The Koch “Center for Free Enterprise”: A Slippery Slope Indeed

Yves here. As this post demonstrates, the Koch brothers see academia as yet another activity that adheres to the Golden Rule: he who has the gold sets the rules.

By run 75441. Originally published at Angry Bear

Mark Jamison has been a guest columnist of the Smoky Mountain News on several occasions now arguing against the addition of the Koch sponsored Center for Free Enterprise. This is another well written expose of why this addition should not be allowed at Western Carolina University. I would point out the flip-flopping going on as Chancellor Belcher glosses over in his explanation of mistakes being made. In earlier statements by Dr. Robert Lopez, the Provost, and the Trustees, the procedure was followed.

To give this the attention needed both Yves Smith at Naked Capitalism and Angry Bear have been covering this issue. “UnKoch My Campus” has also picked up on Western Carolina University.

invisible hand In “Sons of Wichita”, his detailed and heavily sourced biography of the Koch family, Daniel Schulman relates a story about Charles Koch’s attempt to apply his libertarian management theory known as Market-Based Management to Wichita Collegiate, the private school located across the street from the Koch compound. The school originally cofounded by Bob Love an associate of Charles’s father Fred Koch from the John Birch Society became embroiled in an “acrimonious uprising” after Charles Koch in his role as chairman of the school’s executive council applied techniques from his Market-Based Management system, a system designed to force everyone in an institution or business into an entrepreneurial role.

Schulman relates how Koch and other trustees meddled in hiring decisions and caused the abrupt resignation of a well-liked headmaster. “Incensed parents threatened to pull their children from the school; faculty members quit; students wore black in protest. Charles stepped down from the board of trustees citing, among other reasons, the school’s refusal to integrate his management style. But in a sign of just how much influence he exerted over the school; Richard Fink, one of Charles’s key advisors and an architect of Market-Based Management was installed as Collegiate’s interim head. The outrage ran so deep that, as Fink tried to tamp down the uproar, he was hung in effigy around campus.”

Fink, who received his PHD in economics from Rutgers later moved to George Mason, a public university in Virginia, to start the Koch sponsored Mercatus Institute. Fink figures prominently in Koch efforts to control and dictate to charities and educational facilities receiving Koch support. Another Koch sponsored enterprise, the Institute for Humane Studies, caused similar disruptions when it was relocated to George Mason. Schulman reports,

“The mission of IHS is to groom libertarian intellectuals by doling out scholarships, sponsoring seminars, and placing students in like-minded organizations.”

Simply providing funding for the promotion of his libertarian ideology was not enough for Charles Koch though. Roderick Long, a philosophy professor from Auburn and an affiliate of IHS is quoted as saying, “Massive micromanagement ensued.” Long went on to say, “the management began to do things like increasing the size of student seminars, packing them in, and then giving the students a political questionnaire at the beginning of the week and another one at the end, to measure how much their political beliefs shifted over the course of the week. (Woe betide any student who needs more than a week to mull new ideas prior to conversion.) They also started running scholarship application essays through a computer to measure how many times the ‘right names’ (Mises, Hayek, Friedman, Rand, Bastiat, etc.) were mentioned – regardless of what was said about them!” (The preceding quotes come from pages 250-251 Sons of Wichita: How the Koch Brothers Became America’s Most Powerful and Private Dynasty).

It should be noted that Professor Long is no liberal. He edits “The Journal of Ayn Rand Studies” and is a member of the Ludwig von Mises Institute, an organization that promotes the theories of the dean of Austrian economics.

Both Professor Lopez and Professor Gochenour are products of the George Mason program and Mercatus. In his memo to Andrew Gillen of the Charles Koch Foundation Professor Lopez characterizes the other members of the WCU economics department indicating Professor Gochenour was a student of “Boettke and Caplan”. In a YouTube video seminar, Professor Boettke characterizes himself as “a doctrinaire free-marketer.” In the same memo, Professor Lopez lists his association with IHS. Presumably then both professors are familiar with the sort of metrics and deliverables that are integral to Koch’s Market-Based Management system.

Both Schulman’s book and Jane Mayer’s new book “Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right” go into great detail about the various organizations sponsored and funded by Charles and David Koch. From Americans for Prosperity to academic institutions similar to Mercatus, the Kochs have been active in funding organizations that promote specific ideologies. For better or worse that is something endemic in both our politics and apparently our public universities. Lately Charles Koch has been quite vocal in bemoaning the fact that his political contributions have not yielded an appropriate return on investment as demonstrated in a recent interview in the Financial Times where he said,

“You’d think we could have more influence.”

What is perhaps more troubling is in academic settings the Kochs have sought to exercise an extraordinary degree of control. Between 2007 and 2011 Charles Koch has pumped $31 million into universities for scholarships and programs (within that number the $2 million to WCU seems significant). At Florida State the contract with the university provide $1.5 million to hire two professors included a clause giving the Koch Foundation over the candidates.

The plan Charles Koch with the aid of Richard Fink has enacted is called a “Structure of Social Change” – a sort of business plan for the marketing of ideas. Fink has said about the plan:

“When we apply this model to the realm of ideas and social change, at the higher stages we have the investment in the intellectual raw materials, that is, the exploration and production of abstract concepts and theories. In the public policy arena, these still come primarily (though not exclusively) from the research done by scholars at our universities.” (my emphasis)

As Schulman reports,

“ . . . Cato Institute, Mercatus, and the dozens of other free-market, antiregulatory policy shops that Charles, David, and their foundations have supported over the years . . . churned out reports position papers, and op-eds arguing for the privatization of Social Security; fingering public employee unions for causing state budget crises; attempting to debunk climate science; and making the case for slashing the welfare system and Medicaid.”

The book that Professor Lopez published for the broad market, “Madmen, Intellectuals and Academic Scribblers: The Economic Engine of Political Change” follows closely to the program Fink articulates.

Over the years the gifts from the Koch Foundation to various universities have faced increased scrutiny. The contract with Florida State clearly went against basic academic ethics. There is nothing however to indicate that Charles Koch has retreated in his desire to instill his radical brand of libertarianism into the institutions that create public policy and the universities that provide the research that helps support policy decisions. What has perhaps changed is that Mr. Koch, his foundation, and those he supports have become ever more sophisticated in capturing an outsized amount of influence.

Chancellor Belcher assures us there were mistakes made in the presentation of the current proposal but that the proposal itself meets all the basic criteria for acceptance. The fact that Professor Lopez advertised positions before official acceptance and outside normal channels raises significant questions. The contract may not allow veto power but if the structure of the program and the hiring are filtered through products of Koch programs, we may have a distinction without a difference. Charles Koch and his assistants like Richard Fink have been very clear about their intent and goals. It does not take a great deal of research to uncover statements that clearly speak to intent to indoctrinate. Ad hoc denials aside there is no reason not to take Mr. Koch’s word.

Chancellor Belcher suggests the bringing of a stronger level of scrutiny to the Koch proposal pushes us down a slippery slope. The chancellor is no naïf and surely he knows that in a complicated world we are often presented with slippery slopes – that is why judgment, ethics, and scrutiny exist. Dogmatic and doctrinaire disciplines give a skewed and distorted picture of the world as an either or, or black or white scenario. Hayek, Mises, and other doctrinaire believers in the creed of the free-market tell us the choice is either markets or Stalinism, an inexorable “Road to Serfdom.” Tennyson tells us,

“There lives more faith in honest doubt, believe me, than in half the creeds.”

There is a certain irony bordering on outright cognitive dissonance when the economics department of a publicly funded university embraces a set of theories that denies the need for public education and treats such public funding as an affront to the market. If scrutinizing this proposal puts us onto a slippery slope then accepting it simply sends us to the bottom of the slope.

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21 comments

  1. Foy

    The level of control the Koch’s seek is scary. Every time I read about the Koch brothers I get a picture in my head of a James Bond villain trying to subvert and control the world. Even the name Koch Industries sounds like the proverbial SMERSH or SPECTRE. The problem is they are not some fantasy villain, they and what they are doing are very very real. Something weird must happen to the brain once you get to the Koch’s level of wealth, to continue to seek power and control like this. It’s as if they cannot help themselves any more, it’s like an addiction or illness. Maybe that’s what happens when completed surrounded by wealth and yes men, your brain gets fried. Somehow they just have to be stopped. The damage is immense, kids’ educations ruined.

    1. cnchal

      From Keynes

      . . . When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession – as distinguished from the love of money as a means to the enjoyments and realities of life – will be recognised for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.

      The Koch brothers are long past the money as mental disease affliction.

  2. James Levy

    The Koch brothers simply embody an ethos that largely died in most places but held on in the Southern and Western USA that freedom was a kind of property, a good that should be privatized and go only to the “deserving”. It was an oppositional notion of freedom, tied intimately with the idea that for whites to be free, blacks and Indians could not be. If the blacks and the Indians had the same rights and freedoms as whites, then whites would never reach their potential and enjoy true freedom that comes from having money and independence and being able to lord over those beneath them in a proper, natural hierarchy. When you see all those “Freedom isn’t free” bumper stickers you have to understand that part of what is meant is that if freedom is to be worth anything it sure as hell can’t just be the birthright of everyone. It has to be “earned”, it has to be “paid for”.

    The Koch brothers simply believe, and I think they believe it to the marrow of their bones, that their freedom is a result of their father’s savvy and their own intelligence and thrift–if others want to be able to boss people around and get their own way, then go out and become billionaires like us! Freedom is in this way not a universal good, but an expression of personal power. I am free because I can do what I want. You can be free, too, if you just go out there and grab the money and position necessary to exercise “freedom”. Freedom as an abstract set of rights granted by our Maker and codified in law (as in the Declaration of Independence) has no appeal to these people, and is seen as perverse. Freedom for the Koch brothers and most libertarians means freedom to exercise my will. It is not about social relations but personal power and autonomy. That’s why it is so hard for those who come out of the Enlightenment to understand the seeming contradiction between preaching freedom and bossing people around.

    1. susan the other

      the age-old irresolvable conflict between freedom and equality. let’s just leave it all aside and pray to ultimate intelligence to deliver us. UnKoch Us. Please. The Kochs are as asinine as ESTers. This blatant kochery is more and more embarrassed by itself. How nice. I mean, could anyone have forced Socrates to become an entrepreneur? Funny except for tragedy.

  3. DakotabornKansan

    The inestimable Bill Black on the Koching of the Kansas university system:

    “Kansas is trashing the only remaining jewel in the state, its superb university system. The ideological purge that removed virtually all of the “moderate” Republican conservatives from the Kansas legislature has now set its assault rifle sights on the universities. Their view of the glorious “harmony” made possible only through ideological purity perverts a “right” of free speech or “academic freedom” into an act of disloyalty. The new “efficiency” regime founded on “truth” as it was revealed to the Koch brothers and the NRA will gradually sweep discordant views from Kansas’ universities. The purge leaders will eventually celebrate the date, December 18, 2013, on which the Kansas university system was officially Koched and NRAed.” – Bill Black

    The destruction of Kansas universities by our own mediocrities and the docility of acquiescent Kansans.

    What’s the matter with Kansas?

    “Hang around with grassroots conservative voters in Kansas, and in the main you will find them to be honest, hardworking people. But put conservatism in charge of the state, and it behaves very differently … The ruination they have wrought has been thorough; it has been a professional job. Repairing it will require years of political action.” – Thomas Frank, “The Wrecking Crew,” Harper’s Magazine [August 2008], http://harpers.org/print/?pid=85667

    1. flora

      The Kochs pretty much own the KS lege thru their ALEC subsidiary. The KS lege has decided clean energy must not be allowed.
      http://cjonline.com/news/2016-02-12/senate-passes-bill-blocking-study-clean-power-rules

      As far as university chancellors’ offices selling universities good names and reputations: those chancellors know the price of everything and the value of nothing. That was Oscar Wilde’s definition of a cynic. Cynicism in chancellors’ offices; just what education needs. /s

  4. Cry Shop

    Kock Bros have taken a page out of the Goldman Sachs play book, loading academics and government research/policy bodies with people partial to one’s profit line. Funding academics/research to promote one’s political interest goes way back with big tobacco and the chemical industry. As to the specific actions on climate change, again the 7 sisters got there first, but with their typical flair for subtly and hiding behind the curtain, where as the Kock Brothers are in your face.

    In some cases whole wings of otherwise respectable and powerful institutions, such as the London School of Economics, have been taken over – per the following:

    http://www.nakedcapitalism.com/2016/02/200pm-water-cooler-232016.html#comment-2543671

    1. Linda Galindo

      This is why, when I watch PBS programs like Independent Lens, I shudder when the opening funding credit goes to Goldman Sachs in a mini-propaganda “we’re wonderful look how we give loans to build stadiums and improve communities” piece. I question how PBS can take money from them. Is it so they don’t turn the lens on them at the level that exposes their practices such as was told by Greg Smith?http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?_r=0
      After watching a series called The Men Who Built America (Netflix) today’s Koch Brother behavior emerged more clearly to me. Each of those men (Carnegie, Rockefeller, JP Morgan, etc.) ended up establishing huge deathbed “charities or foundations” to relieve their conscience or have good works to show to their maker? No personal accountability for the havoc and destruction they wrought, playing games with each other to “win” at everyone else’s expense. Same play, different day?
      How come PBS doesn’t turn down the Goldman Sachs money?

  5. Steve H.

    A professor at The School of Public and Environmental Affairs at Indiana University just got a Koch grant.

    I am proud of the current crop of young’uns for raising the pressure to a full spraying fountain.

    Not so much, the puckering of the admin.

  6. Pepsi

    It does bring up a very absurd future. A fine future where businessmen complain about right wing brainwashed students who have no appreciable job skills. “Their models… their models are ridiculous…”

  7. Erik

    I was at the Museum of Fine Arts Boston this weekend. I got depressed when I entered the Koch Gallery. Then on the way home. heard on NPR that it was supported by a generous grant from the Koch Foundation.

    The former made sense to me, since charitable giving is deductible and gives cred. The latter was more of a mystery. Why support one of the few media outlets that really scrutinizes you?

    Then this morning the same NPR station had a program with a lively and animated discussion about Scalia’s replacement, and who was right. the President of the GOP, and what their strategies should be. I realized that the entire segment was legitimizing the GOP’s outrageous approach. The story should simply have been “why Mitch McConnell is wrong and what he wants to do is unconstitutional”. Instead, of course, we had a “debate”.

    Now, this station can be relied upon to call a spade a spade when it comes to constant headline issues such as global warming, but this is a perfect example of supporting the station, letting them have their global warming position, but then influencing more around the margins.

    Nefarious.

    1. optimader

      Re: Koch Donations
      Last time I was there , in a Koch exhibit gallery, they inexplicably had what were apparently empty wine bottles, presumably of some notable vintage,displayed as artifacts of some note.. Don’t ask me why..Establish some artifact value which then gets rolled into a donation write off?

      AS well this

      http://www.boston.com/ae/theater_arts/articles/2005/08/30/furor_ahoy/?page=full

      Now I can enjoy the aesthetics of a racing sailboat as well as anybody, but what the heck, beach them in front of a Museum??
      Odd and self serving.. and no doubt a tax write-off scheme.
      Traditionally used racing boats have a depreciation rate similar to a fish left out on the dock. Typically they get sold off for the dime on the dollar or less and eventually get upside down w/maintenance costs in some castaway location as an oddball day charter experience for tourists..

  8. Sandi Campbell

    The Kochs and the Scaifes both established trusts in the names of their kids, the incomes of which had to be given to charity for 20 years. After that, the entire trust became the tax-free property of the kid. One way to avoid inheritance tax, as well as income tax.

    Reading about Charles Koch in Jane Mayer’s book, Dark Money, it seems to me his desire for wealth accumulation is tied up with his visceral need to have total control – of everything. I’m no psychologist, but it seems his father’s total control freak/extreme disciplinarian and yet distant parenting style has a lot to do with Charles’ need to rule with an iron fist himself. He apparently bullied his siblings, even David, into submission or excommunication.

    His early days with the John Birchers put him in with a bunch of whacko conspiracy types. There is enough here for some psych researcher to work on for a lifetime.

  9. Linda

    In an article, at the Philanthropy Roundtable, “K-12” tab, there’s a description of the plutocratic plot, to take over university schools of education. The 2014 article was written by Frederick Hess, from the American Enterprise Institute and, an “external affairs manager” for a Gates-funded organization.
    The Consortium for Policy Research in Education, made up of 7 universities, including two public institutions, is funded by Gates, Pearson, Goldman Sachs, etc. Reportedly, the founder of the Consortium was a Pearson Board member and college of education, president.

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