Quotes from Charles G. Koch

Those who favor a "grand plan" over experimentation fail to understand the role that failed experiments play in creating progress in society. Failures quickly and efficiently signal what doesn't work, minimizing waste and redirecting scarce resources to what does work. A market economy is an experimental discovery process, in which business failures are inevitable and any attempt to eliminate them only ensures even greater failures.

The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble. —RALPH WALDO EMERSON

My lessons weren't specific to business, but they were fundamental values—integrity, humility, responsibility, work ethic, entrepreneurship, a thirst for knowledge, the desire to make a contribution, and concern for others—that profoundly influenced the way I do business and live my life to this day.

Allowing people the freedom to pursue their own interests (within the limits of just conduct) is the best and only sustainable way to achieve societal progress. For individuals to develop and have a chance at happiness, they must be free to make their own choices and mistakes, rather than be forced to accept choices made for them by others.

Principled Entrepreneurship™—creating superior value for our customers while consuming fewer resources and always acting lawfully and with integrity. Good profit comes from making a contribution in society—not from corporate welfare or other ways of taking advantage of people.

The capitalist achievement does not typically consist in providing more silk stockings for queens, but in bringing them within reach of factory girls in return for steadily decreasing amounts of effort. —JOSEPH SCHUMPETER1

The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble. —RALPH WALDO EMERSON (ATTRIBUTED)1

The possibility of men living together in peace and to their mutual advantage, without having to agree on common concrete aims, and bound only by abstract rules of conduct, was perhaps the greatest discovery mankind ever made.

Polanyi argued that we only truly know something—that is, have personal knowledge of it—when we can apply it to get results.

The process of discovery begins when we observe, often vaguely, a gap between what is and what could be. Our intuition tells us something better is just beyond the range of our mind's eye. To build a culture of discovery, we must encourage, not discourage, the passionate pursuit of hunches (no matter their origin).

To succeed, a business must not only develop profit and loss measures, but also determine their underlying drivers, in order to understand what is adding value, what is not, and why. This knowledge informs its vision and strategies, leads to innovations, creates opportunities to eliminate waste, and guides continuous improvement.

But, although the future is unknowable, it is not unimaginable. As Ludwig von Mises put it: "The entrepreneurial idea that carries on and brings profit is precisely that idea which did not occur to the majority. It is not correct foresight as such that yields profits, but foresight better than that of the rest. The prize goes only to the dissenters, who do not let themselves be misled by the errors accepted by the multitude."6

By "good profit," I don't mean high margins or high return on capital, or lots of profit by just any means. What I consider to be good profit comes from Principled Entrepreneurship™—creating superior value for our customers while consuming fewer resources and always acting lawfully and with integrity. Good profit comes from making a contribution in society—not from corporate welfare or other ways of taking advantage of people.

relentlessly strive to come up with new and better products and produce them more efficiently than the alternatives.

I was especially fascinated by the second law of thermodynamics, which holds that entropy virtually always increases in a closed system. Entropy is a measure of disorder or uselessness. In lay terms, this means that progress stalls or declines when something is walled off from the outside world. Usually

interview process typically consists of a series of separate interviews, with each interviewer assessing a candidate's alignment with a unique set of personal traits. These traits are arranged as focus areas based on our Guiding Principles and are as follows: (1) Integrity and Compliance; (2) Value Creation, Principled Entrepreneurship, and Customer Focus; (3) Knowledge and Change; (4) Humility and Respect; and (5) Skills and Knowledge required in the role.

The size of the experiment should have been limited in proportion to the risk-adjusted potential of the opportunity.

Rather than squandering our scarcest resource (talent) trying to save a marginal business, we've learned to focus that resource on opportunities with real potential.

Societies that don't embrace freedom wind up with the least prosperity. Venezuela is a country rich in natural resources, yet after just fourteen years under a socialist government, it now rations food, electricity, water, and other staples.

Life for the overwhelming majority of people who haven't been blessed to live in a free society has been, as Hobbes put it, "poor, nasty, brutish, and short."8

beneficial rules of exchange" are "the right of possession, its transference by consent, and the performance of promises."12 This

If producers knew not only what consumers want now, but what they will want in the future, their job would be pretty easy.

The point is that progress—whether in business, an economy, or science—comes through experimentation and failure

I should regret very much to have you miss the glorious feeling of accomplishment and I know you are not going to let me down. Remember that often adversity is a blessing in disguise and is certainly the greatest character builder.