September 8,1995 THE STATE FACTOR Volume 21, Number 6 June 1995 Questionable Policy Based on Uncertain Science: Global Warming and the Rio Climate Treaty In this edition of the State Factor, noted University of Virginia Professor Dr. Patrick Michaels debunks the myths about global warming spun by many environmentalists. Michaels asserts that many global climate predictions, including those upon which the Rio Climate Treaty is based, are not supported by facts. The Earth's temperature is in a constant state of flux, and global climate data does not support the contention, held by some, that human activity has contributed to global warming. The consequences of U.S. compliance with the Rio Treaty, which is based on such faulty premises, will be disastrous. The treaty will cost jobs — estimates suggest a loss of 50,000 jobs each in California, Texas, Illinois, Ohio and Pennsylvania. The Rio Treaty will cost the average family $3,000 per year by the year 2000 with no discernible environmental benefit. ALEC's model resolution calls for the U.S. to legally withdraw from the Rio Climate Treaty using Article 25 of the Treaty. ALEC PROCEEDINGS Volume 2, Number 4 July 1995 The remarks of the Honorable William J* Bennett, recipient of the 1994 Thomas Jefferson Freedom Award, and Charles and David Koch, co-recipients of the 1994 Adam Smith Free Enterprise Award This special edition of ALEC Proceedings features the remarks of three prestigious ALEC award recipients at the 1994 Annual Meeting held in Tampa. In his remarks, William J. Bennett reflects on America's greatest strength, its people. Throughout American history, Bennett says, individuals, not government, have made our country great. In order to remain a leader, we must recommit ourselves to that Jeffersonian vision. As recipients of the Adam Smith Free Enterprise Award, Charles and David Koch reflect on the responsible and innovative ways in which Koch Industries, one of America's leading corporate citizens, uses the free enterprise system and Adam Smith's "invisible hand" to benefit everyone. ALEC B 910 17s" Street NAT.» Fifth Floor s Washington, D.G. 20005 • (202) 456-: SM000214 09598809 10930432 Source: https://www.industrydocuments.ucsf.edu/docs/ztpw0042 fcKf:*^ THOMAS JEFFERSON I is FREEDOM AWARD ...« u'l.vr and frugal government, which shall restrain men from injuring one another* which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouths of labor the bread it has earned. This is the sum of good government. THOMAS JKKFKKSON 1 , MERON /ilkY LEGSMTM IXCB4NGE ffffffl COUNCIL I Honorable William J. Bennett WMMsmimiimj w mumz VV.'- *i%iS2fisa ADAM SMITH FREE ENTERPRISE AWARD Every individual necessarily labors to render the annual revenue of society as great as he can. He generally indeed neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which has no part of his intention. AD\M SMITH D a v i d II. K o c h C h a r l e s Ci. K o c h SM000214 09596810 10930433 Source: https://www.industrydocuments.ucsf.edu/docs/ztpw0042 AMERICAN LEGISLATIVE EXCHANGE COUNCIL The American Legislative Exchange Council (ALEC) ua% founded in 1973 by a small group of Democratic and Republican state legislators who shared a common commitment to the JelYersonian principles of free markets, free enierprise. limited government and individual liberty. Today, ALEC has grown to become the nation's largest bipartisan, individual membership organization of stale legislators, with nearly 3.000 members throughout the 50 states, Puerto Rtco and Guam. Nearly one-third of ALECs members hold leadership positions in their legislatures. Approximately 63 million Americans are represented by the citizen legislators of ALEC. ALEC brings the states and the nation together through conferences, seminars, publications, and its fifteen National Legislative Task Forces. Each provides a unique vehicle for legislators to communicate across state lines, share experiences and ideas, and work in unison with the private sector to create effective public policies. ALECs goal is to ensure that our legislative members are fully armed with the information, research and ideas they need to win in the legislative arena Our publications keep members up-to-date on emerging trends and provide in-depth analyses of issues at the state level. Our conferences and meetings promote colleague to colleague communication by linking like minded legislators together. Our Legislative Task Forces provide a forum in which legislators and the private sector discuss issues, develop policies and write model legislation. Unlike other state legislative organizations, ALECs credo is that business should be an ally, not an adversary, of state legislators. ALEC provides the private sector with an unparalleled opportunity to have their voices heard, their perspectives appreciated, and their interests put before nearly 3,000 pro-free enterprise state legislators of ALEC. Through ALEC, legislators and the private sector work in a dynamic partnership to develop public policies that harness the immense power of free markets and free enterprise to encourage economic growth, increase the nation's competitiveness, and improve the quality of life for all Americans. ALEC Proceedings: Thomas Jefferson Freedom A ward/Adam Smith Free Enterprise A ward 21st Annual Meeting, August 1994, Tampa. Florida Volume 2, Number 4 ©July 28, 1995 American Legislative Exchange Council 910 17,h Street, N.W. Fifth Floor Washington, D.C. 20006 (202) 466-3800 Publications Order Code: AP05 Cost to non-members: SJ0.00 plus shipping and handling ALEC Proceedings has been published by the American Legislative Exchange Council (ALEO as part of its mission to discuss, develop and disseminate public policies which expand free-markers, promote economic growth, limit government and preserve individual liberty. ALEC is the nation's largest bipartisan, voluntary membership organization of state legislators, with nearly 3,000 member* across the nation. ALEC is governed by a 21 members Board of Directors of state legislators, which is advised by a 23 member Private Enterprise Board representing major corporate and foundation sponsors. ALEC is classified by the Internal Revenue Service as a 591(c)(3) r;n-profil public policy and educational organization. Individuals philanthropic foundations, corporations, companies, or associations are eligible to support ALECs work through tax-deductible gifts. Nothing written herein is to be construed as necessarily reflecting the view of the American Legislative Exchange CourciL its Board of Directors, cr its membership, or as an attempt to aid or hinder the passage of any bill before the Congress or in <^a:e legislatures. Designed by Noel Card and Micteel Reira Ccver p'^ 5 4 cies provide the best opportunities for advancing the well-being of society Let me give you a contemporary example that I hope provides context for my remarks. As Ron Scheberle, Chairman of ALECs Private Enterprise Board, indicated, we sponsor programs for an organization called the National Foundation for Teaching Entrepreneurship, known as NFTE, in three metropolitan areas — Wichita, Minneapolis-St. Paul, and Washington, D.C. The goal of these programs is to help at-risk students understand markets and learn how to advance themselves by satisfying the needs of others; to help them learn that they can control their own destiny, rather than rely on the wellintentioned but crippling trap of the welfare system as we know it. Listen to the testimony of April Shelton, a student in the NFTE program in Wichita. These are her words: "NFTE has given me a new outlook, has built up my self-esteem. When I was younger, I had some people tell me there were certain things I couldn't do because I already had three strikes against me: I was black, I was female, and I didn't have any money.11 Annual ***£eiin\{ SM000214 09598810 109304: Source: https://www.industrydocuments.ucsf.edu/docs/ztpw0042 Charles G. fo'ch 1 don't believe that anymore. And because fare; incentives that enable people to do well by of all I've been able to do through NFTE, I don't doing good. think they do either. Now I know that I can beFor incentives to be beneficial requires that come financially independent if I apply the entreproperty rights and other laws be structured so preneurial concepts I've learned and if I work hard. that people can only profit by efficiently satisfying NFTE has given me the confidence to know that I the needs of others. This is known as the ecocan stand on my own." nomic means of making profits. Profits made in April's experience is not exceptional. History this way are a direct measure of a person's or has shown that when firm's contribution to the barriers are removed and well-being of society. people are free to use Our third pillar, the We should review all our policies to ensure their potential, they ad"rules of just conduct," rethat the incentives encourage people to vance not only themincrease the size of the pie, rather than to fers to the generalized selves but the well-being rules or values that enmerely grab for a bigger piece. of all, and that people can able us to best live and fully develop and use work together. These their potential only in an environment of freedom values create a civil society; because values, more and accountability. than anything else, determine behavior. A free society derives its power to release its They include such qualities as: integrity and potential from three sources — three pillars, pilrespect for the rights and property of others; a lars that are lacking in a command-and-control work ethic; self-discipline; the desire to make a environment. Those pillars are: Use of dispersed contribution; tolerance or treating others as you knowledge, beneficial incentives, and rules of just would have them treat you; taking responsibility conduct — that is, of beneficial culture. for your own behavior; and taking the long view I'd like to take a moment to describe each of — being willing to make the sacrifices or investthese pillars as I understand them, because I ments today that help bring a better future. believe each should be carefully considered evTogether, these pillars allow people to live and ery time policy-makers debate new legislation. work in harmony, so that each benefits by contributing to the well-being of others. They repre"Dispersed knowledge" refers to the knowledge of the particulars of time and place, of people sent the powerful process referred to by Adam and what they value, of local conditions — knowl- Smith as "the invisible hand." edge that enables everyone to contribute because Conversely, when dispersed knowledge, benwe all possess unique information that can be eficial incentives, and rules of just conduct are helpful to others. ignored, society itself begins to decline. For us to use our One source of this dispersed knowledge, it erosion seems to be In short, we must commit ourselves to requires that we be free taking prosperity for examining every policy and our every action to make choices, granted. It's the attitude from the standpoint of their effect on the choices such as where that we're prosperous pillars of a free society, and then to dedicate to work and what to buy. so we can rearrange our efforts to market-based programs that And that includes society however we provide real solutions to society's problems. schools and health choose without affecting that prosperity. care. We quickly forget or have failed to learn the desThis freedom results not in the elimination of perate lessons of the failure of command-and-conplanning, but in people planning for themselves. trol societies. We forget that 99 percent of the Unfortunately, command-and-control legislation history of the world has been one of dire abject takes that freedom away. poverty. And we forget that when society has '"Beneficial incentives" refer to those that removed forward, it has been due to the use of disward people for contributing to the general welA V E F / C * \ LEGISLATIVE EXCHANGE COUNCIL SM000214 Source: https://www.industrydocuments.ucsf.edu/docs/ztpw0042 09596810 10930436 *94 ;Vnv 5^ i m F>-EL E\TE.-;"-I5E Av.^-n persed knowledge, beneficial incentives, and the rules of just conduct. whether they do a better or worse job of allowing people to use their individual knowledge, knowlAs legislators, you recognize the conseedge of their own health needs, of what they value, quences of failing to reinforce and build on these and of the trade-offs they must make. pillars — consequences that include economic We should review all our policies to ensure stagnation; higher deficits and taxes; increased that the incentives encourage people to increase poverty and crime; politicized, less-productive the size of the pie, rather than to merely grab for businesses; failed education; class warfare, and a bigger piece. deteriorating rules of just conduct. A society that This requires that we restrict legislation to dedestroys rather than creates wealth, leaving a termining what the formal rules of just conduct smaller pie to meet much greater needs. So, what are, not dictating how they're to be met. And it can we do together, communities, businesses, and includes creating sustainable jobs that truly conlegislators, to tribute to satisfysupport the piling people's lars of a free soneeds, rather ciety? than make-work To begin, jobs based on we would do subsidies and well to remind counterproducourselves of the tive legislation Hippocratic that destroy real oath, "First, do jobs. no harm" The And most imfailure to exerportantly, we cise this reshould determine straint stems which actions of from what Hagovernment, yek called "the business, and the fatal conceit," media build and the belief that Charles Koch receiving the which erode our 1994 ADAM SMITH FREE ENTERPRISE AY>ARD from leaders or techrules of just conALEC Executive Director Samuel A. Brunelli and North Carolina Speaker and nical experts duct. Central to 1994 ALEC National Chairman Harold J. Brubaker know what is this effort would best for everyone, while ignoring the depth and be designing policies that require business to profit diversity of what people in society know and value. only by the economic means of wealth creation, The consequences are disastrous, because no not by the political means of wealth redistribution. person or committee, no matter how brilliant, can In short, we must commit ourselves to examhave all the constantly changing knowledge ining every policy and our every action from the needed to plan a complex society. standpoint of their effect on the pillars of a free society, and then to dedicate our efforts to marThen, we should focus on improving understanding of how to mobilize this dispersed knowl- ket-based programs that provide real solutions to society's problems. edge. We need to develop the methodology for analyzing how each program, policy, law and reguI have faith that we can get there, that we will lation affects the use of dispersed knowledge. To get there, because of the exemplary work of ormo, the benefits would surpass even that which ganizations such as ALEC. the discipline of law and economics, when used, I am proud of what you have accomplished, has had on judicial decisions. and I look forward to working with you to meeting A current example is the health care debate. the challenges ahead. Reform proposals should be analyzed as to Thank you very much. • ALEC Prccte~din^; 1 y'J4 Annual Meeting Source: https://www.industrydocuments.ucsf.edu/docs/ztpw0042SM000214 09596810 10930437 Mr. David H. Koch Charles and I believe that much can be accomplished if we remain firm in our resolve to maintain the principles of free enterprise. We pursue these principles with great dedication at Koch Industries, our family company, and in the organizations we support. We recognize that Koch Industries has been a great beneficiary of the free enterprise system, and we're appreciative of its splendid efficiency. Because of our success and the tremendous benefits this system has brought to the prosperity of America, we honor the free enterprise system faithfully, even when it is clear that Koch Industries would receive short-term financial benefits from command-and-control laws or regulations. This means that, at Koch Industries, we oppose any form of corporate protectionism. We will not go to the government seeking protective legislation passed at the expense of our competitors. We will not support government subsidies y brother and I are very pleased to be for corporations, or tariffs, or import fees, since recognized by the American Legthey inevitably create inefficiencies, distort the islative Exchange Council, because we respect marketplace, and limit choice. your philosophy and your efforts regarding individual liberty and free markets. It is clear that we And while this philosophy may reduce or elimihave much in common. nate short-term gains for us, it is consistent with the It is clear that we both Charles and I believe that much can point Charles made earrecognize the dangers of lier, that we all benefit by a creeping tide of socialbe accomplished if we remain firm taking the long view, makism and an enormous in our resolve to maintain the ing sacrifices today that growth in government in principles of free enterprise. will bring about a better futhis country, which threatWe pursue these principles with ture. ened our Founding Fagreat dedication at Koch Industries, thers' fundamental conIn addition to supportour family company, and in the cept of a free society. ing these marketplace organizations we support concepts at Koch IndusIt is clear that the intries, and because we creasing presence of have gained from these command-and-control iniconcepts, we also believe in supporting institutiatives seriously inhibit creative solutions to real tions like the American Legislative Exchange problems. And it is clear that these command Council and others who share in this mission, ininitiatives really hinder organizations attempting stitutions that support these concepts in their reto grow in the marketplace through serving the spective fields. legitimate needs of others. But while all of this may be clear to us, creatLet me describe some of the institutions that ing clear understanding and implementing meth- Charles and I support because of their important odologies to support market-based concepts is impact on policy debates and on the long-term often met with suspicion at least and, at times future of the free enterprise system in this counfierce resistance. try. So what can we do, individually and together, We support the Institute for Humane Studies, to overcome this resistance? (IHS) based in Virginia, because it promotes mar- M AVE*.:CAN LEG!SL\TI\E EXCHANGE COUNCIL SM000214 09598810 10930438 Source: https://www.industrydocuments.ucsf.edu/docs/ztpw0042 Iv94 AmM SVITH F;jit EvrEsrsis*-. A*'. ^,~D ket-based thinking in academia by identifying and problems by working to privatize municipal sertraining young economists who understand the vices. role of markets within varying disciplines. By proWe support the Institute for Justice, because viding fellowships, summer seminars, and access it seeks to protect economic liberty by challengto its network of thousands of professors, IHS is ing, in the Courts, the many government barriers helping young people develop enhanced careers to entrepreneurial initiatives. By striking down in academia, law, journalism, Charles many licensing regulations, it has opened up nuand public policy. merous markets to new entrants and increased competition and the quality of products and serWe support the CATO Institute, based in vices. Washington, D.C., because as a market-oriWe support the PaSimilarly, ALEC provides ented liberal public policy cific Research Institute in leadership for market-oriented organization, it takes San Francisco and the academic theories and Pioneer Institute in Bospolicies in your various states. turns them into realistic ton, two similar organizaAnd if you accept the premise that all policy initiatives, influenctions, because they atpolitics is local, much of our shared ing the public debate by tempt to promote private cause will be driven by the work generating awareness alternatives to governyou do back home. and publicity for values ment service in their rethat should guide our spective states. public decisions. And we support the National Foundation for Teaching EntrepreneurWe support Citizens for a Sound Economy, ship, because as Charles mentioned earlier, NFTE because it takes market-based policy initiatives teaches the most vulnerable Americans, which and market-based critiques of public policy to the are at-risk children from inner cities, how to emgeneral population, to help citizens understand brace the market and unleash their entrepreneurhow they will be affected by government legislaial spirit in order to tion. It has been rise from poverty very effective in and lead full, remobilizing large warding lives. numbers of people on many issues. In We are seeing just 10 years, it has firsthand how many grown to over young lives are 250,000 citizenchanging for the members. And last better in the cities year, it played a key where we support role in defeating the NFTE, such as administration's Wichita, Kansas; plans for a huge Washington, D.C.; and cumbersome Minneapolis; New Btu taxYork Ciiy; and This year, it is David Koch appeasing on Live Line America, a nationally syndicated many other places. radio talk show, with hosts Mary Beak and Doug Stephen, during Each of these one of the leading ALEC's 21st Annua! Meeting in Tampa institutions proproponents of a vides leadership in their respective areas at a time market-based health care system. when strong leadership is needed, especially as We support, as was mentioned earlier, the command-and-control initiatives appear to be Reason Foundation, because it promotes margaining influence. ket-based ideas through its national monthly magazine and develops solutions to real-world Similarly, ALEC provides leadership for marALEC Proceedings: 1994 Annual Meeting 3 SM000214 09598810 10930439 Source: https://www.industrydocuments.ucsf.edu/docs/ztpw0042 Di.\JH„ &:ch ket-orientated policies in your various states. And if you accept the premise that all politics is local, much of our shared cause will be driven by the work you do back home. As leaders, you can help define the debate in these terms. While it is easy to agree on the goal of advancing the well-being of society, you play a key role in helping your colleagues appreciate that a free-market environment has proven to be the most efficient means of creating a prosperous society. All of you here today are state leaders in this regard. All of you here today are leaders who support change to provide a social and economic environAnd you can sound the ment that encourages everywarning every time governone to reach for their potenment leaders are tempted tial. Command-and-controi by command-and-control initiatives, by their very nainitiatives that threaten ture, do quite the opposite. prosperity. Now, as you They suggest to us that we know, is one of those times. aren't capable of making our It is time to sound the warnown decisions, conditioning ing as nationalized health us to believe that we are viccare appears more postims, that society prevents us sible with each passing David Koch with his ADAM SMITH FREE from using what potential we ENTERPRISE AWARD and Ronald E Scheberle, former hour. Chairman of the ALEC Private Enterprise Board do have. While the notion of naThis conditioning is even more oppressive for tional health care for all may be well-inten-tioned, the disadvantaged, who are often told they have the result would be even greater government inno hope, no chance, no way out of poverty. And trusion into our private lives, reduced options in unfortunately, well meaning welfare legislation ofthe delivery of health care, more bureaucracy, ten reinforces this point of view, in offering, in ad- higher costs, and reduced quality. dition, its recipients to not even try. In more personal terms, nationalized health As leaders in the legislative are-na, you can care will threaten the well-being of our children and our parents, who rely on their doctors and on help your peers and constituents overcome this critical life-saving procedures and new life-saving conditioning. You can help them understand the drugs that may never be developed, because enormous potential that lives within each individual, regardless of race, creed, or color, and that pharmaceutical companies won't be able to afford research and development. your role is to create, rather than limit, opportunity. It's easy for those of us in relatively good You can avoid giving directives that stifle inihealth to say we won't be affected much by this tiative. Instead focus on health care debate, but building the culture, unit is time to think of othAll proposed legislation should be derstanding the structure ers, those who will sufconsidered in this context: Will it and incentives that enfer if we adopt nationalcreate or limit individual opportunity? courage the full developized health care rather Will it promote or restrict open ment and use of everythan market-based recompetition? Will it reward or punish one's capabilities. forms. economic growth and success? All proposed legislaLet me conclude by Will it support wealth creation or tion should be considered saying please accept my concede to wealth redistribution? in this context: Will it crebest wishes as you take ate or limit individual opon this and other critical portunity? Will it promote or restrict open com- challenges. And thank you so much, again, for petition? Will it reward or punish economic growth recognizing us with the Adam Smith Free Enterand success? Will it support wealth creation or prise Award. concede to wealth redistribution? Thank you. • 6 AMERICAN LEGISLATIVE £"-:a*v\GE G J I \ O L SM000214 09596810 10930440 Source: https://www.industrydocuments.ucsf.edu/docs/ztpw0042