Saturday, July 23, 2011

My Week at the Charles G. Koch Foundation's Market Based Management Seminar

I spent Wednesday to Friday at a seminar sponsored by the Charles G. Koch Charitable Foundation's market-based management initiative.  The seminar was in Wichita.  It was a first rate experience. Without exception, the speakers, mostly Koch executives, were enlightening. The audience was made up of talented libertarian academics from around the country.

On the first full day Mr. Koch spoke with a panel of executives.  It was thrilling to listen to a business genius.  He has built a medium size oil services firm into a $100-billion-in-sales nimble behemoth, the largest closely held corporation in America, using the principles outlined in his book, The Science of Success.  Koch Industries' management style is more advanced than other corporations'.  In contrast to billionaires like George Soros who live off the Fed and immiserate the public, Koch makes money by producing value.  The legacy media therefore libels Koch.

Richard Fink, a former Rutgers economics professor and president of the Charles G. Koch Charitable Foundation, gave several talks about economic freedom.  Charles's son Chase spoke on Friday morning about  how one of the firm's subsidiaries applies market based management. As well, we heard from finance, operations and HR executives about how the firm implements Charles's market based management model. Besides being an innovative competitor Koch displays ethical standards that are beyond anything I have witnessed in academia or in the New York business community.  Koch Industries is MORE ETHICAL than most higher education institutions.

The culture shock of going from upstate New York, which is devoid of industry, to Wichita, which has numerous thriving businesses including Coleman Lanterns, Cargill, and Koch, made me reflect on the reasons for New York's economic failure.   In New York, state and local government spend 23.3% of gross state product while in Kansas state and local government spend 18.17%.

This was a great opportunity because academia excludes and discriminates against libertarian professors. The Koch seminar provided me with an introduction to colleagues who share my views. As well, I enjoyed learning about state of the art management practice.

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