« Freakonomics Radio

293. Why Hate the Koch Brothers? (Part 2)

2017-06-23 | 🔗
Charles Koch, the mega-billionaire CEO of Koch Industries and half of the infamous political machine, sees himself as a classical liberal. So why do most Democrats hate him so much? In a rare series of interviews, he explains his political awakening, his management philosophy, and why he supports legislation that goes against his self-interest.
This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
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over the course of several weeks, I had a series of conversations with Charles COPE, CEO of cook industries, true believing libertarian and a funder of, perhaps the largest and most influential political action network ever this episode is the second of two parts. The first we covered coax management philosophy why he started funding local causes and what it's like to be considered. Public enemy number one of the political left start part two something related to them? This is something I want our: U friendly with Warren Buffett. Yes, what I don't know friendly. I know women and we do a lot of business where these companies I've always been curious. Why? You think the meat generally just gushes over You know this other middle turn billionaire despite his unabashedly, Goober capitalist, tendons,
he's right, while, while here portrayed my guess, because you ve gotten more d, we involved in political policies and stuff is more of a dark and plotting. You know oil man, ideological. Why? What did you think? That's the case where he is so much better Pr person than that which is no bit I mean My whole bein is dedicated to changing the system, to make it more just and bring about greater individual flourishing. His is to support the current system with some tweaks here. I grant so he is no threat to anybody where all the vested interests they go for. Ok, what will increase my short term profits and like when offended the council competitive by what we
to say guys if you're success and failure depends on whether the government dishes out goodies you who need you? Why not four Bernie Sanders and have the gamma just take it all. For here, just a middle man. I mean you, The only reason you should be allowed to make money in peace, so successful is if you creating value for others. If you're here then people improve their eyes of you're. Just in there nap relating the system, get rid of you Charles Coke argues that the biggest threats to America these days are special interests, cronyism and corporate welfare, which may seem strange, if you think, of a corporate ceo, like Coke as a beneficiary of those things. He also argues that our political system has turned into a dumpster fire
with both parties guilty of rent seeking and putting their thumbs and whatever scales I can find, which may also strike you as strange. If you consider that what a political network like the Koch Brothers network does is well with his thumb on the scale, because he primarily funds Republicans and because so much of that funding is dark, anonymous money. He is seen by most Democrats as something close to devil, even though some of his positions as you here today, align quite snugly with traditional liberal positions, my The overall impression from speaking with em Charles Coke, believes, he's fighting the good fight based, unproven principles and but the rest of America has been going mad bit by bit. So I'd like to hear your kind of thumbnail views on a broad spectrum of
choose Charles? What are your views on immigration? My views, immigration are the same, Miss Eyre on any imports of this service is not just peep- I will let anybody and who will make the country better and no one who will make that works, and that would be the same thing of people, who were here illegally if you're here gainfully employed, adding value in society then ya to stay? if you're, not if you're, not contributing instead of your creating trouble. Making people's lives worse, you need to be sent out of the country now to say that you, but in anybody who make the country better, that could be construed, I would argue pretty easily as essentially vote for open borders. You go that far. No, no, I think there needs to be screening particular, whether a giant, affairs stated that we have you don't want people come.
Erin just go on welfare and drain resources. You want peace We're gonna come here and get a job and work. And obey the law and be good sense, since and contribute and saw there needs to be screening for that exist, How to do that? What's effective, I haven't gotten The detail NAFTA too. Now men on import I would like in every import except those that are dangerous, like poison gas in a bomb. An atomic bombs and stuff keep all that stuff there that all the goods and services that are cheaper, better call the Americans, want to buy a lot of men because it makes Americans better off and it increases innovation, just as the japanese imports pause Dorado companies to come into the twentieth century. Now, a lot of people who here that argument that INA assent.
We, the unfettered free trade argument. We want goods and services to move freely without friction and let the market set the lowest price that more people can enjoy stuff. That argument felt a lot better, lotta people ten years ago, but now there is a lot a backlash against globalism. And generally Ford depressing employment and wages here. Have you not lost any enthusiasm for globalization Well, I'm, as you say, I'm again special interest, I'm against corporate welfare and import tariffs in blocking imports, or corporate welfare you're saying to the american people. The right to buy a better product higher already more advanced or cheaper because in Japan, has opposed to its maiden Montana, because we gotta protect it is
The sugar drawers we got what few sure roars and we sub dies them and protect them from foreign competition. And it raises the costs of food stuff for everybody that in fact, my life, but that hurts some people who don't have very much Charles, would is your thumbnail view on drug decriminalization and or the war on drugs? Well, as I forget who said, we fought the war on drugs and we've lost, I mean when people say Godzilla could people doing these drugs and it's terrible. We got to stop them. What part of the terrible part is because we tried to stop them, so it's just like prohibition. They tried that and what did that that put gangs and criminals in charge of of alcohol
and created a crime way. While the same thing is true here, so I think it I'm not an advocate of drugs. I don't do drugs, never hair, I am not in favour of people doing drugs On the other hand, with this extreme criminal station. Has it worked I think, has ruined the lot of lives by turning people who they didn't do much wrong into lifelong criminals. Talking about criminal justice reformer, what what you would even call reform within the realm of criminal justice. Well, I think everything Yes, we need a legal system. That is just where the punishment fits the crime and we also need a system that if people make mistake from their mistake. They need to have a second chance, rather than
ruin their lot, and let me ask you about climate change, causes and consequences. Well, I mean they're their natural causes and then there are the causes do. Increasing greenhouse gases such as Co2, the being the biggest one, not the most potent one, the biggest one, and that so far it unlike projections it is Nat graded catastrophes, but obviously, if the temperature continues to go up at some point, it can be harmful or even very hard, now. But so the question is: what do we do about? It whatever risk there, there is to me, the answer is innovation. These policies that the? U S, government, is is, or others have proposed or promulgated benches symbolic. They have made essentially no difference.
And the Ba said this, so we oppose Because all of these they end up being cronyism. They end up, helping certain wealthy people to the disadvantage of the less fortunate. What would you propose Instead, if you are setting that policy, I would go to permit innovation. I mean this is part of this whole thing of liberation, allows everybody to become rich. So we need deliberate animal, mission, entrepreneurship and productivity and when we say that a lot of progress has been made in solar. There is also a huge improvements in energy efficiency in natural gas placing call due to innovations, so you like at all Progress in having less greenhouse gases and its duty
innovation, not regulation. As a matter of fact, they block the Keystone pipeline, which we, I was gonna cinema. Thank you letter, because that was saving us. Seven hundred fifty thousand dollars a day and crude cause which Europe Maybe it's not a lot of money. It's a lot of money to ass. We understand. How is that saving you that money, because we're Refinery Minnesota that runs on canadian crude and how the marginal buyers on the Gulf Coast and its railed down there, and if they build a pipeline, it would be ship down there. Three dollars a barrel cheaper, so the pipeline is, would be bad for your business. What was your public this non after the coke cooking. We were in favour of the pipeline because why go art our position on everything and we have lecturing of being a private company and can act on principle. No one, Latvia donut
We were there principles, but what we believe are principles that will make people's lives better and that's why we evaluate everything. Every position is to give cronyism to corporate welfare and to liberate the people now, public line on. You, however, is that at well everything that Charles Coke or the cook brother. Advocate society or politically, is just an effort to protect or extend their business interests. So oh you're, giving an example right now that runs purely contract to that argument, but make your best case how and why? That's not so. Ok, we opposed extended powers that tax bill, richer tax exemptions, cronies, said, are passed at the end of every year and they do it year to year so done count in their longer term mom deficits. We make a lot of money from those because they benefit us too.
Endlessly, but we oppose those suppose all import tariffs. We oppose this sub a border adjustment fee in Congresses tax bill, that would make us over a billion dollars a year, their rough. A trillion have special exemptions in the tax code, and we benefit tremendously frown. We'd get rid of all of you, so to get rid of this disease actual deals for special interests. Watches is its answer on our societies, Bosley all the key He is is different estimates The fifteen trillion dollar economy is costing the kind they make it less efficient by four to five trillion. So thirty to forty percent, and so you just think what kind of growth and productivity we would have plus. Then you would open it up
entrepreneurs, new competition, new ideas, new innovations and another huge contribute this problem is its occupational licensure, so not just big business, low cows and state require all this testing: schooling, fees and staff for people who start with nothing and they say it's safety or yeah. That's right up abrading yeah, you need fifteen hundred hours subsequently him in this absurd. Now a lot of people. Listening to you talk, especially on certain issues, immigration. Even the way you talked about climate change, drug decriminalization, criminal justice reform, I think a lot of people hearing that even a lot of Democrats even progressives hearing that a lot of what you're saying would sound pretty palatable to them on the on the topics on the issues and yet, if you were to ask most stomach
That's a progressive again to name their number one enemy, it's probably you and your brother David In your mind, why is that? You plainly feel as if you're sending a series of messages and acting on a series of beliefs that you feel are really valuable. Any yet even to those who, in your mind, would benefit greatly from them, which is to say everybody. I guess we describe it yorkists as not everybody the special interests would be able to less able to exploit everybody else said, but we find people from Democrats from all over who will work with us. We work where the bomb administration, tickler and criminal justice reform also on occupational licensure. We worked with a number of
democratic governors on occupational licensure that obtain these. These special interests are so strong. Are you suggesting that its special interests then, who drive democratic and progressive and even journalistic agendas like Jane Mayor, the new Yorker to paint your endeavours as evil, or is this something it's arrived at more organically? Why? I think that both I mean it all starts with the belief that virtually every body is kept. Full of learning contributing, leading a successful life if they're, good, the freedom an opportunity to do so. So I would reform education system can be these business and government
enable that to come about now. If you believe is, for example, pillory does that those in power are so much smarter and have better information than those of us great, I'm washed out here, and there were either to evil or You stupid to run our own lies, and those in power are much better. Have what higher called it'll concede and were immediately called attorney of experts that they can run it. Force in and when Henry was pushing Hilary care. She said as much that if people are left decide their own healthcare. They won't spend enough, and so the government needs to do and besides,
the gun. I will do it better, so that is a great divide. So when we talk about the kind of reforms that you would propose, I'm curious: isn't it a little Hugh Bristol to assume that you do know what's best for society, so persuade me of your. I guess the level of confidence that, if you could reform things as you see, fit that it truly were but I'm not saying work a hundred percent nothing's a hundred percent, but that it truly would work. Well, I mean, I don't know the deep, as I said yesterday, about how to do immigration exactly no, I think, as a principle here basic principles, as I said, Gordon Newton, if I see furthers because standing on the shoulders of giant what has worked through history, what starting in the seventeenth and eighteenth century cause
The standard of living for the first time in history to explode, caused the? U S to be thirty times. The per capita income in the whole world. Ten, that's what in just since nineteen ninety has caused the number of people in extreme poverty to drop. From two billion to less than eight hundred million and when you go back through history it through liberation its by applying the principles in the declaration of independence. That is everybody is born. Well with certain animal rights, and governments are as students to secure those wrecked enemy. Like our history, is a country we became the most successful country in the world, because we follow those to some extent.
And where we violated M have come all of our tragedies and injustices, whether that slavery, whether that exterminating native Americans. Denial of women's rights. Denial of rights to immigrants, particularly groups like the Chinese and the irish and civil rights. Now, when you say God I do not know what detailed policies, but I think I know enough principles to know what works, because they were universally through history? I mean a phrase: division labour by comparative advantage: creative destruction, the rule of law, the benefits of trade, these kind of principles, we know- and we know from psychology that
People are not happy when you just give them stuff. There's this concept of earned success. What Aristotle called Pneumonia that is, you have human flourishing, would will fully develop their abilities and use them to do good is what my father called the glorious feeling of accomplishment so they're all these principles that, proven true throughout history, we have the same objective and debated and you learn from each other and that's how innovation comes about, and so that's that's part of it is to not get sucked into hubris. I got all the answers. I ve eternal wisdom and know the exact path for all time. No, I'm out here experimenting fumbling around trial and error to try to find a better way,
finding a better way did not include supporting Donald Trump in his run for president or Hillary Clinton Coke compared the choice between Trump and Clinton is having to choose between cancer and heart attack. So coming up on economics, radio, what you got A bout, the Trump administration, though I'm not in that at home and tax, I mean what we're doing with this administration, as we did with the farmer wherein we ve tried to do with all the others is fine areas, we agree on and work with them on that and then up somewhere. We disagreed it's coming up. After this.
Here's what Charles Coke half of the Coke brothers had to say about Donald Trump, a few months before the two thousand. Sixteen election, I'm sure he's a fine fellow underneath, but when you look our guiding principles. You see that his guiding principles are in many ways antithetical to them, and a great many of his policies are antithetical, so you famously did not back Donald Trump and the twenty sixteen election. But here is, as president, you did support MIKE pants, the current VP when he was running for President in TWAIN twelve and you funded his gubernatorial campaign. So, in addition to pence, there are a number of coke allies. I guess I'd call them within the Trump administration Mark short the White House directive.
State of affairs who previously ran Europe. The freedom Partners network MIKE Roman, the White House is directive, special projects and research who used to run the freedom partners, competitive intelligence team, basically upper research. There's my palm pale from you. Say to Kansas. Now, have the CIA received Enough Coke funding that has been called the congressmen from Coke there's the EPA chief Scott, prove it The left considers an enemy of wealth. The environment itself considering the election. Didn't get your guy enter, didn't get in a guide or gal that you wanted were women and women have already died with another guy right in half, so considering you back anyone in the election? We, serious at an early that irish people and governor, but no one presidential low rates in terms of the White House, I'm curious to know how you
things are turning out now why I wrote about that in any way, so that up it I did for the worst ideals yeah. I didn't answer that at pretty well sums it up that it's like all president's, while the last one I really like was Calvin Coolidge ass. He did so great things. So that's better work, but it's sob it migrant labour, fairly, fond of Reagan, at least in retrospect, now well run Reagan. That's an interesting case, because I agree with a lot of the philosophy he article as you can tell bill, Simon, told him when he was elected. Bill Simon. What white way was a sector treasury under Nixon? He told the present rig and he said Mr President, I totally agree with your philosophy that if you want to get any of it implemented, you cannot
if your administration, with the old Fort Nixon hacks and then that's landlord part, what Reagan did because he didn't really care that much about administration then and didn't get the weeds and all those special interests hit aft overcome to make his flock fear a reality, so that government drew a little slower under his first administration and grew just at the same rate as other administrate. Since in his second term- and you I find that virtually every president after Coolidge that that's been true, whether Democratic Republic, where it's down a little better who's been little more restrained is when, with head, divided government. That said now
they divided government. Now and in a precedent that you didn't support. As he wrote in the the Washington Post, you praise the president's quote: thoughtful approach to regulatory reform. You like his picnic, gorse it Supreme court. But then you talk about some of the counter productive measures, including the broad travel bans, discouraging free trade and a tendency toward rhetoric that to ease we divides Americans instead of uniting them, so serve diplomatic. I am I'm guessing a few. Other people you got their fingers on those sentences before they went to the polls. Oh, no! No! No I'm I'm not in that, at home and tax. I mean what we need and what we are doing with this administration, as we did with a plumber wherein we ve tried to do. With all the others, is fine areas. We
agree on and work with them on that and then oppose somewhere. We disagreed with oppose this tax bill. We ve was this immigration we oppose among on these anti trade moves. You opposed the tax bill on what grounds, because there is some pieces of it that I'm sure you're in favour of. We have opposed it. This border adjustment, face subsidizing exports and punishing imports as I said, It will allow us to raise our prices and probably reduce our taxes at the same time, so it will enable us to increase our profit by over a billion dollars a year at the expense of working Americans. Now, what kind of policy is that makes no sense, in other words, as
Theo Cook would be an idiot not to play the game, but existing rules, but as a person Coke thinks the rules are idiotic. They ve been set up to reward relatively thin slice of the population, to which happens to belong. So it's easy to see why his political opponents accused him of blatant self interest when, for instance, the cook political network is punished. Republican candidates who promoted green energy, He, after all, is an oil man from way back, but it's also easy to see why he thinks this accusation is shallow motivated as much by self interest that he is accused of After all, he's already worth some fifty billion dollars these eighty one years old. Is he really chasing a few more billion in fossil fuel profits, or does he truly believe that too much of the momentum behind something like green energy comes from interested party?
we'd Vance their cause less by innovation and free markets and more by political games. Mention. Let me ask you this prevent about the fact that you are a political Bettin war for a lot of people also for a lot of people when they just hear a discussion about the belief in free markets and a kind of libertarian view. Generally, there are a lot of people who just don't believe it there. A lot of people who say, that free markets and what goes along with them, encourage a winner takes all mentality and corporate corruption and the exploitation ten of employees and consumers. So so what do you say to someone who you know, I don't know, how much of a silo you live in? I assume that a lot of the people that you spend a lot of time with agree with you. So what do you say to someone who disagrees with you to their very core? and try to persuade them to hear you out well,
I hope I'm not in this asylum because, as I think you know, we partner with people and look for partners who disagree with us on most everything and so we ve done that in criminal justice reform in occupational licensure in Aceh, and together we work with the commission, The organisations who we believe are really trying to help the community's. I solve their problems and better themselves. We work with a teacher. Her said menaced traders, professors who died? I agree with us on a lot of things, but we find an area weaken worked together, so we we follow Fur Douglas. Philosophy, I will unite with anybody to do right and no one to do wrong and might my philosophy on partnerships is. Is you need three things to have a good partners,
in its your vision, values and bring complimentary capabilities and invasion you don't need to have a vision to exact vision of a free site. My back I don't even agree with myself. I change my opinions and and anybody who agrees a hundred percent on a vision of society at would be be an asylum I'd, be totally by myself. But all we need to do is have the same vision for that particular problem or that issue. So Big supporters of the United States college Fund, Thurgood Marshall, college fund. And we disagree on a lot of things that we, I agree that these kids, the one, there were supporting our remarkable human beings All they need is the opportunity and freedom to do something in and get,
mindset that they can accomplish something in a case like that, What would you disagree with them? On United Negro College Fund, for instance? Well, maybe on how the welfare state should work on those kind of things, whether some of the government programme, Sir Helping M, are hurting em how they education system would be organised, but on teaching The various ideas we ve been talking about himself transformation. They totally agree and that's what we're working with them. You ve been more successful in the vast majority of people over history. Obviously, in the in the business but if your primary goal of your activism is to unite people, I hate to say it, but you ve not been very sick.
That's the one that round bright, I mean, I don't think many people would disagree that we're particularly not just divided but really caustic in the way that we talk to other people or talk past other people who may have different views from US who think that that is just a state of the human animal, the. We like to divide ourselves in the: u, no conflict based, try it was, and what not or do you see examples from history or or are you otherwise encouraged to think that that kind of unity that you want really is possible? Let me, if I might say challenges that we have a united people I don't really know what we stand for, what it is to work with us. We have programmes at our support programmes. It overthrew. Hundred universities, we found ways to unite with every administration
many many govern hers and local officials of different parties, so this works you may if we had no success, were making no progress I wouldn't have released. Completely change. My approach on I'm not real fine, just banning my ETA guest, a Wall Charles. You strike me as a pretty realistic fellow, so I think you degree there's no such thing as a utopian government or sis. It is just not going to happen, but when you look around the world as society or culture that you think is as close to go as we ve gotten something that lines with the way you see, society in governance, working What are your favorites well. I just recently got this human freedom index.
Done by a number of member states around the world. This is not just economic free, It has both the economic and personal freedom and if you look at the at the top countries that start with Hong Kong, Switzerland, New Zealand, Ireland, Denmark and then Canada in Fortunately, the? U S has dropped to twenty third, there alone, great things about the. U S. Bed were wearing increasingly headed under both Republicans and Democrats towards a system of control dependency in cronyism, the pitting individuals and groups against each other and destroying opportunity in progress, and so what I like add is to what degree are the great bulk and people liberated.
And injustice, has eliminated, and even I mean Hong Kong. Switzerland has any or all of these have problems. None of them are perfect, as you say, they'll never be perfect. Human beings are fallible. Would you rather live in any of those countries comments which were in New Zealand, Ireland? Denmark? No, because we have this too, dear society here- and I happened to be in favour. Dear bad for you, a peep at any weren't this system, this system is working, and so that's why, But that's our number one objective: to get rid of the crew is the lack of opportunity for a large portion of the population and that's the main focus
Of our efforts to come up next time on for economics, radio harboured president drew Gilpin, Faust recently announced she will be stepping down next year. So we will bring you an interview we did with fast a couple years ago in which he discussed among many other things being the first female president of Harvard. There were plenty of people who accused me being a token important men, are or alleged that I was a token appointment its next time on for economics, radio, for economics? Radio is produced by w when my c studios and W productions, this episode was produced by Shelly Louis. Our staff also includes Christopher Worth merit. Jacob Greg ASCII Stephanie Tam Eliza Lambert Alison Hockey
very Emma Morgenstern, Harry Huggins and Brain Gutierrez. The music you here throughout the episode was composed by Luis Gara. We had technical assistance in Wichita from Torrent, Anderson and John ciphers. We also had held this week from SAM Bear. You can subscribe, differ economics, radio, on apple podcast source, deter reverie, get your pot guess you should also. Check out or archive at for economics, dot com you can stream or download every episode we ve ever made. You can also read the transcripts and look up the underlying research. We can also be found on Twitter Facebook thanks yeah.
Transcript generated on 2021-01-23.