How One Rich Dude Targeted Colleges to Mold America to Suit His Views + What's the Powell Memo Got to Do with It?
Also this week: Did IWF's Champion Congresswoman Really Tout the Taliban? Yes.
We’re going to jump right in with part 4 of our investigative series on billionaire Charles Koch and the student loan debt crisis. He’s the very rich dude who for decades has targeted colleges to mold America to suit his personal views (a selfish dystopia, in the studied opinion of True North Research).
Charles Koch Set His Sights on Funding Who Teaches College Students and What They Teach
Quick Recap. America’s student debt crisis is the partial result of public policy preferences pushed decades ago by free market fundamentalists like Milton Friedman and Charles Koch, as described in our first installment.
Our second installment demonstrated how Friedman and Koch advanced an anti-government agenda that has resulted in saddling generations of Americans with student loan debt.
Our third installment revealed how Koch’s first non-profit advocated for public universities to cost a lot more for students to attend, embraced student loans to cover higher costs due to slashing public subsidies, and urged corporate colleges.
This week, we detail how Koch sought to capture universities to train brigades of students and scholars in his free market fundamentalism. This includes his attack on the notorious “Powell Memo” for not going far enough to ensure that the corporate view of America is taught at universities and to secure a cadre of academics to attack government (that is, democratic) regulation of corporations.
Koch Attacked Government over Control of What Students Learn and Who Teaches Them — as He Sought that Power through His Wealth
Some of the pamphlets published or reprinted by Charles Koch’s Center for Independent Education (CIE) attack potential methods of “state control” over education made possible by public funding.
Tactics, such as teacher selection and dictating curriculum, are also methods that Koch and his dark money network have sought to implement as part of their efforts to capture education.
One example of the critique of “the state” came from Dr. Benjamin A. Rogge—a member of the Mont Pelerin Society along with Charles Koch, Koch’s lieutenant George Pearson, Milton Friedman, and F.A. Hayek. Rogge contributed a piece warning that “[t]o expect those who provide the subsidies to refrain from interfering with the operation of the schools is to make a demonstrably weak assumption." Friedman credited Rogge with organizing the lectures that became the foundation for Friedman’s book Capitalism and Freedom, which attacks the idea of public universities and schools.
Echoing Rogge, Koch’s right-hand man George Pearson also warned against public funding of education asserting that “extensive interference into these critical areas of teacher and textbook selection is cause for deep concern.” For additional information on such attacks on the public interest, see Nancy MacLean’s book, Democracy in Chains, and check out the writings of In the Public Interest.
Charles Koch Wanted to Create a Cadre of Professors to Teach What He Wanted Taught
Elaborating on the tie between education funding and ideological outcomes, Koch himself said in 1974:
"[T]he development of talent is, or should be, the major point of all these efforts. By talent, I mean those rare, exceptionally capable scholars or communicators willing to dedicate their lives to the cause of individual liberty."
Koch urged business leaders to stop providing general support to universities without requiring the funding promote a corporate agenda of advancing “free market” ideology on campus:
"[W]e should cease financing our own destruction and follow the counsel of David Packard, former Deputy Secretary of Defense, by supporting only those programs, departments or schools that contribute in some way to our individual companies or to the general welfare of our free enterprise system."
In that 1974 speech, which researcher Connor Gibson helped uncover, Koch claimed that “business has consciously assisted the government in destroying the free market.”
This speech was given during the second term of GOP President Richard M. Nixon, a few months before he resigned in disgrace. The Libertarian Party had been launched in 1971 in response to Nixon’s price controls in a period of inflation. Koch-funded groups in the 1970s also denounced new protections for our environment that sought to constrain corporations.
Koch’s 1974 speech was part of a meeting he organized titled “The Anti-Capitalist Mentality” at the Institute for Humane Studies (IHS). IHS was founded in 1961 by F.A. “Baldy” Harper to advance libertarian theories more radically than the Foundation for Economic Education by, for example, calling all taxes “theft,” despite the democratically approved constitutional amendment authorizing income taxes.
Charles Koch began supporting IHS in 1964, and took over IHS in 1973 after Harper died. Koch was a fan of Harper, who had written a piece called “Why Wages Rise” that Koch said changed his life. In it, Harper claimed that wages rise due to worker productivity, not due to public policy changes like the national minimum wage or negotiations by labor unions.
Harper’s claim in that pamphlet, which Koch’s CIE later promoted, has been utterly debunked by the reality lived by American workers for years. Wages have indisputably stagnated despite massive increases in worker productivity. That productivity has netted massive payouts to executives and corporate shareholders, while workers’ benefits have been slashed and huge companies increasingly outsource work to contractors with no benefits at all. Despite such abject failure, Harper’s theories live on through Koch’s decades of infusion of cash to IHS as a vehicle for Koch to get right-wing theories about our economy and the role of our government mainstreamed.
At that meeting, Koch also asserted that:
“Anti-capitalist feelings in the United States are probably more virulent today than ever before. Yet the effort to stem this challenge to our traditional economic values have been ineffective. It is crucial that we understand what is happening, why the defensive efforts have floundered, and what approach, if any, would succeed.”
The Powell Memo. Koch also expressly criticized the “Powell Memo,” a blueprint for expanding corporate power in American democracy, which was written by tobacco lawyer Lewis Powell to the U.S. Chamber of Commerce.
This was before President Richard Nixon named Powell to the U.S. Supreme Court. His confirmation was opposed by the NAACP due to Powell’s role in helping white parents get state funding for private education for their kids to avoid the racial integration ordered by Brown v. Board of Education. (For more details on this point, read Senator Sheldon Whitehouse’s series of speeches about Powell, starting with this one. You can also read the documentation from John Conyers’ Senate testimony on behalf of the NAACP against Powell here.)
Powell used his perch on the nation’s highest court to engraft his personal views of corporate “rights” onto constitutional law. (Learn more about the memo here in Charlie Cray’s analysis for Greenpeace in 2011.)
Powell’s memo was secret at the time, until columnist Jack Anderson broke the story about it in September 1972, after Powell was confirmed to the Court. That memo is now infamous for urging new structures to advance corporate power over public policy and throughout American society. It specifically urged leveraging the money controlled by CEOs to reshape higher education, the courts, policymaking, and the media.
Using feverish rhetoric, Powell claimed socialism was spreading and that, in the middle of the Nixon administration, no one in America had less influence in Congress and on public policy than businessmen. That was not true then, and it is even less true now 50 years later.
Koch and similarly-minded right-wing millionaires, like weapons merchant John M. Olin and the foundation in his name and Joseph Coors of the eponymous beer fortune, were allied in spending significant sums on the defense of the free enterprise system.
Powell’s memo urging CEOs to defend free enterprise also praised his fellow members of the Mt. Pelerin Society Milton Friedman and F.A. Hayek, along with the Institute for Humane Studies, for providing solutions to what he calls decades of anti-capitalism in the U.S.
Koch’s Own Blueprint for Creating Cadres at Universities to Advance His Worldview. Here are some additional excerpts from Koch’s speech about the Powell Memo and higher education. (You can read Charles Koch’s full speech on this at True North’s KochDocs.org. Also, check out this modern rejoinder to the Powell Memo. )
Koch asserted that the business community must first recognize a “fundamental error” of the Powell Memo, which Koch said was the assumption that most in the business community even supported their radical “free market” idea of capitalism and that “there currently exists a free market to be defended and preserved.”
He also made these dramatic assertions (emphasis added):
“First, we have allowed the free market to be blamed for fostering economic crises when, in fact, a free market did not even exist at the times the crisis occurred.”
“Second, we have supported the very institutions from which the attack on free markets emanates. Although much of our support has been involuntary through taxes, we have also contributed voluntarily to colleges and universities on the erroneous assumption that this assistance benefits business and the free enterprise system, even though these institutions encourage extreme hostility to American business.”
“Third, we have accepted the concept that the corporation has a broad social responsibility beyond its duty to its shareholders… Yet the businessman has come to believe that ‘he is defending free enterprise when he claims that he is not concerned ‘merely’ with profit, but also with promoting desirable ‘social’ ends. When the businessman does this, he is in fact preaching pure and unadulterated socialism.”
Koch also discused the mechanisms to get his worldview entrenched at universities, advocating “radical new efforts” (emphasis added):
“As I perceive the situation in which the pro-capitalist businessman finds himself today, there are basically four ways in which he can fight for free enterprise- through education, through the media, by legal challenges, and by political action…”
“[T]he educational route is both the most vital and the most neglected.”
“The important strategic consideration to keep in mind is that any program adopted should be highly leveraged so that we reach those whose influence on others produces a multiplier effect. That is why educational programs are superior to political action, and support of talented free-market scholars is preferable to mass advertising.”
“We desperately need to develop additional talent capable of doing the research and writing that undergird the popularizing of capitalist ideas...While business has sometimes shown an interest in establishing appropriate chairs at universities, there is so little first-rate talent available that this effort has often resulted merely in a shift of one of the few free-market scholars from one university to another.”
”Many things can be done to develop this talent: financing fellowships for graduate students to work under teachers sympathetic to the free market; sponsoring conferences where scholars and students gather to discuss the market economy; arranging publication and distribution of scholarly books; and ensuring that able students can find attractive opportunities as teachers or research scholars. But business must make its funds available for such purposes and use its influence to provide openings. I believe that this long-term, educational approach is absolutely necessary to restore the free enterprise system.”…
“The development of a well financed cadre of sound proponents of the free enterprise philosophy is the most critical need facing us at the moment. And this task is not impractical. As the Powell Memorandum points out, ‘business and the enterprise system are in deep trouble, and the hour is late.’ But the system can be restored if business will re-examine itself and undertake radical new efforts to overcome the prevalent anti-capitalist mentality.”
Koch also issued a broad-based attack on progressive public policies, asserting:
The Libertarian Party Emerges and Advances Koch’s Agenda. Nearly a year after this speech, Koch began looking for ways to maximize funding of the new Libertarian Party and by 1976, Koch had become the biggest underwriter of that new political party. It amplified his attacks on funding our government to advance the common good. Indeed, the Libertarian Party took credit for helping to foment tax revolts in the late 1970s (like California’s Prop. 13 and protests in Illinois and elsewhere) that limited state tax revenue and helped put pressure on reducing public subsidies for public universities.
The Koch-funded Reason magazine and other entities he was bankrolling also helped advance that agenda. His brother, William, later claimed that Charles was using Koch Industries to subsidize his personal politics without the consent of the other major owners of the company, allegations Charles Koch denied. (Learn more about Koch Industries from the researchers at DeSmog Blog.)
However, some libertarians were so concerned with the amount of Charles Koch’s money dominating the movement’s outlets that it was they who dubbed his influence “the Kochtopus.” Democrats only started reckoning with Koch’s growing power three decades later and reprised that moniker, after Jane Mayer’s breakthrough article on the Koch brothers for the New Yorker in 2010.
The Cato Institute also pushed for state budget limits and a federal balanced budget amendment. Koch launched Cato with George Pearson and the Libertarian Party’s Ed Crane in the mid-1970s as a rebrand of a foundation Koch created in his own name),
In essence, a growing array of Koch-funded groups started pushing to starve the state and federal governments in a variety of ways, which over many years have led to cuts how much the costs of public universities are subsidized by taxes. These diminished subsidies have helped fuel the rising spiral of student debt. That includes Koch’s Citizens for a Sound Economy, which was launched in the early 1980s and which spawned FreedomWorks and Koch’s Americans for Prosperity, which has opposed student debt relief and more while also pushing for the tax cuts Trump signed in 2017).
David Koch Became One of the Most Influential Politicians to Never Win Office. Charles Koch also found a home-grown agent for his electoral agenda in his brother David, who agreed to fund the Libertarian Party’s bid for the White House in 1980 by running as Vice President. David spent more than $2 million of David Koch’s own money. That spending was made possible due to a loophole in the Federal Election Campaign Act created by the Supreme Court’s decision in Buckley v. Valeo, litigation that was subsidized in part by the Libertarian Party and its new big donor, Charles Koch.
The fact that the Libertarians would never win their campaign was not the point, nor was it the end of their message. Instead, the Koch-funded Libertarian Party helped amplify Ronald Reagan’s attacks on the role of government. The 1980 Libertarian platform also built on anti-government sentiment fueled by the anti-tax revolts. The Koch-endorsed platform also pushed for the abolition of more several federal agencies along with the repeal of tax laws. The party’s platform also called for the privatization of all public schools.
Why Do These Kochian/LibertarianTheories Matter? At the beginning of the 1970s, with state subsidies covering 65% of college costs in most states, higher education without massive debt was attainable for many low- to middle-income families in the U.S.
After pressures to limit public funding of higher education, federal student loans began to grow rapidly, with loan default rates spiking in the 1980s. Even as college costs rose and family income stagnated, federal education subsidies didn’t fill the gap—in fact, the inflation adjusted value of the federal Pell grant for low income students actually decreased by 12% throughout the 1980s.
Today, after nearly 50 years of ideological and political maneuverings by Koch and his anti-government allies, public subsidies cover less than 30% of the costs of higher education, in general. Meanwhile, student loan debt in 2020 reached $1.56 trillion.
The student loan debt crisis was not inevitable but it is a product of the kind of selfish public policy choices that have been pushed by Charles Koch in innumerable ways.
In next week’s final installment in this series, we will examine Charles Koch’s growing influence on campuses in the U.S. His agents have leveraged his donations to shape what is taught in universities and career paths for scholars aligned with Koch’s free market fundamentalism. Using many of the same tactics Koch’s lieutenant once warned against, Koch has seemingly exploited university funding gaps he and his allies helped create, and in their own words, now “the network is fully integrated.”
This week as Afghanistan fell, one Member of Congress was touting the Taliban. Really. Perhaps it should come as no surprise that Rep. Lauren Boebert (R-CO) has been touted as a “Champion Woman” by the Koch-funded Independent Women’s Forum (IWF). IWF has also lauded Rep. Marjorie Taylor Green, who was temporarily suspended from Twitter for spreading lies about vaccines. For more on Boebert’s claims regarding the January 6th insurrection, check out True North’s timeline here.
Now, head on out to enjoy what’s left of this summer, while we keep an eye on the villians polluting our democracy. Also, please give a listen to one of the very best versions of Summertime by Billy Stewart!