Billionaires and Stealth Politics Page 12
David Koch is now well known for his involvement in politics. Decades
ago, David and (more actively) his brother Charles began quietly funding a libertarian intellectual network built around conservative economist James Buchanan and (eventually) centered at the Cato Institute and in various
institutes at George Mason University in Virginia. That network became
highly influential in promoting a libertarian variant of “public choice”
theory. It contributed to changing college curricula and public discourse,
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and very likely succeeded at reshaping how a good many Americans think
about the desirability of minimizing the size and activity of government.60
More recently, the Koch brothers have organized and funded liter-
ally dozens of political organizations and think tanks focused on public
policy, the most prominent of which is Americans for Prosperity (AFP).
As discussed further in chapter 5, AFP and related groups have pumped
hundreds of millions of dollars into politics each election cycle (they announced plans to spend just under $900 million on the 2016 elections).61
And the Kochs do not just make campaign contributions: their organiza-
tions run very sophisticated operations that actually rival the functions of political parties.62 Koch groups almost exclusively support conservative
Republican candidates and ideologically conservative causes.
Koch mainly contributes dark money that is not reported to the FEC.
This makes his political activities difficult to follow. However, owing to energetic efforts by investigative journalists and scholars— most notably by journalist Jane Mayer, a team at the Washington Post, and Theda Skocpol and her research group— much more is now known about the extent of
Koch’s political activities, including his dark- money contributions, than is known about the political activities of most billionaires.63
For example, the political network coordinated by David Koch and
his brother (again: Charles is actually the more active one64) is known to have contributed about $412,000,000 in the 2012 electoral cycle, approximately as much as the combined contributions of the entire US labor
union movement.65 The Kochs’ core organization, AFP, provided much
of the initial logistical, organizational, and financial support for the Tea Party movement during the early years of the Obama administration.66
The overall strength of the Koch network has been described as rivaling
the strength of the Republican Party.67
The Kochs have also supported many different conservatively oriented
political actions, including efforts to roll back unionization in Wisconsin and Michigan and to prevent federal taxes and regulations aimed at combating climate change.68 Taxes or regulations designed to cut greenhouse
gas emissions or other forms of pollution would raise costs for Koch In-
dustries’ core businesses in oil extraction and refining, chemicals, and paper. The Kochs and Koch Industries have engaged in a number of tussles
with the Environmental Protection Agency and other regulators over
their emissions of toxic waste, oil spills, and the like.69
Despite his heavy involvement in political action, David Koch is rel-
atively quiet in public about politics and is very vague about his policy
four billionaires up close
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preferences when he does speak. Our original web- scraping procedure
identified only one statement in which Koch revealed a specific policy
preference related to taxes or Social Security. Our subsequent closer
look— not restricted to the focused keywords of our systematic web
searches— did reveal that David Koch and his brother Charles have often
spoken in general terms about politics, offering support to the generally center- right concepts of “economic freedom” and a “free society,” as well as voicing libertarian opposition to “crony capitalism.” Charles speaks
out more frequently than David does, but even in Charles’s statements it
is generally difficult to identify specific policy stances.
Nonetheless, David Koch did in fact— long ago— actually take highly
visible positions on public policy. Back in 1979 Koch offered himself as a candidate for the vice presidency under the Libertarian Party label. (The party happily accepted, since Koch also offered to pour his own money
into the 1980 Libertarian campaign.70) As part of his campaign announce-
ment to party members, Koch stated that the legal regime imposing re-
strictions on campaign contributions (from which, with respect to his own campaign, he was exempt) “makes my blood boil.” After receiving the
nomination, Koch ran on a hard- line, economically conservative party
platform that advocated the repeal of many taxes and the abolition of
many government agencies. He gave a major policy speech in which he
denounced the Carter administration’s energy policies, including taxes on oil imports.71 Yet these statements were made more than three decades
ago. In all the years since then, David Koch has rarely made even re-
motely explicit policy arguments. Hence our web- scraping search process, which found no relevant statements for David Koch, accurately reflected
the political posture he adopted during our study period and over a pe-
riod of at least three decades.
Given the extent of Koch’s behind- the- scenes political involvement— on
behalf of candidates whose positions on taxes and Social Security are far more conservative than those of average citizens— and his lack of public
discussions of policy, Koch’s recent behavior constitutes a prominent attempt at stealth politics. (Success is another matter. In recent years, many of Koch’s political activities have been widely publicized.)
The public statements that Koch and his brother do make appear to be
intentionally designed to obscure their political aims. Their language is usually unspecific, vaguely appealing, and very difficult to oppose. Who, after all, does not want a “free society”? A striking example of Koch
rhetoric appeared in a 2016 Washington Post op- ed by Charles Koch.72
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Referring to Bernie Sanders, Koch wrote: “The senator is upset with a po-
litical and economic system that is often rigged to help the privileged few at the expense of everyone else, particularly the least advantaged. He believes that we have a two- tiered society that increasingly dooms millions of our fellow citizens to lives of poverty and hopelessness. He thinks many corporations seek and benefit from corporate welfare while ordinary citizens are denied opportunities and a level playing field. I agree with him.”
Koch went out of his way to highlight his “agreement” with a political
figure whose liberal policy positions were polar opposites from the ex-
tremely conservative positions taken by Koch- led organizations and by the candidates who receive Koch money. Later in that op- ed Koch wrote that
he disagreed with Sanders’s “desire to expand the federal government’s
control over people’s lives,” but he did not specify any particular implications of that disagreement for taxes or Social Security or any other policies (except, oddly, prison reform)— despite the great importance of taxes and Social Security to redistributive policies.
A reexamination of Koch’s statements collected through our system-
atic web- scraping procedure did not reveal any coding errors. Additional open- ended searches, and an examination of Koch’s statements subsequent to our quantitative analysis, did not reveal any measurement errors either. Although David Koch—
and, more often, his brother— sometimes
talks about politics in public, our web- scraping procedure did not miss
relevant political statements in which Koch took a clear policy stance on taxes or Social Security.
Stealth Politics Confirmed
Our closer examination of a handful of billionaires has provided a useful check on the systematic quantitative analyses discussed in other chapters of this book. Fortunately, on the measurement front, the four individual
billionaires we looked at in depth yielded no evidence that we had missed significant instances of public position taking in our earlier, systematic process of web scraping. Our further look at Warren Buffett suggests that billionaires who were coded as quite vocal may actually have spoken out
even a bit more often than we initially thought, but on the same issues and with the same ideological orientation as in our systematic data collection.
Perhaps more important, the Menard, Koch, and Icahn cases indicate that
billionaires we coded as silent were indeed silent during the period cov-
ered by our searches.
four billionaires up close
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For John Menard Jr., David Koch, and Carl Icahn, our additional open-
ended searches and close qualitative scrutiny of statements provided no
evidence of any policy- relevant public speech that had been missed ear-
lier. Icahn and Koch did take policy stands before or after the period for which the quantitative data were gathered. But we found no evidence that
these billionaires, whom we had coded as silent, actually spoke up during the studied period. If they did so, they did it very quietly indeed.
In terms of financial contributions and other forms of direct, policy-
focused political action related to taxes and Social Security, the case studies again confirmed the overall accuracy of measurements in our quantita-
tive data. Billionaires did indeed spend money and support policy- oriented organizations in the ways that our systematic data indicated.
Beyond measurement issues, the case of Carl Icahn led us to reflect
more deeply about the assumptions underlying the stealth politics theory.
Why did the theory not apply well to a billionaire like Icahn with quirky or populist views? How might the theory be modified to account for Icahn?
In a nutshell: we suspect that both Icahn’s early political silence and his anomalous political inactivity may have reflected a lack of motivation to participate, given the disharmony between the structure of his views and
the basic dimensions of competition among other economic and political
elites, until the ascendance of Donald Trump encouraged Icahn to burst
forth into vociferous speech and action. We also suspect that if the political world were to change, or if many billionaires emerged holding views
that did not fit on the usual economic liberal- to- conservative continuum, the theory of stealth politics might require serious alteration. To date we have seen no signs of such a transformation,73 but the Icahn case offers a reminder that political and social theories are often dependent on historical context. When social or political reality changes, theories may need to change too.
Our case studies provided some interesting new information about po-
litical action by billionaires. Our studies of David Koch and John Me-
nard Jr. revealed that some billionaires engage in forms of political activism that go far beyond financial contributions to campaigns or PACs. Billionaires can also deploy their business firms as political tools, as we saw in Menard’s use of employment contracts and employee vocational training
to fight unionization and try to inculcate conservative ideology. (Some
billionaires may also direct corporations they own to lobby Washington
for policies that fit the billionaires’ personal priorities, rather than for the more usual corporate profit- maximizing purposes.74 But we have no evidence one way or the other about this.) As the Koch case spectacularly
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illustrates, billionaires can also fund politically oriented foundations and think tanks, provide infrastructure and logistical support for social movements, build coalitions from the ground up, and indeed rival the power of major political parties.75
Billionaires, then, can try to leverage their economic assets to influence politics through methods that go far beyond campaign contributions. This
suggests that the problem of billionaires’ often stealthy attempts at political influence cannot be reduced solely to concerns about the Citizens United Supreme Court decision,76 or to advocacy of campaign finance reform. Perhaps, as Anthony Downs once argued, economic inequality inevitably pro-
duces political inequality.77 Perhaps, short of a drastic transformation of American society that would radically curtail citizens’ ability to amass large fortunes— or would severely restrict their freedom to use those fortunes politically— it may be impossible to do anything to limit the political influence of billionaires. But we are not so sure.
In the final chapter of this book, we mention some reform proposals
that would make it harder for billionaires to act stealthily, and other proposals that we believe could— if one wished to do so— markedly reduce the effectiveness of billionaires’ political actions.
chapter four
Keeping Quiet on Social Issues
Economic issues like taxation and Social Security greatly affect peo-
ples’ material well- being. But social, cultural, and religious issues like abortion and same- sex marriage often cut more deeply into peoples’ most fundamental beliefs and identities. Some Americans see access to clinical abortions as crucial to sexual privacy, reproductive rights, and women’s
control over their own bodies, while others consider abortion to be a violation of God’s will, a mortal sin. Some consider the right to marry a loved one of the same sex as following from the fundamental freedom to form
a family and to express one’s personal identity, while doing no harm to
anyone else. Others see such marriage as indecent, immoral, and sinful.1
On such issues, emotions tend to run high. Since the political upheavals
of the 1960s, public policies related to abortion and same- sex relationships have come to play central parts in American politics. Conflicts over “freedom to choose,” “the right to life,” “gay rights,” and “traditional families”
have sharply divided Americans from different geographic regions, differ-
ent life circumstances, and different religious traditions. The prevailing American ideologies of “liberalism” and “conservatism” were once primarily economic, focusing on views concerning government economic regula-
tion and social welfare programs. But liberal and conservative ideologies have gradually been redefined— within our two- party system, which tends
to squeeze all issues onto a single dimension— to include many policies that touch on social, cultural, and religious values.2
When it comes to social issues like same- sex marriage or abortion, the
politics of billionaires differ from their political behavior on economic issues like Social Security and taxes. To be sure, there are some similarities.
On social issues, too, billionaires mostly stay very quiet in public. Few speak out about their policy preferences. Again, many billionaires are very active
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politically in ways that directly or indirectly affect public policy, so that similar questions about elusiveness and lack of political accountability arise.
On social as well as economic issues, billionaires’ hefty political influence is somewhat insulated from scrutiny or control by ordinary citizens.
But some of the reasons for billionaires’ silence— and some of the normative implications of that silence— are
different when it comes to abor-
tion and same- sex marriage. One general motivation for avoiding political stands applies especially strongly to these very divisive issues: if billionaires spoke out loudly about them they would very likely offend many people on
one side or another, provoking criticism and attacks that would make them uncomfortable and perhaps hurt business. On the other hand, on these
social issues, billionaires— some with libertarian political philosophies—
tend to be less distant from most Americans (a majority of whom favor
rights to abortion under at least some circumstances,3 and a majority of
whom have moved in recent years toward accepting same- sex marriage4)
than they are with their very conservative views on economic issues like
taxes and Social Security. Moreover, on social issues, the billionaires are much less vulnerable to charges of pursuing their own narrow economic
self- interests.
As a result, when we turn to abortion and same- sex marriage, we find
different patterns concerning which billionaires speak out and which do
not. On balance, billionaires may have somewhat less reason to conceal
their stands.
Of course, consumer- facing businesses can face higher costs on these
issues. This is indicated by our chapter 3 account of a boycott against one of Warren Buffett’s businesses over its donations to Planned Parenthood,
and by the widely discussed liberal effort to boycott Chick- Fil- A because of its donations to groups opposed to same- sex marriage.5 Yet these two
examples also suggest something about limits to public pressure concern-
ing these kinds of social issues. The Buffett boycott was resolved by ac-
counting changes such that the donations were given by Buffett personally rather than by his corporation, Berkshire Hathaway, so the boycott ended
without any significant change in the targeted political behavior. The