Saturday, July 20, 2013

David Henderson raises an important point about funding

He relates the following story:
"A number of years ago, a fairly well-known economist I respect was consulting for a Fortune 500 company. Call the company "A." A wanted to merge with B and the federal government was putting roadblocks in the way. I favored, you probably won't be surprised to know, allowing A to merge with B. This economist, who knew I was on a roll at the time with the Wall Street Journal, writing 5 to 6 op/eds a year for them, asked me if I would write an op/ed for the Journal arguing that A should be allowed to merge with B. "Sure," I said. "And, in return," he said, "A is willing to pay you $2,500." For those of you who don't know, this is a multiple of the price that the Journal typically pays for op/eds, at least in my experience. "I'm guessing that you don't want me to tell the Journal that I'm being paid," I said. "That's right," he said, "there would be no point." "OK," I said, "then my answer is no.""
Moral of the story (IMO at least), if a funder doesn't want you acknowledging them, it's a good sign that maybe you shouldn't take the money. Normally this is just a courtesy thing - to your readers so they know the context and to the people that are helping you to put food on your table! When it's something that funders want to be hush hush that should send up red flags, I think.

It doesn't mean the perspective is wrong at all. Given David's outline of events I'm sure I'd agree with him on the policy question. But I'd feel uncomfortable about taking the money too.


  1. Good grief.

    I think David Henderson -- and you -- should think about this a bit harder.

    If company A wants to merge with company B, *but company A is interested in paying bribes* to economists to write favorable articles without acknowledging the bribes...

    ....maybe you should reconsider your approval of A merging with B. A may be an institutionally toxic company, a Kellogg Brown Root, which poisons anything it merges with.

    Facts are stubborn things, and the institutionalists have a point. An institution which is interested in offering money on these "but don't tell them we paid you" terms is an institution which you should reassess, and maybe you not only don't want A to merge with B.... maybe A should have its corporate charter revoked and be liquidated and shut down.

    Please think about this.

    1. Why don't we just kill them or throw them in prison, that would solve the problem altogether. Right?

    2. BTW, the usage of the word "bribe" is question begging with regard to your conclusion (esp. in terms of legality).

    3. I know defenders of immoral behavior like to engage in ludicrous nonsense, but really, pay attention.

      "We'll pay you money to spread propaganda while lying about who's funding you" is an offer of a bribe, morally.

      Legally, well, as you know, slavery was once legal, and lawyers have been known to claim that all manner of things are legal.

      In a healthy legal system, that's an offer of a bribe.

    4. Please learn what "begging the question" means, because you don't know, Mr. Fetz.

    5. "Why don't we just kill them or throw them in prison, that would solve the problem altogether. Right?"

      What do we do to criminals in our system? I'll wait while you look it up!

    6. I used the term "question begging" correctly. In fact, your responses only further substantiate that point.

  2. If $2,500 is a multiple of what the Journal is paying for an op ed piece then every op ed piece is being written for a collateral purpose. Five hundred to a thousand dollars is not a sufficient motivation by itself for an expert person to put the effort into writing a worthwhile op-ed. Anytime you read an op-ed you should be wondering what motivated the person to make the effort.


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