In a recent interview, billionaire Koch brother Charles condemned what he sees as “one of the biggest problems” in America. Obama aside, the real problem is corporate welfare and cronyism masquerading as capitalism and “free market.” In the end, in Koch’s words, society should instead be about “making money honorably.”
In a society that has failed the “honorable money” standard at all facets—whether through corporate welfarism, military industrial complex, medical-big-pharma complex, fiat money, selling out political principles and personal ethics for profit, whole industries of religious façade fleecing ignorant believers in a million ways, selling Jesus junk, or the political equivalent of it—reminders like this are needed and ought to be heeded.
Responding to a question about negative backlash for his political views, Koch answered, “Somebody has got to work to save the country and preserve a system of opportunity.” His comments and vision in this regard are quite remarkable:
I think one of the biggest problems we have in the country is this rampant cronyism where all these large companies are into smash-and-grab, short-term profits, (saying) how do I get a regulation . . . . well, you say you believe in free markets, but by your actions you obviously don’t. You believe in cronyism.
I have argued in Restoring America that this has been the standard from our earliest days. America has never truly had free markets, despite all the rhetoric about it. We have had tons of cronyism, public-private “partnerships,” and big-business welfare. Most of this was simply outgrowths of the old mercantilist system: government-chartered business. Canal systems, land speculation and development, shipping and trade, and later railroads, highways, and much more, including natural resources, were all dominated by such systems. From the very first presidential state of the union address by George Washington himself, American presidents and politicians have assumed this type of wealth redistribution—taxation and redistribution to the cronies and corporatists—as the norm.
But it hasn’t resided only at the federal level—hardly! As Koch continues, it permeates every level of American life:
[T]hat’s true even at the local level. I mean, how does somebody get started if you have to pay $100,000 or $300,000 to get a medallion to drive a taxi cab? You have to go to school for two years to be a hairdresser. You name it, in every industry we have this. The successful companies try to keep the new entrants down. Now that’s great for a company like ours. We make more money that way because we have less competition and less innovation. But for the country as a whole, it’s horrible.
And for disadvantaged people trying to get started, it’s unconscionable in my view. I think it’s in our long-term interest, in every American’s long-term interest, to fight against this cronyism.
The crony system and corporate welfare practices are actually the opposite of what the free market and business world should be about:
[T]he role of business is to create products that make people’s lives better while using less resources to do it and making more resources available to satisfy other needs. When a company is not being guided by the products they make and what the customers need, but by how they can manipulate the system — get regulations on their competitors, or mandates on using their products, or eliminating foreign competition — it just lowers the overall standard of living and hurts the disadvantaged the most.
This is actually a potent lesson for many young entrepreneurs today, and it applies to wealth generation in general, not just to the influence of government in it. Some people act as if a postmillennial vision is about making money, and not much else. They don’t see much beyond that. Their business and entrepreneurial vision can become dominated by one key motive (perhaps even subconsciously): “how can I make more money.” And in turn, the generation of cash flow is taken in itself as kingdom success.
Too many people with this mentality miss totally the nature of kingdom advancement—they lose any focus of mission, diminish the nature and focus of service and/or ministry, and in some cases even compromise themselves in order to achieve continued success indicators—i.e., more money. The temptation—and indeed real practice—here is that you can look at a genuine cause or mission, and instead of seeing a cause or mission, you see only a market. You think no longer about advancing a cause but about selling it something—anything—to make a profit.
It is in this simple step, even before corporate welfarism enters the picture, that even men with a godly social-business vision end up as moneygrubbers. Once vision and mission are compromised, ethics are too, almost by virtue of the fact. It is no wonder at all that a culture of such people—some of whom may be hypocritically mouthing Christian culture, others who never had a religious ethic to begin with—soon use government coercion of all forms to insulate profits. The path to wealth in such a society becomes largely “who you know.” And to know and to be known require that you submit to the knower’s level of ethics.
Profits are legitimate kingdom goals, for sure, but even Koch has a better standard:
[I]t’s about making money honorably. People should only profit to the extent they make other people’s lives better. You should profit because you created a better restaurant and people enjoyed going to it. You didn’t force them to go, you don’t have a mandate that you have to go to my restaurant on Tuesdays and Wednesdays or you go to prison. I mean, come on. You feel good about that?
All of this does not mean, however, that individual welfare is exonerated in such a culture. Koch criticizes that equally:
The poor, OK, you have welfare, but you’ve condemned them to a lifetime of dependency and hopelessness. Yeah, we want hope and change, but we want people to have the hope that they can advance on their own merits, rather than the hope that somebody gives them something. That’s better than starving to death, but that, I think, is going to wreck the country.
A large part of achieving a better society with free markets and more honorable wealth generation must begin with educational models. Young people are today herded into pointless educational programs where they probably don’t belong, likely can’t succeed, won’t be productive, and for such a privilege will face a life of massive student debts. Koch says there’s a better way:
I don’t know if you ever saw Michael Rowe’s show “Dirty Jobs.” We’re working with him and my foundation. His position is that pushing all these kids into four-year liberal arts (programs), they have all this debt, they don’t have the aptitude for it, so they end up driving cabs if they can get a medallion, or tending bar, or unemployed and living with their parents … Whereas they may have great aptitudes as an electrician or a mechanic, making $100,000 or $200,000 a year — some of them with that aptitude start their own businesses. They become wealthy because they are satisfying a real need, not because somebody subsidized them and pushed them into things they can’t really make a contribution in.
The point is that “making money honorably” requires first and foremost a vision of service. Focus on the money at the expense of the service, and it’s only a matter of time before you wreck society.
What service do you focus on in your business? Every business ought to be able to answer that question before it can take itself seriously.