the family’s initial wealth was not created by the harsh, creative forces of unfettered capitalism, but by the grace of the centrally-planned economy of the Soviet Union. This deserves repeating: The Koch family, America’s biggest pushers of the free-market Tea Party revolution, would not be the billionaires they are today were it not for the whim of one of Stalin’s comrades....
[Young Fred Koch and a classmate were] quickly developing and patenting a novel process to refine gasoline from crude oil that had a highe-yield than anything on the market. It was shaping up to be an American success story, where anything was possible with a bit of elbow grease and good ol’ ingenuity.
The sky was the limit—until the free market rained on Fred’s parade.
See, Fred was living through the Roaring Twenties, a time of big business, heavy speculation and zero government regulation. Much like today, cartels were free to form and free to fix—and so they did. Sensing a threat to their royalty-revenue stream from Winkler-Koch’s superior refining technology, the reigning oil cartel moved in to teach the young Koch how the laissez-faire business model worked in the real world.
“[W]hen he tried to market his invention, the major oil companies sued him for patent infringement. Koch eventually won the lawsuits (after 15 years in court), but the controversy made it tough to attract many US customers,” according to Hoover’s Company Records service. Just like that, Winkler-Koch Engineering found itself squeezed out of the American market. They had a superior product at a cheaper price, but no one to sell it to.
Luckily, there was one market where opportunity beckoned—and innovation was rewarded: the Soviet Union.
Fred would make millions. Today the Koch brothers rail against the same anti-market forces that permitted them to have success. It's free markets and tough love for you. Government intervention and nanny state for me. The tea partyers need to learn to recognize the pattern.