How should Charles Koch use his power?

"It's a very dangerous thing to do exactly what you want"
- The Flaming Lips

One of the most startling moments of my life came at a conference earlier this year, when a tenured macroeconomics prof at a good school, whom I had never met, walked up to me and said: "Hey, I agree with a lot of the things you write about macroeconomics. What do you think we macroeconomists ought to be doing?" More than ever before, it sank in that people might care about, listen to, and be influenced by things I say. I know this sounds a little silly, but I had never really believed that before. Blogging felt like a way to have a fun discussion with smart, nerdy people like Brad DeLong and Tyler Cowen. But when enough people start reading you, you become a "thought leader", whether you meant to or not. At that point you basically have three choices: 1) shut up, 2) confidently push on, or 3) try to moderate what you say.

It's not an easy decision. If you think the Marketplace of Ideas is more or less efficient, then it doesn't matter how loud you shout or how many readers you have, society is going to weigh your arguments on the merits, so you might as well say whatever you feel like saying. Or if you think you're facing an implacable, dishonest opposition, then maybe you should make your message stronger to balance out their power - a sort of "dialectical" approach. Or maybe you think you've found the One True Way, and so it makes sense to fight tooth and nail. I don't really think any of these things, so I've decided to moderate my tone on macroeconomics-related issues ever since I talked to that professor at the conference. Not to say things I don't believe, but to tone it down, insert more caveats, and give a more accurate picture of what I really think instead of just blogging my most controversial (i.e. fun) ideas.

Now, I'm a guy with only a tiny amount of power, so I'm not too worried. A more famous writer like Paul Krugman or Michael Lewis has more. But some people have much, much, much more. For example, Charles and David Koch, the famous Koch brothers.

Together, Charles and David Koch have about 80 billion dollars of wealth. Compare that to Bill Gates, with $77B, and you see that if they were one person, the Kochs would be the richest person in the world...and they act as one for political purposes. If John D. Rockefeller were a comic-book superhero who got split into two people, he'd be the Koch Brothers.

This huge amount of wealth gives the Kochs enormous power to affect politics, if they choose to do so. And they do choose to do so - a lot. "Political activities of the Koch Brothers" has its own Wikipedia page. For the last two years, Koch money has been very important for the Republican party. In some political races, the Kochs outspend all other Republican donors combined. In addition, the Kochs have been extremely active in funding academic departments whose political tenor agrees with their own beliefs. And they have spent lots of money to set up think tanks - including the Mercatus Center, which provides supplemental employment to several of my favorite econ bloggers (for which I suppose I should thank them) - and to influence other think tanks.

Why do the Kochs do this? Why do they think their perspective is so much more important and valid than the perspectives of all the people who have less money and power than they do?

Well, they might believe that all their spending doesn't really influence the political process that much - that money doesn't translate into power. And they might have so much money that they don't feel the need to save it. So it all might just be for fun. But I highly doubt this.

Alternatively, they might believe that there are powerful negative forces in American society, and that these negative forces are unscrupulous and unrestrained in their tactics, and that in order to balance out the "bad guys", the Kochs must pull no punches. Finally, the Kochs might just believe that they understand the One True Way, and that the masses of people who disagree with them are simply misguided.

Reading Charles Koch's recent op-ed in the Wall Street Journal, I'd guess it's a combination of those latter two. Koch is very confident in his view of what is right and good, and he thinks that the people opposing him are unscrupulous and unrestrained:

[T]he fundamental concepts of dignity, respect, equality before the law and personal freedom are under attack...That's why, if we want to restore a free society and create greater well-being and opportunity for all Americans, we have no choice but to fight for those principles... 

Instead of encouraging free and open debate, collectivists strive to discredit and intimidate opponents. They engage in character assassination...Such tactics are the antithesis of what is required for a free society—and a telltale sign that the collectivists do not have good answers... 

Instead of fostering a system that enables people to help themselves, America is now saddled with a system that destroys value, raises costs, hinders innovation and relegates millions of citizens to a life of poverty, dependency and hopelessness... 

If more businesses (and elected officials) were to embrace a vision of creating real value for people in a principled way, our nation would be far better off—not just today, but for generations to come. I'm dedicated to fighting for that vision. I'm convinced most Americans believe it's worth fighting for, too.

Obviously, if America has elected "collectivist" politicians, it means that many, many Americans support "collectivism". Charles Koch thinks it's worth using his own tremendous personal power to singlehandedly balance out the power of a huge number of the people who disagree with him. He thinks this is OK because he believes so strongly in his cause, and because he thinks his rhetorical opponents use dirty tactics.

But if I were Charles Koch, I wouldn't be so sure of these things.

First of all, why do so many people disagree with Koch's ideas? There are certainly times in history when the mass of people was gravely, horribly wrong. But those times are rare. So if the majority is wrong, they're probably only moderately wrong. This is not a reason for Koch to moderate his views. But it is a reason for him to reconsider his policy of outspending the multitudes of his opponents.

Second of all, Koch should consider that his perception of the unscrupulous ways of the "collectivists" might be mistaken. There seems to be a bit of a tendency for certain rich old men to see themselves as being in more danger than they really are - for another example, witness Tom Perkins. Charles Koch should consider whether part of his perception of vicious tactics by the "collectivists" is just a persecution complex.

A big part of the reason that the Kochs are so reviled is that they have lots of power. Power magnifies the degree to which we don't like people who disagree with us. Charles Koch, with his $40 billion, can exercise a voice in politics that is far louder than the voice of any of the people who disagree with him. And with David Koch totally on his side with another $40 billion, there's basically two of him. That scares many people, and it strikes many others as unfair - why should another guy's voice be thousands of times more powerful than my own?

The Kochs have freedom of speech, so the only check on their use of money for political purposes is their own conscience and sense of responsibility. But those can be powerful checks. Notice that most of the super-rich don't shell out hundreds of millions of dollars on politics. Bill Gates doesn't. Warren Buffett doesn't, despite the fact that he obviously cares about issues. Larry Ellison doesn't. The Waltons do a little bit, but not nearly so much as the Kochs. Sheldon Adelson does, but his reasons are...more cynical. George Soros is the only real rival to the Kochs in terms of individual political spending, though he has only about a quarter of their wealth.

So it seems to me that most super-rich people are more skeptical than the Kochs about the correctness of their views, the badness of those who disagree, and/or the fairness of outspending hundreds of thousands of normal, non-rich individuals. If I were super-rich, I think I'd be more like Buffett or Gates or Rockefeller, and less like the Kochs.

(I do hope they keep supporting econ bloggers, however.)