Charles Koch Speaks Out Against Crony Capitalism
The brothers Charles and David Koch, owners of energy conglomerate Koch Industries, have come under assault from the left in recent days for supposedly playing a shadowy role in the budget battle that is wrecking havoc in the state of Wisconsin.
The Republican governor of Wisconsin has taken on public sector unions in his state, seeking to deprive them, in part, of their collective bargaining rights and force state workers to contribute a greater part of their income to health insurance and pensions; changes that would bring them in line with the private sector and save the state $300 million over the next two years.
While unions have staged mass protests in Wisconsin, Democratic lawmakers fled to state to avoid having to vote on the controversial budget measure. Leftist bloggers and journalists have used the occasion to target the Koch brothers who supported Wisconsin’s governor’s election bid last year.
Charles and David Koch are outspoken proponents of the free market system and have donated many tens of billions to Republican Party candidates and libertarian causes for decades. While they oppose government regulation of private enterprise on principle, the hard left has tried to taint them as the conservative movement’s secret sponsors and somehow emblematic of crony capitalism.
Writing in The Wall Street Journal, Charles Koch notes that while trying to extract favors from government may be tempting for businesses, “it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want.”
Too many businesses have successfully lobbied for special favors and treatment by seeking mandates for their products, subsidies (in the form of cash payments from the government), and regulations or tariffs to keep more efficient competitors at bay.
It is a corrupt system that undermines the very purpose of business: “to efficiently convert resources into products and services that make people’s lives better. Businesses that fail to do so should be allowed to go bankrupt rather than be bailed out.”
Because America is a mixed economy, practically every company is today party to the sort of market distorting programs lambasted by the Kochs. Their company is no exception. “However,” writes Charles, “even when such policies benefit us, we only support the policies that enhance true economic freedom.”
Koch Industries doesn’t rely on lobbying to succeed. If it were freed of the immoral regulations and government controls currently impeding growth, Charles is confident that his company will “hire more people and invest in more equipment when our country’s financial future looks more promising.”
With $14 trillion in debt and no end to deficit spending in sight however, the American economy remains fragile. Because of heavy restraints on labor and investment freedom, high corporate tax rates and an administration that is prone to central planning, companies like the Kochs’, despite sustaining some fifty thousand American jobs, will increasingly look abroad to do business.