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comm enter promo code Tim check it out ship station comm promo code Tim hello boys and girls ladies and germs this is Tim Ferriss and welcome to another episode of the Tim Ferriss show where it is my job every episode to deconstruct world class performers of all different types to tease out the principles habits thinking influences and so on that help
them to do what they do and my guest today does not grant many interviews and he came to me through avenues that I would not have expected his name is Charles Koch and I had several of my close friends very very accomplished in business all very socially liberal who had become friends with Charles and suggested that I have him on the podcast
and will talk more about that I'm sure but let's get into the bio and this episode no doubt will excite the internet because there is a case of insanity going around and I would encourage you to listen and to focus on what I hope to transmit which is the importance of attacking the problems not the people we'll come back to that let's get to the bio Charles Koch received a
bachelor's degree in general engineering and two master's degrees in nuclear and chemical engineering from the Massachusetts Institute of Technology MIT he is chairman of the board and CEO of Koch Industries Inc a position he has held since 1967 he was renowned for growing koch industries from a company worth 21 million in the early 1960s to one with revenues estimated as high as
110 billion that's annually by forbes it's one of the largest privately held companies in the world and by revenue it's larger than both Boeing and Disney let that sink in he has transformed the business into a diverse group of companies that employ nearly a hundred and thirty thousand people making everything Dixie Cups to come in your cellphone for 50 years Charles
has supported academic and public policy research with a special focus on developing voluntary market-based solutions to social problems this interest led him to found or helped build a number of organizations including the Institute for Humane studies the Cato Institute the Mercatus Center at George Mason University and the Bill of Rights Institute Charles credits the success of Koch
Industries to applying proven principles of social and scientific progress which led to the development and implementation of his market-based Management mbm business philosophy he describes mbm and its applications in two of his books the science of success and good profit Charles is now using those principles in philanthropy as the founder of stand together to tackle our
country's biggest challenges stand together is partnering with thousands of social entrepreneurs to help them improve their effectiveness and scale attack like poverty improving K through 12 education bringing justice to our criminal justice system and more I have more to say so don't fast forward but you can find out more about both Koch Industries and stand together at Koch in
calm K och IND calm stand together org which I highly encourage you to check out if you are a social entrepreneur or know social entrepreneurs in need of support and capital on Twitter at Koch Industries and at stand underscore together it takes us a little while to get warmed up as it often does in these podcast interviews so give it you know
5-10 minutes to get into flow but we talked about a lot we talked about books that have had the greatest influence on his thinking and actions thinkers we talked about for instance the differences in acquisition strategy between Koch Industries and Berkshire Hathaway we really go all over the place and I also asked him some of the questions that were submitted by people
following me on social media and there are some real haymakers that I do read towards the latter portions of this conversation so I do not simply serve up softballs that's not the intention and that's certainly not the way that I run this podcast in general so this episode why would I do this why would I deliberately polarize my audience because of identity politics
and people applying labels to themselves it caused so many problems and I'm not referring to Charles I'm referring to a lot of people among my listeners no doubt it's because I believe much like Paul Graham does one of the cofounders of Y Combinator that the more labels you apply to yourself the stupider you become and the more prone you are to
groupthink and it's very very dangerous and in this episode my role I view is not to get you to like or dislike Charles but to pay attention to his thinking which I do think is remarkable and I will just mention a few things to calm down many of my friends out there who are predominantly liberal I did live in the Bay Area for 20 years after all to try to encourage them further to
listen to this whole thing number one I would say that Charles has been very active in collaborating with previous adversaries on criminal justice reform including CNN commentator Van Jones they shared or found they shared common principles when it came to reforming this country's criminal justice system and that is the topic that actually was
brought up by a lot of my friends who encouraged me to do this podcast and in partnership with van Charles helped to build a nonpartisan policy coalition that passed historic criminal justice reform last year on foreign policy despite disagreements with George Soros on many other policy issues as you can imagine Charles discovered that he had common ground with him when it came to
foreign policy so they partnered with George's Open Society Foundations to launch the Quincy Institute for Responsible statecraft which is a new think-tank to promote ideas that move the u.s. foreign policy away from Warren towards vigorous diplomacy in the pursuit of international peace and it goes on and on in the sense that despite and I'm quoting the Guardian here does
being a conservative powerhouse that has at times outspent the Republican National Committee the Koch Network is increasingly showing willingness to work with Democrats and investing in nonprofit groups to promote quote free and open societies end quote and then jumping forward in that piece long seen as GOP kingmakers David and Charles Koch have made waves by lambasted Trump and
his administration they refused to back Trump in 2016 vowed to hold him accountable to conservative priorities like free trade free markets and small government and have been outspoken against the White House on immigration and infrastructure spending what I found is that the people who love Charles Koch miss a lot the ones who have the most intense views
about Charles and Koch Industries likewise the people who hate Charles or Koch Industries miss a lot and my hope is that I'm able to add some nuance and texture to this person who is often evaluated based on headlines and also again to encourage everybody listening much like I feel Charles does very effectively to attack the problems and not the people I think that's the only
path forward really is to instead of asking how to most effectively fight against someone to first ask yourself what you might have in common in terms of priorities so that you can align in some fashion without that we're all doomed I think in short or long order either way that's a long intro but I'm happy to provide this and I'm sure that the feedback will be strong in all sorts
of directions without further ado please enjoy my wide-ranging conversation with Charles Koch Charles welcome to the show thanks Tim thanks for having me oh I appreciate you taking the time and I've had a number of my friends over the last it's a year year and a half who have have wanted me to interview you and who are fans of a lot of what you've done the the the main
subject that has come up a lot is criminal justice reform which I'm sure we will get to and there's a lot to cover I thought we would start with dandelions can you tell me about your history with digging dandelions well I was I really consider myself blessed because I had the best of all possible worlds looking back it didn't seem that way at the time but we were wealthy and
my father he called himself a half-baked chemist and he loved doing experiments so we lived on a an experimental farm it wasn't a commercial farm but it was a farm where my father could experiment with various things so we had we had cows horses dogs chickens and raised crops and and my father announced at an early age he said I don't want any my sons to grow up to be country club bums
and I was a metal child on a brother who's two years older and two younger brothers who were twins were four and a half years younger than I was and so my father started this on my older brother and he was more of an artistic bent so the this manual labor that involved helping out on this experimental farm didn't work as well for him and so I bore the brunt of it and you may ask why
why did I bear well that was one reason and as he put it I asked him years later I said pop why were you so much tougher on me than my younger brothers and he said son you plum wore me out and so high I earned the right to be in more trouble get knocked around more and do more work so I started he started me out in all my spare time working and the
first was digging dandelions the reason I say digging you can't just cut them off or pull them you've got to get all the roots out or they just come back so that was my job and then I graduated in two and shoveling out stalls feeding the animals milking cows digging postholes fixing fence and all that stuff and then as I got older I got jobs in other
places so it was it was quite an opportunity to learn the value of work and learn that I better develop some skills that other people will value or I could end up doing this the rest of my life which I didn't look forward to he used to say that he said I was a good kid in many ways as long as the work didn't come too close and so I had I had what's the economists call a high time
preference that is I was into instant gratification how could I minimize the work how could I do something that's fine so that was my whole orientation and and then I was blessed that I thought the only thing I was good at was getting in trouble and I was I was pretty expert at that and I found in the third grade that I had a gift in in math and I later learned when I studied study
psychology I read a Howard Gardner and his multiple intelligence theories and boy did that fit me because the only thing I was good at was what he called logical mathematical intelligence and so I had a gift for math and abstract concepts so basically my whole life has been defined opportunities that that used that that I could create value with that and then to
partner with people who were good at all the other things that needed to be done that I wasn't good at and or dreamed possible is because I've done that whenever I've tried to do things by myself or without that kind of of support I've basically failed I want to ask a bit more about your dad specifically about a believe you still have it I would imagine so a framed
letter that you found in your father's safe-deposit box after his death can you talk about the letter that is on your wall and why it's important to you yeah he wrote that in you know I take January of of 1936 and I was let's say I was born in November so I was let's say three months old and so he wrote it to my older brother and me and in there he talked about adversity provides the
greatest lessons and is certainly the greatest character builder and then his hope for us and whatever he had given us that we used it we didn't misuse that or wasted but used it so we could experience the glorious feeling of accomplishment and so that's everything he did whether I liked it at the time was toward that end and so he and I think this is so important for anyone
who's a parent and certainly we've tried to do that is you don't lecture your kids on anything that you don't live up to and he exemplified integrity humility treating others with respect and and as he used to preach to me son learn everything you can you never know when it will come in handy and so those who are all lessons and and there was no hypocrisy
in there I mean that's the way he lived when you ended up after your education so after MIT you were talked back to Wichita and my understanding is that he had an equipment company that wasn't doing well and effectively said you can run it any way you want the one thing you would need approval for is selling it was that the time that your dad
fascinates me because I think you might have been correct me again if I'm wrong but about 26 I have a piece of advice that that he gave you and it's I hope your first deal is a loser otherwise you'll think you're a lot smarter than you are so it really seems that your dad was focused on preserving your sort of initiative and drive so that the the the wealth wouldn't become
a curse or there are other things that he did when you first joined the business to facilitate that could be before or after but I'm wondering what that initial experience was like yeah we had my father the the way he got me to come back he had been after me I was working for a consulting firm in in Boston and learning a lot and I got to work in all different phases this wasn't
just a management consulting I started in product development and then I did process development and then I worked in an innovation group and I kept maneuvering so I got to try different things I was looking for something that I could use what a few gifts I had and in a way that would be productive in that and that I'd be passionate about and and by the way I had the reason I
was able to get into MIT and as I started my my time preference change rather than being instant gratification I I started I got a much lower time preference and that is I became focused on the long term on on studying and developing these aptitudes and looking for a calling that I could use to create value for others and that would make me successful and
and that I would be fulfilled by so I would be passionate about it and and work so I through all this that I worked in in multiple departments that are thirty little and and I just Charles Manson I apologize that could be talked about I just want to pause on the switch that you made so how did you because a lot of people never make the switch from instant gratification to
this longer term focus what catalyzed that for you well I think it's it's and I said this my father always had me doing dirty jobs and I was minimizing the my work effort I put into it and at some point I figure out this is a dead end what am i doing and and it been maybe his lessons in his example seeped in and so I started started reading probably as a junior in high school
started reading start with novels and then at MIT I I got three degrees in engineering there but I was a lousy engineer but I was good at the concepts behind engineering but not on how to apply anything so I maximized the taking the courses in theory and so I took mathematics for nuclear engineers all these abstractions because that's what I was good at and so not that I've used a
lot of that but it really helped develop my aptitudes and so then as I got to work some in business and business consulting I found while this came naturally because what I was good at in were things like vision philosophy strategy logically analyzing problems and looking at the other side what could go wrong rather than just go with whatever ideas we had but to really
experiment test them applied the scientific method to them which I part of which I learned at MIT part of which I learned afterwards and I'd love to you and we can we can certainly bounce around I mean that's sort of the nature of a lot of these conversations but if we could talk about books because it it certainly seems like books have had a large influence in your life and in your
book good profit you wrote I am a bonafide book person my home contains more books than I'll ever have time to count in the walls of my Wichita office are lined with them - what are what are some of the books that have had the largest impact on your thinking and - I'd love for you to in addition to anything else you might mention I'd love for you to describe what impact - books
had that came up repeatedly my reading FA Harper's why wages rise and I'm probably gonna pronounce this name so you can correct me but Ludwig von Mises or Ludwig von Mises I'm not sure no reg von Mises there we go yeah the human action well I yeah I can talk about those but the two the two authors that have had the biggest influence on me are
our Abraham Maslow and Frederick Hayek and and a lot of what we do is based on Maslow's ideas of posi was one of the early positive psychologists rather than most of them in history Freud and others had worked on the psychiatry of illness and he took the other side he said what can enable somebody to have a fulfilling rewarding life and what he said is what you can be you must be if you
are determined to live your life with a lot developing your potential you may be successful in other ways but you will be deeply unhappy for the rest of your life he said a bird has wings a bird has has to fly what you can be you must be and so that's and then he called that that state of where you are fulfilling your nature self-actualization that what you
can be you've you're becoming not that any of us are every perfect in that because it's a continual learning experience and which requires ongoing effort so that's what we've we try to apply here at Koch Industries and that's what we're applying in our in our philanthropic efforts to enable everybody to have the opportunity to realize their potential and then what I
exit of all the insights that that he's provided one that's I quote in the in my book good profit that what he called perhaps the greatest discovery in history of mankind is that people can live and work together in in peace and to their mutual advantage under generalized rules of just conduct that is with generalized rules that enable people to succeed by assisting others
rather than detailed rules that cause conflicts and and people trying to undermine each other makes all the difference and that was from his study of history well history philosophy economics and so on so you put those two together and it forms the core of my philosophy and what's enabled me to accomplish more than I ever was really capable of doing you you and you and I
in in previous chats have had Karl Popper pop up in conversation a number of times do you find yourself applying scientific principles or engineering principles that you used in your education to business or how does Karl how does Karl Popper fit into your thinking about business well life no no that's the great question the at MIT I became
fascinated with science and the scientific method and then after I moved back to Wichita I started studying one of the early things I studied was the the philosophy of science and the scientific method and in particularly and as one one particular essay of karl popper's called Sciences falsification in which he says that the true scientific method is develop a testable
proposition now to prop proposition that that is untestable but one that's testable and then your obligation is to not to go find evidence that will support it but go out and seek criticisms of it find what's wrong with it and that's what we do on on everything like we have a project or an acquisition okay the first thing to do is find what could go wrong and any idea
I have I let's say I have an idea for a new strategy or a new business and so the first thing I do is think through okay what what are the key drivers of success here what needs to happen and let's say there are five different main drivers then I go find the people who can best show what's wrong or what could go wrong in each of those drivers and we get together and I go through my idea
and and each one is expected to come up with ways that could go wrong and every time we go through that we come up with a better answer then I developed and so that's critical the other philosophers sites that I've particularly drawn on is Palani who wrote whose essay well a couple of things his essay on republic of science where the reason a scientific community
has been so productive and innovative is that no one's in charge it's by consensus debate and knowledge sharing and the innovations come about by taking different ideas and combining them in new and novel ways and so that's what that's another thing that we approach that we use in management every every one of our businesses we look at as a laboratory for for innovation and
finding new and better ways to to do things and new and better opportunities Charles could you could you speak to perhaps an example of how you have applied the Republic of science or the concepts therein and for people who want to look them up first name Michael I believe Palani will put this in the show notes as well for folks but in terms of
information exchange recombining in novel ways could you give a an exam a concrete example of how that has been applied right well the first thing we do is is we emphasize knowledge sharing many companies particularly large companies operate in silos and and you have an incentive where gosh you you know you have an idea or you learn something and you don't want to share it
because you may not get credit for it we consider that the kiss of death so so we expect everybody to share and we build mechanisms and incentives in the company to to encourage this internal knowledge sharing and then we expect every every discipline and there business to build knowledge networks around the world and it may not be largely isn't something that's in in
your field or just with the competitors but something that's going on elsewhere and so we do that I mean for example on on how to keep compressors from breaking down and shutting down your whole operation so we one group are we built a group to do data analytics to to take measurements and determine what it was near breaking down so we could repair it
before it shut the whole plant down and then everybody and shared this knowledge and learn from each other and this this is our whole philosophy of mutual benefit that is the way to get knowledge sharing is show when you help somebody else if the right person or group then they will reciprocate and so we have this culture now of knowledge sharing what we call a republic create the
republic of science and that's that's true for everything for not just compressors but everything and then we have innovation conferences that get draw from different disciplines and different of our businesses they get together and throw out ideas they have and then they then they get to know each other so they don't just share when we set up a structure to do it but would
they have what we call a spontaneous order where people just naturally know gosh I'm working on this problem who might help me in the company and then who can help me elsewhere in the world who's working on something similar I mean it's like what Newton said if I see four others because I'm standing on the shoulders of giants and but they don't need to be giants anybody who who's
working on a similar problem may have an idea that can help you and collectively we're all smarter than we are any of us are individually and you know to that point I'd say that it's it seems like you need to create systems and incentives to reward the right type of sharing and in I keep mentioning good profit you've written other books but a good profit
I've found very interesting for a number of different reasons I mean you have it's certainly completely politically economic I mean you have John Mackey co-founder of Whole Foods who's praised it you've got General Richard B Meyers former chairman of the Joint Chiefs of Staff and others who've talked about it and it's it strikes me that sort of clarity of thought and
systems are a recurring theme so I'd like to talk about a few things that makes what you guys do different perhaps from from others and one that one that stuck out to me and we don't have to spend a lot of time on this but was this is on coke after Fred in Chapter two the it was all the difference between acquisition strategies of a coke and Berkshire Hathaway and I believe I'm
getting this right but it says Berkshire Hathaway buys companies when their competitive position is attractive and if their management is good he assures them that he won't intervene except to decide how to invest the cash flow then he largely leaves them alone to operate as they had before the acquisition coke strategy has been to make acquisitions
when we can create additional value by applying our capabilities I was wondering if there any other differences or contrasts between Berkshire Hathaway or other companies that people might compare co2 that that that come to mind are there any any other differences that really stand out to you that we haven't talked about but I like our management approach is based on on understanding
the principles of scientific and social progress and and we've codified and systematized those in in the in the market based management in five dimension and then which I didn't describe in good profit because I hadn't clearly thought through how we applied that that enabled us to do all the things we did that is to in in 1961 when when I joined the company we had two businesses the
largest one was a crude oil gathering system in southern Oklahoma and the other was a smaller company that that I my father let me run initially that made in internals for distillation columns that was it was struggling at the time and and since then we've increased the value of the company 7,000 fold and entered all these different businesses we now have 12 business groups such as
Georgia Pacific DuPont sold nylon business and and so forth then and well I won't go through them all but but okay the way we've done that is is by creating what I now call virtuous cycles of mutual benefit and that may be highfalutin expression but it's it accurately describes what we did so the starting point is to understand what capabilities you have that others will
value that you can use to create value for others and and and then to find the the opportunities for those capabilities that will create the most value for others and particularly others who will reward you for that value so so our idea that the ideal for business is to maximize value create for others and your profit would come solely as compensation for that value you're
creating for others and then to continually improve and and add to those capabilities which and then look for based on that what what other opportunities are there for which you can create superior value so so there are two components then one is to become preferred partner for all your key constituencies that starts with customers but it's includes employees
suppliers communities and society as a whole and then the second piece is to continually transform yourself like our philosophy is if we in a business or you as an individual working in an area if you're the best in the world it's not good enough and particularly today with the rapid improvements in technologies within a year or two you're going to be
obsolete if you just rest on your laurels so you've got to be constantly thinking on how do i improve how do i do things differently what are the new opportunities I mean if we had just stayed with the crude oil gathering and making those tower internals I mean we'd be out of business now but it's by applying that applying these principles of human flourishing and to create these
beneficial cycles focusing on how do I create value for all my constituencies particularly those who rode is for the value we create for them is what has enabled us to do what we've done and is that in essence the definition of good profit for which the book is titled any profit that is creating value for customers society partners driven by sort of voluntary a voluntary mutual
beneficial relationship it seems to map I'd love for you if you can maybe to confirm or clarify that and then could you give a could you give some examples of what what bad profit is what are examples of bad profit and why our job is to produce products and services that our customers will value more than their best alternatives and in doing so to constantly reduce and become more
efficient in the resources we consume in doing that which okay how does that benefit society it frees these resources then to satisfy other needs so that's what good profit is bad profit is is all the ways they profit that that is antithetical to to that approach that is trying to cheat your customers misrepresenting what you're doing and rigging the system getting corporate
welfare protectionism of all different kinds including protection from foreign competition but also domestic competition and a great example of this is is occupational licensure in which which they're like a third of all I think a third of all occupations today required some kind of government approval whether that's it depends on the state or locale but there are
hundreds of these which are mainly keep people who start with nothing from being able to do anything because some of them require a couple years of going to school and in paying a substantial fee that they can't afford so it just it keeps poor people poor rather than enabling them to realize their potential by developing their skills that other people will value and this is things
like hair braiding hairdressing manicurist yoga instructors funeral parlors interior decorators you name it not things that will blow people up or anything that you think guys the government needs to approve that so it's it's all just cronyism protectionism and corporate welfare you've you know one thing that I found engaging about a good profit and a lot of your writing is that
you're very you're very specific and also very transparent in a lot of respects the there are a number of other things that fall in the book and and please feel free to correct if I'm getting this wrong under the category bad profit got mandates subsidies tax incentives import tariffs restrictions on exports anti-competitive regulations bailouts and I'm looking at a workbook
this is this is uh this is a way to engage with the material a good profit workbook for people who want to really understand the material and one of the questions that they pose is do coke companies participate in bad profit if so why how would you answer that well you can't avoid it I mean if we for example take steel tariffs we oppose those even though we have 40 percent
interest in the newest steel mill in the country in Arkansas mafic Forbes just wrote an article about it in the last issue big river steel and so it makes us money but but we oppose it I mean we play by the rules we're going to play by the rules we're going to be other laws and and but we're going to oppose all the ones that that undermine the the
ideal role for business and society and and why what are you just running a charity no but well we we take the long-term view and toe to rig the system to make a quick buck and makes people's lives worse then what are you doing why does society need business that's making people's lives works if-if-if business and individuals are getting wealthy the only way society is
going to permit that long term is if they're contributing to helping people improve their lives not making it worse so this is a problem with business today we have business people have a bad wealthy people have a bad reputation because there's so much of this cronyism and protectionism going on like we oppose the the Board of Adjustment tax like 20% tax on oil imports even though
we determined it in the most liked of case that would make us over a billion dollars a year by increasing the cost of living to Walmart and Costco buyers and and we helped get that defeated because as I as I told the the leaders in Republic and I said how does this make sense are you gonna promote this we're for this because it's going to make coke
industries a lot of money and probably big exporters like Boeing and General Electric will probably never pay tax again and it will increase the cost of living for the great majority of people in this country particularly those who are least well-off and of course they had they had their reasons but it didn't make sense and and so we and others got it defeated but the sad thing as you
could to tell what the great majority of companies what whether they were for or against that depending on whether they thought it would make them or cost them money short term so that's it all this short termism that's going on i we think is is hurting people and undermining business's role in society what what types of market distortions do you wish didn't exist or are you
trying to prevent all of all of them do could you give are there are there any particular examples that stand out for you as sort of the the heavier Domino of sorts or something that has particularly negative cascading effects well I mean the biggest are all these forms of corporate welfare which I mentioned occupational licensure the restrictions
on innovation and competition and opportunities for those who start with nothing as I as I said on occupational licensure so this would goes with those and then and then all the protectionist provisions these trade restrictions this are crazy immigration system all of these are things we're working hard on to to change it strikes me and I'm a simpleton and pretty uninformed when it
comes to these things but that being a privately held company allows you a flexibility that some people in leadership positions and publicly held companies publicly traded companies would feel they don't have which is a benefit that that that you have for instance if if you have because I would imagine there are differing opinions at at points so if you have an opportunity
or a say legislative or regulatory change that could be short-term beneficial profitable that is and that they conflicts with with you Charles your direction that you would like to see things head on a broader scale for human flourishing how do you have that conversation among top brass in the sense that revenue profit these things that are easily quantifiable
whereas something like human flourishing may be harder to quantify how do you guys have a discussion when there's there's disagreement we had those those kind of disagreements decades ago but I can't think of any of those now we may have a debate on on whether it this will help her her long term but it will it is always will will this enable to fulfill our obligation as a business that is to
profit by helping others improve their lives I mean what we do is we teach these principles we have dozens of people who work full-time on teaching these and consulting on on these principles of principles of human flourishing and and how to apply them that'll make us successful long term and that's how we we try to reward our people well first of all we hire first
on on values on our guiding principles we have now eight guiding principles and and so we hire on those we we reward on those we promote on those and if somebody isn't living by them we encourage them to go somewhere else because it's not a fit for them here and so so we have harmony that doesn't mean we don't have challenges and disagreements but it's on how to do how
to realize this this vision and these goals rather than whether we want to sacrifice our principles for for immediate gain so I would say what guides us at first are are these basic principles of human progress human flourishing second is building capabilities that will enable us to create value for others and then do to continually transform ourselves to do a
better and better job of that and to and focus on using our abilities to to contribute so that's what's made us successful so I mean I mean you look at our track record not that we've been perfect and we haven't had problems and haven't violated these principles because we're all we're all flawed we all make mistakes and and get off track which we've we've done many
times and do it continually particularly when it's we do have a hundred and thirty thousand employees that's incredible I mean it blows me away constantly the power of these ideas people say oh well you're so smart I am NOT believe me everywhere I've ever worked or whatever there are a lot of people who are smarter than I am it's just I was dedicated to understanding
and living by these principles and that's what's made the difference in my life that transformed my life well let's I'd like to talk about your the principles in your and your intellectual formation and I set a book note to come back to this and maybe maybe these are the wrong trees to be barking up but could you speak to I have a couple of thinkers I've written down authors and
thinkers we've already talked about a few of them Michael Polanyi we've talked we've spoken about your father certainly I have FA Harper author of why wages rise ludwig von mises author of human action among other things of course and W Edwards Deming and wondering what what are the main principles or lessons that you've taken away from any any any of
those people we don't have to necessarily cover all of them but if any come to mind that we haven't given any airtime to if there are any principles or learnings that you you think are core to what you took away from any of the names that I mentioned right well we've talked about popper and planean there was another besides republic of science that I got from Palani it's personal
knowledge that that in that too he's read in a book but named personal knowledge which says there's a huge difference between conceptual knowledge and personal knowledge and he uses an example of a concert violinist okay the first thing a concert somebody wants to be a concert violinist first how do I hold the violin how do I move my hands how do I make
notes and and so they focus on the parts and after these parts become natural like the violin and becomes an extension of your hands you don't have to think about how to use your hands but that's what he calls personal knowledge as opposed to conceptual knowledge and then after you do that enough where the parts become second nature then you can focus on the whole the whole is making
beautiful music and so that's what I mean just that changed our whole approach to teaching our management philosophy because we were in its what I called I think of a flaw in our education system it's not really education that schooling teach to test and what we found in our programs that works and helps helps people realize their potential is to like is to
consider real education to be three-dimensional rather than one-dimensional and those three dimensions are discover your gifts your aptitudes and what will turn you on then the second one is I do whatever you can to fully develop those so first you learn to be then you learn to learn and then you learn to apply it okay how do I apply these that will make a
contribution in society that will be that will help me better myself and and and in the process better others help others better their lives and that's three dimensional education and we find that in the programs we've started support that's what we're looking for because that's that's what moves us toward a society of mutual benefit where where people have the opportunity to
realize their potential okay that's so that's personal knowledge is another one another one is the division of labor by comparative advantage which also fits Howard Gardner's thesis on multiple intelligence that is basically that people aren't smarter are dumb overall I may accept in the in real extremes but most of us are gifted in some ways and and and not too Swift in others and that
I'm Exhibit A in that and so I mean that was that division of labor by comparative advantage I was first developed by Ricardo on nations nations ought to focus on what they're good at and then trade with others and then I that optimizes everything learning best use of resources and so on another concept is is creative destruction Schumpeter's concept that is you don't
want to be protectionist in your own shop that is you're doing something a certain way like Kodak in in making film rather than do it digitally they had the technology but they've tried to protect their existing product line and so ended up growing broke so you've got to do you want to drive creative destruction internally that is constantly replaced what you're doing with a better way a
better product a better technology another one is self actualization when I which I described and then another one from also from Maslow and other positive psychologists is what he called synergy is a system and state of mind where what selfish an unselfish merge I mean and that's what he meant by I mean contribution motivated that focusing on helping others in a way
that's also rewarding to you then the whole dichotomy between selfish and unselfish disappears now that's an idealized case that'll never be perfectly true but if we could have a society in an organization where that's generally true then you're going to be much better off and that's what we try to apply here that is to have what's in the long-term interests of the company
in the interests of the individual employees and as I say learn that from from Maslow and then and then free speech and open inquiry is another one the role of property rights and decision rights which is a key one of the five dimensions of market-based management then basic values such as integrity humility respect and desire to contribute then another from this is
from von Mises human action model people only act if the action will satisfy three requirements the first is is you become dissatisfied with your current state you have a vision of a better state and you have a path to get there so this is very important for how companies or societies organize themselves if if people believe they're dissatisfied with the current state they
see what's wrong with it but they have no vision of a better state and because you don't have free speech you don't have communication they don't they haven't seen a better alternative or you're so bureaucratic and in protectionist you don't allow anybody to improve or like in a company the approval process is so painful and difficult you just give up somebody we work with
in one of the major oil companies years ago was always complaining about the bureaucracy there and he couldn't do anything wrong and I finally I said well so what do you do about it and he says well after a while you just paint your ass white and run with the Antelope [Music] that's that's what what happens so these these principles may seem obvious but if
they're are so obvious why are so many countries organizations and people ignoring them anyway why why do you that's actually a fantastic question why do you think they are ignoring them because they're not obvious or because there are other other factors at play and then I want to segue into after after you have a chance to just comment on that to stand together
and and we'll provide some background to that and then get into it but why do you why do you think that these these principles aren't are neglected is it because they're not obvious because they're difficult for for other reasons I I think it doesn't fit their priorities and I think a good part of it is they're short term oriented rather than long term oriented I think that's
critical and and as I say that's been the demise of of so many companies that's why you see companies the top companies in the country 50 or 100 years ago or all gone they're not all but the great majority are gone or else very declined markedly in their position yeah yeah it's incredible how many blind spots and maybe not incredible it's totally sensible how many blind spots
are created by ignoring some of these factors a friend of mine one of the cofounders of a site and a service called reddit who's been on the podcast described a meeting with an executive at at Yahoo at one point who dismissing Lee looked at their numbers and said you're a rounding error and of course that didn't didn't work out well for for Yahoo so the creative
destruction is really important well let me let me mention one other principle that's been critical in my life that I touched on it and that is that as I said I I have I just have a narrow range of abilities developing those and focusing on that and then partnering with with people who could complement that and and and what I've learned is to have a good
partnership that would do that requires three things it requires shared vision shared values and having complementary capabilities and where I've had that partners who fit those three or we fit those three together then I've been very successful where I haven't I've generally failed and my best partnership has been with my wife we've been together 51 years and and we share
vision and values and I'm good at the few things she is and she's good at about everything I'm not good at so we make each other better and so that's been one of another one of my great blessings and advantage in in my life yeah I wanted to to ask you if perhaps later well we'll come back to this but what is factors that have made it work the the the relationship with your wife
because we've we've spoken about that before and I do want to come back to that if we have the time to do so but I also want to make sure that we have a chance to cover and give you time to to stand together as a way of getting there because I think there are a lot of there are a lot of passionate supporters and there are a lot of passionate detractors
and at least in my own very small microcosm of this my experience is that the most intense supporters and detractors tend to miss things so I want you to to correct me if I get anything wrong that I'm gonna say as means of context but just leading up to stand together I want to paraphrase a former Congressman Joe Scarborough this is from that source basically the the gist of it
is although your critics are usually unaware the the Koch brothers have supported more than just Werner generally considered conservative causes they post george w bush and many issues our pro-choice support same-sex marriage and worked closely with the Obama White House for the Obama administration's criminal justice reform initiatives that align with their own I've to two things
that I wanted to mention on criminal justice reform and foreign policy and then feel free to and I would love you to correct anything that I get wrong obviously but what's what's impressed me about a number of the things that you've done and probably many many things that you've done is that you've allied with former combatants as may be too strong
word but people with whom you've had tension or people with whom you still have many disagreements over different things the first criminal justice reform despite what I believe was pretty adverse a relationship with activists in CNN commentator Van Jones you ended up collaborating to work together on criminal justice form similarly on foreign policy despite disagreements
with George Soros on many policy issues you found the you had common ground when it came to foreign policy so you were able to partner with Georgia's open society foundation the question I want to ask you before we get to stand together which we're going to in just a few minutes is how is your approach to policy did I get anything wrong I'm cheating it's a two-part question and
then B how's your approach to policy coalition's changed over time no that's a that's a great question well I've been at this social change and and philanthropic approach for fifty five years now and it was basically I had learned these principles that transform my life and enabled me to [Music] really realize my potential and accomplish more than I ever dreamed possible
and so I I had the desire to help as many others have the same kind of benefits in their own way to fit their own situation and and gifts and so I started as I say and I started in on this in in 1963 and and for the first let's say 40 years of that I wasn't involved in politics at all I wanted to stay away from that and and work with helping people realize their potential
and supporting mainly students and then as as the students talked to their professors about what they were learning working with with our organization that the professor's would come and they want us to help them set up a program to do that so it just spread and then to get things done we we decided we needed to to build our organizations that would
well first of all that would take these ideas and develop what are the policy implications of these and so I helped found the Cato Institute and a number of other institutes to do that and then we decided we needed to help mobilize people more and more people were interested in these ideas how do we how do we get policy changes well we need to mobilize people who were interested in
them and help them have a voice and so we started doing that and then decided we needed to get politicians more politicians who would be interested in ideas that would really help the country long-term rather than just help them get a reelected and so we started doing that and the Republicans seem although far from ideal seem more sympathetic to these so we started supporting
Republicans and and then then we learned that didn't get us anywhere so we have changed no we're just we will go back and support anybody who will advance these policies that will help bring about the Society of mutual benefit where people have the opportunity to realize their potential and so if you put it in terms of my philosophy on partnerships you share vision and values
and have complementary capabilities what I was doing was applying to brought a requirement for shared vision that is ok wills only support those and work with those who we share broadly a vision of what kind of society we want it and so that was really limiting the number of people we could work with and so in the last few years we've changed that all we
need is shared vision on a specific issue and we may disagree on everything else but if if you can really help us advance this policy that will help people improve their lives we will we'll work together and so that's how Van Jones has gone from being somebody who was trying to shut us down to working with us and bragging on us and and enabled us to work with Soros and
everybody on specific issues other even though we have major disagreements with him and that see and then that fits where we're finding is doing that it reduces the the hostility and the conflicts if rather you meet somebody rather than try to find something you disagree wheel on and fight them and attack them search for something you can work together
that will contribute that will help people improve their lives and doing that now we have allies I never would have believed we can and now as this is changed changing our brand and help people look at us now many many more people are open to working with us and it seems like a lot of what you've done not just in the last year's but certainly even before that has led up to
this initiative stand together could you tell us a little bit about that focus and why it's a focus what it is right we've we started the organization that was originally stand together now stand together foundation to build on the work we were doing in troubled communities and and our approach there is what we call bottom-up as opposed to top-down
and it starts with the the recognition as I've been saying that everybody has a capability to realize their potential if they have the right mindset and support so how do we how do we help people get the right mindset and support so they can have a better make a better life for themselves and it's as I say it's with a bottom-up approach rather than a top-down approach and what I mean by
that is rather than have somebody come in and say well on average or we can improve the statistics on this here's what we're going to do and we want everybody to do this same thing we find that hasn't worked but what works is is what we define what we call social entrepreneurs who are closest to the problem and this would be largely people
who who've had a problem have gotten in trouble have been held back [Music] have learned to overcome it and now are dedicating their lives to helping others do the same so they have different capabilities than we do we advertise if you're interested in our help so you can improve your efficiency by better management practices and want to scale and celebrate it so it can spread so
more and more people can benefit from your proven approach then we'd love to do that and so we've had several thousand applications we now have a hundred and fifty these partnerships in these troubled communities on on everything from addiction to to criminal justice to homelessness from lack of Economic Opportunity from two young people who who have only seen a negative
contribution negative motivation rather than contribution motivation and to help them change their mindset that they can succeed in contribute and you know it strikes me and I'd love for you to correct me if this isn't accurate but it seems like you're taking a lot of your experiences from say criminal justice reform where you've focused among other places on really analyzing recidivism
and reducing recidivism looking at how to change things so that employment opportunities for released convicts aren't as constrained as they are currently we're expanding those options and I've actually spent time in some Mac security prisons teaching entrepreneurship with a number of organizations that you're taking some of those learnings and then applying it
more broadly to enable a community of social entrepreneurs the so that some of the numbers that I have in front of me are in terms of the entrepreneurs and groups who focused on and it looks like there are five five four key institutions education business communities government policy so you have a more than a thousand professors at more than 350 universities tens of thousands of
k-12 teachers and this will lead up to a question more than 700 of the top business and philanthropic leaders that combined employ more than more than 2 million people 140 plus community groups tackling poverty and addiction I'm very interested in addiction that's that's a longer story for another time but millions of grassroots activists in all 50 states so this is is clearly
bottom-up like you mentioned I think a lot of people when they when they hear Charles Koch think market-based solutions are market-based solutions part of this we're looking for market-based solutions or is it broader than that well it's it's market-based and in that it's it's looking at what really works and looking at individuals rather than I mean it market is a little
bit of a misnomer but it's applying the same philosophy that that made Koch Industries successful and enables us to to help our our employees become contribution and motivated and by the way I you suggested this early and our employees who after years of learning they can succeed by constantly improving their ability to create value for others they tell me and and after they retire
or leave write me and say they they they are so appreciative that they learn this because it improved their family life their communities their friendships everything to look at it that way rather than the way they were looking at it before but so it's it draws yeah our experience in criminal justice reform but but more broadly our experience in
in what made Koch Industries success what have made societies throughout history success which ones have people have flourished and which ones have people have been admitted and what we learned in in developing youth entrepreneurs and that's an organization my my wife and I started 28 years ago here in Wichita as we saw met so many kids that obviously had ability that
they did played sports with but we're just getting terrible advice they were came from broken homes and tough neighborhoods where people were trying to hurt each other so wow this is what a waste so we need to start something particularly in this in these inner-city high schools that would teach them what we call principle entrepreneurship that is this to have create this three
dimensional education where they learn they could change their mindset look in spite of you thinking things are hopeless from where you came from they're not all you got to do is change your mindset and then we'll provide the support to help you become successful so in youth entrepreneurs they theory what are the skills and values they need to
be successful and discover their own and then pair a business plan and the best business plans will get some venture capital to help you start your own business and then will if you're successful you can will will find a local entrepreneur to help mentor you maybe provide internships for you and if you continue to do well you want to go to trade school or college whatever fits
you will help you do that and it is amazing the how many of these young people's lives have been transformed by this and and are running successful businesses out of this everything from car dealerships to the one developed a protein bar that sold on Amazon clothing lines chartering buses fitness clubs Hair Braiding making jewelry tutoring others I mean it is incredible
it just it blows you away when you send these here these kids describe how they've how this is transform their lives so that's what motivates me not just the theory but seeing what it really does to change people's lives it and with with something Charles when you're when you're operating at such a high level in many respects and you have so many different places you could
allocate capital and effort what what does success look like for standing other foundations say a year from now three years from now whenever you would assess it to determine whether to put more into that or more into something else which could also be philanthropic maybe just a new iteration or a new foundation how do you how do you think about what the success metrics are or if
not metrics what how you determine if it is working or not well I mean what what we're looking for these social entrepreneurs is which ones can really we help scale and then celebrate so it could capture the the national imagination and change the way people think about these like criminal justice reform I mean there it was what was current and choice was okay somebody did
something illegal block them up and throw the key away and and prison is for punishment rather than to help them rebuild and get a second chance now now it's changing because we we and others with Van Jones and others have built these broad-based coalition's that this first step Act passed by 87 votes in the Senate I mean that's incredible in this day and age to have this kind of
bipartisan support and there's impetus to to take it to the next level but it's it's changing life as people realize that 90 some percent of people who go to prison get out and do you want prisons to be incubators for more hardened criminals than they were when they went in or you want them to have a second chance and come out with a skill and
values that will enable them to contribute and become contributors rather than detriments to well-being and safety and I mean for example one of the groups we support Hudson link puts on college accredited courses in prison that that are three-dimensional as I mentioned and and if the graduates of their program has a recidivism rate first percent that go back to prison in
three years after they get out it's 2% from graduates of their program as opposed to nearly 70 percent nationally and 40 some percent in in New York where they they have mainly operated and we've helped them or they're up to five prisons now and we think it can be greatly expanded you've also done you've supported some some really good work being done in addiction treatment with
the Phoenix and I'll link to all of this in the show notes so people can can take a look at it but it's it's it's really important work these are important topics and part of the reason Charles that I wanted to have you on after you know months of just organizing to make it happen is that in very polarized times where you have it could be any number of people the
President or someone else is the second coming on one channel you flip to the next channel and he or she is the Antichrist that it is possible to attack the issues or attack the problems and not the people and while I'm sure that and I would hope that if we were to spend more time together you and I would disagree on a lot of things that there are things we could absolutely agree
upon and that provides the space to have a conversation and discuss the possibility of collaboration for things that anyone can agree upon and this is I'm really pleased to give some of those specific examples because it's it's paralyzing when everything becomes ad hominem and so so that that's really more of a comment than a question but I just wanted to thank you for making the
space for us to to talk about that and I do have some more questions but the question about about the standing other foundation are are you still accepting applications by social entrepreneurs or as has that window already closed oh no we haven't actually helped change the trajectory of the country more toward this ideal so we're just getting started
we we're a world up to over a hundred and fifty now of these social entrepreneurs we're partnering with and we think we're as we're developing capability we can add as many as 70 a year so we're just we like just scratching the service and and then developing the capability to help them scale and then to to more fully celebrate it to get this out in the mainstream so people see what's working
and how how this approach transform lives what what these individuals have learned from their own experiences and and are dedicated to apply and those are my heroes in society of people who have suffered injustice tremendous injustice and rather than come out better or giving up to dedicate their lives so that others don't have to suffer somewhere in justices I mean
those are that's if we can encourage more more and more people to have that frame of mind and that kind of dedication that's the only thing I think that will get us on a better trajectory in this country people can learn more of course I'll mention this at the end of the show as well but stand together org is a great URL and a simple URL for people to remember for those who want to
learn more I'd like to shift gears in a way but it's it's it's connecting a handful of things and also giving us an opportunity to talk about sort of ad hominem vs. issue based debates and also accurate perceptions versus misperceptions so I have I have some questions from my audience and there were a lot of questions and I've deliberately chosen a few that I think
tackle head-on or they don't really tackle but I give sort of an emotional voice to a number of things that people some people rightly or wrongly want to ask so the first one I'd like to throw out and this is from Matthew B and you can tackle this any way you'd like but the gist of it is does he ever have pangs of guilt about the millions of Americans made poorer sicker or dead by
unfettered capitalism does he actually prefer a world where the majority struggle in misery so few can hoard billions why are higher margins worth polluting the environment and how does he square that with the animals and people sickened and killed by deregulated industrial pollution so that's very strongly worded of course but I want to sort of give airtime to a
few of these questions and there are a number of questions about environmental issues and climate change so I'd love for you to answer that in any way that you'd that you'd like I mean I think we've talked about you don't need to answer do you prefer a world where the majority struggle in misery so if you can hoard billions I think that's a pretty self-evident that your answer is
you do not prefer that but how would you like to comment or respond to that you know we we would agree I mean I'm not I don't like the term capitalism that that assumes that what we're after is a system where certain people have a lot of capital and that's not what we're about what we're after is a system where everybody has the opportunity to realize
their potential including those who start with nothing and and business should only profit to the extent they're helping other people improve their lives and that so and and polluting and making people sick killing people is they shouldn't profit they should bear a cost for that and those are my worst you talking you asked about failures our biggest failures in my mind and what we
worked the hardest on are our safety problems when there's an accident and people die I mean that's monstrous so that's that's job job one is keeping people safe and job two is protecting the environment and I think the last five years the EPA has ranked us either number one or number two of US companies in pollution reduction initiatives that
is that is our second top priority after keeping people safe so I mean we agree to the extent but what you find is that the the countries that do the worst and those are those that are top down if you're bottom up and you're looking at individuals and how to improve their lives it changes your approach rather than some top-down statistical approach or control and so that's been to me the
basic difference is do we want a system that empowers people or one that controls them and you look at systems through history that have tried to to advance humanity by controlling everybody and making them follow some theory of of the people in charge as opposed to having incentives and rules that will cause people to want to believe that the way to succeed is by
helping others improve their lives I mean the results throughout history there is no comparison between the two in in the benefit to human flourishing I'm if you want to look at the biggest polluters look at East Germany when when that became combined with West Germany they had all these inefficient factories that were massive polluters and then and
then look at I don't know if you've seen the documentary try Noble on the that shows when things become politicized they become corrupted and that's that's why all those years I got had nothing to do with politics and now we're we have something to do with it but that based on on not partisan but who's going to help improve the policy so so we can move toward this system of mutual benefit
so I'm gonna ask just a few more of these and I'm gonna alternate between the the highly politically charged and not so I'll go to one that I think is not but I'd be curious to hear your answer it was uploaded quite a bit this is from John Jay asked Charles while we can't return to the tax structure of last century higher taxes equals higher GDP we average twice the GDP of today
trickle-down never works government is created or supported most businesses in this country computers GPS internet roads electricity etc what are your thoughts Charles I mean I my reading of history is is somewhat different my I I don't I don't have a dog in the fight because I'm not I don't know well educated on this people are liberated and empowered they succeed if
you look at the history of humanity for all the millennia up until starting in the 18th century there was barely ever any improvement and because these were top-down societies were those in charge well they were they were beyond authoritarian they were totalitarian and people weren't allowed to think differently if you if you violated the religious dogma torture didn't tell you
either died or or changed your opinion or were threatened with that and so that's stifled progress and then starting really in with Holland when they got it from another Spanish rule they started liberating so religious and other dissidents started coming to Holland and they had free trade open I mean they had plenty of problems they still had slavery which was endemic
everywhere but they had much more than others so they became the most prosperous country in the world and then it it it followed in in England and then spread to the United States these ideas and was to me best embodied in the Declaration of Independence that as a system of equal right and and everybody having the right to the pursuit of happiness which to me is
a different way of saying the opportunity to realize their potential and who to learn contribute and succeed and to the extent that was followed in this country made us the us the most successful country in the history of the world unfortunately it was not applied across the board for example African Americans and Native Americans had no rights obviously with slavery for
African Americans and practicing genocide against Native Americans women only had partial rights not just and I'm not talking about just the right to vote but they weren't allowed to go to college in the early days they weren't when they got married whatever property they had their husbands controlled so the relationship between husband and wife was almost like a master-servant
relationship and it took 80 years to remove the great majority of that then very various immigrants such particularly the Chinese and-and-and the Irish had only partial rights and certain religious groups didn't so all these all those were violations of the principles in the Declaration of Independence and to me what we're working on what stand together is
working on is to eliminate the the aspects of all those in justices that continue to haunt us haunt the country today thank you a lot of I'm going to jump back to the the more charged a lot of these questions are about climate change and I don't I don't know the answer to this I'm just going to ask since this is sort of a thematically it's come up a couple
from Iman I'm not going to give a last name this one is from Iman do you really fund propaganda to confuse people about global warming well I certainly hope not believe me I am totally dedicated to the scientific method in in good science and what we're doing is is trying to get various groups not people on the extremes who say there there is no man-made contribution to to warming or
others who say within a few years the the world's going to end so leaving those people out people who are somewhat open-minded and willing to listen to the other side to get them together and we've had several of those sessions so we can find something I mean there there's enough concern about a man-made contribution to to warming that various
policies are have been developed and are being developed and so what we want them to do is is to find policies that will actually work actually do something about reducing co2 emissions manmade co2 emissions and at the same time not make people's lives worse many of these policies haven't done anything reduce co2 but they make people's lives worse particularly the poorest and and the
biggest contribution or the biggest reduction has been in the u.s. in recent years because of fracking of natural gas substituting for coal and so the u.s. is now as figures I have seen is now responsible for 15 percent of the co2 manmade co2 generation and a countries in Asia particularly China and India share is growing and the problem with many of our policies as they
they are doing much for it and they make us less competitive versus China and China has double the co2 emissions per unit of GDP that the u.s. does and so as we push more over there push more production over there we're just increasing and uncertain of that of the production there for example in fertilizers and chemicals that are based on coal gas rather than natural gas it's
four to five times the emissions per unit of production so these are all dilemmas that we try to do something here but it many of them make it worse so how do we what we think we need are innovations that are going to cause China to adopt them and have them reduce emissions rather than us try to do it in ways that causes them to increase emissions so that's that's what we're
working on and because it's not it's just not once again it's just not a simple top-down matter you've got to provide incentives for people to to do it and people have to believe it will make their lives better rather than worse and accomplish nothing which is what a lot of the policies have done yeah that's a great point about China and offshoring that's I certainly hadn't
thought through as as granularly is that I mean it's after if you're pushing off production into a jurisdiction or just a could be jurisdiction it could be regulatory it could be cultural I have no idea where the the the emissions or pollution per unit of production is four or five times higher you you haven't solved the problem by changing the location and you and you see that in the
world all these policies and all this and these initiatives and co2 emissions are still going up around the world so we need a different approach I mean to keep doing the same thing over and over this is a form of insanity so that's what we're trying to do is get people focused on something that will make it different and not make people's lives worse
Charles this is a question for me just building on that or related to it what what do you think are the most legitimate existential threats to mankind if you go to Silicon Valley artificial intelligence is a very popular vote you certainly have sort of climate change or global warming depending on if you're using whose wording you're using which is the vote for a lot of folks in
your mind what are the if any the the more legitimate existential threats to humankind I think the biggest threats as they were for millennia up until the 18th century are top down the tyranny of experts the fatal conceit that a few smart people can go tell everybody how to live their lives and what we're finding we're working with these social entrepreneurs the ones who
have good solutions micro solutions not macro solutions because they've lived through problems and they worked their way out of it and they know what works and are proving it every day that that's what we need society as as Hayek found in history that enables people to pursue their own interests in a way that is mutually beneficial and leads to peace and harmony and these top-down solutions all
they do is create partisanship and and and conflict and that's what we see today in this country because it's politics is win lose gain working together to your mutual benefit is win-win as opposed to win lose so we need to maximize the amount that we allow people to do to advance their interests in a way that benefits others are there any particular problems
that worry you or things on the horizon that worry you that you think everyone should be paying more attention to any specifics that come to mind yeah I think I think policies on trade and and immigration it's what is attributed to Basquiat if Goods don't cross borders soldiers will and to have and then our foreign policy of forever wars that's why we
with with with cirrhosis foundation we we created this the Quincy Institute named after John Quincy Adams who said following the founders we got we go not abroad in search of monsters to destroy we're the friends of all nations and allies of none and so we're in dozens of wars we have a over eight hundred bases around the world we're involved in everything trying to control the world
and it doesn't work this is totally this is the most top-down of all yeah it didn't didn't work very well for the Roman Empire not to say they're equivalent but quick review of history it seems to indicate that that that doesn't tend to pan out so well and then you add nuclear weapons to the mix and the more we we bully are like like we did in Libya Gaddafi promised and got
rid of his nuclear ambitions and so we destroyed him and so that creates a little bit of perverse incentive for Iran and North Korea and septa to believe our promises that we'll leave them alone if if they'll drop their nuclear weapons so I mean it's this stuff is so backwards what would this is this is a question from I think it's joke amor hokum I
don't know how to pronounce it and I know we probably have a handful of minutes left if you're open to just going for another maybe five to ten minutes sure and his question is what would you be willing to risk your whole fortune for and and I'll just add my own parameter to that which is it's not necessarily betting the farm with the company but your personal fortune is
there anything that you would risk a lot of or your entire fortune for well I'm investing all the liquidity I have in stand together so I mean I The Economist's have a concept called demonstrated preference that pay attention not to what people say but what they do so that's what I'm doing and that I dedicate a lot of my time to that as well my time and right and
treasure and and so that's that's what I'm I'm risking everything to and that's that's the progress we're making there is one of the reasons I get up in the morning charged up every day yeah it's important to have a reason to get up which I think you're you're not to not to hearken all the way back to this but your chapter on incentives in good profit actually touches on quite a lot
what would you put on a billboard metaphorically speaking if you could get a quote or a message question a word anything non-commercial out to billions of people is there anything that you might put on that billboard yeah I put night which is our our slogan that stand together greater you're good and that's because that's a little bizarre so that
what what are they talking about so you would hope that then they'd follow up what do they mean by that and yeah what's he mean yeah and I mean just exactly what I'm thinking I mean what we've been talking about that is discover your your gifts develop them and apply them in a way that helps others that's also beneficial to you so you'll be motivated to continue to do it well Charles it I I
don't want to take up too much your time but I do have maybe a few more questions and I want to we started close to the beginning age six I want to say something along those lines digging dandelions let's go back even further who were who were you named after where do you get your first name well my first and middle name was as Charles de candolle and I was named
after an entrepreneur my father worked for named charles de gallo and he he he my father at age I don't know 25 or so or maybe it was 27 designed a refinery for him on that I love green and the UK and worked for him for a couple years and they became lifelong friends and he greatly admired Charles de Gaulle's entrepreneurship his integrity and his treatment of others so
that's who I was named after did did Charles give your father opportunities that were important early on or was there did that factor into the the friendship they developed or was it in a broader sense what you just mentioned yeah he his son Carl de ganar was a classmate of my my father my father started at Rice and studying chemistry because the there wasn't a field called
Chemical Engineering and then after during his sophomore year there MIT started the first chemical engineering department and so my junior year my father transferred to MIT and and got his degree there in chemical engineering practice and then he went to work for was Texaco then and then the gasoline products company which was a process design company and in in all this he he
developed his own ideas on on refining and upgrading heavy oil and so Charles de Gaulle wanted to build this plant and in the isle of grain and believe me plants back then in the 20s were nothing like today whole refinery would cost maybe a couple of million and it was primitive by today's standard but Karl recommend to his father that he hired my
my father from from as an employee at gasoline products company and so my father quit guessing from went to work for Charles de candolle so he gave him that opportunity and and then my father wanted to go in business for himself and he he came back he came to Wichita another classmate had an engineering company and he joined there as a partner he invested $300 and became a partner
and now the funny story is people wonder well how'd you get the name coke how do you pronounce that well my my my grandfather my father's father immigrated from the Netherlands in 1888 and and he didn't speak any English so he came over he was the printers apprentice and he went to work for various Dutch newspapers and in that learned to speak English and then he
heard about this print shop and and weekly newspaper in quantity exis that he and a partner could buy for I don't know two three hundred dollars and so they bought that and it was very poor place they they mainly got paid with blood farmer would have chickens or eggs and deliver eggs or chicken or or wheat or whatever is largely a barter system because nobody had any money and
so that's where my father grew up and he had this technical ability so he said he'd he wanted to go somewhere where there was more opportunity so that's he went to rice and then MIT and then ended up with his own business and is is Koch the Dutch pronunciation oh yeah thanks I got off the subject yeah so so my grandfather pronounced it call hard for English speakers well
particularly west accent said didn't exactly fit their pronunciation so so they pronounced it kaw like a crow CAW Fred call that's the way it's pronounced there my father hated that pronunciation and one time he was traveling on business and he was paged as Fred Koch and he said I like that so that's how we got her name so you can see it has this elegant history from
royalties from the bartering with chickens and having people address him as coughing is so much that he took the last name from an announcement that's incredible well Charles I suppose much like the Charles that we mentioned who gave your your father those opportunities early on I'm really excited to see what stand together does and what opportunities
they provide to people who could benefit from them and hopefully like you said to scale solutions that can you know capture the imagination of the nation that that's that's a that's a worthwhile project and people can learn more about that at stand together org they can learn about all of the the company side of things at Koch IND dot-com on Twitter people can find stand together at at
stand underscore together and Koch Industries is simply at Koch industries is there anything else that you would like to say or discuss yeah I think there are a number of videos that I've done and others have done on on YouTube I think you can just go on YouTube and look up Charles Koch and you see mine and so you can but I mean I mean particularly what I've said and
then you can you can judge me by that I've done a number of of op-eds and and I've done one with with Bloomberg on free speech and open inquiry at college campus Michael Bloomberg I've done one with the Tim Cook on Apple on the dreamers on making them permanent and and we've we've brought dreamers back to Washington and and to the Nasdaq to show
how many of them are productive bunch of them work for us and other companies Microsoft has joined us in that and then I've done one with Michael Lomax the the president of United Negro College Fund on the work we've done with with that organization to help students at these historically black colleges to learn principled entrepreneurship so that's that's been another amazing story of
helping these students transform their lives just like youth entrepreneurs has been great I will I will get a number of videos from your team and then we will also link to the op-eds and for everybody listening you'll be able to find links to everything that we spoke about certainly in the show notes at tim dot blog forward slash podcast as always
and you can just search by the episode or search coke koc ation it'll pop right up Charles thank you so much for taking the time I know you're a very very busy man you seem to be as busy as ever at 83 which I admire and I hope that this episode will certainly bring attention to stand together but even more than that some of the the principles behind it and the underlying ability if we
choose to exercise it to attack the problems and not the people even with the people you most disagree with on say 90 95 percent 99 percent of all issues you can still find common ground so so my hope is that this episode and the stories that you've shared and certainly the current initiatives also will show people that that is a path you can
choose so thank you for making the time Charles I really appreciate it well thanks for having me Tim and and asking some of the tough questions that's what we need that's the scientific method that challenge so I enjoy it and appreciated my pleasure thanks Charles yeah hey guys this is Tim again just a few more things before you take off number one this is five bullet
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