Billionaire Koch Reads Hayek and Mises

He got a PhD at MIT; he inherited Daddy’s company, and now he’s #33 on Forbes list of billionaires. He’s Charles Koch, worth north of $12 billion.

How did he do it? According to Stephen Moore it’s the “library of liberty” in the bookcase.

Whereas the bookshelves of most of America's leading CEOs are stocked with pop corporate management and "how to succeed" books, Mr. Koch's office is a wall-to-wall shrine to writings in classical economics, or, as he calls it, "the science of liberty." The authors who have had the most profound influence on his own political philosophy include F.A. Hayek, Ludwig von Mises, Joseph Schumpeter, Julian Simon, Paul Johnson and Charles Murray. Mr. Koch says that he experienced an intellectual epiphany in the early 1960s, when he attended a conference on free-market capitalism hosted by the late, great Leonard Reed.

Well, of course those are the authors on every conservative’s bookshelf. And the cool thing is that most liberals have never heard of them. OK so they have heard of Paul Johnson, they revile Charles Murray; they’ve heard the quote about “creative destruction,” and they have a vague recollection of Hayek and Mises.

Best of all, Koch is putting his money where his mouth is.

Charles Koch--no surprise--disdains government and the political class. He has invested tens of millions of dollars into free-market think-tanks and political activist groups (including several founded by this author). He's disgusted with the runaway federal budget under the Republicans, and he proposes that "every new law should be subject to the question: Will it strengthen the culture of prosperity?"

Sounds like my kind of guy.

Yes, Why Does Freud Matter?

To celebrate the 150th anniversary of the birth of Sigmund Freud, the Wall Street Journal hauled out Harold Bloom to explain in “Why Freud Matters” why Freud matters.

As you would expect, Bloom signally failed to do so. He tells us that Freud was not so much a scientist, as he pretended, but a “moral essayist” like Montaigne, a contemporary of Cervantes and Shakespeare. He writes that “Freud maps our minds by mapping his own.”

So what? Does Freud map your mind? Me neither. At a visceral level, Freud doesn’t ring true. Id, Ego, Super-ego? So what?

But a conservative can understand Freud on an intellectual level. And this understanding began for me when I read a playwright declare that the scales fell off his eyes when he read Freud.

What could he mean, I wondered? I certainly didn’t experience a similar epiphany from Freud. All the stuff about repressed memory, infant sexuality, the importance of dreams. What was the point of it?

The Freudian apparatus may not mean much to a conservative, but it does have a point for the creative artist. And that is why Freud has been so praised and so woven into the culture of the twentieth century. Let us try to understand why this is so.

The creative artist lives a daily agony. He may be a fine prose stylist, a craftman of the written word, but that is only the half of it. The other half is talent, the silent, unbidden impulse that makes the difference between a craftsman and a genius. Where does the idea for a novel or a painting come from?

Even more urgent, where does the idea for the next plot twist come from?

This question is the agonizing problem of every creative person. Fortunately, it is also the great subject of German philosophy and psychology beginning with Kant.

First of all, Kant says that we cannot know the thing-in-itself, only appearances. If we cannot know reality directly then we can only know a Weltanshauung, a world view. In Kant’s world I cannot know the ultimate reality; as a conscious ego I can only possess a personal view of the world as it appears to me. Then along comes Fichte’s creative ego and the declaration that “All our thought is founded on our impulses.”

With a dash of Hegel’s developmental psychology and Schopenhauer’s theory of repression everything is in place for Freud, physician and prose stylist, to come along and popularize the ideas that will help the playwright wipe the scales from his eyes. Genius is impulse, Freud teaches him, creative impulse that wells up out of the unconscious. And the worst thing you can do is to repress it.

Maybe creativity is everything for artists and writers, people whose job it is to think previously unthought thoughts. But the rest of us may be excused for pointing out that, creativity or not, we have lives to live: going to work, following the rules, and performing our promises.

There is also the minor question of getting married and raising children. On the whole, the artists inspired by Freud would rather not.

Freud matters because he mapped the artist’s mind. And he explained the agony of the creative artist to any of the rest of us that cared.

But don’t expect a theater of the neglected artist’s child any time soon.

In Politics Luck is Everything

Lucky David Cameron led the British Conservative Party to a smashing win this week in the British local elections. It was the best result for the Conservatives since 1992.

The New Labour Party of Tony Blair obligingly self-destructed in the week before the election. First the health minister was booed by union nurses. Then the Home Secretary was caught letting foreign criminals out of jail without deporting them. There was a cockup on the coordination front. Finally the portly Deputy Prime Minister was featured in the tabloids having an affair with a subordinate civil servant.

So the New Labour Party that boasted of “joined-up” government has proved to be incompetent at managing the day-to-day work of government. It has thrown money at the public services without reforming them to get better value for money. And the less said about the sexual liaison with a junior co-worker the better. The law doesn’t seem to apply to left-wing politicians.

Just as Bill Clinton got every lucky break imaginable in 1992, and Tony Blair in his campaign to become Prime Minister, it looks like David Cameron is another one favored by the gods. How do they do it?

Beyond the luck, it appears that Cameron is succeeding in moving the party leftwards. Wrote Charles Moore in the Daily Telegraph

A tieless Tory called Adam, with a ponytail, won in Crawley by drawing lots with the Labour man after they'd got exactly 500 votes each. He looked rather sweet. The crowd of party workers celebrating the capture of Ealing were youngish, a little bit ethnic and even verging on the cool.

This is exactly what Cameron wants to read after his campaign to “Vote Blue, Go Green.” (Blue is the party color of the Conservatives.)

Tieless Adam with the ponytail is a far cry, as the Brits would say, from the traditional Tory “blue-rinse” grandmother.

The Importance of Associational Government

What is the best way to create a prosperous and free country? Is it through the careful work of an enlightened elite, the imposition of a higher form of government from the top down? Or is it through the peaceful interaction of ordinary people, the slow work of trust-building from the bottom up?

It’s an important issue at a time when the United States is trying to bring democracy to Iraq and wondering what to do about the eruption of left-wing thugs in South America.

In a thoughtful article in TCSDaily Arnold Kling looks at this critical matter, and introduces the work of Meir Kohn. Kohn opposes the concept of “associational government” against “predatory government.” As Kohn writes:

The economic basis of associational government is joint action. A group engaged in any common activity -- whether production, trade, or predation -- will organize itself for joint action whenever it is advantageous to do so. Unlike predatory government, associational government is government from below, it is voluntary, and it derives its authority from the will of the group.

Or to put it in Kling’s words:

Kohn's theory is that the associational state -- meaning limited government that is held accountable to the governed -- is built from the bottom up by smaller forms of associations. Government as we know it is not created by constitutions or democratic vote. Those institutions can help to maintain associational government once it is established, but associational government is possible in the first place only if people have a strong tradition of religious, commercial, and lesser governmental institutions.

The success of self-government in the Dutch Republic, in Britain, and in the United States built upon a solid foundation of voluntary institutions. But the big states like France and Spain had a strong king and weak institutions. It is not therefore an accident that “the commercial and industrial revolutions took off earliest in the associational states” like Britain.

The problem is that this model does not encourage optimism on Iraq. Writes Wretchard at the Belmont Club:

There is total lack of trust among the families, the tribes, and the sectarian factions created by the 35 years of despotism and isolation of the criminal Saddam regime.

Without a foundation of cooperation and trust how can the groups of Iraq get together and govern?

And when we look at the peasant cultures in Venezuela and on the altiplano of Peru and Bolivia we can understand why it is that left-wing thung dictators can battle to power.

The bottom line is, of course, that if you want the prosperity of capitalism you have to build the associational culture of cooperation and trust throughout society. In Marxian terms you would say that the superstructure of freedom depends of the productive forces released by the bourgeois culture of serving the consumer.

Watch South America Go Down the Tubes

While many conservatives are fearful of the resurgence of left-wing dictators in Latin America, there is another response. Sadness.

At the start of the twenty-first century we know what happens when a left-wing dictator takes power and centralizes control of all resources into the political sector. It is poverty.

In 1917 left-wing thugs took power in Russia. Eighty years later, after dreadful famines and wars, it collapsed into frank poverty and failure.

In 1949 a left-wing thug took power in China. Thirty years later, after about 60 million deaths, it started to spin away from the dead hand of state capitalism and immediately the energy of the Han people set China on the road to prosperity.

And let us not forget the pathetic left-wing thug Fidel Castro who has wrecked the island of Cuba in his 45 years of misrule.

Now Evo Morales, the elected president of Bolivia has nationalized the Bolivian natural gas industry. And the left-wing Presidents of Venezuela, Brazil, and Argentina have got together to say that all is well.

But with South America turning to left-wing thugs like Hugo Chavez and Evo Morales, we know what to expect. Poverty, thuggery, and misery. Powered by the fuel of nationalized energy industries they will strut and fret for a season. And then energy prices will go down and the people will suffer.

And the nationalized energy industry, run by incompetent political hacks, will go down the tubes.

Do we have anything to fear from the South American energy thugs? Probably not. Energy is energy. There’s a world market, and oil is fungible.

But if there is one thing that the twentieth century has taught us. Democratic capitalism works, every time it is tried. And it brings immediate and consistent prosperity to the people. Dictators don’t.

Buckley and Will on Galbraith

Why does the death of J.K. Galbraith this week matter? And why are we beating it like a dead horse here at Road to the Middle Class? Because he defined what it meant to be a liberal in the middle of the twentieth century. Understand Galbraith and his writings, and you understand liberals.

In William F. Buckley, Jr’s obit we can observe a gentle reminder of Galbraith’s wrong-headedness.

It is fortunate for Professor Galbraith that he was born with singular gifts as a writer. It is a pity he hasn't used these skills in other ways than to try year after year to bail out his sinking ships.

And George Will nails it, describing Galbraith as the culmination of a culture of intellectual conformity that got its start in the 1950s.

Intellectuals, that herd of independent minds, were, as usual, in lock step as they deplored "conformity." Fear of that had begun when the decade did, with David Riesman's "The Lonely Crowd" (1950), which was followed by C. Wright Mills's "White Collar" (1951), Sloan Wilson's novel "The Man in the Gray Flannel Suit" (1955), William Whyte's "The Organization Man" (1956) and Vance Packard's "The Hidden Persuaders" (1957).



Galbraith brought to the anti-conformity chorus a special verve in depicting Americans as pathetic, passive lumps, as manipulable as clay. Americans were what modern liberalism relishes — victims , to be treated as wards of a government run by liberals. It never seemed to occur to Galbraith and like-minded liberals that ordinary Americans might resent that depiction and might express their resentment with their votes.

It still hasn’t occurred to liberals that people might resent their condescension. Or that they ought to.

Gen. McCaffrey Reports on Iraq

Rumsfeld critic retired Gen. Barry McCaffrey recently visited Iraq and filed a surprisingly optimistic report. Excerpted by Wretchard at the Belmont Club it describes an Iraq where things really are looking up.

McCaffrey reports that the Iraqi Army is “real, growing, and willing to fight,” the Iraqi Police is a problem, but improving, and that he is optimistic about a successful government.

[I]n my view, the Iraqis are likely to successfully create a governing entity. The intelligence picture strongly portrays a population that wants a federal Iraq, wants a national Army, rejects the AIF as a political future for the nation, and is optimistic that their life can be better in the coming years.

His especial praise is reserved for the US armed forces in Iraq.

The morale, fighting effectiveness, and confidence of U.S. combat forces continue to be simply awe-inspiring.

But two institutions get a failing grade: the State Department and the media. The State Department cycles people in and out of Iraq too fast, and the media doesn’t get out enough.

Read the whole thing.