In 2006, just two years before Iceland's banking system collapsed, a professor of banking and financial institutions at Columbia University's Graduate School of Business, Frederic Mishkin, co-published a report titled Financial Stability in Iceland. Mishkin touted the quality of the country's financial institutions and volunteered them as an international model. Other economists at the time were warning that Iceland's bankers had constructed a virtual Ponzi scheme of risky investments that gave notice of a very different future for its economy, but Mishkin painted a rosy picture of the institutions they were running. Interviewed in the 2010 Academy award-winning film Inside Job, Mishkin acknowledged a certain irony in this sequence of events. But the film-makers also revealed another part of the story: Mishkin had been paid more than $120,000 (?77,000) by the Iceland Chamber of Commerce to write the report, a fact he did not disclose in the report but which was declared on the mandatory financial disclosure form he had to file when he was appointed to the US Federal Reserve Board.
The proper term for this situation is a financial conflict of interest (FCOI). That doesn't mean that an individual has misrepresented their conclusions. An FCOI points to the factual possibility that someone's professional judgement gives the appearance of having been compromised. Indeed, research shows that even small amounts of cash can prejudice "expert" opinion, often without the expert realising.
Over the past generation, the prevalence of FCOI among US and UK faculty members (among others) has steadily risen, with some academics defending companies or their dangerous products earning millions of dollars for doing so. The problem is exacerbated for academic disciplines such as economics that have no strong tradition of trying to establish ethical standards for their members. Many prominent university economists earned fortunes promoting and defending the risky financial products that led to the 2008 global recession. They bear a share of the responsibility for the hundreds of thousands of people who lost their jobs, their life savings, their pensions, their homes and the economic futures they had counted on.
The longest-running FCOI story, however, is probably not about economists. It is about a range of academic disciplines - history, law, statistics and a number of scientific fields - thousands of whose members have been handsomely paid for their services to the tobacco industry. That story dates back to the 1950s, after tobacco companies began colluding with one another to influence and distort university science and public opinion, with the aim of sowing doubt about the connection between smoking and lung cancer. The companies were eventually convicted of racketeering in a US court for this 50-year project of scientific deception. But only this year, with the publication of Robert Proctor's Golden Holocaust: Origins of the Cigarette Catastrophe and the Case for Abolition, did we learn how many academics had been co-opted.
Proctor's book is the first to take full advantage of the fact that an 80-million page archive of tobacco-industry documents is now fully text-searchable online. This lets us identify thousands of scholars who had secretly consulted with and advised tobacco companies in exchange for generous compensation.
"Sowing doubt" about scientific consensus has become the strategy of choice for companies profiting from dangerous products - and their best advocates are highly placed faculty members who lend prestige to their claims. Some advocate for their paymasters openly, but many more advise industries in confidence, which is why the American Association of University Professors urges in a new report, AAUP Recommended Principles and Practices to Guide Academy-Industry Relationships, that universities worldwide require that all their academics and administrators disclose the exact amounts of their FCOI on publicly accessible websites. Otherwise the integrity, reliability and public reputation of faculty opinion is in jeopardy.
The practice of using scholars to sow doubt about scientific consensus has spread from tobacco to asbestos to lead in paint to chemical industry products such as the carcinogenic product vinyl chloride. Its most notable recent target is, of course, global-warming science.
Disclosing FCOI does not solve the problem. But it helps readers of faculty publications or court testimony to be sceptical of expertise that may be compromised. Simply seeing that Mishkin was paid for his work by the Iceland Chamber of Commerce would have led many readers not to accept his conclusions at face value.