Friday, February 04, 2011

UC defends two billionaires, attacks another!

...because liberty is our fundamental value...

In the last 24 hours, two of my close friends (who do not know each other) independently sent me two different "exposés" of brothers David and Charles Koch and the Charles Koch Foundation. I’ve dealt with the Koch Foundation and am very well informed on their activities, so I was quite taken aback by the viciousness of these articles and their plain dishonesty. There's been a smear campaign against the Kochs underway for a while, and it’s very disturbing. Unforeseen Contingencies explains.

The Kochs run an extremely successful private enterprise, and are billionaires because of it. They produce valuable goods and services that people actually are willing to pay for on the free market - this isn’t Halliburton getting sweet deal contracts from the federal government, paid for by the taxpayer, nor Goldman Sachs, getting special protection and bailouts from its agents in the federal government. Nor is it speculators, gambling that governments have overextended themselves, and hoping to trigger and profit off a currency collapse that harms millions of unsuspecting citizens. This is actual free enterprise, producing useful goods that successfully compete in the market because people want them.

The Kochs also use their personal wealth to fund libertarian activities - think tanks, academic institutes, scholars, and students. Institutes such as Cato Institute, the Mercatus Center, IHS, and Atlas Foundation are important recipients. These are serious and respectable operations.

The recent attacks appear to be coming from a variety of directions, and – to me – appear to be coordinated. But whether they are coordinated or not, they’re bizarre. Perfectly legitimate activity is being portrayed as sinister, and smeared in the most bizarre fashion.

Case in point is an article a German friend of mine sent (she's now an American citizen, and highly regarded professor of history at a nationally ranked research university). The article is an incredible (literally) smear: the article alleges, but does not establish, that Charles and David are shirttail relatives of important Nazis. This is enough for the authors to claim Nazism, the John Birch Society, neoconservatism, libertarianism, and the Tea Party are all pretty much the same thing...all Nazism, of course. It’s totally insane. My response to my friend:

"Good grief. Your grandfather was a Nazi, right? Therefore you are too, and your politics as well. That's the level of this "expose." [Note: my friend is a progressive with libertarian tendencies who voted Obama.] It's part of a continuing effort to smear and destroy libertarianism. There's been quite a bit of stuff written recently attacking the Kochs, from all sorts of unrelated angles. It seems to be an orchestrated smear campaign - I think because they are important financiers of libertarian causes.

Libertarians are enemies of the omnipotent state, and advocates of individual freedom. OTOH, Progressives can't say when government is too big, and can't identify any dimension of life in which the state can't intervene. American progressivism sprang from German Historicism, at least in part...the same intellectual tradition that German National Socialism came from. They are all for the omnipotent state, ultimately.

There's also an Austrian economics connection with this. The Austrian School began in part in opposition to German Historicism. Schmoller and the rest of the Historicists self-identified themselves as the intellectual bodyguard of the House of Hohenzollern. Carl Menger, Bohm-Bawerk, Wieser, Mises, and the rest of Austrians fought them on theoretical and methodological grounds in the Methodenstreit, and also saw themselves as champions of enlightened liberalism opposed to German statism. Koch Foundation has been an important source of funding for Austrian economics. And while I've received funding, no one has ever monitored me or exerted even faint pressure on anything I've done. They don't finance people doing things antithetical to their purposes, obviously - no one does. But it's strictly legitimate fostering of intellectual inquiry in which they have an interest.

I'm always astounded when I hear people, especially Americans, denounce libertarianism and libertarians. Freedom seems like such an obviously valuable thing in itself; and being dictated to by government so offensive... it shocks me that people could be anti-libertarian... but they exist, and are the enemy."

Only minutes thereafter I received a second "exposé" of the Kochs from another friend. This one, from, refers to Common Cause's ongoing campaign against the Kochs. Common Cause bused a large number of protestors to a remote resort in order to, umm, what? Disrupt a private conference. Some of the demonstrators were arrested after entering the resort and trying to break into the conference; to the Salon writer this means the Kochs have effectively suspended the First Amendment. My reply to my second friend:

I'm astounded by the barrage of attacks directed against the Charles Koch Foundation. Apparently the one idea wealthy people are not permitted to finance is libertarianism.

The story as told by Pareene is a complete misrepresentation of what happened, at least according to NYT and
ABC news
and New York Times.

"Common Cause" is funded by billionaire George Soros, the man who
announced an objective to drive free market economics from the university system
, and apparently receives hundreds of thousands of dollars from his Open Society Institute. They've been conducting a sort of war on the Kochs.

[I can send links re "Common Cause" and Soros-OSI to anyone who requests -- conservatives publish this stuff all the time, but I got mine off the OSI site, always preferring not to simply trust critics to get things right, and the links on OSI are a mess to wade through.]

So where is Pareene and the rest of the critics when this particular billionaire is spending at least $50 million to decide what is to be taught, and not taught, in universities? Or when he finances an attack on his intellectual opponents?

I should note that Kochs have been quite active in financing Austrian economics - not in trying to shut ideas they disagree with from academia, but simply financing an intellectual tradition they do support. I've been a recipient of funds from Koch, and noticeably, no one has ever checked to see if what I've done with the funds met a political litmus test. It certainly has not met the standard "creation of political consensus around various government policies that allow them to pollute as much as they want" since some of what I've done, and what others receiving Koch funding have done, is about how to reduce negative externalities such as pollution. The characterization of "free market economics" in this piece is so far from accurate as to not even be a cartoonish version of the truth - it's diametrically wrong.

This article is bizarre - the Kochs are bashed for financing libertarian think tanks while protecting their (own, honestly earned) money from taxes "for school lunch programs." You won't find Pareene making this argument about Soros or Kennedys or other billionaires who fund the left... even though open Society Institute shelters Soros' money from taxes and instead funds his own preferred political action groups -- e.g. those who pursue the Kochs. In these screeds "left" is intellectually respectable, and "libertarian" is evil, simply by assumption. This article is particularly dirty, though, since the headline could be taken to say that the Koch brothers are Christian right-wingers, and the Michelle Malkin-Chiken-Filet-Koch picture reinforces this, even though these are entirely different stories, and phenomena. Kochs are libertarians, not right-wing bible-thumping Baptists.

A more accurate account of this story would be: "Members of a leftist group financed by billionaire George Soros were arrested while trying to crash a private conference held by billionaires Charles and David Koch. Soros, who has created an institute to purge academic economics of ideas he opposes, is now financing political action groups to harass the Kochs, who have for years financed research by economists of the Austrian school." This has me wondering whether Soros or his affiliates own stock. That would be an interesting story to investigate.

The level of venom and illogic in these attacks is quite dangerous. I take them quite personally because they are such outlandish misrepresentations of what I do, what my students do, what Cato Institute does, what Mercatus Center does, and what the Kochs do. (Kochs help a number of our students pay for college, you realize.) This kind of viciousness is plain evil.

In the end, it looks to me very much like George Soros and his scoundrelly friends are out to smear and silence the few people who speak out consistently for individual liberty, including freedom of individuals to trade: the free market. It's not a battle of ideas at this point, since this kind of vile attack has no pretense to better ideas – it's obvious disinformation, and an attempt to simply destroy opposition. Since it’s directed at exponents of freedom, it follows that it’s on behalf of statism, tyranny, and dictatorship. Soros' Institute for New Economic Thinking is explicitly about replacing economic reasoning that concludes free markets work with economics that begins by assuming the state and socialism have an important role. "Never mind science, our pre-conceived conclusions are too important for that." Well, to hell with Soros and his lackies in this.

Ironically, if I were pressed to do it, it would take me less than five minutes to document that there are worthwhile institutes and activities that Kochs and Soros simultaneously fund…and not much longer to document that the Lewdwig von Rockwell Institute thinks they are all neocons. But let's not go down those rabbit holes.

Disclaimer: I have on occasion received funding from both the Charles Koch Foundation and from George Soros' Open Society Institute. I estimate that I've received roughly an order of magnitude more from Soros. Neither one has ever imposed any check or attempted to influence my research, teaching, or opinions. And unfortunately, neither of them has paid even a cent to Unforeseen Contingencies.

one thing eludes me: cui bono? NV
Always a good question, but in regards to which element of all this are you asking?
Who gets an advantage from smearing the Koch group? what are they trying to do?
Intellectual and ideological opponents would benefit. The Kochs are important in financing libertarian think tanks, economics programs & centers that promote free markets, and individual scholars.

I gather the idea is to smear and discredit ideas without having to refute them or even admit what they really are.
Well, that is a weak and clumsy attempt. The claims sound ludicrous to me. NV
You must be missing this in Europe.

There's an unprecedented barrage of anti-Koch "journalism" and news events (such as this demonstration, press releases from Common Cause, and the like) in the U.S.

Here's an example from NPR's "On Point."

Good luck trying to find a similar example exposing George Soros' funding of endeavors to shape American politics.
Thank for heads up. Correction: This is not ludicrous, this is simply outrageous. I googled a bit in the news. MI will not link either not to pollute your page, but my first impression is this: Outrageous narratives à la "Der Stürmer". While there are some anti-Soros articles in the European press, they remain extremely civilized in comparison to these attacks.
On a side note, don't you think that if the Koch family was, even remotely compromised or linked to the III. Reich, German authorities would know? And in that case, do you seriously think that if they were that compromised, the Koch brothers would be able to E V E R enter German territory without encountering any type of problem? Let us be serious here, Charles. These accusations are sheer nonsense. NV
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