Brunell: Politics aside, Koch’s way is good for America
By Don Brunell
Published: November 3, 2015, 5:55am
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To listen to liberal politicians such as President Obama and Hillary Clinton, political donations by conservative billionaires Charles and David Koch epitomize what’s wrong with America’s political system. But Obama and Clinton are silent when liberal billionaires George Soros and Tom Steyer do the same.
Casting politics aside, the Koch brothers embody the ideals of our free market system, which has made America the economic power it is today.
Charles Koch’s book, Good Profit, details his philosophy that consumer choice in the marketplace should determine whether a business is successful. He defines “bad profit” as that which comes when government uses taxpayer subsidies to determine winners and losers.
Koch Industries is America’s second largest privately held company with products ranging from energy, fertilizer production and agriculture to forest and consumer products, pollution control equipment and technologies and building materials.
In Washington state, Koch’s largest presence is the Georgia Pacific paper mill at Camas, which converts wood into pulp for bathroom and facial tissue, paper towels and printer paper. Globally, Koch Industries employs more than 100,000 people in nine business groups with an annual income exceeding $100 billion.
The Koch brothers attribute their success to “market-based management.” Their focus is on the customer, their core values are ethical behavior and the deeply-held belief that people should be treated based on their individual merits.
According to Koch, integrity is the foundation of mutually beneficial relations within a company and with your consumers. While “profit” has become a dirty word in some circles, Koch believes that generating a profit is what makes our system tick. “What is good for business is good for society and profitable companies generate taxes for government and charitable contributions.
The Kochs believe in acting lawfully, and that means being proactive. For example, when the Georgia Pacific management team noticed a suspicious new conformity in industry pricing, it independently combed its policies and prices to ensure they were not violating anti-trust laws. As a result when a price-fixing suit was filed against the industry, GP was excluded.
Koch wants people to succeed based on the quality of their work. Corporate culture is an important part of their success. People in the company are encouraged to be agents of change, to think critically and, when necessary, to challenge their bosses. When people have a say in the operation and the products they make, it ignites a passion for innovation and gives meaning to work.
I saw this philosophy in action.
In the early 1980s, Crown Zellerbach initiated a process that empowered workers in the Camas paper mill (now Georgia Pacific). They were encouraged to fix problems and worked side-by-side with engineers and product managers. As a result some of our nation’s best ergonomic practices were developed and implemented before being required by government regulations.
Finally, while many decry Koch’s right-leaning political contributions, less than half of the $111 million Charles Koch donated last year supported political causes. But make no mistake – they will be as involved in the 2016 elections as will Soros, Steyer and others on the left.
In a Wall Street Journal interview, Charles Koch said he shares voters’ dissatisfaction with the country’s elected officials and expressed alarm at the rise of Donald Trump and Bernie Sanders.
He is frustrated by the dearth of discussion about overhauling the tax code, reducing regulations, ending subsidies and corporate tax breaks and making it easier for low-income Americans to start businesses.
Koch Industries is in the middle of an advertising campaign to rebrand the company around its products rather than its political activities. Hopefully, Americans realize that what Koch Industries does is in our best interests.
Don Brunell, retired as president of the Association of Washington Business, is a business analyst, writer, and columnist. He lives in Vancouver and can be contacted at TheBrunells@msn.com.
