have competing views. For example ' [David] Koch also said he now considers himself a Republican first and foremost — rather than a Libertarian or a nonpartisan supporter of free enterprise — despite a background in Libertarian politics and some views that are out of step with the GOP orthodoxy. “The Libertarian Party is a great concept. I love the ideals, but it got too far off the deep end, and so I dropped out,” Koch said. “I think the Republican Party has a great chance of being successful and that’s why I support it,”- Charles Koch. Furthermore, despite professing Libertarian values the Kochs spent £8 million on funding the ultra-conservative Scott Walker in Wisconsin, an actively tried to damage the Ron Paul campaign, as a result of his connection to the Mises Institute. Additionally investigative journalist Greg Plast in an interview with Alex Jones highlighted that the Kochs helped found the Democratic Leadership Council and gave support to Bill Clinton.
Ultimately the Koch's and their involvement in politics is a controversial issue that is of the utmost importance for the Libertarian movement. Britain's Adam Smith Institute has so far been scathing of criticism of the Kochs. Indeed for many the presence of a rich donor is something to celebrate rather than decry, the transition from a committed group of idealists to a functioning political organisation is never an easy one. Nevertheless as a movement that should be conscious how it will be seen by history. The question of the Kochtopus will be an important one for us to understand.

Where we stand

Part of the beauty of the Libertarian movement is that it is made up of an eclectic mix of groups and ideas. Although being a varied conglomeration of differing views and intellectual traditions ensures there will be tensions, as we move from the pages of philosophy books and into the political arena. For this reason, understanding and evaluating the Libertarian movement is of the utmost importance. The early Communists of the first and second international where notorious for ideological disputes and political wrangling that ultimately resulted in Stalin's 'great purge'. This is not to suggest the same thing could happen to Libertarianism, but it does demonstrate how an unstable political movement can lead to self-destruction.
It is this reason why the Koch brothers are such a contentious force in the history of Libertarianism. Arguably their relationship with Washington D.C and wide ranging support for extremely varied groups of people highlights a movement that is not yet comfortable with this process.
The goal has always been, Charles says, “true democracy,” where people “can run their own lives and choose what they want to buy, choose how to spend their money.” (“Now in our democracy you elect somebody every two to four years and they tell you how to run your life,” he says.) People running their own lives would be less democracy and more a private property society (i.e., a Rothbardian anarcho-capitalist view), without legislators and other government operators attempting to micro-manage populations. Such a private property society would be a good thing, but it is hard to square Charles’ supposed take on this with the brothers behind the scenes role in propping up various politicians who move in a direction quite different from a private property society'-Robert Wenzel, Mises institute.
When we discuss ideas and theories, we often imagine a solitary figure or certain number of books and treatises. Yet the experience of the Kochtopus highlights world in which ideas are no longer the confines of lone philosophers and political groups. Even if this is not the case, a certain cynicism about the realm of political ideas is a defining feature of our age. Despite being nothing new, Money and politics have never gone more hand in hand.  A report in the Daily Bell confirms this reality:
'We believe that it is not so much "rich, well-connected individuals" that steer the country as a handful of top globalists with access to the incredible riches of central banking that they helped create and implement'- Daily Bell

'If competition was acknowledged as the main driver of industry standards and if the centralizing effects of modern monopoly central banking and corporate personhood were removed, oligarchic tendencies would be greatly diminished. This won't easily happen, however, because those in power SEEK an oligarchy and endorse the various socio-political and economic platforms that support it'-Daily Bell

At the heart of this issue is an uncomfortable set of decisions. Ludwig Von Mises highlights at the end of Human Action that: 'The flowering of human society depends on two factors: the intellectual power of outstanding men to conceive sound social and economic theories, and the ability of these or other men to make these ideologies palatable to the majority.'- Mises, Human Action

Therefore the issue of Koch funding requires analysis. 'Money for thought-analysis has to come from somewhere. The Cato Institute has solved the money problem by intensive fund-raising but in the process has become far less "edgy" than Mises under Rockwell'-Daily Bell. Admittedly for many the Koch brothers are wealthy political bogeymen. The Kochtopus a monster that must be removed from society. Yet this essay does not support that view. One could argue that whether the Kochs are a positive or Negative force depends on the person in question. Here we try to critically assess the relationship between the Kochs and their relationship to the wider Libertarian movement. And fundamentally we have to conclude that the relationship in an uneasy one. Conclusively for those that truly strive to achieve and accept the principles of a free-society, this is a question of our relationship to the existing state structure. Can we work with it? Can we work within it? Or does it need to be destroyed entirely? It is my fundamental belief that although we may have differing answers to these questions. As long as we are thinking about them, we ensure our place in the annals of history.