1974 Charles Koch Speech: “Anti-Capitalism and Big Business” and How the Powell Memo Did Not Go Far Enough

In this 1974 speech, Charles Koch claimed that “business has consciously assisted the government in destroying the free market.” This speech was given during the second term of Republican President Richard M. Nixon, a few months before he resigned in disgrace.

This address was part of a meeting on “The Anti-Capitalist Mentality,” which was organized by the Institute for Humane Studies. IHS was founded in 1961 by F.A. “Baldy” Harper to advance Libertarian ideas more radically than the Foundation for Economic Education by, for example, calling all taxes “theft,” despite the Constitutional provision authorizing taxes. Charles began supporting IHS in 1964, and took over IHS in 1973 after Harper died. So, this speech was an address to followers of a group he controlled; IHS continues to play a substantial role in the Koch empire and his efforts to change the law and legal policy to suit his agenda.

At that meeting, Koch claimed, among other things, that “[a]nti-capitalist feelings in the United States are probably more virulent today than ever before. Yet the effort to stem this challenge to our traditional economic values have been ineffective. It is crucial that we understand what is happening, why the defensive efforts have floundered, and what approach, if any, would succeed.”

In this speech, Koch criticizes the Powell Memo for not going far enough, in his view. He also praises his fellow members of the Mt. Pelerin Society–Milton Friedman and F.A. Hayek–along with IHS for providing better solutions to what he calls decades of anti-capitalism in the United States.

Here are some excerpts from Koch’s speech:

  1. “With all due respect to the laudable purpose of the Powell Memorandum, it contained a fundamental error which was generally unnoted by businessmen themselves and which must be corrected if we are to combat the anti-business climate effectively. This error is the assumption that the most influential segments of the American business community actually believe in capitalism- in a free enterprise system- and that there currently exists a free market to be defunded and preserved. Neither of these “facts” is correct, and defense of the free market will not succeed if we proceed on the assumption that they are.”
  2. “First, we have allowed the free market to be blamed for fostering economic crises when, in fact, a free market did not even exist at the times the crisis occurred.”
  3. “Second, we have supported the very institutions from which the attack on free market emanates. Although much of our support has been involuntary through taxes, we have also contributed voluntarily to colleges and universities on the erroneous assumption that this assistance benefits business and the free enterprise system, even though these institutions encourage extreme hostility to American business.”
  4. “Third, we have accepted the concept that the corporation has a broad social responsibility beyond its duty to its shareholders… Yet the businessman has come to believe that “he is defending free enterprise when he claims that he is not concerned ‘merely’ with profit, but also with promoting desirable ‘social’ ends. When the businessman does this, he is in fact preaching pure and unadulterated socialism.”
  5. “As I perceive the situation in which the pro-capitalist businessman finds himself today, there are basically four ways in which he can fight for free enterprise- through education, through the media, by legal challenges, and by political action… I do maintain, however, that the educational route is both the most vital and the most neglected.”
  6. “The important strategic consideration to keep in mind is that any program adopted should be highly leveraged so that we reach those whose influence on others produces a multiplier effect. That is why educational program are superior to political action, and support of talented free-market scholars is preferable to mass advertising.”
  7. “The development of a well financed cadre of sound proponents of the free enterprise philosophy is the most critical need facing us at the moment. And this task is not impractical. As the Powell Memorandum points out, “business and the enterprise system are in deep trouble, and the hour is late.” But the system can be restored if business will re-examine itself and undertake radical new efforts to overcome the prevalent anti-capitalist mentality.”

For more analysis of this speech, review the resources available by UnKoch My Campus and read this article by Connor Gibson of Greenpeace: “To Charles Koch, Universities Are Propaganda Machines.”