Thursday, September 29, 2011

Oh Geez, Charles Koch Advised Friedrich Hayek to Sign Up for Social Security

The interventionists will never let us hear the end of this.

A researcher has found correspondence between Friedrich Hayek and billionaire Charles Koch, where Koch urged Hayek to sign up for Social Security payments, to insure that Hayek, recovering from a gall bladder operation, would be able to make a trip to the US with the knowledge that he would be covered by Medicare for any medical emergencies.

Walter Block, I'm guessing, would consider Hayek justified in taking SS payments, since Hayek paid into the program for many years. But, where does Koch get off throwing this at Hayek without as much as a nod to the libertarian principles involved in such a decision?

What was behind all this?

Koch wanted Hayek to visit the US and spend some time at the Koch-controlled Institute for Humane Studies. How bad did the exchange get between Koch and Hayek? Here's The Nation, breaking the story:

A few weeks later, the institute reported the good news: Professor Hayek had indeed opted into Social Security while he was teaching at Chicago and had paid into the program for ten years. He was eligible for benefits. On August 10, 1973, Koch wrote a letter appealing to Hayek to accept a shorter stay at the IHS, hard-selling Hayek on Social Security’s retirement benefits, which Koch encouraged Hayek to draw on even outside America. He also assured Hayek that Medicare, which had been created in 1965 by the Social Security amendments as part of Lyndon Johnson’s Great Society programs, would cover his medical needs.

Koch writes: “You may be interested in the information that we uncovered on the
insurance and other benefits that would be available to you in this country.
Since you have paid into the United States Social Security Program for a full
forty quarters, you are entitled to Social Security payments while living
anywhere in the Free World. Also, at any time you are in the United States, you
are automatically entitled to hospital coverage.”

Then, taking on the unlikely role of Social Security Administration customer service rep, Koch adds, “In order to be eligible for medical coverage you must apply during the registration period which is anytime from January 1 to March 31. For your
further information, I am enclosing a pamphlet on Social Security.”

The Nation then gets carried away, painting the entire libertarian movement as having what appears to be the opportunistic bent of Koch:

Why didn’t Charles Koch offer to put up some of his enormous wealth to pay for Hayek’s temporary medical insurance? One obvious answer: because the state had already offered a better and freer program. But perhaps Koch’s stinginess also reveals the social ethic behind libertarian values: every man for himself; selfishness is a virtue.
To long term observers of the libertarian movement, this early opportunistic move by Koch will come as no surprise. It's likely why he attempts to distant himself from the parts of the libertarian movement that promote the great economists Ludwig von Mises and Murray Rothbard. For an opportunist, like Koch, Mises and Rothbard are simply too principled.

It's also likely why Koch puts up with the beltarians around him. For an opportunist, these malleable types who can love the Fed and love war, when it's necessary, and still with a straight face think they are lovers of liberty, are just what an opportunist needs.

Ignoring, Mises, Rothbard and Ron Paul, is something a beltarian can do with the greatest of ease. It's about as easy for them as it is for Charles Koch slipping a Social Security pamphlet into an envelope and sending it off to Hayek.


  1. Walter Block would say Hayek was justified taking money from SS whether or not he paid into it because it's always good to take resources from the State and put them into private hands, and ESPECIALLY when it's a libertarian doing so who will use such resources to support his resistance of the State.

    That's what Walter Block would say.

  2. Speaking of Block & Hayek, have you ever read the exchange of letters between Block and Milton Friedman concerning Hayek? They make for pretty amusing reading.

  3. libertarians drive on roads so they're all hypocrites bla bla bla

    heard it all before

  4. I don't like the Koch brothers but this is making a mountain out of a mole hill. Yes, it is a little creepy the way Koch writes glowingly about Social Security and Medicare. He doesn't sound like a libertarian, perhaps because he isn't one.

    But the Nation's attack on libertarianism as "every man for himself" is old hat, a straw man. The stupid, emotionally-driven left-liberals can't distinguish the state from society.

    Socialism is the real "every man for himself" ideology. It destroys the social bond by making everyone's well being dependent upon the distant, cold, bureaucratic state instead of his fellow man. As Bastiat described it, through the state, "everyone tries to live at the expense of everyone else." That is socialism, not liberty.

  5. If I had a billion dollars, and someone I knew well enough to correspond with needed money for treatments, I would pony up the money. There is money, and then there is having class. Guess which one (and only one) Charles Koch has.

  6. I think there may be more than meets the eye going on here. Walter Block is exactly right that this would constitute a reclamation of prior looting done by the state.

    But the Nation isn't exactly an unbiased source either. I wouldn't put it past them to exclude any conversation to that end if it occurred. The shrill tone of the article proves they're obviously digging in the Hoover archives in hopes of bringing out dirt to trash Hayek's reputation, so they're going to give it a reading in the worst possible light they can.

    I'd like to see the whole unedited set of documents before passing any judgment.

  7. I don't know of Hayek ever voiced an opinion on Social Security or Medicare, but he did support the general idea of a social safety net. So why not advise him to take advantage of a program he likely supported?

  8. Never ask a cannibal what to order for dinner...

  9. It is funny, when I tell friends, acquaintances and/or coworkers that I am a libertarian (more specifically, an Austro-libertarian/Rothbardian), they typically have no concept of what I am even talking about. However, if I go onto youtube or some other comment-friendly site, when I show my Rothbardian colors, the inevitable mention of the Koch bros comes up.

    Just for the relief of my own curiosity, how many of you define yourselves as a libertarian? Further, do you believe that the Koch's are libertarians?

  10. I am a libertarian, and I do NOT consider the Koch brothers to be libertarian.

  11. "The interventionists will never let us hear the end of this."

    DeLong is already on it.

    Krugman will probably have something tomorrow.

  12. But just imagine trying to apply the opposite: Progressive and economist Paul Samuelson buys shoes at Sears, gas from Mobil, a typewriter from IBM, etc. Not that interesting a story right? well how does this grab you.....He didn't print his textbooks at the government printing office!!! OH THE HIPOCRAZY.......

  13. "There is money, and then there is having class. Guess which one (and only one) Charles Koch has."

    Great observation. Class and money are very different things!

  14. They say that Isabell Paterson had a drawer full of uncashed social security checks in her desk when she died. That's called principle. Taking ss is not getting back what you put in. It is being bribed, aka welfare. It is being an accessory after the fact. I am appalled that Block would support this.

    @Jaffi Joe, as for the Koch bros, I don't waste my time thinking about them and their minions on the beltway any more. When I realized that the Cato/Reason crowd is in support of the three most totalitarian policies of our gov't--1. war, 2. support of gov't schools thru vouchers, and 3. the fed--I wrote them all off as posers, or maybe agents provocateurs is a better way to put it.

  15. If i recall correctly, Walter Block already has given his opinion of Hayek's less than libertarian tendencies in some regards. In my recollection he showed how Hayek once made clear in an interview how the state is allowed to create a safety net.

    I don't know if he said this before or after he talked to Koch, but i personally maintain that someone who states that a social safety net as one of the function of government is not a true libertarian.
    This is why i myself don't overpraise libertarianism's 'big thinkers'. One wrong idea can blow up a man's whole philosophy.

  16. Speaking of having money and having class. I have no problem with charities going on TV and asking for my donation and I am certainly not a class warfare advocate - well, no, that's not exactly true, there is a governing class which have obtained their wealth by virtue of their proximity to the levers of power, the well connected class who's existences are predicated on having the skids greased from cradle to grave for whom the rules of life do not apply.

    I do oppose this class - but whenever, for example, I see a request, say, for a donation to repair the cleft palates third world babies I have to think to myself - well, a Bill Gates could repair the cleft palate of every single child on earth and still be a multibillionaire. For this reason I'm inclined to feel resentful when I am made to feel responsible and guilty for not ponying up a percentage ("...just 15 cents a day!!!") of my pittance of non-wealth to save the world. The truth is, the vast majority of us have NO wealth. Some have an income, but the vast majority of us have NO wealth. And we are, most of us, completely dependent on our paychecks for survival. And we are all held hostage to a system that has been put in place to protect the interest of those who actually do have wealth.

  17. Something in The Nation's analysis didn't sound right to me.

    "Professor Hayek had indeed opted into Social Security while he was teaching at Chicago and had paid into the program for ten years. He was eligible for benefits."

    And then a little later,

    "Why didn’t Charles Koch offer to put up some of his enormous wealth to pay for Hayek’s temporary medical insurance? One obvious answer: because the state had already offered a better and freer program."

    Do they mean "free" as in beer, or "free" as in speech?

    If you think paying into a program for 10 years is the same as "free", you'll love to hear about the "pay me to sit at home and do whatever I want for the next decade" program. The cost to you? "Free".

  18. Nice catch, Brian. Things aren't "freer" in that sense. They're either free or not. But then again, this is the Nation, a statist regressive dump of a magazine.

  19. I seem to recall a story about the multi-billionaire Koch's refusing to assist with the nursing home care bills of Margit von Mises unless "matching" funds could be found through other private sources. In all likelihood the widow Mises bills ended up falling to the state as a result. It's not clear at all the Koch's intent from the very beginning hasn't been to undermine the libertarian movement by poisoning it with their influence, rather than to advance it.

  20. How did Hayek "opt" in to the program?? I thought everybody was forced by "law" to be in it.

  21. I hate the Kochs as much as the next guy but who wants to be part of the New Commie Outrage over the Kochs. It's too anti life.

  22. If you'd invested what you'd put into SS, you'd have got back more than you put in, right?

    Plus, the government has been manipulating the market so much that no one has got the fair return on their savings anyway. And some people have lost big time as a direct result of the government.

    Not to mention all the other stuff the government does and the dozens of time people get screwed and LOSE everything because of the government.

    So what if they ALL died knee-deep in social security checks? I couldn't care less. If they'd not had them, the private markets would have provided MUCH better, only we'll never get to know because this is all we have.

    So I don't know why this is suddenly such a big deal and we're supposed to feel shamed by it. The media has no problem killing masses of people and lying about it, but if someone gets ten cents more than they should have from the government, then they get their knickers in a twist about it.

    That's ten cents less for war and bribery as far as I'm concerned.

    You'd ALWAYS have done better without the government.

    I agree with Block on this one.

    Anytime money gets rerouted to people outside the government, it's a good thing.

    Better than fattening the government sector.