The Structure of Social Change: Charles Koch, Market Fundamentalism, and the Assault on Higher Education Free

Abstract

Libertarian megadonors including Charles Koch have played a significant role pushing market fundamentalist ideas and policies and, in doing so, have fundamentally transformed American politics. These political efforts have proven so successful because they are organized around a clear political strategy, designed to produce policy at an industrial scale through a fully integrated political infrastructure. In this model, universities serve as the producers of “raw materials,” which think tanks refine into model legislation and elite support, and implementation groups advance among legislators and the wider public. The result is an integrated political/intellectual infrastructure. This strategy—known internally as the Structure of Social Change model—was formalized by Koch strategist Richard Fink and spread throughout the Koch-funded political operation. Appreciating the degree to which libertarian megadonors are guided by this political strategy makes it more likely that scholars, journalists, and citizens can understand the considerable success this small but well-organized group of market fundamentalist megadonors have had on American politics. It also helps explain why these donors have taken such a concerted interest in higher education.

On August 23, 1971, Lewis F. Powell Jr. (1971: 1–2)—then the director of the board at Philip Morris—submitted a thirty-four-page memo to the US Chamber of Commerce, arguing that “the American economic system is under broad attack,” which “is gaining momentum and converts.” Powell described this onslaught as originating with “perfectly respectable elements of society: from the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences, and from politicians,” and called for American business interests, organized through the Chamber of Commerce, to actively fight back (2–3). Many scholars, journalists, and political commentators have since identified the Powell memo as a watershed moment in galvanizing an organized, corporate counterrevolution to the New Deal legacy as well as the massive mid-twentieth-century civil rights, environmental, consumer protection, and antiwar movements (Harvey 2005: 42–44; Whitehouse and Mueller 2022: 43; Mayer 2017: 72–88; Ferguson 2017: 35–53).

Given that Powell submitted his memo to the chairman of the education committee at the Chamber of Commerce, it remains unsurprising that the document focuses on specific strategies for combating left-wing influence in higher education specifically. In the memo, Powell (1971: 12–13) calls college campuses “the single most dynamic source” of the threat to free enterprise, owing to the “personally attractive and magnetic” faculty, such as Herbert Marcuse, who are “stimulating teachers,” “prolific writers and lectures,” and authors of textbooks, and who therefore “exert enormous influence.” And, in the section “What Can Be Done about the Campus,” Powell suggests the Chamber should counter these threats by placing “highly qualified scholars in the social sciences who do believe in the system,” staffing a Speaker’s Bureau to promote free enterprise ideas on campus, vetting textbooks, demanding “equal time” for promarket speakers on campus, enforcing ideological “balance” among the faculty, developing close relationships with business schools, and engaging in similarly concerted efforts in secondary schools (15–20). These recommendations will read as eerily familiar to anyone following the current culture war attacks on critical race theory (CRT) and diversity, equity, and inclusion (DEI) or right-wing expressions of outrage over a lack of campus “free speech” and “viewpoint diversity.”¹

This resonance is not surprising, given that the Powell memo successfully galvanized a small cadre of wealthy donors to develop (and fund) a long-term strategy designed to counter the success of mass movements that had proved successful in convincing the larger public about the threats that emerge from treating unregulated capitalism as “the most important and valuable entity in US society, more valuable than the disfranchised and more precious than our planet” (Ferguson 2017: 37). Powell himself would continue this procorporate crusade from the bench of the Supreme Court, where he enshrined a legal doctrine of corporate personhood granting corporations the same speech protections as persecuted minority groups (40–47). While the Powell memo has garnered considerable attention as a watershed moment in the conservative backlash to the 1960s, the plutocrats and conservative activists who implemented this strategy often receive much less critical engagement. This article examines one conservative megadonor, Charles Koch, who not only embraced Powell’s strategy but used his philanthropic foundations to fund a formidable intellectual/political infrastructure designed to remake American politics, including higher education.

Charles Koch is not the first industrialist to deploy their considerable wealth to remake American politics and American higher education. Since the late nineteenth century, both the Carnegie Foundation for the Advancement of Teaching and the General Education Board, funded by Rockefeller, used their Gilded Age financial leverage to impose a Taylorist industrial model on American academic institutions. The result was increased standardization, including the adoption of the “student-hour” to measure instruction time, the division of teaching labor from administration, and using financial leverage to populate governing boards with representatives from major corporations, often replacing local politicians, business leaders, and clergy (Barrow 1990). During the early twentieth century, major industrialists—including Carnegie, Rockefeller, Ford, and Russel Sage—responded to growing labor radicalism by creating philanthropic foundations, which helped usher in a “heavily managerial brand of corporate capitalism” that helped appease the demands of labor while still serving the interests of “the growing ideological hegemony of a narrowly constituted, big corporate/big government, and increasingly, big university elite” (O’Connor 2011: 229). In response to mounting political pressure during the mid-twentieth century, these same foundations again evolved to become more “pluralistic, accountable, less insular, and more responsive to public concerns” (246). However, within the context of the Cold War and McCarthyism, a new group of vehemently anti–New Deal and anticommunist foundations—including Bradley, Olin, Sarah Scaife, Smith-Richardson, and Coors—took up Lewis Powell’s call to arms. The new foundations pushed a form of free-market radicalism aimed at reinstating the unregulated laissez-faire capitalism of the late nineteenth century (246–47). Charles Koch would build on, and greatly expand, the political/intellectual infrastructure initiated developed by these “funding fathers” largely responsible for bankrolling the conservative movement (Hoplin and Robinson 2008).

This new group of donors not only espoused a fiercely held “commitment to free-market individualism,” they also “shared an intense animosity to what liberal philanthropy had wrought” (O’Connor 2011: 247). Rather than defending monopoly corporate capitalism of the post–World War II era, these wealthy industrialists pursued policies that scholars have called “market fundamentalist” (Oreskes and Conway 2023), “property supremacy” (MacLean 2017: 10), “hardline libertarian” (Hertel-Fernandez 2019: 166), and part of the “ultra-free-market right” (Skocpol and Hertel-Fernandez 2016: 682). Like many of his wealthy colleagues, Charles Koch arrived at this market fundamentalism through an engagement with Austrian school thinkers such as Ludwig von Mises and F. A. Hayek.² As demonstrated below, the political/intellectual infrastructure built by Charles Koch continues to expend considerable energy and resources promoting this profoundly antisocial, radically individualist understanding of freedom and free markets.

On the one hand, Charles Koch is just one of many wealthy megadonors guided by market fundamentalism. On the other hand, few other figures have played as significant a role in shaping American politics through their political expenditures. Theda Skocpol and Alexander Hertel-Fernandez demonstrate that Charles Koch has proven uniquely effective at pushing the Republican Party to adopt, support, and pass into law extreme and otherwise unpopular economic policies. This is possible because, unlike many most political megadonors, Koch has focused less on funding candidates and campaigns and has instead, guided by a political strategy with a long time horizon, created successful “donor consortia” that fund “an integrated set of political organizations operating to the right of the Republican Party” (Skocpol and Hertel-Fernandez 2016: 682). As this article demonstrates, the Koch network has developed a highly strategic, integrated, and well-funded political/intellectual infrastructure designed—from tooth to tail—to transform otherwise unpopular market fundamentalism into policy. Koch started funding programs and organizations for advancing market fundamentalist ideology starting in the 1970s, forming the foundation of his political strategy and influence. These initial investments would begin returning huge returns on investment starting in 2003, when David and Charles Koch³ began hosting secretive semiannual strategy “donor seminars.” Following the election of Barack Obama and the 2010 Citizens United Supreme Court ruling, which further deregulated political spending, these meetings rapidly grew in size and importance. They bring together politicians, political groups, media personalities, Supreme Court justices, academics, and think-tank personnel together with the Koch brothers’ wealthiest collaborators. These seminars raise hundreds of millions of dollars from the nation’s wealthiest conservative and libertarian megadonors and commit the money to various organizations advocating market fundamentalist policies (Mayer 2010; Friedman 2011; Elliot 2016; Skocpol and Hertel-Fernandez 2016; Mayer 2016, 2017; Hertel-Fernandez, Skocpol, and Sclar 2018; Windsor 2014). These meetings remain largely secretive. What little is known comes largely from leaked memos and attendance lists. In fact, great caution is taken to keep these summits secret, including confiscating electronic devices and installing “white-noise-emitting loud-speakers around the perimeters” (Mayer 2017: 9). In 2015, known attendees included at least eighteen billionaires, with a combined wealth of $214 billion, in addition to a slew of multimillionaires (9). These donor seminars are organized by a Koch organization Stand Together Trust, formerly Seminar Network, Inc. (Gibson 2022). Between 2019 and 2021 a “fleet” of twenty-seven organizations directly overseen by Charles Koch—or Koch Industries top executives—spent $2.1 billion on causes that directly advocate their political and economic agenda and ideology (Gibson 2023).

Today, scholars, investigative reporters, and activist researchers have documented the considerable effects of the political infrastructure funded by Charles Koch and his network of ideologically aligned megadonors.⁴ Many of these analyses, however, do not focus on how investments in higher education are central to the Koch-funded infrastructure—which can be described as an integrated political and intellectual, or ideological, project.

Between 2005 and 2017, Koch-affiliated foundations spent more than $256.7 million on higher education (Greenpeace 2020). This total grew to $458 million two years later (UnKoch My Campus 2021). And in 2021 alone, Koch foundations spent $81.7 million at 140 colleges and universities (Armiak 2022). It might be tempting to treat these donations as typical philanthropic gifts, made by a wealthy benefactor with a special passion for higher education, like one might fund the arts. However, as this article demonstrates and other scholars and journalists have corroborated, Koch views funding in higher education as an integral part of a broader political project. The university provides an essential resource needed to transform his preferred market fundamentalist ideas into actual public policy. For example, a study of Charles Koch Foundation (CKF) contracts to academic institutions found that many contracts gave the CKF considerable influence over the hiring and content decisions, including naming the individuals to staff academic centers and allowing the donor to withdraw funding if they conclude that the program diverges from the donor’s intent (Beets 2019). At Florida State University, for example, the economics department chair described the multimillion-dollar donation he received from Koch as “coming from a group of funding organizations with strong libertarian views.” He added that these “organizations have an explicit agenda,” meaning the department could no longer “hire anyone we want and fund any graduate student that we choose” (Benson 2007: 1). A subsequent investigation found that the Koch Foundation was able to obtain influence over the hiring of faculty and the selection of student fellows (Wilson, Funt, and Norris 2017).

In 2019, as the result of student protests and Freedom of Information Act requests, George Mason University (GMU) released its contracts with the Charles Koch Foundation. These documents revealed that, as early as 1990, Koch officials were “given a seat on a committee to pick candidates for a professorship that they funded” (Green and Saul 2018). They also showed tremendous Koch influence within the hiring process in the school’s Mercatus Center, including grants of upward of $1 million “conditional” on the school’s appointment of certain professors selected by the Koch Foundation (Green and Saul 2018). In response to these documents, George Mason’s president Angel Cabrera issued a statement declaring that many of the contracts between GMU and the Charles Koch Foundation “fall short of the standards of academic independence” (Larimer 2018).

But in addition to focusing on the centrality of higher education to the Koch-funded political infrastructure, this piece also argues for adopting the Koch network’s own theory of social change as a heuristic for theorizing and understanding how the political infrastructure works. Naomi Klein (2023: 223–31) argues that when studying actual conspiracies, constructed by oligarchs and the ultrawealthy, it is helpful to think structurally and to identify recurring patterns. This article, therefore, not only documents the historical emergence of Charles Koch’s political strategy and its emphasis on academic capture but also argues that scholars, journalists, and concerned citizens can use this stated strategy as a heuristic, an endogenous political theory, to help see the recurring patterns generated by this well-funded infrastructure.

The first section examines the intellectual inspirations and political context that gave rise to Charles Koch’s interest in funding academic centers and programs that promote market fundamentalism, as well as the role these investments play in a well-funded and integrated political/intellectual infrastructure. This strategy has a name—the Structure of Social Change model—articulated by Koch’s chief strategist, Richard Fink. The second section dissects this strategy specifically, offering evidence of its ubiquity within the integrated network of Koch-funded academic centers, think tanks, and advocacy organizations. The article concludes by examining a handful of examples, including the current round of attacks on critical race theory (CRT) and diversity, equity, and inclusion (DEI), as the latest example of this strategy at work. These examples demonstrate how the Structure of Social Change offers a useful heuristic, or an endogenous political theory, that helps make visible the reoccurring political patterns produced by this political infrastructure.

Funding Academics in a War of Ideas

Advocates of market fundamentalism have long understood that building political hegemony requires assembling a cadre of free-market academics and intellectuals (Desai 1994; S. Hall 2021). And there exists a long track record of wealthy businessmen and corporations funding think tanks and academic centers for the purpose of producing, normalizing, and legitimizing market fundamentalist ideology. The first libertarian think tank, the Foundation for Economic Education (FEE), was created in 1946 by a group of businessmen that included DuPont vice president Jasper Crane. FEE was designed “to peddle pro-market, anti-government ideology” (Oreskes and Conway 2023: 6). But even prior to the creation of FEE, wealthy industrialists had already bankrolled a number of “astroturfed” interest groups—including the National Association of Manufacturers (NAM), the National Electric Light Association (NELA), and the American Liberty League—which produced reports, radio broadcasts, pamphlets, opinion pieces, and other content designed to promote market fundamentalist ideas, including advocating against the regulation of electricity and child labor (Oreskes and Conway 2023).

Immediately following World War II, many of these same corporate interests also invested in the careers of free-market academics, including those from the Austrian school of economics (Slobodian 2018; Wasserman 2019). Friedrich von Hayek was one major recipient of this early political/intellectual funding. Hayek ([1944] 1994) published The Road to Serfdom in 1944, popularizing the claim that the “collectivism” of the New Deal and Keynesian economics existed in continuity with Stalinism and Nazism. The William Volker Fund—directed by the industrialist and market fundamentalists Harold Luhnow—funded Hayek’s book tour and public engagements promoting this book (Oreskes and Conway 2023: 239). The Volker Fund and FEE also bankrolled the conference Hayek hosted at the Swiss resort town of Mont Pelerin three years later (Mirowski and Plehwe 2015: 15). This event initiated the formation of the market fundamentalist academic organization that bears the town’s name, which continues to this day.⁵ Hayek opened that conference with the admonishment that, “if the ideals which I believe unite us . . . are to have any chance of revival, a great intellectual task must be performed” (quoted in Desai 1994: 44).

Hayek not only personifies the confluence of corporate money and academic inquiry, he also described quite explicitly the proactive role free-market intellectuals should take in bringing about their preferred political change. His 1949 article “The Intellectuals and Socialism” calls attention to the “professional secondhand dealers in ideas” (Hayek 1949: 417). In this piece Hayek argues that socialism is primarily an intellectual movement, spread by “journalists, teachers, ministers, lecturers, publicists, radio commentators, writers of fiction, cartoonists, and artists” as well as “professional men and technicians, such as scientists and doctors” and those in the educated professions (418). These intellectuals did not necessarily develop these ideas themselves, but peddled socialist ideas developed by others (Hayek 1949: 421). Defenders of liberalism and capitalism, therefore, find themselves in the uncomfortable position of needing to defend the “existing order,” without the luxury of the speculative utopianism possessed by Left intellectuals (429). In response, Hayek argues for the development of “intellectual leaders” capable of promoting “truly liberal radicalism . . . which does not confine itself to what appears today as politically possible” (432). The creation of academic networks such as the Mont Pelerin Society would provide the intellectual arguments that think tanks would then spread throughout society—as secondhand dealers of free-market ideas.

Hayek’s argument has had considerable material impact. For example, in 1945, Anthony Fisher, a World War II pilot, read the Reader’s Digest abridged version of The Road to Serfdom and met with Hayek at the London School of Economics. Hayek dissuaded Fisher from entering politics and encouraged him to instead create a “scholarly research organization” (Desai 1994: 45; Oreskes and Conway 2023: 154). In subsequent years, Fisher built a fortune in industrial chicken processing and used his money to open the Institute of Economic Affairs (IEA) in London in 1957. IEA would become one of the first and most influential market fundamentalist think tanks, playing a significant role in the election of Margaret Thatcher and the mainstreaming of Thatcherite economic policies (Desai 1994: 45–50).

After the success of IEA, market fundamentalists donors invited Fisher to establish other libertarian think tanks around the world, including the Adam Smith Institute in the United Kingdom, New York’s Manhattan Institute, California’s Pacific Research Institute, the Center for Independent Studies in Australia, and the Fraser Institute in Canada. Drawing from this run of successes, Fisher created the Atlas Network “with the mission to ‘litter the world with free market think tanks’” (quoted in Djelic and Mousavi 2020: 259). Atlas was, in other words, a think tank specializing in establishing libertarian think tanks around the world—a “‘Johnny Appleseed’ of anti-regulation groups” (Center for Media and Democracy 2021). Initial funding for the Atlas Network came from the Sarah Scaife Foundation (Djelic and Mousavi 2020: 259). And in 1999, the John Templeton Foundation funded the International Freedom Project (IFP) to pay university professors “to develop free market courses and invite prominent guest lectures”; John Templeton was a close friend of Fisher and a longtime member of the Mont Pelerin Society Foundation (269). Fisher claimed to have named the Atlas Network not after Ayn Rand’s novel but rather Archimedes’s response to the Greek myth of Atlas. In response to Atlas holding the world on his shoulder, Archimedes replied, “‘Give me a lever . . . and I will move the world.’ Fisher’s think tanks, together with those of his US billionaire friends, were to be the levers with which to move the world” (Lawrence et al. 2019).

Consistent with Hayek’s strategy, market fundamentalist megadonors also spent considerable resources establishing and funding academic centers and departments to promote procapitalist messaging on college campuses. For example, in 1948, Luhnow convinced the University of Chicago to hire Hayek after the Volker Fund agreed to pay his salary for ten years (Oreskes and Conway 2023: 242). The economics department refused to host Hayek and other Volker-funded libertarian academics, so the group that would eventually become known as the Chicago school of economics established itself within the more hospitable law school. The Volker Fund similarly installed Ludwig von Mises at New York University. As noted by Naomi Oreskes and Erik M. Conway (2023: 43), a process of “open competition had not brought Ludwig von Mises to NYU, and open academic competition did not bring Friedrich von Hayek to Chicago or create the Free Market Project. Harold Luhnow did” (Oreskes and Conway 2023: 243).

Starting in the mid-twentieth century, well-funded market fundamentalist intellectual communities, academic centers, and think tanks had become an important part of a concerted political strategy waged by business elites to justify and legitimize an economic order from which they benefited. Charles Koch would supercharge this strategy by investing in radical and fringy libertarian centers and programs, before scaling up to spend lavishly across higher education. Koch would not only increase the scale of funding but find ways to deeply integrate academic centers with think tanks and a broader political infrastructure.

Charles Koch

Charles Koch took over the reins of Koch Industries in 1967, transforming it into one of the largest privately owned companies in human history (Leonard 2020). In 2023 Koch Industries was the second largest privately owned companies, taking in a staggering $125 billion in revenue (Murphy 2023). In addition to inheriting his father’s company, Charles also followed in his father’s political footsteps. Fred Koch was an active anti–New Dealer, a “zealous purveyor of anticommunist literature,” and a founding member of the John Birch Society (Dallek 2023: 20–21). Created in 1958, the John Birch Society grew into a formidable political operation during the mid-twentieth century, bringing together market fundamentalist beliefs with a paranoid and conspiratorial brand of anticommunist populism. Three founding members would later serve as presidents of the National Association of Manufacturers, and many Birchers shared close connections with FEE and the Freedom School (28). The Freedom School, located in the mountains near Colorado Springs, was a project of the libertarian guru Robert LeFevre. Charles Koch enrolled in the school, where he avidly consumed the work of Austrian economists, which would become the intellectual core of his fanatical procapitalist and antigovernment political project.⁶ In 1964, Charles Koch donated $7,000 to keep the school running, stepping into a leadership role (Schulman 2014: 89–95).

By the mid-1970s Charles Koch had already begun developing a more ambitious strategy of building the political infrastructure needed to promote his market fundamentalist ideas. In 1974, Charles Koch presented a paper arguing that the Powell memo did not go far enough, because it started from the assumption that Americans already enjoyed a free enterprise system that requires defending. Instead, Koch (1974: 3) argued, a free enterprise does not exist in a society that still engages in taxation and has “so-called equal opportunity requirements, safety and health regulations, land use controls, licensing laws, [and] outright government ownership of businesses and industries.” To achieve a free enterprise system, Koch—like many industrialists before him—recognized the importance of gaining traction within institutions of higher education. Koch argued that corporate America needed to create institutions that would “fight for free enterprise” (namely, his extreme libertarian vision). This could be done through four possible means: “through education, through the media, by legal challenges, and by political action” (8). Like Powell, Koch concluded that higher education was central to this political project since it yielded the greatest return on investment. This was because investment in scholars and academic centers, he argued, had a greater “multiplier effect” than investing in lobbying, political action groups, or advertising (12).

This talk was presented at the Institute for Humane Studies (IHS), which itself epitomized the parallel intellectual infrastructure Charles was beginning to build for the purpose of mass-producing market fundamentalist ideas. Founded in 1961 by the libertarian activist F. A. “Baldy” Harper, IHS became—and remains—a central node in Koch’s political infrastructure. Koch began funding IHS in 1964 and took over the reins after Harper’s death in 1973 (KochDocs 2019). IHS would later move to George Mason University, where Koch family foundations would become by far its largest donor—spending more than $41 million between 1986 and 2017 (Greenpeace 2020).

Two years after his call for a more radical interpretation of the Powell memo, Charles Koch presented another paper, this one titled “The John Birch Society,” at the Social Transformation Conference held at the Center for Libertarian Studies.⁷ In this paper, Koch expressed concern that his preferred market fundamentalist ideas were gaining little traction among policymakers and called for building a political infrastructure that could mainstream these ideas. He expressed admiration for the John Birch Society’s ability to build a grassroots anticommunist movement but criticized its increasingly top-down paranoid leadership style. Instead, Koch argued, the libertarian movement could make similar strides by also seeking to “destroy the ‘legitimacy’” of the “present political system” (Koch 1976: 16). Efforts to delegitimize the existing political system would be accompanied by offering the libertarian movement’s “own ideology . . . presented in terms of how it can solve these problems whereas alternative ideologies cannot” (16). In this paper Koch argued for the need to attract and train a small cadre of students who would play the critical role advancing this agenda. Koch argued that the libertarian movement needed to focus on “attracting youth since this is the only group that is largely open to a radically different social philosophy” (15–16). However, because the goal was to attain specific political objectives, “control must be limited to a small group of sound, knowledgeable and dedicated people” (15). And because such a corporate vanguardist approach would likely be highly unpopular, “how the organization is controlled and directed should not be widely advertised” (15). The venue where this paper was presented, the Center for Libertarian Studies (CSL), was founded by the anarcho-capitalist Murray Rothbard, with an early donation from Charles Koch (Mayer 2017: 54). CSL would become the Ludwig von Mises Institute in 1982, situated just off the campus of Auburn University.⁸

In the years since his presentation before the Center for Libertarian Studies, Koch followed his own advice, constructing a secretive, well-funded, donor-controlled, and youth-centric movement that advocated an ideologically procorporate, antigovernment, libertarian ideology. The sketch Charles Koch laid out in this paper would provide the outline of a more detailed political model developed a few years later by his chief strategist, Richard Fink, who would give it a specific name: the “Structure of Social Change.” This political strategy would emphasize the importance of funding intellectual centers and academic programs. Understanding this stated strategy also helps explain why Koch has spent so lavishly on intellectual projects like IHS and the Center for Libertarian Studies, and why the political infrastructure he built would continue to pay careful attention to higher education.

The Structure of Social Change

Richard Fink is largely responsible for formalizing a model of social change that starts with recruiting and training market fundamentalist intellectuals, who are then integrated into a broader political infrastructure. It is not surprising, therefore, that Fink himself was a product of this infrastructure. In 1978, while a graduate student studying Austrian economics at New York University, Fink requested funding from Charles Koch to establish an academic center at Rutgers University, where he was teaching as an adjunct professor. Koch provided $150,000 for the project (Schulman 2014: 260–62). In 1980, Fink moved the Center for Market Processes to George Mason University (GMU), where it later became the Mercatus Center. The Mercatus Center is situated on the GMU campus but its proximity to Washington, DC, and the tens of millions of dollars from the Koch family foundations have allowed it to become what one GMU professor aptly termed “a lobbying group disguised as a disinterested academic program” (Clayton A. Coppin, quoted in Mayer 2017: 150).

From the Mercatus Center, Fink impressed Koch with his organizational abilities and libertarian zeal. Over the years, Fink would rise through the ranks, serving in leadership positions at Koch Industries, Citizens for a Sound Economy, the Charles G. Koch Foundation, the Institute for Humane Studies, and the Center for the Study of Public Choice. He would become known as Koch’s chief strategist, his “ideological consigliere” (Schulman 2014: 260–62), and “the central nervous system of the Kochtopus” (Mayer 2010).

In 1980, Charles Koch commissioned Fink to conduct a study into “a handful of libertarian outfits he supported with a view toward recalibrating his strategy to bring about a free-market revolution” (Schulman 2014: 264). In doing so, Fink began to formalize a model to explain how Koch’s various intellectual and political investments could effectively shape policy. He called this model the Structure of Social Change.

While much of what takes place in the Koch-funded political world remains hidden, we know about the existence of this internal strategy because Richard Fink wrote about it in a 1996 article in Philanthropy Magazine.⁹ In “From Ideas to Action: The Role of Universities, Think Tanks, and Activist Groups,” Fink (1996: 10) writes that “we at the Koch Foundation find that the Structure of Social Change model helps us to understand the distinct roles of universities, think tanks, and activist groups in the transformation of ideas into action.” This model recognizes that “universities, think tanks, and citizen activist groups all present competing claims for being the best place to invest resources.” Universities claim to be “the real source of change. They give birth to the big ideas that provide the intellectual framework for social transformation.” However, they are often criticized as too esoteric. In contrast, think tanks “argue that they are most worthy of support because they work on real-world policy issues, not abstract concepts.” However, they produce “more position papers and books than anyone could ever possibly read,” are often inaccessible to those “outside the policy arena, [and] lack realistic implementation or transition plans.” And the “citizen activist or implementation groups claim to merit support because they are the most effective at really accomplishing things. They are fighting in the trenches, and this is where the war is either won or lost.” However, “their commitment to action comes at a price. Because activist groups are remote from the universities and their framework of ideas, they often lose sight of the big picture” (10). Instead, Fink argued, the Charles Koch Foundation and their allies have established an integrated network of academic centers, think tanks, and citizen activist groups that draw from the strengths and expertise of the various institutions, with the shared goal of passing donor-preferred legislation.

This model is built on Hayek’s theory of production from Prices and Production. In this account, “consumers’ goods”—that is, the final outputs of the production process—are produced more efficiently when investments are also made in the production of “producers’ goods.” Hayek (1967: 71) argues that some producers’ goods, such as “highly specialised kinds of machinery,” are used only during specific stages in the production process. Raw materials, however, are a producers’ good that remain throughout the production process.

Fink then applies this stage-based model of production—which breaks out producer, intermediate, and consumer goods—and applies it from industrial manufacturing to the “form[] of social change” that he “know[s] best—change that results from the formation of public policy” (11). In doing so, Fink argues, “Hayek’s model explains how investments in an integrated structure of production yields greater productivity over less developed or less integrated economies.” To produce public policy at an industrial scale, Fink argues that the Koch political network invests in the entire production process. First, it funds the creation of “intellectual raw materials” through grants to individual academics and by establishing academic centers and campus programs (11). These academics develop the key concepts and theories needed to justify the donor-preferred policies. The ideas are then passed on to the think tanks (here Fink specifically names the Heritage Foundation, the Reason Foundation, and the Cato Institute), which refine these raw ideas into specific policy proposals. These intermediate policy proposals are then handed to activist groups (here he names Citizens for a Sound Economy, the National Taxpayers’ Union, and Defenders of Property Rights). And only at this point does the network focus on changing the minds of individual policymakers. Fink’s 1996 article includes a diagram of the Koch network’s Structure of Social Change (fig. 1).

Despite the limited knowledge we have about the inner workings of the Koch political infrastructure, we still have clear indications that this model has been circulated within Koch seminars, present in documents published by groups funded by the donor network, and often used to explain the network’s strategy. For example, an edited version of Fink’s (n.d.) essay was reprinted in the Institute for Humane Studies’ Liberty Guide publication aimed at helping students pursue careers within the policy world, advising students to pursue “social change” by working within free-market think tanks, as politicians, or as university professors. A slightly updated version of the Structure of Social Change diagram appeared in a 2015 conference presentation Fink gave before the Koch-funded Association for Private Enterprise Education (APEE), later reproduced by an attendee (fig. 2).¹⁰ And another version appeared in an internal document produced by “implementation group” Americans for Prosperity (formerly Citizens for a Sound Economy), of which Fink was a founding board member (fig. 3).¹¹ While Fink’s public-facing version of the Structure of Social Change shows a three-stage process for using tax-exempt philanthropy to advance social change (fig. 1), the internal version clearly also show that the model also extends to the “Decision-Makers”—that is, the network’s highly coordinated political contributions to policymakers (figs. 2 and 3).

Kevin Gentry, a Koch Industries vice president, drew from Fink’s Structure of Social Change in his presentation “Leverage Science and the Universities,” during the 2014 Koch Donor Seminar. He explicitly pointed to the central role higher education plays in the Koch Donor Network’s broader political strategy, highlighting the integrated nature of this political infrastructure. Gentry (2014) noted that students they recruit in college go on to

Thus, in private, the donors and political operatives talk about a “fully integrated” political infrastructure with academic centers and campus programs creating a “talent pipeline” for young people into this ideological infrastructure.¹²

In a 2016 op-ed, Charles Koch lamented that higher education has become “increasingly hostile to the free exchange of ideas,” evidenced by the fact that his preferred ideas are “demonized, ostracized or otherwise treated with scorn and derision.” The same year, the Koch Foundation announced an initiative to “support[] major academic centers all over the country.” At a surreptitiously recorded APEE panel titled “Successful Models of Programs in Private Enterprise,” the Koch Foundation’s Charles Ruger (2016) introduced this initiative, claiming that

In other words, consistent with Fink’s model of social change, and when everyone assumes no outsiders are listening, a Charles Koch Foundation representative freely admits that the funding of academic centers, faculty lines, and fellowships is designed to “build a bench” for the purpose of expanding the reach of their market fundamentalist ideology.

Fink’s strategy—a strategy of mass production—rests on developing a division of labor in which specific organizations focus on discrete elements of the production process, maximizing its advantage in those areas. Some groups become highly specialized, focusing on, for example, mobilizing Latino voters (e.g., the Libertas Institute) or influencing university governing boards and accrediting agencies (e.g., the American Council of Trustees and Alumni). The same small group of funders pour money into this fully integrated intellectual/political infrastructure in which some entities are responsible for producing the intellectual “raw material”; others write reports, draft model legislation, and garner elite support; others organize students; others provide media coverage; others engage in voter mobilization; and others shape the courts. Funded by anonymous donations, these groups all look distinct and independent from one another. Yet they regularly coalesce, in unison, around particular issues—such as passing right-to-work legislation, K–12 privatization, or defeating Medicare expansion—thereby creating the appearance of widespread, grassroots support.

These organizations often share the same megadonors, board members, and a revolving cast of academics, think-tank professionals, and partisan activists recruited from college campuses and donor-funded academic centers. Many are formally connected through the State Policy Network (SPN), a Koch-funded think-tank umbrella group that brings together federal think tanks, state-level think tanks, and other political entities to coordinate activity at the state and national level (Hertel-Fernandez 2019: 174–210). The president of the SPN once described the group as offering an “IKEA model” for changing state policy: select an issue from the catalog—“opposing President Obama’s health-care program and climate-change regulations, reducing union protections and minimum wages, cutting taxes and business regulations, tightening voting restrictions, and privatizing education”—and SPN will deliver an easy-to-assemble policy customizable to your state (Mayer 2013).

Understanding the Structure of Social Change as a theory put into practice (with the help of billions of dollars) makes visible the Koch-affiliated intellectual/political infrastructure at work. It also helps explain why higher education—understood by Koch, Fink, and others as the producer of “intellectual raw materials”—has become an important site for political intervention by this infrastructure.

An Endogenous Theory: Taking Fink at His Word . . . and Seeing His Theory in Practice

Social scientists develop theories for explaining political and social phenomenon, including why political actors make the choices they do or why certain policies are more likely than others to succeed. In doing so, we often take debates from our field—about methodology, epistemology, ontology, and causality—and apply them to empirical questions around us. However, rarely do we take the theories used by political actors themselves. Especially when those theories originate from the Right. This tendency might result from a sense that most political actors lack a coherent model or theory for explaining their own actions and therefore require outside experts to make sense of otherwise muddled intentions and motivations. Scholars might also trust social science analyses to better capture what is “really” going on.

Given the present moment, however, it seems important to develop a theory for explaining how libertarian megadonors wield so much influence over American politics. In general, social scientists have paid little attention to the Koch network, or plutocrat donors more generally. Furthermore, as with journalists, those scholars studying Koch donor influence tend to describe libertarian megadonors influence. These studies focus on demonstrating that Charles Koch and aligned libertarian megadonors wield considerable influence, without necessarily developing a theory explaining how they have done so. The result is lots of information, names, dates, acronyms, and numbers, without a general model that helps decipher the complexity or reveal the patterns. The Structure of Social Change, we argue, provides an endogenous theory that could prove profoundly useful for scholars, journalists, and concerned citizens to understand megadonor political influence. Like a good social scientific theory, the Structure of Social Change offers a systematic shorthand for distilling and explaining a complex phenomenon—namely, the political mainstreaming of otherwise highly unpopular market fundamentalist ideology. Fink’s own model proves both empirically robust and predictive.

Starting with Fink’s model would lead scholars to test whether a deeply integrated network of academic centers, think tanks, and astroturfed activist organizations is at work in advancing market fundamentalist policies. We have seen enough examples and evidence to suggest that this theory of social change is both descriptive and predictive. Furthermore, as the intellectual/political infrastructure grows beyond Koch himself, the strategy becomes diffuse and reinforcing. In this way, taking Fink at his word creates a useful heuristic not only for understanding Koch-funded political activity but also for seeing how the right-wing political infrastructure works more generally. By way of a conclusion, therefore, let us examine a few examples of the impact the Koch-funded intellectual/political infrastructure has had in recent years.

In 2012, Governor Sam Brownback pushed a dramatic tax overhaul in Kansas, also known as the “Kansas Experiment,” that has been largely regarded as a product of the American Legislative Exchange Council (ALEC) (Krugman 2015). Yet this incomplete characterization neglects the role of other actors including Koch-allied academics. Indeed, Brownback hired economist Arthur Laffer to develop the policy. Laffer serves as a member of ALEC’s Board of Scholars, where he publishes the annual “Rich States, Poor States” report, a dubious but influential state-by-state analysis that advocates for greater tax cuts and decreased public spending. Best known for promoting supply-side economics within the Reagan administration, Laffer has held a number of academic positions at the University of Chicago, the University of Southern California, and Pepperdine University, but he also enjoyed close ties to Koch-funded libertarian think tanks.

Another person eventually credited with developing the Brownback tax cuts was Arthur Hall (Cooper 2014). Hall was the former chief economist at Koch Industries Public Affairs group, and, although he currently omits any mention from his bios, served as director of research for Citizens for a Sound Economy (A. Hall 2012). In the runup to the tax cuts, Hall served as the executive director of the University of Kansas’s Center for Applied Economics, which was funded by the Charles Koch Foundation to the tune of $430,000 (Shepherd 2015). In his academic capacity, Hall published numerous reports on tax policy, including a report with the SPN-affiliated Kansas Policy Institute claiming that Kansas’s structural deficit risked running the state’s economy off a cliff, like Thelma and Louise (A. Hall 2011). In 2010 Hall testified before Kansas’s House Taxation Committee against raising the state sales tax, alongside representatives from the Kansas Policy Institute and Americans for Prosperity.¹³ The following year he testified in favor of HB 2220, repeating Laffer’s claim that increased economic output would compensate for lost tax revenue.¹⁴ At another hearing the chair pointed the committee members to Hall’s “Technical Primer on the Governor’s Proposal,” included in the briefing packet.¹⁵ And the president of the Kansas Policy Institute would regularly cite Hall’s “Looming Crisis” report in his own testimony.¹⁶ That same year, the Kansas Policy Institute received a grant from the Charles Koch Foundation.

Other lobbying came from Grover Norquist’s Americans for Tax Reform and the state director for Americans For Prosperity Kansas, who wrote on behalf of “the more than 41,000 Americans for Prosperity members in Kansas.”¹⁷ Also serving as Brownback’s Budget Director was a former Americans for Prosperity economist Steve Anderson (KSAL 2013). Not coincidentally, Koch money also provided the largest share of Brownback’s campaign funding (Judis 2014). This is just one example of how the Structure of Social Change helps make sense of the political/intellectual infrastructure that seems to seamlessly include Koch-funded academics, ALEC-developed policies, SPN-affiliated think tanks, and the AFP ground game. It also shows how donors can avert direct lobbying and culpability for legislation. In the case of Kansas’s radical tax cuts, when pressed by journalists, Koch Industries maintained that they “didn’t lobby on the tax plan in 2012” (Judis 2014).

In addition to informing how we theorize the passage of highly unpopular policies such as Brownback’s tax cuts,¹⁸ the Structure of Social Change can also help understand the intellectual/political infrastructure currently working to remake higher education itself. In 2021 we published Free Speech and Koch Money: Manufacturing a Campus Culture War, examining how Fink’s model explains the manufactured narrative that there exists a crisis of free speech on college campuses. Even before attacks on critical race theory (CRT), diversity, equity, and inclusion (DEI), and congressional investigations into antisemitism, we show that donor-funded academics, academic centers, think tanks, and affiliated media outlets were already villainizing higher education and railing against trigger warnings, coddled students, and those deploying the heckler’s veto to protest campus speakers (Wilson and Kamola 2021). Our book demonstrates that libertarian plutocrats funded the careers of professional campus provocateurs, such as Milo Yiannopoulos, Charles Murray, Ben Shapiro, Ann Coulter, Candace Owens, and others. Student groups funded by the same donors brought these speakers to campus. A similarly funded media ecosystem railed against the lack of viewpoint diversity and demanded that campuses become more welcoming to conservative ideas. Litigation groups, also backed by the same donors, sued schools for not allowing these provocateurs on campus. And, in manufactured maelstroms, ALEC and other Koch-funded organizations advocated model legislation designed to transform campus speech codes, making it easier for donor-preferred market fundamentalist ideas to make their way on campus. Starting with Fink’s model helped us see the political machinery manufacturing the culture war. It helped us see the patterns, while avoiding the tendency to treat this barrage of campus incidents as isolated events.

We finalized that book during quarantine as Black Lives Matter protesters took to the street during the summer of 2020. Armed with Fink’s analysis, it became evident that the right-wing attacks first on the 1619 Project, then on CRT, then on DEI, were not simply grassroots expressions of discontent. When the 1776 Commission released its report, Fink’s model accurately predicted that it was written largely by members of market fundamentalist think tanks, many affiliated with the SPN (Kamola 2021). Fink’s model also explains the meteoric rise of Christopher Rufo and his strategy of weaponization of CRT, and later DEI, as a cudgel to discredit K–12 and higher education (Kamola 2024a, 2024b, 2024c).

Fink’s model also offers a shorthand analysis that captures what happened in Students for Fair Admissions v. Harvard, which upended affirmative action in higher education. Students for Fair Admissions (SFFA) claims to be a “nonprofit membership group of more than 20,000 students, parents, and others who believe that racial classifications and preferences in college admissions are unfair, unnecessary, and unconstitutional.”¹⁹ And SFFA’s founder, Edward Blum, is regularly described as a scrappy political activist on a quixotic mission to end affirmative action (Park and Penner 2022). Nothing could be further from the truth. SFFA is an astroturfed group funded by megadonors to recruit plaintiffs for cases alleging discrimination in the college administration process. SFFA is funded by donors who overlap with Charles Koch, including DonorsTrust ($2.5 million between 2017 and 2019), the Searle Freedom Trust ($500,000), the Sarah Scaife Foundation ($250,000), and Leonard Leo’s 85 Fund ($250,000) (Orakwue and Teichholtz 2022). SFFA is an offshoot of Blum’s previous outfit, the Project on Fair Representation, which used funding from the Bradley Foundation to litigate Shelby County v. Holder, gutting key provisions of the Voting Rights Act, and Fisher v. University of Texas, Blum’s initial effort to strike down affirmative action. Overturning Holder, before a Supreme Court majority consisting of Federalist Society appointees, opened the door for ALEC to develop model voter ID laws which were ultimately passed across the country (Fischer 2013). Not only has Students for Fair Admissions v. Harvard reshaped college admissions, but it has done so in large part because the Federalist Society had already played such a pivotal changing American legal culture. It has built a donor-funded talent pipeline between law schools and the conservative legal movement, with funding from many of the same donors that also fund Students for Fair Admission (Seth 2022). In other words, the same market fundamentalist donors fund the law schools that train the legal talent and concoct the legal theories, the litigation groups that gin up the plaintiffs and manufacture cases, and the organizations that picked the Supreme Court supermajority that ultimately decides the cases (Whitehouse and Mueller 2022; Bernstein, Kroll, and Marritz 2023).

Conclusion

Fink’s Structure of Social Change may be too simple for many social scientists, a crude heuristic for drawing attention to the overwhelming influence of megadonors and plutocrats in American politics. However, unlike most theories of social change, billions of dollars have been spent to bend reality to comport with this theory. As a result, it can be helpful for social scientists, journalists, and the public to draw from this endogenous model to help explain how market fundamentalist ideas are transformed from unpopular minoritarian beliefs into actual policy. We contend that this model of social change helps explain with great accuracy decades of market fundamentalist policies concerning labor, health care, the environment, and school vouchers as well as the deregulation of campaign finance, voter ID laws, and other legislation that increasingly concentrates power in the hands of the ultrawealthy. Why does the United States experience levels of climate denialism out of step with other advanced industrialized countries? Based on Fink’s theory, we would start developing our hypotheses by looking into the well-funded network of academics, think tanks, and media integrated into an echo chamber, and that this political infrastructure is built by the fossil fuel companies and billionaires that benefit (Milman and Harvey 2019). Turns out the story goes back to the 1950s through the late 1990s, when tobacco companies developed the strategy of funding academics and think tanks to spread denialism about the science demonstrating links between smoking and cancer. As Conway and Oreskes demonstrate in Merchants of Doubt, this period initiated a strategy of bringing together well-funded academic researchers, think tanks, and astroturfed political mobilization groups like Citizens for a Sound Economy, which would evolve into today’s Koch-funded juggernaut Americans for Prosperity (Oreskes and Conway 2011). Today, the Koch network funds many of the institutions at the forefront of climate denial (Doreian and Mrvar 2022).

Taking the Structure of Social Change seriously also helps explain why the politics of higher education—whether regarding campus speech or efforts to ban CRT and DEI or to end affirmative action—have garnered so much attention from the Koch-funded intellectual/political infrastructure. If higher education is necessary to produce the raw material and talent pipeline for social change it becomes strategically useful to batter down the university’s doors to ensure that these donor-preferred ideas have a better chance of prevailing on college campuses.

Of course, the Structure of Social Change does not describe every aspect of every market fundamentalist legislative success. It is, after all, a crude theory. However, it does suggest where to look and what kinds of political infrastructure might be involved. As an endogenous theory, Fink’s model also shows social scientists the utility of following the money. As in all issues of policy, there are causal stories more complicated and interesting than focusing on a handful of plutocratic donors. There are fancy statistical models and theoretical abstractions more appealing and supple than focusing on the networks and money deployed by a few rich old white men. However, as in many areas of public policy, in reality there would be no story without these donors. No academic gag orders. No SFFA v. Harvard. No Tea Party or draconian school voucher laws. No attacks on CRT or DEI. No voter ID laws. No Janus or Citizens United. When it comes to market fundamentalism, plutocrats are often a necessary—but often also a sufficient—variable for describing right-wing policy successes. And Fink’s Structure of Social Change does as good a job as any theory explaining why that is the case.

Notes

References