Organizations and Markets

4 Comments Add your own

• 1. William Newman  |  17 July 2008 at 4:56 pm

  I don’t find it shocking. Charges about the corrupting effect of private funding are older than I am, and at least since the development of public choice theory, sometimes hi-falutin’ theoretical barbs come back the other direction too.

  If you do find it shocking, be sure to note that in _Fable of the Keys_, Liebowitz himself does something similar, pointing out “evidence that is both scant and suspect” where “suspect” refers at least in part to August Dvorak’s financial interest in the results of the studies the Dvorak conducted.

  I do find it an inappropriate argument in the current controversy, though, and to hear the authors making it damages their credibility with me about as much as hearing of them being shy about releasing data.

  I don’t think anyone can claim that arguments about financial incentives are generally appropriate. Someone can have all kinds of perverse incentives and still do rigorous honest work, And we’ve developed a lot of rules and traditions in science and engineering to let them demonstrate it, and to let others check it. So like some other arguments — notably “my opponent is not even a specialist in the appropriate field” — one should have achieved overkill demonstrating that one’s opponents aren’t doing rigorous honest work before pulling out the financial incentives argument. Or, really, I consider both to be explanations, not arguments. That is, if you resort to the financial “argument” in order to establish your primary point that your opponent’s work is invalid, it should set readers’ internal alarms clanging about your own competence or integrity. But if you are orbiting triumphantly over the bouncing rubble of your primary point, sometimes it can be appropriate to address a secondary point, whether there is an explanation for why they chose to publish such shoddy work. At that point, sometimes it’s hard to overlook the explanation of financial motive (or, similarly, the explanation of lack of suitable training). E.g., I think most people (possibly including you) would argue that it was reasonable for Liebowitz to consider Dvorak’s incentives in _Fable of the Keys_.

  I haven’t looked into the recent rounds of the file-sharing controversy, but early on, my strong impression was that reasonable impartial people could’ve raised the criticism Liebowitz made. And after that, I thought the early responses of the authors and journal editors would not satisfy an impartial critic. I don’t know how the authors may have worked to redeem themselves since then, But almost no matter what they’ve done, I don’t see how they can be in a good position to charge that Liebowitz has behaved so inexplicably badly that we need to invoke financial temptations to explain it.

  Incidentally, even if recent developments show Liebowitz has been unusually stubborn about this, financial incentives wouldn’t be my first explanation. I’ve written elsewhere about how I find it inexplicable that _Knowledge and the Wealth of Nations_ (2006) has Romer’s version of QWERTY running through it (9 mentions in the index) and mentions Liebowitz not at all. That seems remarkably sloppy, and lot of prominent economists (e.g. Tim Harford, Paul Krugman, Ken Arrow, Robert Lucas) blurbed that book favorably. From this, and from my vague memory of David Friedman using _Fable of the Keys_ as a prime example of an unacknowledged critique, I’d expect Liebowitz’s patience for people ignoring his critiques was exhausted before this particular controversy began.

• 2. spostrel  |  17 July 2008 at 9:50 pm

  This ad hominem stuff is getting out of hand. As one of the two or three people who might have looked at the May 2008 Academy of Management Perspectives, I can tell you that James Walsh launches a similar ad hominem attack against Steven Kaplan in that issue’s series of articles on executive pay. And this attack’s is in an edited article, not just a comment to a journalist. I don’t know what the editors of AMP were thinking, but this seems awfully inappropriate and unprofessional to me.

  Starting on p. 31, Walsh’s article has a section titled “Is Professor Kaplan a Positive Role Model?” Think about that for a minute. Then, after a lot of high-minded throat clearing about scholars’ social responsibilities, he attacks Kaplan because Kaplan “never revealed his other interest in this compensation question…he currently serves on the boards of Accretive Healthm, Columbia Acorn Fund, and Morningstar. The Morningstar Web site reports that he joined their board in 1999 and currently serves as their compensation committee’s chair….Professor Kaplan enjoyed the proceeds from the sale of more than $3.8 million worth of stock in a recent 18 month period (June 16, 2006 to November 16, 2007)….he is an extremely well-compensated insider in the governance regime he so passionately defends. Congress and his AMP readers should know that.”

  Walsh thanks a bunch of people, including the editor of AMP, for their comments. I think they would have done him a big favor if they’d told him to cut out this section, which makes him rather than Kaplan look bad. I will refrain from speculating about anyone’s motives here lest I compound the problem under discussion.

• 3. TRUTH ON THE MARKET » The Filesharing Debate Gets Ugly  |  18 July 2008 at 2:44 am

  […] Glenn brings us the latest in the filesharing dispute.  HT: Peter Klein, who says sensible things about the newest, and ugliest piece of the controversy: Strumpf suggests […]

• 4. Peter Klein  |  19 July 2008 at 12:05 am

  William, I agree that in general, bringing up funding sources is fair game. In this particular case, however, as a means of silencing a critic, it strikes me as being in particularly bad taste.

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