He turned eighty years old in 2015. But it didn’t seem that anyone expected him to retire.
“They’ll take Charles out of there on a stretcher. And I think he’ll be the happiest that way,” quipped Leslie Rudd, one of Charles Koch’s longtime friends in Wichita.
But even if he never retired, Charles Koch could not lead the company forever. And this raised a troubling question: Could Koch Industries thrive without him? The politically correct answer among Koch employees was that Market-Based Management would be able to carry on without the charismatic CEO who created it. Charles Koch’s wisdom had been codified into a machine, this thinking went, and the machine could thrive without his personal intervention. But history was replete with examples of companies that had stagnated once their founders left. Koch Industries seemed like a prime candidate for this fate. Charles Koch insisted on maintaining control over the company since he became CEO in 1967. No one knew how the corporation would operate without him.
Charles Koch had a contingency plan. He had placed a hedge bet against mortality and the passage of time. There was a possibility that Koch Industries might be passed down to an heir, a young man who could carry on the Koch name and the tradition of family ownership.
Charles Koch was raised in a household with four sons, four potential heirs to the family business. Charles, on the other hand, had only one son. He had vested many hopes, and many years of work, in him and by 2015, Charles Koch’s son was seen as the heir apparent.
His name was Chase Koch, and everyone who met him thought that he might be CEO of Koch Industries one day. But what people didn’t know was if he’d be ready to do it. Or, more importantly, whether he wanted to.
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I. Even the most optimistic of these forecasts profoundly underestimated how much oil would come gushing from the ground.
II. There were an additional thirteen refineries that produced lubricating oils and asphalt in 2012.
III. Koch’s complex in Corpus Christi includes two refineries. For the sake of simplicity, the complex is referred to here as simply Corpus Christi, or the Corpus Christi refinery.
CHAPTER 22
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The Education of Chase Koch
(1977–2016)
When he was a young boy, Chase Koch might have seemed unteachable. But that didn’t mean that his father didn’t try. On Sunday afternoons, Chase Koch and his older sister, Elizabeth, got personal lessons from their father.
It was common for families in Wichita to attend church on Sunday, sending the kids to Sunday school while their parents listened to sermons from the altar. This was not the tradition in Charles Koch’s household. Charles Koch developed his own curriculum to teach his children, a curriculum that taught them about his systematic view of human behavior and how best to organize human society. On Sundays, Charles Koch gathered Elizabeth and Chase in the family library.
The library was a large, imposing chamber in the back of the house, with walls that were lined by thousands of books. The books on philosophy, history, and science were the raw material of Charles Koch’s worldview, which he had encoded in Market-Based Management. When they sat down for their lessons in the library, Elizabeth and Chase Koch were likely the only people on earth to get such deep, one-on-one lessons in MBM from the creator himself.
Charles Koch played taped lectures from economists like Walter E. Williams and Milton Friedman. As the economists and philosophers droned on, Charles Koch periodically stopped the tape and quizzed his children.
“He’d pause it and then say, ‘Okay, well, what did you kids learn from that?’ ” Chase recalled. Chase was maybe eight years old at the time; certainly “in the single digits,” as he remembered it.
Elizabeth, the oldest child who always seemed eager to please, was attentive to the lessons and earnestly answered her father. Chase struggled to stay awake. “Literally half the time, I’d get caught, like, with a baseball hat over my eyes, because I would be sleeping through it,” he said. “And my sister, being the good first child . . . she was valedictorian in her class or second in her class. And so she was, at a very early age, just gobbling this stuff up.”
Charles Koch tried to teach his son, but it appeared that his son did not want to learn. Chase’s obstinance, or apathy, posed an obstacle to Charles Koch and his future plans.
Those plans seemed clear to everyone from the first day Chase Koch was