The New York Times ran a story this past weekend, “Quixotic ’80 Campaign Gave Birth to Kochs’ Powerful Network,” that spins David Koch’s 1980 Libertarian-party run for the vice presidency as a losing political horse race, ignoring a lightning-fast policy success that it won.
The Kochs — then as now wealthy energy entrepreneurs — were drawn into political activism by the Nixon-Ford-Carter era energy crisis. During the 1970s, brother Charles had denounced subsidies and special treatment demanded by corporations as well as the Nixon Administration’s price controls. In that decade, Koch Industries, the family business, ran into legal trouble for violating federal energy price controls.
When the Kochs plunged into politics, brother David, taking advantage of a campaign-finance loophole, exercised his First Amendment right to spend unlimited amounts of money on his vice-presidential campaign. While he ran as a thoroughgoing libertarian (demanding full legalization of abortion and the repeal of laws that criminalized drug use, prostitution, and homosexuality), he used his soapbox to emphasize energy issues. The Times’ Nicholas Confessore reports that David Koch denounced “an ‘Alice in Wonderland’ energy policy [that was] a mix of subsidies and price controls that had stymied market forces and caused high prices and shortages,” but Confessore fails to note that this was essentially fact, not Koch’s ideological worldview. Bad policy had resulted in rationing, disincentives for new production, and hours-long gas station lines.
According to Confessore, the campaign failed because mainstream press coverage was minimal and the Kochs’ hopes for 3 percent of the vote were crushed — the Libertarian Party only drew about 1 percent. But third parties in American politics aren’t properly measured by polling results. Successful ones, such as the Populists of 1892 and Socialists of 1932, see much of their policy agenda become law. By that standard, the Libertarian-party crusade against the Carter administration’s energy policy was an immediate success. It drew the attention of opinion writers, and Ronald Reagan ended oil price controls on January 28, 1981, just eight days after his inauguration. As David Koch had predicted, prices immediately crashed. By June 1981, the mainstream media was talking about an oil glut.
Far from being quixotic, the Kochs’ key policy prescription triumphed. Deregulation ultimately helped the Kochs greatly increase their fortune, while all Americans benefited from the end of 1970s stagflation and the resulting 1980s boom.