Chase Koch on Principles, Music, and Overcoming Entropy

**Tyler Cowen** (0:04)
Conversations with Tyler is produced by the Mercatus Center at George Mason University, bridging the gap between academic ideas and real world problems. Learn more at mercatus.org. For a full transcript of every conversation enhanced with helpful links, visit conversationswithtyler.com.
Hello everyone and welcome back to Conversations with Tyler. Today, I'm chatting with Chase Koch. He is the lead guitarist of a band known as Too Lot.
He plays major roles in Koch Disruptive Technologies and the Foundation, Stand Together, and he and his father Charles Koch have a new book out, which I was happy to blurb. It is called Becoming a Principle Driven Leader, subtitle, 41 Principles to Build an Enduring Business.

**Chase Koch** (0:54)
Thanks for having me on, Tyler. It's an honor.

**Tyler Cowen** (0:56)
Now, early on in the book, you tell a story of you being Penn and your father lecturing you about Hayek, Maslow, Schumpeter, Aristotle, and others. You've absorbed a lot of those lectures, but what was it from those lectures that did not stick with you? You either rejected it or just you've still been ignoring it.

**Chase Koch** (1:13)
Yeah, I mean, I definitely rejected it when I was 10 years old, I think like most 10-year-olds would. I mean, it was more than a lecture, just people in the room with me and my father and my sister. These were Sunday philosophy lessons, sometimes economics lessons, and they were actually books on tape that he would play. Whether it was Milton Friedman or Hayek or a choose your philosopher, every 10 minutes he would stop the tape and then quiz us with questions to see if we were paying attention. My sister Elizabeth, she knew the answer, she was right in there, and I was usually either half asleep or not paying attention. So it wasn't really until later on in life, call it my late 20s, that the principles really hit me. All the things that he'd been trying to teach me hit me at a visceral level, and it was from me experiencing them myself. And I'll give you just one example, when these principles really came to life for me. I was running our fertilizer international business, and we were trying to expand all over the world, and Brazil was one of the most important import markets.
And we had a large trading business, and I was trying to expand it. And we were opening up a new terminal to bring nitrogen fertilizers in with large ships and break bulk 30,000 tons to get to farmers. There was a new high-speed conveyor belt and a storage terminal and everything. And the bureaucracy, the red tape, even the corruption that I, as a kind of a young business leader, felt we thought would take under a year to build and get in market took us over five.
And so just feeling that, I was like, ah, this is what my father has been telling me since I was 10 years old. We don't want our country to go down this path. Protectionism, not thinking about things from a mutual benefit lens, barriers in business, holding people back. All the things that he was teaching me came flooding to the front of my brain. And I was like, I got it. And that was just one of many examples on why I became so passionate about the principles that my father was trying to teach me since I was a little kid.

**Tyler Cowen** (3:26)
But there must be something from those books on tape that you absorb the least. So do you wake up in the morning and say, ah, today still A does equal A. Dad was right about Aristotle. Or did that just still like, I don't need this so much. I know A equals A.

**Chase Koch** (3:41)
You know, it's interesting, Tyler, I would say if he looks at everything through the lens of principles.
And ever since I was a kid, whether it's how he raised Elizabeth and raised me, how he treats my mother, how he does business, the things he's trying to change, you know, in our country with all of our efforts and stand together to help people improve their lives. Those principles, I'm 100% aligned on with them. There's not something I could sit here and tell you. It's like, I'm just so polar opposite my father. On that, what I will tell you is how I express them is different. He also taught me this, right? The principle of comparative advantage, which I think of the 41 principles in the book is maybe one of the most powerful. As you know, the principle of comparative advantage is really focusing on, I mean, you can look at it from an individual standpoint or you can look at it on a country's comparative advantage and what they make and produce and at what cost. Look at it from a personal level. What my comparative advantage is, is what is my gift?