The famous Tea Party backers and right-wing libertarian ideologues the Koch brothers, owners of Koch Industries, a huge fossil-fuel conglomerate, directly and through their network of think tanks and “grass roots” organizations, espouse an “America loving” set of policies that loves free markets and hates regulation. And their words at times almost sound convincing, and indeed have convinced many Americans. But look closer at their actions. The policies and projects they promote actually stifle true capitalism and promote a regulatory structure to make sure it stays stifled in a way that benefits only their own business interests.
Patrick Michaels of the Cato Institute (which was founded and subsequently funded with $14 million by the Kochs) is one of the Kochs’ main bulldogs. He says of global warming that “this is a problem that’s gonna solve itself,” and of carbon that “society will address the emissions of carbon dioxide and the energy issues because of pressures for increased efficiency.” And of the Kochs directly, Michaels has said, “they think free markets are efficient vehicles to create environmental protection; I think they’re right.”
Free markets are the best way to address carbon emissions and to protect the environment. Fantastic. In a world of true capitalism, where money chases the best and most efficient ideas, this would be true. Because wind and solar are already near parity with fossil fuel derived electricity, and with more scale and continued development, experts and industry analysts agree that these renewables have the ability to become far more inexpensive. In a truly free market, this is where the bulk of new investments and government benefits would be going. But in the bought-and-paid for world of American politics? Not so much. The Kochs have lobbied for dozens of self serving initiatives, many of them regulatory in nature (surprised?), including the right to engage directly in the writing of legislation. As I’ve mentioned before, oligarchs’ ability to craft legislation is surprisingly easy and inexpensive; according to Bloomberg News:
The energy companies [Koch and ExxonMobil] helped write the [fossil fuel promoting] legislation at a meeting organized by a group they finance, the American Legislative Exchange Council, a Washington-based policy institute known as ALEC.
The corporations, both ALEC members, took a seat at the legislative drafting table beside elected officials and policy analysts by paying a fee between $3,000 and $10,000, according to documents obtained by Bloomberg News.
The opportunity for corporations to become co-authors of state laws legally through ALEC covers a wide range of issues from energy to taxes to agriculture. The price for participation is an ALEC membership fee of as much as $25,000 — and the few extra thousands to join one of the group’s legislative-writing task forces.
I wonder how many American voters know some of their legislation is written by corporations and carried unedited to the floor of the House? Not that the Kochs’ and others’ behavior in this regard is at all surprising. As The Economist recently noted, “it’s in the interest of business leaders to push for rules that stifle competition and interrupt the market mechanisms that allow good ideas to flourish.” In other words, to step on the capitalism that allowed them to get where they are. I suppose that the inverse corollary, that smaller business’ role is to fight to make the best new ideas known, is one reason I write this blog.
True, the Kochs oppose selected regulations: those that could erode the market share of their businesses. In 2010 the Kochs contributed to 62 of 87 of the new Republican members of the House, making them instrumental if not singlehandedly responsible for the GOP takeover. The first thing they asked their cub Tea Party and GOP congress people to do? Dismantle the EPA. Remove all regulations and health and safety protocols around fossil fuel mining, refining and burning. Never mind that solar is as cheap and becoming cheaper now, even if the health effects such as lung and heart disease and mercury poisoning are not counted in oil’s and coal’s costs. Acknowledging that would be true capitalism, and again, the Kochs have no interest in that.
(As an aside, if you’re not convinced about solar’s capital efficiency, consider: with polysilicon spot prices now as low as US$51 per kilogram, “30 pounds of silicon, an amount that costs $700 to produce, is enough to generate a lifetime of household electricity.” As solar thus becomes cheaper and cheaper, I fail to see how the nonstop required process of mining, transporting and burning coal can possibly be as cheap or efficient as a means of getting electricity. A true capitalist sees this and starts making his investments accordingly. And, in fact, a lot of smart money is pouring into renewables.)
The reason the Kochs talk free market but don’t actually practice it is because they don’t really have America’s or the peoples’ best interests in mind, but only their own. If you’re constantly pimping fossil fuels, and driving policies that will benefit those only, even when other sources of electricity have become as cheap and cheaper, to say nothing of cleaner and safer, you are stifling true capitalism. Capitalism only works when investors have access to accurate information. The disinformation propagated by the Kochs and their ilk, especially regarding climate change and renewable energy, is anti-capitalist in the extreme and serves only to make dollars chase their old, busted, 18th century energy technology. For example, one of the Kochs’ pet groups, Americans for Prosperity, is about to launch a multi-million dollar ad campaign once again falsely using Solyndra as evidence that renewable energy is a “scam.” There’s a difference between a capitalist democracy and an oligarchy. (Or as Citibank would have it, a plutonomy.)
Don’t take my word for it. Look up any Koch-backed initiative and ask yourself “who benefits?” What you’ll find, by thus viewing their actions and ignoring their nice platitudes, is that the Kochs benefit, their fossil fuel businesses benefit (an example just now being their connection to the Keystone XL pipeline); or labor suffers so dirty energy bosses can become even richer, and so on.
Ralph Waldo Emerson pretty much nailed it (and may as well have been referring to the Kochs) when he said “What you do speaks so loud that I cannot hear what you say.” Word, Mr. Emerson. It’s time we pulled back the rhetorical veil and saw the Kochs for the anti-capitalist, pro-legislation fat cats they really are. Free markets are indeed great, let’s bring them back.
Garvin Jabusch is cofounder and chief investment officer of Green Alpha ® Advisors, and is co-manager of the Green Alpha ® Next Economy Index, orGANEX and the Sierra Club Green Alpha Portfolio. He also authors the blog“Green Alpha’s Next Economy.”