Fred Koch, Stalin, and Social Security
November 5, 2011
by William P. Meyers

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The Koch brothers, or the two of them that own Koch Industries, Charles and David, are now well known financiers of the Tea Party and, more generally, the movement to dismantle all social welfare programs at the international, federal, state and local levels. They are the main backers of Herman Cain [See Ready for a Caining?] and for that matter directly or indirectly fund a number of current candidates for the Republican nomination for President of the United States.

Charles and David Koch run a lot of industries. They are smart, competent guys. How did they end up with their current political ideology? Can the rest of us, who are inclined to like Social Security and Medicare, learn anything from the brothers Koch? I think we can learn a lot from examining the history of their father, Fred C. Koch, and his relationship with Joseph Stalin, who was the leader of the Union of Soviet Socialist Republics (Soviet Union) from the late 1920's until his death in 1953.

Fred Koch's father had immigrated to the United States after learning the printing trade in Europe. He owned a small town newspaper, the Tribune-Chief in Quanah, Texas. That means he was one of the chief citizens of Quanah, but in the American scheme of things was a hard-working member of the middle class. Fred's older brother, Anton, stayed with the family business, and thus remained in the middle class. Fred Koch was sent to college, graduating from MIT in 1922 as a chemical engineer. At some point he aspired to being more than middle-class. He became an petrochemical engineer and in 1927 invented a process that improved the efficiency of turning raw oil into gasoline. I count that as a good thing: if you are going to make gasoline, you might as well make it efficiently.

Koch then saw the mean side of monopoly capitalism. He licensed his methods to a number of (relatively) small, independent oil companies. The larger oil companies buried him in litigation, forcing him out of business in the United States. He had more success overseas, where the new Soviet Union became one of his large clients. Joseph Stalin had been Communist Party boss there since 1922 and was effectively dictator by 1928. Stalin decided to collectivize agriculture and at the same time push to industrialize the Soviet Union. While this forced industrialization was no more brutal in total than the capitalist industrialization process had been in Great Britain, Germany, and the United States, it certainly was no less brutal, and served anti-communists with many propaganda points. More significant was Stalin's penchant for imprisoning and executing people (probably 800,000 in total, many of them Communist Party members, not counting those who died of hunger and disease), which was done on a scale that made rough forms of capitalist politics seem minimally violent.

Therein lies a contradiction: the Koch family fortunes are largely based on Communist money. Fred Koch, however, did not like Stalin's methods any more than he liked the monopoly tactics of the Rockefeller family. He became one of the founding members of the John Birch Society in 1958.

It has been a while since I studied John Birch Society doctrine, but my understanding is that, much like George Orwell (who was an anti-Stalin socialist), Birchers believed there was a conspiracy by some of the richest members of the ruling class to use the working class and impoverished non-workers as a weapon to take wealth and political power from the middle class, in particular from small private business owners. Thus to the Birchers communists like Stalin and monopolists like the Rockefellers were at least playing the same game against the middle class, and probably actually cooperating with each other. Recall that by the time the Birch society was founded in 1958 the Rockefeller family had turned liberal, at least by Republican standards. Liberal Republicans of that era favored civil rights, a progressive income tax, and social security. In that era too the conservative wing of the Democratic Party (mostly, but not exclusively, southern Democrats) was against civil rights for African Americans, but had come to accept social security and the income tax.

Fred Koch made his money honestly and made so much that later in life he was, by wealth if not by ideology, a certifiable member of the ruling class. His sons are made of different stuff, inherited money. Thus while Fred's political beliefs were pragmatic (if, as I will show, somewhat mistaken), Charles and David's are ideological, free of any meaningful real-world testing. This does not mean they are stupid or mean-spirited, but they were not able to get a clear view of political, economic and social realities because they were wrapped in a fog of great wealth since birth. They have become, in effect, the very type of capitalists who tried to destroy their father's early engineering business.

I have actually met a number of people who thought highly of Stalinism. Mostly they were either aging CPUSA (communist party U.S.A.) members who refused to believe in reports of Stalin's purges, or young organizers who were angry enough to rationalize killing (in a non-war, non-civil war situation) as a legitimate political tool. In the 1980's in the U.S. you could still find a few thousand such people in the U.S. Today, as best I can tell, they number in the hundreds at best.

It is not right to equate Stalinism with socialism. Before the Russian Revolution most socialists, including most Marxists, were Democrat Socialists. They believed the preferred method for reaching a socialist society was through organizing the working class to vote for socialist parties in free elections. The Bolshevik Revolution was actually a catastrophe for the global socialist movement. The Bolsheviks attacked and eventually destroyed the larger socialist groups (anarchists, Mensheviks, Social Revolutionaries and others) when they consolidated power. According to anarchist thinking the Bolsheviks did not represent the working class achieving power, but the establishment of a new capitalist class that in effect made the state into one big oppressive industrial monopoly.

Outside the Soviet Union, communists worked as hard to destroy other socialist groups as they worked to actually overthrow capitalism.

Socialism does not require a dictatorship. Socialist parties have come to power many times in democracies, and when the voters tired of the government, left power peacefully to become the opposition party. Judging all socialism to lead to Stalinism is like saying all capitalist rulers are just steps in the path to the type of regime General Franco ran in Spain. I may not like Bill Clinton, but I'll take him any day over General Franco.

Socialism can mean government ownership of industry, but how much government ownership of industry is there in the U.S. today? Very little. The Post Office and the TVA are the only significant examples [See Our Socialist Constitution Framers]. Social security is not an industry, it is a national pension system, and there are good reasons the government runs it. Only an ideologist would want to move America back to the days before social security. If you want to get rid of social security, why not get rid of the internal combustion engine, the printing press, and that newfangled Christian religion that vilifies the old fashioned religions of our ancestors?

The Constitution gives Congress the power to promote the general welfare. The most common abuse of that power is when a member of Congress uses that power as a cover to promote the interests of political donors, who are typically already very wealthy.

The idea that social security is a step on the road to socialism is disputed by the Marxists themselves. Most Marxists see the socialist revolution as most likely when the working class, and those unable to find work, are most miserable. Thus food stamps, welfare, Social Security and Medicare are seen as attempts to shore up capitalism. They are the modern equivalent of bread and circuses (we now let private industry take care of the entertainment fix), designed to keep the Democratic Party and its basically capitalistic, imperialistic, corrupt political machine in power.

I think most Americans should agree that freedom has many dimensions. Before the Civil War the slavery of many was the freedom of the few. We reject individual freedom when it is the freedom to take away the freedoms of the rest of us. We don't want the government running Wal Mart or the local bar, but we don't want private industry tearing pieces of flesh out of us like it would if it ran social security. Bad enough the banks are private. We are mostly tired of the medical insurance industry, and medical capitalists and even doctors, tearing more out of us than their services are fairly worth.

My basic conclusion is that it is a very bad idea to let people who are born rich run the government. It is as stupid as having whatever idiot a king has for a son become the next king. Not everyone who is born rich gets as out of touch with reality as the Koch brothers, but there are plenty of smart, hard working thinkers from the middle class who will take better care of our governance. That is as close to the Birch society as I am willing to get.

To the extent I believe in Americanism and the original Constitution, I oppose the existence of a titled nobility. We don't have a system of Sirs and Lords, but we have allowed the economic equivalent to take root. I would like to give the modern interpretation to this phrase of the Constitution [Article I, Section 10]: "No state shall ... grant any title of nobility." A reasonable interpretation of that is that, since great wealth is effectively nobility, no person should be able to accumulate great wealth in their lifetime, and no person should be allowed to inherit great wealth. As to how much wealth constitutes great wealth, I am willing to leave that open to debate for now.