Thursday, March 3, 2011

Re. attacks on Koch Industries

This topic is near and dear to my heart, as the Institute for Humane Studies - a Koch-funded non-profit devoted to advancing liberty through various grants, seminars, and scholarships - helped me land an internship that led to the job I now have. I am eternally grateful for and proud to be part of the Vast Koch Conspiracy.

So with that disclosure out of the way, I just wanted to examine the Center for American Progress's attacks on Koch Industries and its fraternal owners.

Like a number of prominent DC think tanks, CAP is a 501(c)3 non-profit, but its fund is a 501(c)4 advocacy group, which means it is not legally required to disclose its donors. In other words, the organization heading up attacks on conservative groups for injecting billionaires' money into the political process is funded by anonymous rich people and corporations. And that's fine! But a massive glass house is sitting at the corner of 14th and H.

Called out on that apparent double standard by Politico reporter Ken Vogel, ThinkProgress blogger Lee Fang - who has apparently been assigned to the Koch beat - responded with a tweet that, in less than 140 characters, summed up everything wrong with the mentality behind the left's Koch-hatred. Fang asked Vogel: "don't you think there's a very serious difference between donors who help the poor vs. donors who fund people to kill government, taxes on rich?"

To paraphrase Hamlet, ay, that's the rub. The Kochs' political donations are ipso facto illegitimate, the argument implies, since they go towards a cause - the free market - that is, in a word, bad.

Is the free market a force for good or not? That's a wholly different question, and one to which millions of words are devoted every day. But it's beside the point in this context. Fang and his organization are not opposed to money in politics. They're opposed to libertarian economic policy. That's an important distinction. There is nothing righteous about CAP's crusade against Koch industries. It's simply a partisan - or ideological, if you wish - attempt to root out and stunt philanthropists with whom they don't agree.

30 comments:

Lachlan said...

By the way, I would highly recommend IHS for any liberty-loving student looking for a job or an internship. They work their connections to find you a position, then give you a nice stipend so you don't starve.

http://www.theihs.org/

TJE said...

Thanks for your thoughts Lachlan.

Megan said...

Amen.

Patrick_Landers said...

First off, I agree that there is a certain amount of hypocrisy with any critique of undisclosed conservative funding by liberal groups who also limit how much they disclose.
Right now, you concentrate on the fact that both sides have the right to provide funding to promote their ideology and policy positions.Conservatives/Libertarians believe in limited government and individual liberty. Liberals/Progressives believe in government assistance and social action to improve flaws and inequities in the current system. (Just quick definitions- obviously we could quibble about both of them). Two diametrically opposed political ideologies, both with merits and flaws aplenty. Why shouldn’t both sides be able to proactively push their agenda, even if that requires money? Fair enough. When you frame the debate as people making value judgments to determine when money in politics is acceptable or not, you are correct in your conclusion that this is indefensible and hypocritical (source- quote from your post: “The Kochs' political donations are ipso facto illegitimate, the argument implies, since they go towards a cause - the free market - that is, in a word, bad.”)
However, I would argue that you are, implicitly or explicitly, cherry-picking the limits of the debate to advance your desired outcome. There is an additional perspective that also needs to be considered.
The Koch brothers do have a history of funding groups and movements that not only conform to their announced ideology, but also serve their business and financial interests. On the left, there is also a lot of money donated by corporations and foundations funded by corporations. However, they often use that money to argue for government actions like poverty assistance…as well as the increased taxes it takes to afford a more interventionist government system. Their donations do not further their own financial interests. In fact, they are hurting themselves and their personal financial well-being with their social activism. They clearly don’t benefit materially if poverty is reduced- the act has no personal gain for them, which means by definition it is a selfless act. You could then consider this debate as between:
1) Corporations and wealthy conservatives making financial contributions in order to advance their personal well-being. It may be based completely on passionate ideological beliefs, but by definition it is self-serving.
2) Corporations and wealthy liberals making financial contributions in order to promote greater redistribution from themselves to others. It may also be based completely on devotion to principles (and they may be wrong in trying to have the government force other wealthy people to redistribute their wealth), but their actions certainly aren’t serving their own interests. They are being self-less.

Caveat: Obviously there are some instances where those on the corporate- and wealthy-left might be financing leftist activities serving their own pecuniary interests (i.e. Wall Street Democrats). However, those activities have no definitional basis in the actual ideology of Liberals/Progressives. Libertarianism however is predicated on promoting individual liberty and limited government action, which serves to solidify the free market outcomes which have served the Koch brothers’ interests very well.
A person engaging in activities to promote their self-interest in a civil society obviously sounds acceptable. However, that hazy analysis needs to be more nuanced when evaluating our current situation- people secretively using money to influence the political system for their personal advantage. I won’t say that it’s a sufficient argument, but is a reasonable one for justifying heated opposition to the Koch brothers’ activities and seeking to make them public.

Patrick_Landers said...

My use of poverty assistance is meant to be just one example of the many left-goals that wealthy contributors support, but could never materially benefit from. Perhaps you'll try to develop examples of left goals that do advance the interests of the wealthy class- I'm not thinking of any at the moment, but I'll be happy to consider any suggestions. For now, I'll just say that it seems to me that libertarian arguments advantage the interests of those who do best/are wealthy from the free market system. (Whether that success is due to their own efforts or the advantages given to them by their parents and discriminatory social ladders is a separate question). Progressive/Liberal goals on the other hand don’t seem to advantage the wealthy. But that’s just an opinion- perhaps people disagree and will seek to prove me wrong.

TJE said...

Patrick,

What about rent-seeking a la GE's support for cap and trade or fluorescent light bulbs?

Isn't it difficult and risky to impute "self-interested"and "self-less" motives to others?

Lachlan said...

(1/2) Patrick, you are incorrect. Liberal economic policy consistently works to the advantage of the largest businesses.

First of all, we can't possibly know that CAP's financial backers don't benefit from liberal economic policies, because we don't know who those backers are.

But your categorical assertion regarding who benefits from a free market and who benefits from state intervention in the economy is off. In fact, most large businesses actually benefit far more from additional regulations and taxes imposed on entire industries than they would from a truly free market, since such state interventions generally keep out smaller competitors and consolidate market share for the largest companies. Some examples:

Wal-Mart teamed up with CAP in 2009 (and also gave them a cool million or two) to lobby for Obamacare. The reason: the new 1099 requirement (which looks like it will be repealed, thankfully) imposed new costs on businesses that Wal-Mart could easily absorb, but its smaller competitors - especially the mom-and-pop stores the anti-Wal Mart crowds always seem so worried about - could not.

Phillip Morris - which owns just over 50% of the American tobacco industry - was by far the largest lobbying force for Obama's 2009 tobacco regulation bill. That bill imposed massive new costs on all tobacco companies, but PM supported it knowing that it could better absorb those costs than its smaller competitors.

Enron, at the time the largest natural gas company in the world, was far and away the largest American lobbying force for the Kyoto treaty, since it would have imposed burdensome costs on oil and coal producers, driving up the prices of alternatives to natural gas and thereby making Enron's product more attractive.

Those are just a few examples, but these sorts of practices are undertaken constantly. And this is all before even mentioning the massive subsidies and mandates that benefit the country's most politically-influential businesses - which are inevitably the largest businesses, since those are the ones that can afford the largest lobbying shops.

Professor Eismeier mentioned GE. GE has a nasty habit of investing in ventures that can only be profitable through government intervention - for instance, their creation of a carbon credit trading venture, which can only ever turn a profit if the state requires polluting businesses to buy carbon credits. Not coincidentally, GE was a massive lobbying force for cap and trade.

Health insurance companies comprised a massive lobbying force for Obamacare, since its individual mandate will drive an additional 30-40 million customers their way.

Again, these are just a couple examples of a widespread practice. State intervention in the economy is a boon for big business. The free market, on the other hand, works against economic inertia by enabling new competitors to enter the field (which will inevitably displease whichever company dominates an industry at a given moment).

Lachlan said...

(2/2) As for whether the Kochs fund groups in order to advance themselves financially, if what you're saying is that the Kochs benefit financially from the free market, then yes, they absolutely do. Organizations like IHS, the Reason Foundation, the Cato Institute, the Competitive Enterprise Institute, and other libertarian groups consistently call for a more libertarian economic policy. To the extent that Koch Industries benefits from a freer market, those groups serve the company's financial interests.

But isn't it possible - reasonable, even - that the Koch brothers recognize just how much success the free market has brought them, and wish to bring that success - and the prosperity the market affords society generally - to others? None of these leftist groups - certainly not CAP - seem to be complaining that Al Gore stands to make billions from the environmental policies he advocates. He's given the benefit of the doubt: he invests in what he thinks is right. The same can be said of the Koch brothers.

If, on the other hand, you're saying that the Kochs benefit from government rent-seeking and special favors from the political class, then your claim that they fund groups to serve their own interests is not just untrue, but laughable. To the extent that the Kochs benefit from handouts, regulations, and special treatment, they fund groups that work precisely and consistently against their interests!

Patrick_Landers said...

here's my response to Professor Eismeier. It will be awhile before I move onto Lachlan's points (which I haven't read at this time, so hopefully nothing in my reponse to Professor Eismeier turns out to be problematic.)
I anticipated counterexamples being made- hence my original caveat.
However, neither of the examples you provided are instances of corporate/wealthy interests financing activities fundamental to a leftist ideology. I can assure you that regulating light bulbs is not the primary way people on the left would prefer to tackle the environmental issues that might one-day soon bring devastation to large portions of the impoverished third world. Last time I checked my top-secret leftist manual; mercury-filled light bulbs weren’t sacrosanct.
Addressing climate change is not a liberal goal- it’s an assumption about a physical phenomenon that will one day be proven true or false. It’s true that people on the left disproportionately conform to this belief. But that’s not due to their liberal ideology. A way of thinking is not going to change whether climate change in the end proves to be real or imaginary.
Climate change matters to liberals/progressives because the outcomes could hurt billions of people in the future, as well as having a detrimental impact on all forms of life on this world. If climate change would have no effects, then liberals would care less about it. They don’t care about a phenomenon, they care about its impact. The phenomenon is simply an assumption today and a fact/falsehood in the future. Nothing about climate change itself is leftist.
Ergo, GE thinks, or is pretending to think, that climate change is real. Hence they support action. That is based on a non-ideological assumption. It doesn’t matter if it’s mostly people on the left who share that worldview, believing in climate change is unrelated to a leftist ideology.
Therefore, your two examples of potentially self-serving activity “on the left” fall flat. They are unrelated to the left’s ideology.
My argument was that inherent in libertarianism is a belief in free-markets, individual liberty, and government not mitigating market-outcomes. The Koch brothers do well by the market. While their ideology predisposes them towards supporting libertarianism, that doesn’t mitigate the fact that their actions also further their business and individual financial interests. Self-serving. Serving one’s own interests. I don’t see how the Koch brothers’ activities don’t fall under the denotation of this word. Koch brothers’ activities are self-serving in addition to being pro-libertarian.
GE’s “pro-left” activities aren’t self-serving- because they aren’t based on the left’s ideology. They are based on an assumption completely unrelated to a way of thinking. Therefore, GE is not an example of a leftist ideology being self-serving when practiced by wealthy corporations/individuals.
In conclusion, the Koch brothers are an example of a business using undisclosed money in a self-serving fashion. Therefore, it is completely valid for people on both the left AND right to use this argument to criticize the organization and individuals. It is NOT hypocritical for people on the left to use this specific justification. It WOULD be hypocritical for them to simply argue against all usage of private undisclosed money because they do this as well. The argument people on the left CAN make is against any private, undisclosed, corporate/wealthy individuals using massive sums of money in a self-serving fashion.

Patrick_Landers said...

To attack this argument as hypocritical, libertarians/conservatives must find an example of private, undisclosed, corporate/wealthy individuals using massive sums of money being donated by those on the left in a self-serving fashion. Since GE is not basing its actions on the lefts’ ideology, it is not a left activity. So far, I see no example of self-serving liberal activity through the use of wealthy corporate and individual money. I just seen an activity, supported mostly by those on the left, based on a disputed assumption. The examples given so far are not sufficient to claim hypocrisy.
Therefore, I still conclude that the Koch brothers’ particular activity can be argued as being wrong because it’s self-serving. Those on the left who call them out on this are not being hypocrites, because they are not also using private, undisclosed, corporate and wealthy individuals’ money in a self-serving fashion.

Patrick_Landers said...

I can see where I am drawing a very fine disction, which I think is important, but others may not. It all goes back to Lachlan's original argument- which that it's wrong to discriminate and make value judgements when deciding whose undisclosed donations of corporate/wealthy individuals' money is wrong. I am rebutting his point- it isn't just an ideological value judgement being used to judge certain people's actions as wrong. I am saying that the problem is that the Koch brothers are being self-serving, in addition to pro-libertarian, with their contributions. I don't see an opposing example of where people on the left are pursuing leftist ideology based goals at the same time they are making self-serving financial contributions.

Lachlan said...

The distinction between Wal-Mart and Koch Industries therefore is that Wal-Mart supports leftist policies because they advance the company's interests, without regard for the rightness of those policies or their benefits for society at large. Koch Industries, on the other hand, supports libertarian policies because they advance the company's interests and they benefit society at large.

I fail to see how that makes corporate libertarianism less justifiable than corporate liberalism.

Lachlan said...

Or, rather, Wal-Mart supports liberal policies because it believes they are good for the company. Koch Industries supports libertarian policies because it believes they are good for the company and good for society.

Megan said...

What about government workers (namely unions)giving large amounts of money in support of the Democratic ideal of bigger government (which obviously is beneficial for them)? This may not be exactly what you guys are talking about because I'm not sure about disclosure, but I think it is a glaring example of money on the left being used for self interest.

Lachlan said...

Great point, Megan. Let's not forget that the top spender in the midterms was AFSCME.

Patrick_Landers said...

btw, later means post 9pm due to work and class in the meantime. However, I look forward to responding. I haven't made any decisions about which way I'm going to take this. Maybe I'll just expand this to an all-out assault on libertarianism...? Just for fun? Wouldn't that be fun Professor Eismeier (and Lachlan)?
I find it fascinating, and a little disheartening, to see just how many young people (including many left-leaning ones) hold the opinion that "libertarianism is great in theory, but its trouble is putting it into practice." That’s like saying Communism is fine in theory, but alas it can't work-out in the real world. What a dangerous train of thought/load of crap. A failure to be implementable in the real world (of course, I'm sure you'd both disagree with this evaluation applied to libertarianism) is a good sign that there are serious flaws with the theory itself- particularly in the assumptions it makes about reality.
Not that I really care for the progressive/liberal ideology (though I’m not sure what exactly it's supposed to be?- so many strains of thought at this point). But it's just a little scary, as someone who believes in the power of ideas, that libertarianism has spread so far that many young leftists say it’s a good theory when they also profess to despising so many of the outcomes libertarianism is destined to exacerbate. This na├»ve infatuation with libertarianism is especially disturbing, since some of the most virulent forms of conservative/libertarian hybrids are ones that have recently been gaining traction in our nation’s politics. People need to watch out for what cesspools and putrid creatures lie concealed under that crystal clear surface-water. At least young non-libertarian conservatives understand their problems with libertarianism are with the underlying ideology...
Mwhahaha. Sorry for the sudden intensification of the debate. I couldn’t stop myself. I don’t know what came over me, but I greatly enjoyed making such scathing remarks about libertarianism. Like throwing salt water on an oozing wound…that isn’t mine. I just wanted to get people riled up

Lachlan said...

Actually, your rant illustrates very nicely my initial point: objections to the Kochs' political activities are almost invariably rooted in disagreements with their political views, not in a concern for the outsized role of money in our politics.

Patrick_Landers said...

I'm hurt- I feel like rant's too harsh of a characterization for my critique. I said everything with love and a gentle touch. Maybe it could be called a diatribe? But a rant? Calling it that implies that I said something crazy, when I really was providing a very dispassionate, and surprisingly generous, review of this synapse-failure we call libertarianism.
:-)

PBM said...

Lachlan, I dont doubt the $91 million number about the AFSCME from the NYTimes since its a generally liberal publication, but I am wondering where it comes from (how many weeks leading into the elections.) All the other numbers I've seen put their spending around $12-15 million, but that could just include spending close to election day. I do want to point out, however, that overall conservative/corporate shadow/whatever else you want to call it spending was actually double that of unions in 2010. Again, I don't know what timeline my source (http://www.opensecrets.org/news/assets_c/2011/03/Top%202010%20Outside%20Spenders-3993.html) is using, but it definitely shows that conservative groups spent far more in 2010 than unions.

PBM said...

Also, opensecrets.org places every individual conservative group as having spent more than any union group. That being said, the $91 million should have some part in the debate, I just think that that number should be compared to conservative groups' spending in the same time period.

PBM said...

Which I suspect is equal or greater.

Lachlan said...

As if on cue...

Lachlan said...

PBM,

We're getting a bit off topic here, but you make some good points. There are plenty of ways to measure the influence of money on the electoral process. I think the numbers you're citing with respect to spending by conservative groups focuses on independent expenditures, rather than donations to campaigns.

It's not at all clear to me that independent expenditures denote any more sway over the electoral process than direct contributions. And if you look at contributions to candidates and parties, Democrats received more from businesses, labor unions, ideological groups, and "other" in the 2010 cycle, according to OpenSecrets.

Dems also dominated in donations from top individual contributors, and top industries.

PBM said...

Now, to wade into the actual debate here, I definitely identify with Patrick's view, although at this point of government and business co-mingling for hundreds of years there is no clean cut answer. I think if you look at the instincts of a rich, liberal donor, let's just use George Soros here (although you can probably find something to disprove me with him, again, nothing/noone is going to be perfect in this debate.) He, generally, gives money to candidates who want goverment to provide solutions to help the poor and middle class, who have a voice in our political debate, but not nearly as large of one as corporations and the rich. The Kochs, on the other hand, want to cut taxes for the rich, cut government services, and cut regulations that are meant to protect the general public. I know these are all generalizations, but I'm just trying to say in a perfect world the richest liberal is out there trying to use government to help the poor, while the richest libertarian is out there trying to help businesses by eliminating taxes and regulation. The aforementioned examples of corporations supporting liberal causes show how mixed up everything is now, and how everyone has a stake in every policy.

Lachlan said...

See, this is exactly what's wrong with the anti-Koch line. The Koch brothers believe, and I agree, that capitalism is the best way to help the poor and that history bears this fact out. Now I know you don't agree with that, but to say that the Kochs give to the causes they do out of pure self-interest is to simply say that no libertarian is really concerned with mankind's well-being. I hope you would not impugn the motives of your ideological counterparts like that.

PBM said...

I don't think there is an empirical way to determine how effective independent expenditures are, but to me, it seems like campaign ads, voter registration campaigns, astroturf grass roots campaigns and the sort from outside groups could definitely help tilt the scale. Dems did get some pretty heavy backing from a number of groups, and there's no way to know what strategies are most effective, but AFP, Crossroads GPS and the Chamber of Commerce's expenditures and ad campaigns definitely didn't hurt Republicans.

PBM said...

I see what your saying there, and I guess I am making a mistake by straight on attacking an ideology like that, but I guess my basic thesis is that there is never going to be such thing as a perfect free-market, and with the levels of gov't intervention we already have its difficult to go back without hurting the poor and middle class. Let's take for example the Clean Air Act, or just basic environmental safeguards. With absolutely no government intervention and a perfect free-market (Sidenote: how do you feel about externalities and their absence in today's pricing?) then the market would punish anyone who violates environmental rules, and people wouldn't buy goods or services from them (this would have to involve a shit ton of transparency, hence "perfect" free market). But with today's levels of corporate power, that doesn't happen and there needs to be a referee (the government) that is on the side of the people's general welfare. So basically, I don't think we will ever be able to remove government enough from our lives to get a perfect and transparent free market, and that by removing government incrementally you create a lot of pain for people that rely on its services and regulations, while just helping businesses and not actually establishing an actual free market. I see where the allure of a perfect free market comes from, I just don't think it will ever happen. And so that's where my insulting generalization came from and I don't think that libertarians really believe in hurting the poor and helping the rich.

Lachlan said...

Thank you for conceding that point. And though I disagree with your argument concerning market forces (surprise!), my counter-argument would be far too long to type on a blackberry. I'll try to get to it tonight, and if I can't than definitely tomorrow.

Tore said...

So, self-interest is bad. Marx's followers used that to justify killing millions. If you really believe that, Landers, try giving your next steak to a hungry dog. Or, don't eat cow, pig, chicken or egg. Better yet, don't compete with hungry poor the world over by eating rice or beans. Since global warming is related to a large population using resources, perhaps liberals would volunteer to reduce the population by stopping eating?

Patrick_Landers said...

Tore,

You managed to take my arguments to a nonsensical extreme in order to, presumably, defend the actions of the Koch brothers and similar business entities. However, I never argued that self-interest is bad, so you have simply created and attacked a straw-man argument, adding nothing of substance to this debate.