An extract from “Inside Job”, a book by Charles Ferguson about university corruption and the financial crisis, was published in the Guardian on Monday. It explains the muted contribution of US academics to understanding the global financial crisis. Many with power in universities are ”in bed” with business and financial sectors.
While medical and scientific communities have spent decades distancing themselves from the influence money, faculties teaching economics, law, business and political science have not.
“…Over the past 30 years, significant portions of American academia have deteriorated into “pay to play” activities. These days, if you see a famous economics professor testify in Congress, or write an article, there is a good chance he or she is being paid by someone with a big stake in what’s being debated. Most of the time, these professors do not disclose these conflicts of interest, and most of the time their universities look the other way.”
“Half a dozen consulting firms, several speakers’ bureaus and various industry lobbying groups maintain large networks of academics for hire for the purpose of advocating industry interests in policy and regulatory debates. The principal industries involved are energy, telecommunications, healthcare, agribusiness – and, most definitely, financial services…”
The extract illustrates links that top graduate schools have with the banking and financial sectors. Academics, paid up to $135,000 per appearance by entities from those sectors, are not required by their employing university to disclose the connection – and seldom do so voluntarily.
“…The problem of academic corruption is now so deeply entrenched that these disciplines, and leading universities, are severely compromised, and anyone considering bucking the trend would rationally be very scared…”
Ferguson claims that US financial interests affect academic research and policymaking. With some exceptions, there has been no interest in challenging industry practices. This perhaps explains “….how an entire industry came to be structured such that employees are encouraged to loot and destroy their own firms …. and …why deregulation and economic theory fail so spectacularly…”
It seems ironical that a British paper should champion print media standards, but the extract notes that while universities have few disclosure requirements and few academic publications require the disclosure of interests, “….newspaper reporters are strictly prohibited from accepting money from any industry or organisation they write about…”
Ferguson also notes that “… most institutions continue to oppose further disclosure and … refused even to discuss the subject…”