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Kochland: The Secret History of Koch Industries and Corporate Power in America
Christopher Leonard’s Kochland uses the extraordinary account of how one of the biggest private companies in the world grew to be that big to tell the story of modern corporate America.
The annual revenue of Koch Industries is bigger than that of Goldman Sachs, Facebook, and US Steel combined. Koch is everywhere: from the fertilizers that make our food to the chemicals that make our pipes to the synthetics that make our carpets and diapers to the Wall Street trading in all these commodities. But few people know much about Koch Industries and that’s because the billionaire Koch brothers have wanted it that way.
For five decades, CEO Charles Koch has kept Koch Industries quietly operating in deepest secrecy, with a view toward very, very long-term profits. He’s a genius businessman: patient with earnings, able to learn from his mistakes, determined that his employees develop a reverence for free-market ruthlessness, and a master disrupter. These strategies made him and his brother David together richer than Bill Gates.
But there’s another side to this story. If you want to understand how we killed the unions in this country, how we widened the income divide, stalled progress on climate change, and how our corporations bought the influence industry, all you have to do is read this book.
The annual revenue of Koch Industries is bigger than that of Goldman Sachs, Facebook, and US Steel combined. Koch is everywhere: from the fertilizers that make our food to the chemicals that make our pipes to the synthetics that make our carpets and diapers to the Wall Street trading in all these commodities. But few people know much about Koch Industries and that’s because the billionaire Koch brothers have wanted it that way.
For five decades, CEO Charles Koch has kept Koch Industries quietly operating in deepest secrecy, with a view toward very, very long-term profits. He’s a genius businessman: patient with earnings, able to learn from his mistakes, determined that his employees develop a reverence for free-market ruthlessness, and a master disrupter. These strategies made him and his brother David together richer than Bill Gates.
But there’s another side to this story. If you want to understand how we killed the unions in this country, how we widened the income divide, stalled progress on climate change, and how our corporations bought the influence industry, all you have to do is read this book.
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First published August 13, 2019
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October 26, 2019
It's well researched and information-dense, but still readable. Emphasis is on the Koch family making money rather than what buy.
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November 22, 2019
The age of Goliath.
I read Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right shortly after the 2016 election. It was very eye opening about the role big money is playing in politics. One of the privately-held corporations named in that book was Koch Industries, so when Kochland: The Secret History of Koch Industries and Corporate Power in America was published this year, I thought it would be important to find out more about their business and how they are affecting our country and our government--heck, our everyday lives and the environment--by the influence created with their billions of dollars.
Christopher Leonard's book is a very well-researched, in depth look at all aspects of the Koch family and their business acquisitions, investments, dealings, and machinations over the years. Charles Koch has come up with a philosophy of business he calls Market-Based Management, which he argues is 'the ultimate solution for running a prosperous business,' and perhaps even for operating entire societies. OMG! That sounds a bit megalomaniacal, doesn't it?
Perhaps with that in mind, "Charles Koch has spent forty years building political networks in Washington. He has cultivated experts and operatives through years of employing them at think tanks, lobbying offices, and funded university chairs."
The Koch brothers are essentially libertarians, believing that the less government is involved in our lives, or more to the point, in how businesses are run, the better. Some examples of how their influence played out during the early days of the Trump administration: Leonard writes about how Koch's power and influence helped to stop the passage of the American Health Care Act that Trump wanted so badly. The Kochs, on the other hand, want no government-supported health care at all.
And when the opportunity came to rewrite the tax code, the Kochs made sure that Paul Ryan's idea for a Border Adjustment Tax (BAT) that would affect, among other things, the cheap Canadian crude oil Koch Industries imported, would die before it could be included in that proposal. And did you know that the tax cut for middle-class families is temporary? According to Leonard, 'those cuts would begin to expire in 2022 and be fully repealed by 2027, leaving many families with a tax increase.' I hadn't heard that before. Maybe it's time to find out if that is true before the next election.
Climate change? Supposedly, their plan is to get rid of the EPA all together because its rules and regulations to protect the environment are bad for the fossil fuel industry--where their mega-bucks are coming from.
Read this book to be more knowledgeable about what is really going on with these quiet multi-billionaries who are affecting public policy and laws today. And please be sure to vote in 2020!
I read Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right shortly after the 2016 election. It was very eye opening about the role big money is playing in politics. One of the privately-held corporations named in that book was Koch Industries, so when Kochland: The Secret History of Koch Industries and Corporate Power in America was published this year, I thought it would be important to find out more about their business and how they are affecting our country and our government--heck, our everyday lives and the environment--by the influence created with their billions of dollars.
Christopher Leonard's book is a very well-researched, in depth look at all aspects of the Koch family and their business acquisitions, investments, dealings, and machinations over the years. Charles Koch has come up with a philosophy of business he calls Market-Based Management, which he argues is 'the ultimate solution for running a prosperous business,' and perhaps even for operating entire societies. OMG! That sounds a bit megalomaniacal, doesn't it?
Perhaps with that in mind, "Charles Koch has spent forty years building political networks in Washington. He has cultivated experts and operatives through years of employing them at think tanks, lobbying offices, and funded university chairs."
The Koch brothers are essentially libertarians, believing that the less government is involved in our lives, or more to the point, in how businesses are run, the better. Some examples of how their influence played out during the early days of the Trump administration: Leonard writes about how Koch's power and influence helped to stop the passage of the American Health Care Act that Trump wanted so badly. The Kochs, on the other hand, want no government-supported health care at all.
And when the opportunity came to rewrite the tax code, the Kochs made sure that Paul Ryan's idea for a Border Adjustment Tax (BAT) that would affect, among other things, the cheap Canadian crude oil Koch Industries imported, would die before it could be included in that proposal. And did you know that the tax cut for middle-class families is temporary? According to Leonard, 'those cuts would begin to expire in 2022 and be fully repealed by 2027, leaving many families with a tax increase.' I hadn't heard that before. Maybe it's time to find out if that is true before the next election.
Climate change? Supposedly, their plan is to get rid of the EPA all together because its rules and regulations to protect the environment are bad for the fossil fuel industry--where their mega-bucks are coming from.
Read this book to be more knowledgeable about what is really going on with these quiet multi-billionaries who are affecting public policy and laws today. And please be sure to vote in 2020!
September 29, 2023
I absolutely hated reading every single page of this book - yet, with every page, I felt it was my duty as a concerned citizen to continue reading. There were several times I wanted to stop. But I didn't. I pushed myself to 'get it over with'... just so I would have the information.
I had already read Jane Mayer's terrific 'Dark Money' - and I hesitated about reading 'Kochland' because I felt that, in a way, Mayer already told me everything the average person needed to know about Charles Koch. But Mayer's book concentrates on Koch's methodical and heavy-handed involvement in present-day government in DC. (~which is bad enough.) That's only the latter, more recent part of the labyrinthine story. With breathtaking detail, 'Kochland' tells the whole thing.
Author Christopher Leonard (whose way of storytelling is sharp and accessible) is merciful in his choices. We only get the basic, necessary facts about Daddy Koch. As well, we only get minimal info about 3 of the 4 Koch Brothers - which accents the bottom line that there really is only one story here: Charles Koch.
[As for the peripheral story re: David - who recently died, we gleam that David wanted things both ways: on the one hand, he seemed to hope that his considerable philanthropy would buy love; on the other, he was perfectly in sync and agreement with his brother's ruthless and heartless mode of operation. David let Charles do the dirty work that resulted financially in his own life being cushy, celebrity-filled and undisturbed.]
This is not a biography - so we're not really given much in the way of a breakdown of Charles' childhood and youth. Here as well, Leonard is judicious about what's most pertinent - he tells Charles' story as though he were using a scalpel to get at 'the root of the problem'.
And Charles *is* a problem. He is a *huge* social problem - and it's probably not even arguable to say that, in our world today, Charles Koch is the single most terrifying person who, nevertheless, in demeanor is also among the least terrifying. In his famously soft-spoken, tempered, guru-like way, he happens to think that his particular capitalist view of the world - which all-but-completely shuts out those who are not wealthy - is the only viable one. He believes to his core that it's what's best for the world - which translates as 'Charles *is* the world'; his vanity is supreme and all-encompassing.
It wasn't always necessarily a direct threat to the American way of life. Years ago, Koch didn't particularly have much interest in politics... as long as it stayed out of the way of his financial goals. But all of that changed as Koch began to feel progressively threatened by Washington DC. So he decided to... well, buy it... in the same way he bought everything else... with tons of money and coordinated, hands-on bullying procedures. After 40+ years of making sure that those associated with him would bend to his iron will, Koch has his operation almost down to an effortless science.
That 'science' is now on its way to dismantling the American way of life.
At the end of his book - which is, of course, inconclusive (Charles is still alive), Leonard suggests that there may be hope for our country. It would take getting Koch where he and his empire live: making him lose money. That would take real effort on the part of Americans and their government.
I had already read Jane Mayer's terrific 'Dark Money' - and I hesitated about reading 'Kochland' because I felt that, in a way, Mayer already told me everything the average person needed to know about Charles Koch. But Mayer's book concentrates on Koch's methodical and heavy-handed involvement in present-day government in DC. (~which is bad enough.) That's only the latter, more recent part of the labyrinthine story. With breathtaking detail, 'Kochland' tells the whole thing.
Author Christopher Leonard (whose way of storytelling is sharp and accessible) is merciful in his choices. We only get the basic, necessary facts about Daddy Koch. As well, we only get minimal info about 3 of the 4 Koch Brothers - which accents the bottom line that there really is only one story here: Charles Koch.
[As for the peripheral story re: David - who recently died, we gleam that David wanted things both ways: on the one hand, he seemed to hope that his considerable philanthropy would buy love; on the other, he was perfectly in sync and agreement with his brother's ruthless and heartless mode of operation. David let Charles do the dirty work that resulted financially in his own life being cushy, celebrity-filled and undisturbed.]
This is not a biography - so we're not really given much in the way of a breakdown of Charles' childhood and youth. Here as well, Leonard is judicious about what's most pertinent - he tells Charles' story as though he were using a scalpel to get at 'the root of the problem'.
And Charles *is* a problem. He is a *huge* social problem - and it's probably not even arguable to say that, in our world today, Charles Koch is the single most terrifying person who, nevertheless, in demeanor is also among the least terrifying. In his famously soft-spoken, tempered, guru-like way, he happens to think that his particular capitalist view of the world - which all-but-completely shuts out those who are not wealthy - is the only viable one. He believes to his core that it's what's best for the world - which translates as 'Charles *is* the world'; his vanity is supreme and all-encompassing.
It wasn't always necessarily a direct threat to the American way of life. Years ago, Koch didn't particularly have much interest in politics... as long as it stayed out of the way of his financial goals. But all of that changed as Koch began to feel progressively threatened by Washington DC. So he decided to... well, buy it... in the same way he bought everything else... with tons of money and coordinated, hands-on bullying procedures. After 40+ years of making sure that those associated with him would bend to his iron will, Koch has his operation almost down to an effortless science.
That 'science' is now on its way to dismantling the American way of life.
At the end of his book - which is, of course, inconclusive (Charles is still alive), Leonard suggests that there may be hope for our country. It would take getting Koch where he and his empire live: making him lose money. That would take real effort on the part of Americans and their government.
August 29, 2019
n an era when journalism has polarized into name calling on TV and what we call news can include a tweet, it’s refreshing to read a book that’s the result of deep investigative journalism. Seven years in the making, the author set out to trace the rise of modern corporate America through the story of a powerful and secretive family corporation that most of us in America know little about. I first started hearing about “the Koch brothers” during the last election cycle and had no idea that the company’s annual revenue exceeds Goldman Sachs, Facebook and U.S. Steel combined. Koch is everywhere, embedded in your daily life from the fertilizers that make our food to the synthetics we wear to the diapers and chemicals and carpets we walk on. A genius businessman with a belief in free-market ruthlessness, Koch began quietly amassing companies from Wichita, Kansas, with a view toward very long-term profits. Operating in deep secrecy, he and his brother David consolidated power over 50 years, transforming capitalism in a way that led to anemic unions, widened the income divide, stalled climate change progress and exerted vast control in the influence industry and politics. At times the book reads like a thriller, with epic characters waging battles worthy of Game of Thrones.
August 28, 2019
The pro-EPA, anti-Capitalist, and anti-Koch position of the author is palpable. However, with that said, the book is well written and obviously well researched. Some of his assertions are off though in my opinion.
Leonard writes about how breaking the Labor Unions is tied to the divide between management and the workers. However if you look at the Union structure, and the salaries of the Labor Union Bosses you will see that they too are off from the standard worker. There was a time when Labor Unions were necessary and created value for the worker. However today, with the Government intervention in EVERYTHING we do, the Unions are a thing of the past. The Left, the ones who support Labor Unions, will tell you that the "Citizen's United' decision should be reversed because it gives corporations the ability to "interfere" in political elections and that the corporations are NOT people and should not be allowed to participate in funding campaigns. Although I somewhat agree with that stance, I also think that Labor Unions should also NOT be allowed to mingle in elections. Today, you have Labor Unions that are allowed to pull workers out of their "regular work" to assist in "Labor Union Business" which in many, many cases is electioneering for a pro-union candidate. Not to mentions the disparate salaries of
2017 Labor Leaders Salaries and Compensation
United Food and Commercial Workers Local 464
(UFCW)
John Niccolai
Salary - $589,439.00
Compensation - $594,193.00
Air Line Pilots Association
Timothy Canoll
Salary - $526,292.00
Compensation - $775,829.00
Laborers International Union of North America
(LiUNA)
Terrence O'Sullivan
Salary - $516,698.00
Compensation - $717,992.00
International Longshoremen's Association
Harold Dagget
Salary - $488,008.00
Compensation - $533,222.00
International Brotherhoos of Trade Unions Local 713
Peter Hasho
Salary - $477,500.00
Compensation - $756,973.00
Source: https://laborpains.org/2017/05/17/uni...
I am sure that the respective Labor Union members are not pulling in those numbers. I am sure if you look at the percentage the bosses are making over the standard worker, the number would ALSO be staggering. And these do not include the really big ones like Teamsters and AFL CIO.
Leonard also writes about the Charles Koch not wanting to take the company public because it would open up the company to scrutiny and shareholders would be able to demand information. I make one observations, the Labor Union are also NOT public. And they too, as you saw above, have all kinds of information they do not want revealed.
Charles Koch is a business genius. He has grown his company based on strategies he has devised and lessons learned. Their success was not based on shareholders and wall street or even government intervention. This speaks to the Freemarket and how some win and some lose. Obviously in this book we see that Koch Industries failed at many points in their time. They pushed through and were able to protect themselves for the "bad times". The Kochs were very liberal with their money from a philanthropy perspective. They gave to multiple causes that should meet the approbation of the author, however he points out that the 100 Million dollars donated was over 10 years. I am curious what donations the author supports?
Democrats "create jobs" by enforcing arduous regulatory efforts that require full time teams to try to comply. This is not organic and cost companies profits that stifle internal growth. The Democratic policies and regulations coupled with labor unions would destroy this economy. Although not specified in her book, Ayn Rand's book Atlas Shrugged lays out the current Liberal agenda.
I think the best thing to happen to the "climate change" movement was also the worse; arguably, Gore's movie/commercial "Inconvenient Truth". After Gore states that carbon credit was the path to take, he followed it up by saying his company was the only one that could sell you said credits. Any racional person could see right through it. I believe there is climate change but I do not believe it is as cataclysmic as some make it out to be. Nor do I think that we need to regress back to the horse and buggy days while the reset of the world ignores and pushes on. It is a suicide pact.
Leonard is critical about Koch and the "astroturf" of him funding protest movements and so on. This is nothing new here. Soros has been doing this for quite some time. Leonard also blast Glenn Beck, which I am not a fan of BTW, for peddling in fear. Yet today you see every media outlet talking about Trump being a Russian Spy, racist, et al. I am not saying that peddling in fear is good, but for God's sake, look at your team and at least make reference to what is going on around YOU. You are basically doing the same thing you accuse Beck of doing.
Chase Koch chapters were very interesting. Even if you do not like Koch, you must admit he did some very difficult things with his son. He instilled good work ethic and although Chase did not assume the "thrown" of Koch Industries, aside from the terrible tragedy he was at fault for, he did pretty good. I mean, Ted Kennedy did great things arguably after his issues with cars and deaths.
I think the funniest portion of the book is the policies that were thousands of pages long and difficult to follow and undertand. Take a look at our tax code, our laws, the ACA with over 20,000 pages for just health care. The author is obviously on the side of big government and more regulation, what does that look like in pages? It was funny to read that section.
Leonard writes about how breaking the Labor Unions is tied to the divide between management and the workers. However if you look at the Union structure, and the salaries of the Labor Union Bosses you will see that they too are off from the standard worker. There was a time when Labor Unions were necessary and created value for the worker. However today, with the Government intervention in EVERYTHING we do, the Unions are a thing of the past. The Left, the ones who support Labor Unions, will tell you that the "Citizen's United' decision should be reversed because it gives corporations the ability to "interfere" in political elections and that the corporations are NOT people and should not be allowed to participate in funding campaigns. Although I somewhat agree with that stance, I also think that Labor Unions should also NOT be allowed to mingle in elections. Today, you have Labor Unions that are allowed to pull workers out of their "regular work" to assist in "Labor Union Business" which in many, many cases is electioneering for a pro-union candidate. Not to mentions the disparate salaries of
2017 Labor Leaders Salaries and Compensation
United Food and Commercial Workers Local 464
(UFCW)
John Niccolai
Salary - $589,439.00
Compensation - $594,193.00
Air Line Pilots Association
Timothy Canoll
Salary - $526,292.00
Compensation - $775,829.00
Laborers International Union of North America
(LiUNA)
Terrence O'Sullivan
Salary - $516,698.00
Compensation - $717,992.00
International Longshoremen's Association
Harold Dagget
Salary - $488,008.00
Compensation - $533,222.00
International Brotherhoos of Trade Unions Local 713
Peter Hasho
Salary - $477,500.00
Compensation - $756,973.00
Source: https://laborpains.org/2017/05/17/uni...
I am sure that the respective Labor Union members are not pulling in those numbers. I am sure if you look at the percentage the bosses are making over the standard worker, the number would ALSO be staggering. And these do not include the really big ones like Teamsters and AFL CIO.
Leonard also writes about the Charles Koch not wanting to take the company public because it would open up the company to scrutiny and shareholders would be able to demand information. I make one observations, the Labor Union are also NOT public. And they too, as you saw above, have all kinds of information they do not want revealed.
Charles Koch is a business genius. He has grown his company based on strategies he has devised and lessons learned. Their success was not based on shareholders and wall street or even government intervention. This speaks to the Freemarket and how some win and some lose. Obviously in this book we see that Koch Industries failed at many points in their time. They pushed through and were able to protect themselves for the "bad times". The Kochs were very liberal with their money from a philanthropy perspective. They gave to multiple causes that should meet the approbation of the author, however he points out that the 100 Million dollars donated was over 10 years. I am curious what donations the author supports?
Democrats "create jobs" by enforcing arduous regulatory efforts that require full time teams to try to comply. This is not organic and cost companies profits that stifle internal growth. The Democratic policies and regulations coupled with labor unions would destroy this economy. Although not specified in her book, Ayn Rand's book Atlas Shrugged lays out the current Liberal agenda.
I think the best thing to happen to the "climate change" movement was also the worse; arguably, Gore's movie/commercial "Inconvenient Truth". After Gore states that carbon credit was the path to take, he followed it up by saying his company was the only one that could sell you said credits. Any racional person could see right through it. I believe there is climate change but I do not believe it is as cataclysmic as some make it out to be. Nor do I think that we need to regress back to the horse and buggy days while the reset of the world ignores and pushes on. It is a suicide pact.
Leonard is critical about Koch and the "astroturf" of him funding protest movements and so on. This is nothing new here. Soros has been doing this for quite some time. Leonard also blast Glenn Beck, which I am not a fan of BTW, for peddling in fear. Yet today you see every media outlet talking about Trump being a Russian Spy, racist, et al. I am not saying that peddling in fear is good, but for God's sake, look at your team and at least make reference to what is going on around YOU. You are basically doing the same thing you accuse Beck of doing.
Chase Koch chapters were very interesting. Even if you do not like Koch, you must admit he did some very difficult things with his son. He instilled good work ethic and although Chase did not assume the "thrown" of Koch Industries, aside from the terrible tragedy he was at fault for, he did pretty good. I mean, Ted Kennedy did great things arguably after his issues with cars and deaths.
I think the funniest portion of the book is the policies that were thousands of pages long and difficult to follow and undertand. Take a look at our tax code, our laws, the ACA with over 20,000 pages for just health care. The author is obviously on the side of big government and more regulation, what does that look like in pages? It was funny to read that section.
August 23, 2019
If you need a blow by blow of the various awful things the Koch brothers have done, this would be your book. Author Christopher Leonard takes the reader through a journey that shows us how the ruthlessness of the Koch family has continued to grow richer and richer at the expense of so many workers, the environment, good business, small businesses, etc. It's a lot to absorb.
Leonard looks at era by era, entity by entity and goes through what the Koch family and their various businesses do from their business practices to the fallout. There's also a bit about the family and its dynamics but the focus here is definitely on actions of the Koch Industries and affiliated businesses.
I had read 'Sons of Wichita' and was thinking this would be similar. That book tends to focus more on the family and the family dynamics, whereas this is more about the business. As such, the reader is basically treated to a huge cast of characters who have a role and typically drop out once Leonard moves on (excluding the Kochs themselves and certain others). I didn't care for the format of looking at individual cases and honestly thought the details were a little too much.
That said, this could be a great companion book to 'Sons', especially if you're doing research, need a reference, etc. Library borrow was best for me but it can be a great purchase for the right person.
Leonard looks at era by era, entity by entity and goes through what the Koch family and their various businesses do from their business practices to the fallout. There's also a bit about the family and its dynamics but the focus here is definitely on actions of the Koch Industries and affiliated businesses.
I had read 'Sons of Wichita' and was thinking this would be similar. That book tends to focus more on the family and the family dynamics, whereas this is more about the business. As such, the reader is basically treated to a huge cast of characters who have a role and typically drop out once Leonard moves on (excluding the Kochs themselves and certain others). I didn't care for the format of looking at individual cases and honestly thought the details were a little too much.
That said, this could be a great companion book to 'Sons', especially if you're doing research, need a reference, etc. Library borrow was best for me but it can be a great purchase for the right person.
September 3, 2019
The author comes off as biased (anti-capitalist, anti-Koch). That's his prerogative however it left a bad taste in my mouth. I've read books written by Mr. Leonard's mentor Steve Coll and was hoping for a similar writing style. The book is organized well and provides a lot of interesting details about Koch and his business practices. If the author's bias wasn't palpable this would receive 4 stars.
March 29, 2020
KOCHLAND - Book Review.
The BEST Business Book I have read so far. Nothing comes close.
The KOCH bros are the top 5 richest people on earth. You HAVE to own, read & study this book to figure:
- The DEEP dive into what makes businesses successful. The relentlessness of Charles Koch to IMPROVE, study, innovate, improvise, be firm & NEVER give in.
- The early stories of how Koch obliterated the Labor union is personal to me. My socks factory in Lower Parel had the same issues.
- The WHY of staying "private" and not going for glam, PR, noise, etc. No branding, marketing, 'logo making' 🙂
- The institutionalisation of the Corporate's Playbook. It's so hard to set common agendas & missions. (I fell for the rigour of the process vs the content (unknown)
- How opportunities are seized by those who are ready. The Business of PREPAREDNESS.
- The MACHINE that Koch built to control Washington. Scary but fascinating.
- How everything boils down to UNRELENTING HARD WORK.
- The nuclear level of DETAIL that KOCH went into everything.
- The approach of frugality. (Office decors, chairs, all 'normal)
- The model to create wealth from Knowledge, Data, Work.
The BEST Business Book I have read so far. Nothing comes close.
The KOCH bros are the top 5 richest people on earth. You HAVE to own, read & study this book to figure:
- The DEEP dive into what makes businesses successful. The relentlessness of Charles Koch to IMPROVE, study, innovate, improvise, be firm & NEVER give in.
- The early stories of how Koch obliterated the Labor union is personal to me. My socks factory in Lower Parel had the same issues.
- The WHY of staying "private" and not going for glam, PR, noise, etc. No branding, marketing, 'logo making' 🙂
- The institutionalisation of the Corporate's Playbook. It's so hard to set common agendas & missions. (I fell for the rigour of the process vs the content (unknown)
- How opportunities are seized by those who are ready. The Business of PREPAREDNESS.
- The MACHINE that Koch built to control Washington. Scary but fascinating.
- How everything boils down to UNRELENTING HARD WORK.
- The nuclear level of DETAIL that KOCH went into everything.
- The approach of frugality. (Office decors, chairs, all 'normal)
- The model to create wealth from Knowledge, Data, Work.
November 27, 2023
I work in St. Paul and I drive to Woodbury a few times a week, and ever since I’ve been working in St Paul I’ve always thought to myself while I drive over the 494 bridge A) what is that big refinery with the fire coming out of its pipes that hovers over the Mississippi River and what does it do? And B) what is that disgusting smell that radiates the air while I’m driving over the 494 bridge? With the help of this book, I have an answer for both those questions. The book actually starts out talking about the father of the Koch Brothers, named Fred Koch, who left behind the Koch Company to his children, and the one to take over the business and pretty much the main character of this book is the one who turned that oil refinery into what it is today, and his name is Charles Koch. The refinery is called the Pine Bend oil refinery and it is essentially what made the Koch family into what is it today, which are the 3rd richest family in the United States. What makes the Pine Bend refinery such a large source of profit for the Koch family is the fact that it gets its oil for cheap from Canada and is able to process it here in Minnesota without having to ship it far. The Pine Bend oil refinery used to be a place where men with little education could work at, be safe from the pressures of corporate America with the help of labor unions, get paid a handsome wage and become middle class and raise a family. Once Charles Koch stepped in to take over the Pine Bend Oil refinery, all that was thrown out the window, and with the help of his corporate raiders, he tore down all the benefits that the labor unions built, and even tore down the labor union itself after it fought a long war with Koch Industries that even turned militant. The labor union that represented the workers of Pine Bend did not want to give up there benefits and staged protests to stop Charles Koch from tearing down the rules that unions had in place for the workers, and Charles Koch had the laws changed so they couldn’t even protest in-front of the refinery, and thats what set everything off. One of the union workers used a rifle to destroy one of the electrical grids, a group hijacked a truck that was bringing oil out of the factory, and another group even sabotaged a train and had it crash and derail inside of the oil refinery. That might sound unnecessarily but these workers were about to lose there stake in the middle class, and Koch Industries knew this and didn’t care, all just for the sake of profit. Koch Industries tactics of union busting and paying employees low wages in unsafe working environments and their little regard to the environment is a result and rooted in Charles Koch’s religious belief in the philosophy of MBM, Market Based Management. The reason why I would smell almost vomit inducing scents in the air when I drive over the 494 bridge is due to the sulfuric rich oil that is refined at Pine Bend, and the sulfuric residue is dumped into the Mississippi River from there refinery. Since the refinery is so old, it doesn’t have to follow as many regulations imposed by the EPA, since it was created before 1974. But even with these regulations that benefit Koch Industries, and even a agency that was created by the republican president Richard Nixon (I didn’t know Nixon made EPA lol) they still would love to tear that agency down as well, because Charles Koch is a libertarian and is anti-government oversight and anti-global warming since the major money maker of their business is in oil.
Like I said in the previous paragraph, Charles Koch is the creator and believer in a form of running businesses called “Market Based Management”. If you want to work at Koch industries and be successful, you must follow those beliefs or else you probably will be out of the door sooner than later. Charles Koch is a follower of Austrian economics and his favorite economist in Friedrich Hayek, and he is one the main influences behind MBM, for better or worse, and that is what has made him so successful to this day. Koch believes in buying things cheap and as soon as possible because the price will rise in the future, and a lot of his business deals reflect that belief, such as the purchase of the Pine Bend oil refinery, his purchase of Georgia-Pacific and all of his other purchases, investments and entrances into different industries like fertilizer and synthetic fabrics . On the other hand, there are plenty of situations where this philosophy has failed him, such as the purchase of Purina, which almost sank Koch Industries, and even to this day he runs his companies by being very cheap towards his employees and by putting them in unsafe working environments that led to deaths at his refineries and at Georgia-Pacific, which is a paper and building materials company. A lot of these decisions based on his philosophy have led to run ins with the federal government, and have cost him a lot of money. Charles Koch is a firm libertarian and believes that any government oversight is a terrible thing, and he funds lobbyists who fight for his causes in Washington DC, and is one of the highest spenders of lobbies in the USA, and will play both sides if it benefits him. A company that was very similar to Koch Industries, but wasn’t as successful was Enron, who was also in the fossil fuels industry, but unlike Koch, didn’t learn there lessons after their run in with the federal government. Koch and MBM believes in 10,000% compliance, which essentially is to follow the law 100% of the time, with 100% of the employees which is just 100 times 100. Obviously they don’t follow taxes laws, but they were actually the ones who created the idea of offshoring companies to save on taxes, even though they don’t need to, but since Koch is such a die hard libertarian, he feels that any form of taxation is robbery by the government, and takes it personally. The fights Koch Industries has had with the federal government have been enormous, he also has had fights with his own brothers about control over the company, and Charles relationship with one of his brothers has soured due to this, but Koch industries tends to win them a lot. Charles biggest fights have been with his brother Bill Koch, who wanted to turn the company public and sell it off, which ended with Bill selling a portion of his stock for about a few hundred million dollars, chump change to the amount Charles and David have accumulated now, also with labor unions who tend to lose to the fact that Koch management plays the hardest ball imaginable, and with the federal government, in particular the Democratic Party who want to regulate oil emissions. All these situations, Koch industries won simply by being more ruthless and cold than Charles’s opponents.
My biggest take away from this book isn’t how ruthless corporate America is, but his much they are willing to destroy just simply for profits. Charles Koch and his brothers won’t have to face the brunt of global warming, they won’t even have to face a life of getting paid low wages, but simply due to a faulty philosophy, they won’t change. Charles Koch is even willing to betray his own morals about government oversight and help people like Trump take down environmental regulations, simply because it benefits him, which to me is just sad. Koch industries is the perfect analogy of what has happened in the USA since FDR was president, corporations have become bigger and bigger and they have undue all the laws in place and made lives of Americans harder due to less wage increases and less benefits, and even made our lives even less safe due to these regulations being undone. What’s scary is that Charles Koch vision for the future is to have every company have faith in MBM, which is absolutely evil because it will only make our lives harder and the select few in the top 1% easier, simply just for profits. In a world run by Market Based Management, everything is cheap and can replaced, especially the workers. Charles Koch also funds grassroots organizations that invade politicians rally’s that are against the policies that they are for, so we are fighting a war against an enemy that will attack from every front imaginable, from the corporate front, political front and the environmental front. Like they don’t have a true vision for the future except to make money, which is disgusting because what’s the point of making money when every year after year the Earth is getting hotter and there will be nothing left to make a future. I left this book with a little less optimism about corporate America, including America as a whole because I learned so much about the libertarian movement and it almost seems like they are winning. A libertarians idea is to have as low of corporate taxes as possible and have the government owe as much money as possible so that our government can’t function, like how can a company even be considered good for the US population when it is actively weakening the government, weakening the middle class and is even killing the planet in the process? Like Koch Industries is so cartoonishly evil it’s pathetic, like we must stop these corporations from literally destroying the world or else they will take over the entire Earth with there philosophy of Market Based Management, which will only lead to more suffering, except for the people in the top 1%.
Like I said in the previous paragraph, Charles Koch is the creator and believer in a form of running businesses called “Market Based Management”. If you want to work at Koch industries and be successful, you must follow those beliefs or else you probably will be out of the door sooner than later. Charles Koch is a follower of Austrian economics and his favorite economist in Friedrich Hayek, and he is one the main influences behind MBM, for better or worse, and that is what has made him so successful to this day. Koch believes in buying things cheap and as soon as possible because the price will rise in the future, and a lot of his business deals reflect that belief, such as the purchase of the Pine Bend oil refinery, his purchase of Georgia-Pacific and all of his other purchases, investments and entrances into different industries like fertilizer and synthetic fabrics . On the other hand, there are plenty of situations where this philosophy has failed him, such as the purchase of Purina, which almost sank Koch Industries, and even to this day he runs his companies by being very cheap towards his employees and by putting them in unsafe working environments that led to deaths at his refineries and at Georgia-Pacific, which is a paper and building materials company. A lot of these decisions based on his philosophy have led to run ins with the federal government, and have cost him a lot of money. Charles Koch is a firm libertarian and believes that any government oversight is a terrible thing, and he funds lobbyists who fight for his causes in Washington DC, and is one of the highest spenders of lobbies in the USA, and will play both sides if it benefits him. A company that was very similar to Koch Industries, but wasn’t as successful was Enron, who was also in the fossil fuels industry, but unlike Koch, didn’t learn there lessons after their run in with the federal government. Koch and MBM believes in 10,000% compliance, which essentially is to follow the law 100% of the time, with 100% of the employees which is just 100 times 100. Obviously they don’t follow taxes laws, but they were actually the ones who created the idea of offshoring companies to save on taxes, even though they don’t need to, but since Koch is such a die hard libertarian, he feels that any form of taxation is robbery by the government, and takes it personally. The fights Koch Industries has had with the federal government have been enormous, he also has had fights with his own brothers about control over the company, and Charles relationship with one of his brothers has soured due to this, but Koch industries tends to win them a lot. Charles biggest fights have been with his brother Bill Koch, who wanted to turn the company public and sell it off, which ended with Bill selling a portion of his stock for about a few hundred million dollars, chump change to the amount Charles and David have accumulated now, also with labor unions who tend to lose to the fact that Koch management plays the hardest ball imaginable, and with the federal government, in particular the Democratic Party who want to regulate oil emissions. All these situations, Koch industries won simply by being more ruthless and cold than Charles’s opponents.
My biggest take away from this book isn’t how ruthless corporate America is, but his much they are willing to destroy just simply for profits. Charles Koch and his brothers won’t have to face the brunt of global warming, they won’t even have to face a life of getting paid low wages, but simply due to a faulty philosophy, they won’t change. Charles Koch is even willing to betray his own morals about government oversight and help people like Trump take down environmental regulations, simply because it benefits him, which to me is just sad. Koch industries is the perfect analogy of what has happened in the USA since FDR was president, corporations have become bigger and bigger and they have undue all the laws in place and made lives of Americans harder due to less wage increases and less benefits, and even made our lives even less safe due to these regulations being undone. What’s scary is that Charles Koch vision for the future is to have every company have faith in MBM, which is absolutely evil because it will only make our lives harder and the select few in the top 1% easier, simply just for profits. In a world run by Market Based Management, everything is cheap and can replaced, especially the workers. Charles Koch also funds grassroots organizations that invade politicians rally’s that are against the policies that they are for, so we are fighting a war against an enemy that will attack from every front imaginable, from the corporate front, political front and the environmental front. Like they don’t have a true vision for the future except to make money, which is disgusting because what’s the point of making money when every year after year the Earth is getting hotter and there will be nothing left to make a future. I left this book with a little less optimism about corporate America, including America as a whole because I learned so much about the libertarian movement and it almost seems like they are winning. A libertarians idea is to have as low of corporate taxes as possible and have the government owe as much money as possible so that our government can’t function, like how can a company even be considered good for the US population when it is actively weakening the government, weakening the middle class and is even killing the planet in the process? Like Koch Industries is so cartoonishly evil it’s pathetic, like we must stop these corporations from literally destroying the world or else they will take over the entire Earth with there philosophy of Market Based Management, which will only lead to more suffering, except for the people in the top 1%.
October 31, 2020
Easily, one of the best and the most important books that I have read this year.
It isn’t just a biography, over its mammoth width - this book is a fine work of investigative journalism. Lobbying, Oil, Labor relations, derivatives-trading, Fracking, Capitalism - more than these ideas, it is a journey of a man at the center of all this - Charles Koch.
He is an opportunistic libertarian fanatic! And nothing is more dangerous than a dangerous idea that is sown in the ground for years and decades at a time, as it spreads its root deep within to create a redwood leviathan.
A patient man who shakes the world, and then profits from all the volatility.
It isn’t just a biography, over its mammoth width - this book is a fine work of investigative journalism. Lobbying, Oil, Labor relations, derivatives-trading, Fracking, Capitalism - more than these ideas, it is a journey of a man at the center of all this - Charles Koch.
He is an opportunistic libertarian fanatic! And nothing is more dangerous than a dangerous idea that is sown in the ground for years and decades at a time, as it spreads its root deep within to create a redwood leviathan.
A patient man who shakes the world, and then profits from all the volatility.
October 26, 2019
The “Long View” for Good and Bad
As with much in our country today, there is likely to be a partisan divide over author Christopher Leonard’s examination of Koch Industries, a book that parts much of the veil on a company and a family that for decades has operated under the deepest secrecy. Because of its size and influence, this is a company that everyone should try to understand.
Leonard has written a book that portrays in high relief the strengths and weaknesses of pure capitalism. His profile will be disliked by the unquestioning believers in Koch and his ideology. It will also be disliked by those who think the company (the second largest private company in America) and its leadership are the embodiment of evil.
The way Charles Koch runs his company has many attributes that merit approval.
As a result of Koch Industries being a private company, it does not have to worry about short-term, quarterly profits. This is a classic criticism of the way many large public companies are run — satisfy Wall Street every three months and structure compensation systems that reward CEOs for short-term performance. Indeed, many CEOs who manage public companies for the long term have short term careers.
We learn that Charles Koch is not afraid to make commitments that may show losses for years, if he is convinced that there will be longer term, very significant profits. Across an economy, decisions based upon emerging profit opportunity help ensure that resources are deployed to generate growth that in turn generates jobs. And there are many examples of government decision-making that is slow, based on politics, and results in mis-allocation of tax dollars.
An example of the Koch approach, cited by Leonard, was the company’s investment in pipelines to serve the emerging fracking industry before anyone was sure of fracking’s significance. Oil and gas was being discovered in areas where there was no transportation infrastructure to move product once it came out of the ground. Major investment was required up front, with profits years off. Koch analysts were convinced that the risk was not as great as generally perceived, and Charles Koch gave the investment a green light despite the fact that payback would be years off.
The pipeline example is also one that demonstrates a rigorous analysis of investments. Koch looks for an opportunity that can provide a chokehold on a segment of the economy, or can establish the company’s dominance in a business with a high barrier to entry to new competitors. It’s unlikely that a competitor’s second pipeline to the same area could earn an adequate profit so riches go to the first mover. Refining, as the author explains, is another example of a Koch monopoly, taking advantage of the fact that existing refineries are grandfathered under lax pollution standards (even when the old refineries are expanded). New refineries have to meet rigorous EPA standards and thus none have been built since these standards became law decades ago.
Leonard also provides a wonderful example of Koch’s negotiating tactics to undermine “holdouts”. The insight, when building a pipeline, was to negotiate with all the property owners along the route at once. Wall all potential sellers off from knowing the price offered to each. This put the group’s income at the jeopardy of a holdout and it will be the group, not Koch, that will put pressure on the reluctant seller to accept the offer to all.
The reader is struck by the duality of ideological purity and rigidity of Charles Koch’s philosophy on the one hand, and his flexibility to adapt as market conditions change. When it comes to business decisions, he also has the ability to learn from mistakes and move on.
The “Book of Mormon” for Koch Industries is “Market-Based Management”, which places great emphasis upon data-driven decisions and sharing of market information among the company’s diverse businesses. This information sharing leverages the profitability of Koch’s trading in oil and other commodities. These businesses are driven by fact-driven realism on steroids, the ability quickly to adapt to changing market conditions, and deep contempt for government and unions.
When it comes to political ideology, Charles Koch is unbending. He rejects the idea that a role of government is to provide a social safety net. And in this, too, he takes the long view. While early on, Koch and his company wanted nothing to do with politics, the company has slowly and inexorably built one of the most effective lobbying groups not only in Washington but at the state level everywhere it operates. Koch is an exceptionally tough negotiator with unions, taking advantage of their eroding strength in the American economy.
Early in Charles Koch’s tenure as CEO, Koch Industries was known to flout environmental and safety laws and regulations. But after some heavy penalties, difficulties with regulators, and publicity that threatened the reputation of the company, Koch strengthened the compliance department and implemented “10,000 percent compliance” with regulations.
Instead of violating laws and regulations and hoping to get away with it, the company’s efforts would be focused upon getting such legal restrictions removed entirely.
Ironically, the company with the “long view” is implacably opposed to any regulations that discourage the use of fossil fuels for the long term health of the planet. Author Leonard describes the unsuccessful effort of one of Koch’s analysts to convince Charles Koch that the same trading skills and integration of information so profitable to the company elsewhere could be employed to make money under proposed “cap and trade” regulations. These were designed to incentivize companies to reduce greenhouse gas emissions and could be traded in an open, capitalistic market. Koch would have none of it, and succeeded in killing the bill.
There is much else of interest in this book, including Charles Koch’s feud with his brother Bill and the passive role of Charles’ late brother David who carved out his own role as a New York-based philanthropist. Charles’ son Chad was rising in the company based on merit, but decided to bow out — at least for now — from assuming the mantle of leadership. Left unanswered is how this private, powerful company will be led once Charles Koch, now 84, passes away.
This is a fascinating book, the product of seven years of reporting and writing. Whatever one’s political philosophy, author Leonard’s insights into Koch are impressive and deserve discussion and debate.
As with much in our country today, there is likely to be a partisan divide over author Christopher Leonard’s examination of Koch Industries, a book that parts much of the veil on a company and a family that for decades has operated under the deepest secrecy. Because of its size and influence, this is a company that everyone should try to understand.
Leonard has written a book that portrays in high relief the strengths and weaknesses of pure capitalism. His profile will be disliked by the unquestioning believers in Koch and his ideology. It will also be disliked by those who think the company (the second largest private company in America) and its leadership are the embodiment of evil.
The way Charles Koch runs his company has many attributes that merit approval.
As a result of Koch Industries being a private company, it does not have to worry about short-term, quarterly profits. This is a classic criticism of the way many large public companies are run — satisfy Wall Street every three months and structure compensation systems that reward CEOs for short-term performance. Indeed, many CEOs who manage public companies for the long term have short term careers.
We learn that Charles Koch is not afraid to make commitments that may show losses for years, if he is convinced that there will be longer term, very significant profits. Across an economy, decisions based upon emerging profit opportunity help ensure that resources are deployed to generate growth that in turn generates jobs. And there are many examples of government decision-making that is slow, based on politics, and results in mis-allocation of tax dollars.
An example of the Koch approach, cited by Leonard, was the company’s investment in pipelines to serve the emerging fracking industry before anyone was sure of fracking’s significance. Oil and gas was being discovered in areas where there was no transportation infrastructure to move product once it came out of the ground. Major investment was required up front, with profits years off. Koch analysts were convinced that the risk was not as great as generally perceived, and Charles Koch gave the investment a green light despite the fact that payback would be years off.
The pipeline example is also one that demonstrates a rigorous analysis of investments. Koch looks for an opportunity that can provide a chokehold on a segment of the economy, or can establish the company’s dominance in a business with a high barrier to entry to new competitors. It’s unlikely that a competitor’s second pipeline to the same area could earn an adequate profit so riches go to the first mover. Refining, as the author explains, is another example of a Koch monopoly, taking advantage of the fact that existing refineries are grandfathered under lax pollution standards (even when the old refineries are expanded). New refineries have to meet rigorous EPA standards and thus none have been built since these standards became law decades ago.
Leonard also provides a wonderful example of Koch’s negotiating tactics to undermine “holdouts”. The insight, when building a pipeline, was to negotiate with all the property owners along the route at once. Wall all potential sellers off from knowing the price offered to each. This put the group’s income at the jeopardy of a holdout and it will be the group, not Koch, that will put pressure on the reluctant seller to accept the offer to all.
The reader is struck by the duality of ideological purity and rigidity of Charles Koch’s philosophy on the one hand, and his flexibility to adapt as market conditions change. When it comes to business decisions, he also has the ability to learn from mistakes and move on.
The “Book of Mormon” for Koch Industries is “Market-Based Management”, which places great emphasis upon data-driven decisions and sharing of market information among the company’s diverse businesses. This information sharing leverages the profitability of Koch’s trading in oil and other commodities. These businesses are driven by fact-driven realism on steroids, the ability quickly to adapt to changing market conditions, and deep contempt for government and unions.
When it comes to political ideology, Charles Koch is unbending. He rejects the idea that a role of government is to provide a social safety net. And in this, too, he takes the long view. While early on, Koch and his company wanted nothing to do with politics, the company has slowly and inexorably built one of the most effective lobbying groups not only in Washington but at the state level everywhere it operates. Koch is an exceptionally tough negotiator with unions, taking advantage of their eroding strength in the American economy.
Early in Charles Koch’s tenure as CEO, Koch Industries was known to flout environmental and safety laws and regulations. But after some heavy penalties, difficulties with regulators, and publicity that threatened the reputation of the company, Koch strengthened the compliance department and implemented “10,000 percent compliance” with regulations.
Instead of violating laws and regulations and hoping to get away with it, the company’s efforts would be focused upon getting such legal restrictions removed entirely.
Ironically, the company with the “long view” is implacably opposed to any regulations that discourage the use of fossil fuels for the long term health of the planet. Author Leonard describes the unsuccessful effort of one of Koch’s analysts to convince Charles Koch that the same trading skills and integration of information so profitable to the company elsewhere could be employed to make money under proposed “cap and trade” regulations. These were designed to incentivize companies to reduce greenhouse gas emissions and could be traded in an open, capitalistic market. Koch would have none of it, and succeeded in killing the bill.
There is much else of interest in this book, including Charles Koch’s feud with his brother Bill and the passive role of Charles’ late brother David who carved out his own role as a New York-based philanthropist. Charles’ son Chad was rising in the company based on merit, but decided to bow out — at least for now — from assuming the mantle of leadership. Left unanswered is how this private, powerful company will be led once Charles Koch, now 84, passes away.
This is a fascinating book, the product of seven years of reporting and writing. Whatever one’s political philosophy, author Leonard’s insights into Koch are impressive and deserve discussion and debate.
January 27, 2020
“‘I am totally convinced that probably seventy percent to seventy-five percent of our government is being run by Satan worshipers,’ [Maria] Brady said. ‘That’s what’s wrong with this country.’” (p. 630).
Little Maria Moron of Fantasyland, USA, and her scholarly wisdom, provide the perfect illustrative example of the disease afflicting this unraveling Republic.
Leonard painstakingly chronicles the history of the Koch brothers and their rising empire, as well as reveals the grand scheme of Koch Industries (with Charles as the true Brainiac) as it seeks a Libertarian paradise for vampiric capitalism, while brainwashing the gullible through its numerous nonprofits, political activist groups like Americans for Prosperity, Super PACs, Fox News grotesques like Glenn Beck, puppet politicians, and the incredibly destructive verdict of Citizens United v. Federal Election Commission to create those Elysian Fields filled with bulging sacks of untaxed cash. The fact that the Tea Party movement (and the House Freedom Caucus) was bankrolled by the Kochs is no surprise to anyone anymore, unless the arrogant ignorant choose to ignore it as easily as they do the Constitution and the New Testament. We live in a plutocracy, one that—era after era—seems to favor the filthy-rich and their corporations over all else. The lies are shrink-wrapped and packaged to the demographics that crave them, those seeking delusional halcyon yesteryears. Trump offered bread and circuses to the masses for huge tax breaks for him and his coterie, and has undertaken a systematic dismantling of environmental protections for our great polluters backed by the idiotic denial of the hard science addressing global warming and its future ramifications. Clean coal! Chinese ploys! Socialism!
The facts that Charles Koch rides in armored convoys manned with armed guards and his Wichita HQ is now a fortress ringed by a huge earthen berm are interesting and also illustrative of the super-rich living in the Land of Gun Nuts and Truck Bombs. They are fearful, but their power is deeply rooted within the entire political and governing system. I wonder if we can ever break the tentacled stranglehold of Democracy in chains. The hourglass drains . . .
\m/
Little Maria Moron of Fantasyland, USA, and her scholarly wisdom, provide the perfect illustrative example of the disease afflicting this unraveling Republic.
Leonard painstakingly chronicles the history of the Koch brothers and their rising empire, as well as reveals the grand scheme of Koch Industries (with Charles as the true Brainiac) as it seeks a Libertarian paradise for vampiric capitalism, while brainwashing the gullible through its numerous nonprofits, political activist groups like Americans for Prosperity, Super PACs, Fox News grotesques like Glenn Beck, puppet politicians, and the incredibly destructive verdict of Citizens United v. Federal Election Commission to create those Elysian Fields filled with bulging sacks of untaxed cash. The fact that the Tea Party movement (and the House Freedom Caucus) was bankrolled by the Kochs is no surprise to anyone anymore, unless the arrogant ignorant choose to ignore it as easily as they do the Constitution and the New Testament. We live in a plutocracy, one that—era after era—seems to favor the filthy-rich and their corporations over all else. The lies are shrink-wrapped and packaged to the demographics that crave them, those seeking delusional halcyon yesteryears. Trump offered bread and circuses to the masses for huge tax breaks for him and his coterie, and has undertaken a systematic dismantling of environmental protections for our great polluters backed by the idiotic denial of the hard science addressing global warming and its future ramifications. Clean coal! Chinese ploys! Socialism!
The facts that Charles Koch rides in armored convoys manned with armed guards and his Wichita HQ is now a fortress ringed by a huge earthen berm are interesting and also illustrative of the super-rich living in the Land of Gun Nuts and Truck Bombs. They are fearful, but their power is deeply rooted within the entire political and governing system. I wonder if we can ever break the tentacled stranglehold of Democracy in chains. The hourglass drains . . .
\m/
July 4, 2020
I was very much looking forward to this book as I usually enjoy biographies of entrepreneurs. And then the high 4.3 average star rating!
I was hoping for a ton of insides and great stories on how Charles Koch managed to build this behemoth of a private company. Learnings, takeaways, tactics, strategies - thing to employ in my own entrepreneurial endeavors.
Instead, I got a book that emphasizes way too much the depths of the political activities from an opponent’s political perspective.
Also way too long and detailed - seriously, get to the point! I’m still rating it 3 stars for the amazing entrepreneurial performance and learning more about it.
Don’t read for entrepreneurial insights, read if you’re left-leaning and want your worldview confirmed.
I was hoping for a ton of insides and great stories on how Charles Koch managed to build this behemoth of a private company. Learnings, takeaways, tactics, strategies - thing to employ in my own entrepreneurial endeavors.
Instead, I got a book that emphasizes way too much the depths of the political activities from an opponent’s political perspective.
Also way too long and detailed - seriously, get to the point! I’m still rating it 3 stars for the amazing entrepreneurial performance and learning more about it.
Don’t read for entrepreneurial insights, read if you’re left-leaning and want your worldview confirmed.
September 8, 2019
This book was 700 pages of stomach turning modern-day capitalism. Not exactly a fun reading experience, but I did find it really interesting once I got into it. The first third was more difficult to get through until the story of the company starts getting told through the perspectives of non-Koch family member employees. It was nice to have a few people to root for in a book filled with grade A assholes.
November 22, 2020
So the Koch family does not bring sacrifices to the gods of Leonard. Hence they must be dealt with, or this heresy might get out of hand.
January 8, 2020
I worried that Leonard would go into too much detail, but he handles this issue well. Instead of exhaustively covering everything, he chooses a few areas---for example, union relations at the Pine Bend refinery and at a Portland warehouse, or the Waxman-Markey carbon cap & trade bill---and goes into them in detail. The areas all involve Koch Industries, though not necessarily the Koch brothers personally. The tone is even throughout, not strident. Nonetheless, the story is quite frightening. The Koch brothers have constructed a sort of business cult, Market-Based Management, based on extracting value from everything—the environment, the political system—with no regard to future consequences. The Koch brothers are both engineers by training, and are well aware of climate change, but have dedicated themselves to destroying the planet for the sake of money today. The future doesn't matter when you are 84 years old, with a $50 billlion fortune, and live your life in gated compounds in Wichita, Kansas, surrounded by security guards. It's fascinating, but I wish the book gave us more insight into Charles and David Koch's thoughts.
> The underlying cause of this dysfunction is a set of loopholes in the Clean Air Act, a massive set of regulations passed in 1963 (and significantly expanded in 1970) that imposed pollution controls on new refineries. The legacy oil refiners, including Koch, exploited arcane sections of the law that allowed them to expand their old facilities while avoiding clean-air standards that would apply to new facilities. This gave them an insurmountable advantage over any potential new competitor. … The grandfathering clause built a protective wall around a group of companies that were lucky enough to be doing business in 1970. The clause froze the oil industry in midplay, leaving the existing players to have the game board to themselves by making it prohibitively expensive for new players to enter the market and compete. The last large-capacity US oil refinery was built in 1977. … In 2010, the average profit margin to refine a barrel of crude oil in the United States was roughly $6 a barrel, by far the highest in the world. The next-highest profit margin was in Europe, where it was about $4 a barrel. One year later, US refining profit margins had swelled to over $16 per barrel—nearly triple the next-highest rate of almost $6 a barrel in Europe. These profit margins were partly the gift of fracking, which delivered copious amounts of cheap oil to refine. In a double stroke of good luck, fracking also cut the cost of natural gas, which refiners used to power their plants.
> Charles was not, in fact, just the boss of the company. He was its leader. Charles Koch did not order people around him to do what he said. He inspired them to do so.
> Ron Howell founded an obscure nonprofit group called Oklahomans for Judicial Excellence. It did something unheard of: it started grading local judges based on their fealty to free-market economic theory. … The grading system created a way to embarrass judges in the local press by publicizing their low scores. Koch Industries also offered them a way to escape this embarrassment: the company sponsored a series of free seminars that judges could attend if they received poor grades from Koch’s rating system. The seminars were not held in stuffy classrooms. Koch Industries paid for judges to travel to a ski resort in Utah or a beachfront condominium … By 2016, it had transformed into a new program that offered free seminars to judges called the Law & Economics Center, which was housed at George Mason University in Fairfax, Virginia, along with Koch’s free-market think tank, the Mercatus Center. The Law & Economics Center claimed to have hosted more than four thousand state and federal judges from all fifty states at its seminars. It offered up to a dozen events a year.
> The jury found Koch Industries guilty of stealing oil between 1981 and 1985 from federal land and Indian reservations, and of falsifying roughly twenty-five thousand documents in order to underreport how much oil the company was taking. The fines for Koch could have been enormous. The judge could have levied a $214 million fine just for falsifying the oil sale receipts. But Koch's lawyers were able to settle the case before it went to the penalty phase, paying an undisclosed amount.
> In 1998, the Minnesota Pollution Control Agency fined Koch Industries $6.9 million for the company’s pollution at Pine Bend. It was the largest fine of its type in the history of the state. Federal criminal charges quickly followed after that. In 1999, Koch Industries pled guilty in federal court to criminal violations of environmental laws, both for dumping ammonia and for allowing leaks at the refinery to pollute the surrounding area with oil for several years
> "10,000 percent compliance," meaning that employees obeyed 100 percent of all laws 100 percent of the time
> even the biggest Wall Street banks were at a disadvantage when they went up against the traders at Koch Industries, British Petroleum, or Amoco. The Wall Street banks didn’t have access to inside information. Goldman Sachs didn't own refineries or pipelines and couldn’t get a sneak peek into where markets were headed.
> To execute a parking trade, a trader at Koch or Enron sold electricity from a power plant in California to a customer outside the state, like PNM in Arizona. This sale was made in the day-ahead market, where prices were capped. But the sale was bogus. The next day, when power was supposed to be delivered from California to PNM, the utility would suddenly sell the exact same amount of power from Arizona into California, and into the much pricier ISO hourly market.
> Koch jettisoned the use of budgets, for example, just as it had done back in the 1980s. Because it was a publicly traded firm, Georgia-Pacific's employees invested countless hours of their time to write quarterly and annual budgets, setting out targets to be met to please shareholders. This created a circular logic
> Back in the 1970s, it was difficult for a company to lock out workers and replace them during a strike. This was in part due to the strength of picket lines, but also because it was seen as unethical to replace workers who were on strike. This changed in 1981 when Ronald Reagan fired federal air traffic controllers who were on strike and replaced them. … Another clause limited the IBU's ability to honor picket lines—a crucial provision that was increasingly common in labor contracts around the country. This provision broke the solidarity between unions, making it a fireable offense to refuse to cross each other’s picket lines.
> The network included the main lobbying office in Washington, DC; all of the contract lobbyists it hired; a relatively obscure activist group called Americans for Prosperity with chapters in several states; at least several private political consultancies; the Koch Industries corporate PAC; various think tanks; academic programs and fellowships; and a consortium of wealthy donors that Charles and David Koch convened twice a year to pool large donations for Koch's chosen causes. … If the CEO of General Electric or any other publicly traded company tried to build a similar machine to influence public policy, and dedicated as much time and money to it as Charles Koch, then that CEO would almost certainly be curtailed by a board of directors. … AFP's full power was not mobilized until the Waxman-Markey bill threatened Koch Industries. As the threat of regulations on carbon emissions increased, Charles and David Koch dramatically increased the funding and reach of Americans for Prosperity. In 2007, the group had a budget of $5.7 million. By 2009, that budget was $10.4 million. In 2010, it was $17.5 million … Americans for Prosperity also helped direct the activists' passion toward a very specific group of targets: Republican politicians. Attacking the Republican party was one of AFP's central strategies from the earliest days.
> A 2010 Greenpeace analysis of spending on climate-denial groups between 2005 and 2008 found that Koch Industries and its affiliates spent $24.9 million to support such groups, almost triple Exxon’s $8.9 million in spending. And Koch was more uncompromising than Exxon, whose lobbyists made it known that Exxon might support some sort of carbon emissions plan, such as a carbon tax.
> The Koch political network would attack the effort to repeal Obamacare, and in doing so it would win a second victory by proving its power and ensuring a place at the bargaining table for Charles Koch. On March 6, the House of Representatives unveiled a plan to repeal and replace Obamacare with a bill called the American Health Care Act. The next day, Americans for Prosperity mobilized against the plan, just as it had mobilized against Obama. … The sin of the AHCA, as it was called, was the inclusion of tax breaks that would help millions of people pay for health insurance—"families will be given up to $14,000 of other people’s money," Meadows complained. He pointed out that the bill also forced insurance companies to fine their customers if they dropped their health insurance, a sneaky way to perpetuate Obamacare's mandate to purchase insurance. The bill also included subsidies to insurance companies approaching $100 billion, Meadows said.
> Libertarians, Rothbard wrote, should not be concerned about creating budget deficits by cutting taxes. The deficits weakened "the enemy," as Rothbard referred to the state, and strengthened the libertarian's power to demand that the state reduce its spending and shrink its role in society.
> Senior leaders at Koch Industries phrased everything they said in the vocabulary of Market-Based Management. One of Charles Koch's indisputable accomplishments over the preceding thirty years was creating an organization where every employee—to a person—publicly subscribed to the same intricately encoded philosophy. … Division heads who came to Wichita spoke in terms of mental models and discovery processes and the five dimensions. They talked about integrity. Decision rights. Challenge processes. Experimental discovery. Virtues and talents. These weren't dog whistles or catchphrases. They were the internal vocabulary of Kochland. Learning them was the first condition to winning a seat at the table
> The underlying cause of this dysfunction is a set of loopholes in the Clean Air Act, a massive set of regulations passed in 1963 (and significantly expanded in 1970) that imposed pollution controls on new refineries. The legacy oil refiners, including Koch, exploited arcane sections of the law that allowed them to expand their old facilities while avoiding clean-air standards that would apply to new facilities. This gave them an insurmountable advantage over any potential new competitor. … The grandfathering clause built a protective wall around a group of companies that were lucky enough to be doing business in 1970. The clause froze the oil industry in midplay, leaving the existing players to have the game board to themselves by making it prohibitively expensive for new players to enter the market and compete. The last large-capacity US oil refinery was built in 1977. … In 2010, the average profit margin to refine a barrel of crude oil in the United States was roughly $6 a barrel, by far the highest in the world. The next-highest profit margin was in Europe, where it was about $4 a barrel. One year later, US refining profit margins had swelled to over $16 per barrel—nearly triple the next-highest rate of almost $6 a barrel in Europe. These profit margins were partly the gift of fracking, which delivered copious amounts of cheap oil to refine. In a double stroke of good luck, fracking also cut the cost of natural gas, which refiners used to power their plants.
> Charles was not, in fact, just the boss of the company. He was its leader. Charles Koch did not order people around him to do what he said. He inspired them to do so.
> Ron Howell founded an obscure nonprofit group called Oklahomans for Judicial Excellence. It did something unheard of: it started grading local judges based on their fealty to free-market economic theory. … The grading system created a way to embarrass judges in the local press by publicizing their low scores. Koch Industries also offered them a way to escape this embarrassment: the company sponsored a series of free seminars that judges could attend if they received poor grades from Koch’s rating system. The seminars were not held in stuffy classrooms. Koch Industries paid for judges to travel to a ski resort in Utah or a beachfront condominium … By 2016, it had transformed into a new program that offered free seminars to judges called the Law & Economics Center, which was housed at George Mason University in Fairfax, Virginia, along with Koch’s free-market think tank, the Mercatus Center. The Law & Economics Center claimed to have hosted more than four thousand state and federal judges from all fifty states at its seminars. It offered up to a dozen events a year.
> The jury found Koch Industries guilty of stealing oil between 1981 and 1985 from federal land and Indian reservations, and of falsifying roughly twenty-five thousand documents in order to underreport how much oil the company was taking. The fines for Koch could have been enormous. The judge could have levied a $214 million fine just for falsifying the oil sale receipts. But Koch's lawyers were able to settle the case before it went to the penalty phase, paying an undisclosed amount.
> In 1998, the Minnesota Pollution Control Agency fined Koch Industries $6.9 million for the company’s pollution at Pine Bend. It was the largest fine of its type in the history of the state. Federal criminal charges quickly followed after that. In 1999, Koch Industries pled guilty in federal court to criminal violations of environmental laws, both for dumping ammonia and for allowing leaks at the refinery to pollute the surrounding area with oil for several years
> "10,000 percent compliance," meaning that employees obeyed 100 percent of all laws 100 percent of the time
> even the biggest Wall Street banks were at a disadvantage when they went up against the traders at Koch Industries, British Petroleum, or Amoco. The Wall Street banks didn’t have access to inside information. Goldman Sachs didn't own refineries or pipelines and couldn’t get a sneak peek into where markets were headed.
> To execute a parking trade, a trader at Koch or Enron sold electricity from a power plant in California to a customer outside the state, like PNM in Arizona. This sale was made in the day-ahead market, where prices were capped. But the sale was bogus. The next day, when power was supposed to be delivered from California to PNM, the utility would suddenly sell the exact same amount of power from Arizona into California, and into the much pricier ISO hourly market.
> Koch jettisoned the use of budgets, for example, just as it had done back in the 1980s. Because it was a publicly traded firm, Georgia-Pacific's employees invested countless hours of their time to write quarterly and annual budgets, setting out targets to be met to please shareholders. This created a circular logic
> Back in the 1970s, it was difficult for a company to lock out workers and replace them during a strike. This was in part due to the strength of picket lines, but also because it was seen as unethical to replace workers who were on strike. This changed in 1981 when Ronald Reagan fired federal air traffic controllers who were on strike and replaced them. … Another clause limited the IBU's ability to honor picket lines—a crucial provision that was increasingly common in labor contracts around the country. This provision broke the solidarity between unions, making it a fireable offense to refuse to cross each other’s picket lines.
> The network included the main lobbying office in Washington, DC; all of the contract lobbyists it hired; a relatively obscure activist group called Americans for Prosperity with chapters in several states; at least several private political consultancies; the Koch Industries corporate PAC; various think tanks; academic programs and fellowships; and a consortium of wealthy donors that Charles and David Koch convened twice a year to pool large donations for Koch's chosen causes. … If the CEO of General Electric or any other publicly traded company tried to build a similar machine to influence public policy, and dedicated as much time and money to it as Charles Koch, then that CEO would almost certainly be curtailed by a board of directors. … AFP's full power was not mobilized until the Waxman-Markey bill threatened Koch Industries. As the threat of regulations on carbon emissions increased, Charles and David Koch dramatically increased the funding and reach of Americans for Prosperity. In 2007, the group had a budget of $5.7 million. By 2009, that budget was $10.4 million. In 2010, it was $17.5 million … Americans for Prosperity also helped direct the activists' passion toward a very specific group of targets: Republican politicians. Attacking the Republican party was one of AFP's central strategies from the earliest days.
> A 2010 Greenpeace analysis of spending on climate-denial groups between 2005 and 2008 found that Koch Industries and its affiliates spent $24.9 million to support such groups, almost triple Exxon’s $8.9 million in spending. And Koch was more uncompromising than Exxon, whose lobbyists made it known that Exxon might support some sort of carbon emissions plan, such as a carbon tax.
> The Koch political network would attack the effort to repeal Obamacare, and in doing so it would win a second victory by proving its power and ensuring a place at the bargaining table for Charles Koch. On March 6, the House of Representatives unveiled a plan to repeal and replace Obamacare with a bill called the American Health Care Act. The next day, Americans for Prosperity mobilized against the plan, just as it had mobilized against Obama. … The sin of the AHCA, as it was called, was the inclusion of tax breaks that would help millions of people pay for health insurance—"families will be given up to $14,000 of other people’s money," Meadows complained. He pointed out that the bill also forced insurance companies to fine their customers if they dropped their health insurance, a sneaky way to perpetuate Obamacare's mandate to purchase insurance. The bill also included subsidies to insurance companies approaching $100 billion, Meadows said.
> Libertarians, Rothbard wrote, should not be concerned about creating budget deficits by cutting taxes. The deficits weakened "the enemy," as Rothbard referred to the state, and strengthened the libertarian's power to demand that the state reduce its spending and shrink its role in society.
> Senior leaders at Koch Industries phrased everything they said in the vocabulary of Market-Based Management. One of Charles Koch's indisputable accomplishments over the preceding thirty years was creating an organization where every employee—to a person—publicly subscribed to the same intricately encoded philosophy. … Division heads who came to Wichita spoke in terms of mental models and discovery processes and the five dimensions. They talked about integrity. Decision rights. Challenge processes. Experimental discovery. Virtues and talents. These weren't dog whistles or catchphrases. They were the internal vocabulary of Kochland. Learning them was the first condition to winning a seat at the table
January 7, 2022
Kochland is many stories in one book. It is the story of three generations of the Koch family, starting with Fred Koch, the founder, and his four intelligent, tall and handsome sons. Of these the eldest is a cypher who appears at the beginning and then vanishes. The second is Charles Koch, one of the great business managers and empire builders of the past century, a man driven by reason, ambition and self interest into creating the second largest private fortune in the world (he and David together are worth over $100 billion- only Jeff Bezos is richer). And the twins, David and Bill. David was a socialite who lived in Manhattan, patronizing the higher arts, unlike his elder brother, who remains stubbornly a son of Wichita, apparently without other interests than running Koch Industries under his Market Based Management doctrine while taking over the Republican Party and attempting to run the country in his interest. Then there is Bill, who is obviously as smart as the others (they all or most of them have doctorates from MIT) and yet he allowed his jealousy to estrange him from Charles, whom he involved in decades of litigation. While very useful in bringing to light Koch shenanigans, Bill is a thoroughly dislikable character, unredeemed by financial talent (as Charles is). The proof is in the pudding. Whereas in 2019 Charles and David where each worth over $50 billion, Bill languishes at $1.3 billion, comparatively a poor relation. Then there is Chase Koch, Charles’s dutiful son whose youth was scarred by his bad decisions and who seems to have recused himself from the top job when his father retires or dies. There is also the rebellious and somewhat estranged Elizabeth, the firstborn, who seems in the book to have been quite talented and interested in the family business, but who was never allowed to become involved in day to day activities, possibly because she was a daughter.
The book tells the story chronologically and chooses specific incidents that shed light on the times and on the Koch fortunes. It shows that, at the death of patriarch Fred Koch, the company was a jumble of businesses without a clear driver for their being yoked together. Then it deals with the acquisition of the Pine Bend refinery in Minnesota, which would later become the cash cow that would fund the rest of the empire. It is interesting that, in spite of the apparently principled opposition of the Kochs to government action, Pine Bend was so profitable mainly due to regulations that in the Carter administration tightened technical requirements for new refineries while grandfathering existing ones like Pine Bend, which led to no new major refineries being built in the US since 1977. Also, regulations for importing oil from Canada helped make the refinery exceptionally profitable. In the 1980s and 1990s Koch got involved in energy trading (in which it is a global powerhouse) that led it to scandal along with Enron in the California energy crisis of 2000. It pilfered oil from Indian lands, stealing many millions of dollars from the tribes and then lying about it. It went on a massive acquisitions binge that included Purina pet food and fertilizer plants. Many of these acquisitions misfired and produced substantial losses, so the Koch group had to be retooled in the 2000s. In this decade Koch continued its policy of breaking the unions (in the 1970s it had an exceptionally violent strike in the Pine Bend refinery that it put down mercilessly), which it did in order to fortify its position in other acquired companies such as Georgia Pacific. Koch learned from his mistakes and expected the organization to do the same. The book’s description of how the group ran Georgia Pacific workers into despair by extreme management is worth the price of admission by itself. I didn’t enjoy reading that, in the same period when Koch management was destroying job security and eliminating any semblance of middle class life among its Georgia Pacific staff by cutting their salaries by over 20% from what they were in the 1970s (the Obama era, in which incredibly Charles Koch was sure that the US was lurching into socialism), Charles and David Koch doubled their wealth. Of course, this leads us into politics. Charles Koch is a believer in Austrian economics (Hayek, Mises, and later avatars like Friedman and Rothbard) which he studied deeply. He co-created the Cato institute and he funded libertarian activities and think tanks all over the US (including George Mason University). He also paid for junk science denying that there is global warming caused by burning fossil fuels, even after his partner in mischief Exxon Mobil decided to pull out from this unsavory venture. It is particularly nasty that Koch Industry chose to do this, when clearly the company knows more than anyone else about this matter. Koch helped finance and organize the Tea Party, and was able to take over large segments of the Republican Party from the ground up. The story of Koch’s fight with Trump is very interesting: the strategy was block-and-tackle. Koch would block any Trump initiatives he didn’t like (such as the value added tax that the administration tried to introduce into the tax code, which would favor companies that produced their goods in the US rather than those that manufactured abroad for cost reasons and then sold their products in the US) and then he would support (tackle) any initiatives that he liked (such as defanging the Environmental Protection Agency). Koch showed Trump who’s boss and now they seem to be working well together. This administration has been a bonanza for the Kochs and their allies. Reading about activists from Americans for Prosperity (a Koch funded libertarian group) attacking regulations for favoring moneyed interests while supporting initiatives dictated by some of the richest men in the country and against the interests of average people (such as tax cuts and tax breaks that favor almost exclusively the rich) was infuriating. What gall. What cheek. But then we know that people never lack reasons for defending that which benefits them. It was also interesting to read about how fracking pumped new life into the fossil fuel burning economy sponsored by the Kochs and how this supposed windfall (the US is energy sufficient for the first time in over 60 years) will actually worsen the trend in climate change.
In a final analysis, the influence of Charles Koch and his minions (by all accounts, decent, competent, hardworking Midwesterners, the best of the heartland) must be seen as negative. He made much money, mainly for himself, his brother and a few other insiders, while poisoning the planet, despoiling his workers, corrupting the political process and helping the US congeal into the oligarchy it has clearly become.
No other business leader in US history has had as much power over political decisions as Koch. Rockefeller never did. In practical terms, Charles Koch has been more successful than Bill Gates or Jeff Bezos or Mark Zuckerberg or (so far) Mike Bloomberg. Without creating a new industry he built the largest private company in the US and probably the world, mostly in industries that have been around for over 60 years, while achieving a political influence that no one else approaches.
The book tells the story chronologically and chooses specific incidents that shed light on the times and on the Koch fortunes. It shows that, at the death of patriarch Fred Koch, the company was a jumble of businesses without a clear driver for their being yoked together. Then it deals with the acquisition of the Pine Bend refinery in Minnesota, which would later become the cash cow that would fund the rest of the empire. It is interesting that, in spite of the apparently principled opposition of the Kochs to government action, Pine Bend was so profitable mainly due to regulations that in the Carter administration tightened technical requirements for new refineries while grandfathering existing ones like Pine Bend, which led to no new major refineries being built in the US since 1977. Also, regulations for importing oil from Canada helped make the refinery exceptionally profitable. In the 1980s and 1990s Koch got involved in energy trading (in which it is a global powerhouse) that led it to scandal along with Enron in the California energy crisis of 2000. It pilfered oil from Indian lands, stealing many millions of dollars from the tribes and then lying about it. It went on a massive acquisitions binge that included Purina pet food and fertilizer plants. Many of these acquisitions misfired and produced substantial losses, so the Koch group had to be retooled in the 2000s. In this decade Koch continued its policy of breaking the unions (in the 1970s it had an exceptionally violent strike in the Pine Bend refinery that it put down mercilessly), which it did in order to fortify its position in other acquired companies such as Georgia Pacific. Koch learned from his mistakes and expected the organization to do the same. The book’s description of how the group ran Georgia Pacific workers into despair by extreme management is worth the price of admission by itself. I didn’t enjoy reading that, in the same period when Koch management was destroying job security and eliminating any semblance of middle class life among its Georgia Pacific staff by cutting their salaries by over 20% from what they were in the 1970s (the Obama era, in which incredibly Charles Koch was sure that the US was lurching into socialism), Charles and David Koch doubled their wealth. Of course, this leads us into politics. Charles Koch is a believer in Austrian economics (Hayek, Mises, and later avatars like Friedman and Rothbard) which he studied deeply. He co-created the Cato institute and he funded libertarian activities and think tanks all over the US (including George Mason University). He also paid for junk science denying that there is global warming caused by burning fossil fuels, even after his partner in mischief Exxon Mobil decided to pull out from this unsavory venture. It is particularly nasty that Koch Industry chose to do this, when clearly the company knows more than anyone else about this matter. Koch helped finance and organize the Tea Party, and was able to take over large segments of the Republican Party from the ground up. The story of Koch’s fight with Trump is very interesting: the strategy was block-and-tackle. Koch would block any Trump initiatives he didn’t like (such as the value added tax that the administration tried to introduce into the tax code, which would favor companies that produced their goods in the US rather than those that manufactured abroad for cost reasons and then sold their products in the US) and then he would support (tackle) any initiatives that he liked (such as defanging the Environmental Protection Agency). Koch showed Trump who’s boss and now they seem to be working well together. This administration has been a bonanza for the Kochs and their allies. Reading about activists from Americans for Prosperity (a Koch funded libertarian group) attacking regulations for favoring moneyed interests while supporting initiatives dictated by some of the richest men in the country and against the interests of average people (such as tax cuts and tax breaks that favor almost exclusively the rich) was infuriating. What gall. What cheek. But then we know that people never lack reasons for defending that which benefits them. It was also interesting to read about how fracking pumped new life into the fossil fuel burning economy sponsored by the Kochs and how this supposed windfall (the US is energy sufficient for the first time in over 60 years) will actually worsen the trend in climate change.
In a final analysis, the influence of Charles Koch and his minions (by all accounts, decent, competent, hardworking Midwesterners, the best of the heartland) must be seen as negative. He made much money, mainly for himself, his brother and a few other insiders, while poisoning the planet, despoiling his workers, corrupting the political process and helping the US congeal into the oligarchy it has clearly become.
No other business leader in US history has had as much power over political decisions as Koch. Rockefeller never did. In practical terms, Charles Koch has been more successful than Bill Gates or Jeff Bezos or Mark Zuckerberg or (so far) Mike Bloomberg. Without creating a new industry he built the largest private company in the US and probably the world, mostly in industries that have been around for over 60 years, while achieving a political influence that no one else approaches.
October 12, 2019
63rd book of 2019. 4.5 stars, here’s how America runs.
Through personal experience I know tech and government. Finance has been reported on to death. But that leaves about 80% of the economy that remains a mystery.
Kochland shines a light on what feels like the everyday American economy, through the lens of a family empire that has steadily grown over the last 40 years. In this book the patriarchs libertarian leanings are simply an outgrowth of the company religion market based management. Rubinstein with the feds lead the company down the center of a heavily regulated path and away from the disasters of enron and lehman brothers. As good if not better than private empire.
Great overview of Koch enterprises and Charles Koch's philosophy. Too big a story to tell in one book, but Leonard makes a great effort. Learned a lot.
Through personal experience I know tech and government. Finance has been reported on to death. But that leaves about 80% of the economy that remains a mystery.
Kochland shines a light on what feels like the everyday American economy, through the lens of a family empire that has steadily grown over the last 40 years. In this book the patriarchs libertarian leanings are simply an outgrowth of the company religion market based management. Rubinstein with the feds lead the company down the center of a heavily regulated path and away from the disasters of enron and lehman brothers. As good if not better than private empire.
Great overview of Koch enterprises and Charles Koch's philosophy. Too big a story to tell in one book, but Leonard makes a great effort. Learned a lot.
May 4, 2021
This book exposes the sad fact about what happens when individuals are given to much power. Abouslte power corrupts absolutely, and this book shows that Charles Koch worked hard to maintain his power, at the expense of the entire country.
January 3, 2020
Extremely detailed business biography on Koch Industries as well as on Charles Koch.
May 4, 2020
First off, Charles Koch is a scary-good businessman. And KOCHLAND by Christopher Leonard traces how he steered Koch Industries from being a bit-player in the energy market when he took over as CEO after his father died to the largest privately held company in America.
Unlike the other books I've read where Koch has a central place, like DARK MONEY, this book focuses on the business, not his shady political activity. But, suffice it to say, his business leaders are so focused on cost-cutting and turning a profit that they do all sorts of shady things. For instance, his solid delivery drivers would INTENTIONALLY steal raw crude from Indian reservations from the 70s through the 90s. And while each individual theft was tiny, about 1 gallon in 50, those gallons added up to hundreds of thousands of gallons of crude that Koch Industries tapped for pure profit.
There are other harrowing things here. As a libertarian in a business known for creating toxic by-products, Koch is not keen on EPA regulators. So until the early aughts, his cost-cutting philosophy had his managers ignoring regulations, but on the sly. So as not to get caught. Not because he told them explicitly to "pollute the river," but because investing in infrastructure like new sewage systems for aging plants would cost money, which would impact profits, which could get them fired.
Don't get me started on this. Because if Koch truly believed in "markets," he'd have to acknowledge that polluting dumps costs that he's not accounting for. So Koch makes billions, while off-loading costs on people earning a median income of $56K a year. Since we'll need to pay for site clean-up, we and our families will get the cancers the chemicals cause, etc. Worse, if we take a large company like Koch Industries to court, odds are we lose since they can hire the best and brightest lawyers money can buy, something most of us cannot do.
Koch's also as ruthless when dealing with humans as well. He expects all employees to be as dedicated as him. He expects every employee to "drink the Koolaide," and buy his free-market philosophy hook, line and sinker. And he treats his employees like machines. monitoring them closely, expecting near inhuman performance from them. All while earning billions and cutting their pay.
Leonard also examines the political arm of Koch industries, but only how and why they've manipulated the political process to help Koch industries.
For instance, remember the Tea Party? Koch did not start the movement but funded an expansion via an astroturf campaign via Americans for Prosperity.
Remember how Paul Ryan's tax plan of 2016 included a Border Added Tax, similar to the EU's Value Added Tax, which would tax companies producing goods outside of America and bringing them back in? Ryan included that to encourage American businesses to produce goods here, and dis-incentivize companies from off-shoring. Once again, Koch killed that via Americans for Prosperity.
Remember the Cap & Trade bill, the Republican-led, bipartisan effort to create a carbon market to drive down CO2 emissions? There were votes in both the House and Senate to pass the bill... until Koch killed it.
Etc.
I like how Leonard does not pass judgment on the John Birch kookiness of Koch's political beliefs... expected since his father Fred Koch co-founded the John Birch Society. Instead, his focus remains laser-like on the business. And he reveals how his subtle machinations steered "grass-roots" movement to rail with populists language... to support him, a billionaire, at their own expense. He cares not how it gets done. he doesn't care if his political operatives lie to the rank & file members to get his way. Koch just wants his way.
All told, a fascinating book. Charles Koch is a brilliant businessman. Alone among the business leaders whose histories I've followed, except for Jack Welch, he seems the ablest to create a long-standing business structure built to create undreamed of efficiencies. Like Welch, he brings a keen engineer's mind to a problem. But unlike Welch, Koch's more under-handed. He'll work behind the scenes, buy politicians and manipulate populist movements to rally for elite billionaire's ends. And unlike Welch, who invested in his workforce, training thousands in advanced statistical quality techniques, a skill still valuable in 2020, Koch treats people like chattel.
The story is rich, detailed, and well-told. And while I had a problems with some sentences and ideas being repeated several times too often, I place that more on the feet of the editor than the author. And the material is so good it's worth reading.
Five stars.
Unlike the other books I've read where Koch has a central place, like DARK MONEY, this book focuses on the business, not his shady political activity. But, suffice it to say, his business leaders are so focused on cost-cutting and turning a profit that they do all sorts of shady things. For instance, his solid delivery drivers would INTENTIONALLY steal raw crude from Indian reservations from the 70s through the 90s. And while each individual theft was tiny, about 1 gallon in 50, those gallons added up to hundreds of thousands of gallons of crude that Koch Industries tapped for pure profit.
There are other harrowing things here. As a libertarian in a business known for creating toxic by-products, Koch is not keen on EPA regulators. So until the early aughts, his cost-cutting philosophy had his managers ignoring regulations, but on the sly. So as not to get caught. Not because he told them explicitly to "pollute the river," but because investing in infrastructure like new sewage systems for aging plants would cost money, which would impact profits, which could get them fired.
Don't get me started on this. Because if Koch truly believed in "markets," he'd have to acknowledge that polluting dumps costs that he's not accounting for. So Koch makes billions, while off-loading costs on people earning a median income of $56K a year. Since we'll need to pay for site clean-up, we and our families will get the cancers the chemicals cause, etc. Worse, if we take a large company like Koch Industries to court, odds are we lose since they can hire the best and brightest lawyers money can buy, something most of us cannot do.
Koch's also as ruthless when dealing with humans as well. He expects all employees to be as dedicated as him. He expects every employee to "drink the Koolaide," and buy his free-market philosophy hook, line and sinker. And he treats his employees like machines. monitoring them closely, expecting near inhuman performance from them. All while earning billions and cutting their pay.
Leonard also examines the political arm of Koch industries, but only how and why they've manipulated the political process to help Koch industries.
For instance, remember the Tea Party? Koch did not start the movement but funded an expansion via an astroturf campaign via Americans for Prosperity.
Remember how Paul Ryan's tax plan of 2016 included a Border Added Tax, similar to the EU's Value Added Tax, which would tax companies producing goods outside of America and bringing them back in? Ryan included that to encourage American businesses to produce goods here, and dis-incentivize companies from off-shoring. Once again, Koch killed that via Americans for Prosperity.
Remember the Cap & Trade bill, the Republican-led, bipartisan effort to create a carbon market to drive down CO2 emissions? There were votes in both the House and Senate to pass the bill... until Koch killed it.
Etc.
I like how Leonard does not pass judgment on the John Birch kookiness of Koch's political beliefs... expected since his father Fred Koch co-founded the John Birch Society. Instead, his focus remains laser-like on the business. And he reveals how his subtle machinations steered "grass-roots" movement to rail with populists language... to support him, a billionaire, at their own expense. He cares not how it gets done. he doesn't care if his political operatives lie to the rank & file members to get his way. Koch just wants his way.
All told, a fascinating book. Charles Koch is a brilliant businessman. Alone among the business leaders whose histories I've followed, except for Jack Welch, he seems the ablest to create a long-standing business structure built to create undreamed of efficiencies. Like Welch, he brings a keen engineer's mind to a problem. But unlike Welch, Koch's more under-handed. He'll work behind the scenes, buy politicians and manipulate populist movements to rally for elite billionaire's ends. And unlike Welch, who invested in his workforce, training thousands in advanced statistical quality techniques, a skill still valuable in 2020, Koch treats people like chattel.
The story is rich, detailed, and well-told. And while I had a problems with some sentences and ideas being repeated several times too often, I place that more on the feet of the editor than the author. And the material is so good it's worth reading.
Five stars.
October 6, 2019
Points out the scary fact that, regardless of where one stands on impeaching Trump, he is no friend of the Koch family but Mike Pence has been for years. So due to the fact that Pence comes across (as did the ruthless, thieving Koch brothers and now just the remaining one, Charles) as more polite and much less temperamental than Trump, we may need to ask ourselves: are we just going to be moving from a monkey throwing his feces directly at us to a well-dressed, seemingly mild-mannered but corporate crook smilingly serving feces to us on a platter? I hope not; but I wonder...
January 15, 2024
Page turner. Interesting to learn about the energy industry and Koch's influence. Final 150 pages were a crawl though.
August 27, 2019
Coincidentally read this book the week that David Koch died and the Amazon rainforest fires ignited. A glaring example of the power of money and a difficult under the circumstances. At times, too many characters and detail to follow but kept my attention.
September 6, 2019
When reading a biography, or something of the sort, it's hard to keep your preconceived notions out of the way. Even harder is to struggle to resist making heroes and villains out of men.
But if you can struggle, then you definitely will end up amazed at the magnitude of Koch Operations, the sheer relentlessness of the organization, and the fundamental philosophies underpinning it.
The author does a great job weaving together, far reaching and complex narratives over many years. He provides a clear picture and does this without trying to guide the reader to see things from his own perspectives.
A good read.
But if you can struggle, then you definitely will end up amazed at the magnitude of Koch Operations, the sheer relentlessness of the organization, and the fundamental philosophies underpinning it.
The author does a great job weaving together, far reaching and complex narratives over many years. He provides a clear picture and does this without trying to guide the reader to see things from his own perspectives.
A good read.
September 3, 2019
Loooong, extraordinarily well-researched tome about Koch Industries. So long and so detailed, in fact, that I found myself skimming more and more as I read. I was interested in learning more about Koch’s political machinations, but most of the book focuses on (and succeeds at) explaining its complicated, sometimes shady business practices.
September 27, 2019
Horrifyingly scary. This was hard for me to get through because it was so densely packed with information. But I liked being introduced to real people whose lives have been ruined by their contact with Kochland.
June 19, 2023
Meandering
December 3, 2023
I am a changed person now after reading this book Kochland by Christopher Leonard. This book has riveted the importance of money in me. Till now, I was fairly cavalier when it came to the money matters, but I am wiser after completing this book. The book instills the power that money wields, and it can sway the governments’ decisions, policies, laws and what not! Being from India I was not aware of the intricacies of the governments’ actions in the US, as I did not follow the developments thoroughly. I often wondered how and why the environmental measures on greenhouse gases (GHGs) took a backburner, despite being one of the burning issues in the President Obama’s election campaign. This book has answered the how and whys of the questions that I had in my mind after reading a few books on Climate Change.
While I was reading the book, I came to know what it takes to be the largest privately held company in the largest economy of the world. Though I am not a fan of all that took place for the company to move to the upper echelons of the economy, I do understand that real life is a combination or a web of plethora of circumstances, challenges, issues, and what not. It takes the mind of someone like Charles Koch to navigate through all the maze that forms in real life and make the industry that he and his brothers inherited into one of the largest conglomerates in the world. I am a fan! And I would like to read about the Market-Based Management (MBM) philosophy of the promoter of Koch industries.
As I was reading the book I was thrilled and at the same time bewildered to read about the environmental regulations that Koch industries exploited to stay in production. I was able to understand what, how, and why they exploited the loophole in the environmental regulations to stay compliant yet blowing the rules to smithereens (I could identify myself with Heather Faragher in the book). However, in the very next chapter of the book the author talked about commodities trading, that is about the futures and options in the stock market. I must admit that being financial illiterate that chapter was hard on me. It let me ponder why an engineer Brenden O’Neill can learn about stock trading and I, being an environmental engineer, can’t. As I said in the beginning that I am a changed person, this very person has kindled my thirst to understand the stock market. I may not be an active investor from now on, but I will certainly make decisions about investing whatever little amount of money that I earn.
I want to conclude after reading this well researched book that money is powerful and can alter the course of actions if used decisively. One should be judicious about taking monetary decisions. I give the book 4 stars because I was not able to comprehend everything written in the book, though it deserves a 5-star rating!
While I was reading the book, I came to know what it takes to be the largest privately held company in the largest economy of the world. Though I am not a fan of all that took place for the company to move to the upper echelons of the economy, I do understand that real life is a combination or a web of plethora of circumstances, challenges, issues, and what not. It takes the mind of someone like Charles Koch to navigate through all the maze that forms in real life and make the industry that he and his brothers inherited into one of the largest conglomerates in the world. I am a fan! And I would like to read about the Market-Based Management (MBM) philosophy of the promoter of Koch industries.
As I was reading the book I was thrilled and at the same time bewildered to read about the environmental regulations that Koch industries exploited to stay in production. I was able to understand what, how, and why they exploited the loophole in the environmental regulations to stay compliant yet blowing the rules to smithereens (I could identify myself with Heather Faragher in the book). However, in the very next chapter of the book the author talked about commodities trading, that is about the futures and options in the stock market. I must admit that being financial illiterate that chapter was hard on me. It let me ponder why an engineer Brenden O’Neill can learn about stock trading and I, being an environmental engineer, can’t. As I said in the beginning that I am a changed person, this very person has kindled my thirst to understand the stock market. I may not be an active investor from now on, but I will certainly make decisions about investing whatever little amount of money that I earn.
I want to conclude after reading this well researched book that money is powerful and can alter the course of actions if used decisively. One should be judicious about taking monetary decisions. I give the book 4 stars because I was not able to comprehend everything written in the book, though it deserves a 5-star rating!
October 4, 2022
There was a lot to like about this book. Everything but the writing. I've been reading a lot by economists, most notably Thomas Sowell, and for the first part of Kochland I was enthralled. Very clear, well documented descriptions of Charles and his business. It was the later part of the book and the obvious bias towards global warming issues and Koch's political activity ( how dare he) where Leonard lost me. He continuously used the words seems and seemed as if that was reason enough to not have attribution. Did he know what none of us did? I think that Leonard belongs to the Tony Romo school of insider speculation.
Leonard talks Koch's "breathtakingly lucky break". He has obviously forgotten everything he previously wrote about how prepared Koch was for every contingency. Read your book Christopher.
Leonard offers 67 pages of notes many of which were helpful ... however he didn't identify a lot of the people he interviewed, and there were an annoying number of interviews of people 'speaking on background' which I learned means "Don't mention my name, you can quote what I say but you can't even hint at who said it." Leonard actually writes of one interview, "according to notes of the meeting that were taken by someone who observed it." ???
I'm glad I read this. Leonard did a good job on describing Koch and his philosophy. If I were to do it again, I would have stopped at page 534.
Leonard talks Koch's "breathtakingly lucky break". He has obviously forgotten everything he previously wrote about how prepared Koch was for every contingency. Read your book Christopher.
Leonard offers 67 pages of notes many of which were helpful ... however he didn't identify a lot of the people he interviewed, and there were an annoying number of interviews of people 'speaking on background' which I learned means "Don't mention my name, you can quote what I say but you can't even hint at who said it." Leonard actually writes of one interview, "according to notes of the meeting that were taken by someone who observed it." ???
I'm glad I read this. Leonard did a good job on describing Koch and his philosophy. If I were to do it again, I would have stopped at page 534.
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