Monday, October 04, 2010

Conflicts of interest

This article from the Chronicle of Higher Education raises important questions about the incentive structure that many economists and law profs, if writing about issues that business groups care about, face these days. To be sure, it's a matter of broad-ranging entrepeneurial choice how one directs one's academic efforts. The important point, however, is that conscious hypocrisy is not needed for the incentive structure (including side rewards) facing academics in a given field to matter greatly.

I should emphasize that I don't mean to endorse this article's critique of any particular individual, be it Larry Summers or any of the others named. Given the non-monetary rewards we seek in academics (prestige, the enjoyable aesthetics of doing good intellectual work, etc.), the rewards of taking a side that proves lucrative may often be inframarginal even if one isn't surprised to end up reaping them. And there may be plenty of other biases out there as well, some pointing in different directions.

But the issue of potentially reaping enormous rewards for analysis that ends up suggesting a pro-business-constituency bottom line is out there, too big and potentially significant NOT to be discussed even though the discussions may prove quite awkward because they can get ad hominem.


michael a. livingston said...

But there are also career rewards for taking an anti-business, sorry, a progressive position sometimes, aren't there?

Daniel Shaviro said...

Yes, and I noted that there are currents pressing in different directions. In most fields in law school clearly the professional bias tilts to the left.

This is not necessarily about left vs. right, BTW. Note that pro-business need not, for example, mean the same thing as pro-market.