Monday, August 25, 2014

How Important is Money to Charles Koch?

By Robert Wenzel

There is something going around called the "ALS Ice Bucket Challenge."

Here are the details and the rules:
The challenge involves people getting doused with buckets of ice water on video, posting that video to social media, then nominating others to do the same, all in an effort to raise ALS awareness.  People can either accept the challenge or make a donation to an ALS Charity of their choice, or do both.
The multi-billionaire Charles Koch was challenged, he chose getting doused rather than making a donation (He clearly indicates this is the video below.) It is not the first time that he has indicated a high ranking for marginal money. When Koch wanted  Friedrich Hayek to come to the U.S., but Hayek was concerned about making the trip because of  potential medical expenses related to a then-recent gall bladder operation that he had, the muti-billionaire, instead of telling Hayek that he would foot any medical bills, sent him a pamphlet and told him to apply for Social Security. (SEE: Oh Geez, Charles Koch Advised Friedrich Hayek to Sign Up for Social Security).

These indications by Koch of a high value ranking for the marginal buck do not surprise me. I think in both of the cases above, if I was a multi-billionaire, I would have taken out my checkbook and written a check. It's probably one of the reasons I am not a muti-billionaire.

I have in the past, on a couple of occasions, I have advised people with wealth in the multi-hundred million dollar range. In two specific cases, they had serious problems that could have been handled by writing checks in the $100,000 range. I would have written the checks in their situation and told them so at the time. The problems would have gone away. But they ended up going through complicated battles to save those marginal dollars.

The same kind of valuation ranking has been displayed by Donald Sterling and George Soros.

There is in my view nothing wrong with this high ranking of money, anymore than there is a man ranking pink see through socks high on his valuation scale. But both rankings are way out there on the bell curve.

In other words, I think we should not consider such people as "cheap," but rather as having a very uncommon valuation for the marginal buck. This is not bad for the rest of us, if they use legitimate free market means to acquire more dollars. It means they have to provide more goods and services to the rest of us to get more dollars, but if they become crony capitalists to feed their abnormal desire for the marginal buck and rank that buck above honoring the non-aggression principle, then that is far worse than being cheap.

And that is the scorecard I use to rank these deep in the money long tail characters. In my ranking, Donald Sterling comes out on top. I am not aware of anything close to a crony deal that he has been associated with (Though I have no problem with being corrected if someone can point me to a crony deal he has done.).


  1. Watch the Patrick Stewart #IBC for REAL class.

    He calmly writes his check, pulls a bucket or ice into the frame and then calmly makes himself a drink, like a civil

  2. Since I don't believe a monopoly can exist without coercive enforcement and in our society the government has monopolized the initiation of coercion, it appears that Mr. Sterling's investment in the NBA monopoly would have to involve some element of a crony transaction.
    As to the "ice bucket challenge" I take heart in the fact that most people apparently ignored this indulgent charitable event. Charity is destructive of human wealth and well being and ignoring it is therefore a most civilized human action.

  3. "Uncommon valuation". I like that.