Charles Koch: Corporate Cronyism Harms America

Today in the Wall Street Journal op-ed section was an article by Charles Koch about crony capitalism. As you may know I did an extensive three part series on the Kochs here, here, and here.

The main gist of the article is that Charles Koch opposes crony capitalism and doesn’t want the government to come help him out (too bad more business leaders are not like this). People on the left claim that Koch Industries takes subsidies from the government but their arguments are shaky at best. Let’s examine some of their claims. The first claim is that Fred Koch (father of Charles) helped construct refineries for Joesph Stalin. What they don’t explain is how free market the father became after realizing how communism didn’t work in the former Soviet Union. Also even though no one is fond of Stalin I am not sure how the U.S. government is subsidzing this. Another claim is that Koch is trying to lobby politicians by making campaign contributions and then in return the politicians will help out the business. Koch has been against subsidies like the NAT Gas Act, against ethanol subsidies (which actually increase the price of food), and alternative energy subsidies. You could take away all of these subsidies and Koch Industries would be just fine. Also sometimes the government forces companies into taking subsidies even when they don’t want them (giving banks money in 2008 that were financially stable). This is like when people claim that oil companies get subsidies. This of course is nonsense since oil companies get no unique tax credits or deductions. In fact in 2005 when oil company CEOs were called in front of Congress about “excessive profits” each executive said these so called subsidies wouldn’t make a difference in their bottom line because it doesn’t even apply to them.  

Charles and David Koch believe in free markets which is actually against their self interest which  so many people fail to point out. They want free markets not to make them rich but to make everyone else rich while enhancing the standard of living for everyone. Liberals often say the Koch brothers just want to pollute to make more money. My question would be do Charles and David Koch breath different air then everyone else? Also if these accusations of pollution were as true as so many claim why wouldn’t there would be criminal action against Koch Industries? Yes, the company has had incidents were sometimes bad things go wrong. However, when you are operating a company with over 60,000 employees dealing with chemicals that are not so friendly bad stuff can and will happen. The question is what trade off are people willing to accept. We could have so much regulation that gasoline would cost $6 at the tank in order to be safe, however how many people could be able to afford to go to work every day? I would argue the Koch brothers have done more to increase standard of living than politicians by giving people a place to go every day to earn a living, a place to help them pay bills, a place to give them purpose, and most importantly a place to create value. If you know if any welfare problems that have similar results without taxpayer money please let me know.