"Inside Job", COIs, and Academic Economics

<originally posted August 2011 on earlier blog>

I've been watching the "50 Documentaries you must see before you die" or some such title. "Inside Job" (http://www.insidejob.com/) was one one them -- as the title suggests, its a story of the economic collapse and it includes a very disturbing portrayal of economics in academia (and elsewhere). It's portrayal of economics motivated me to write the Association of American Universities (AAU: http://www.aau.edu/). That organization's "Scientific Enquirer" is a response to the drubbing that science has taken in some quarters and I think its an informative publication, though very new (http://www.aau.edu/research/Science_Enq.aspx?id=12370).

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Dear AAU,

I recently watched the Academy Award winning (2010) documentary “Inside Job.” In the eleven minutes starting at 1:22:30 in that film, academic economics was portrayed very negatively. The film’s claim that (a) some in academic economics are seriously conflicted with the financial industry and that (b) this conflict contributed to current, severe worldwide economic troubles through long-term academic advocacy of deregulation, is the most disturbing portrayal of academia that I recall seeing. While the film highlights only a few institutions and a few faculty members and university administrators, there is a suggestion that the problem of conflict of interest is systemic in academic economics.

Your Press Release of 02/28/2008 on Conflicts of Interests states:

“According to the report, institutional conflicts of interest are becoming a growing concern as academic institutions assume more complex roles and expand their relationships with industry. Conflicts of interest policies are critical to assure that these essential interactions remain principled and are conducted within a rigorous, transparent, and credible framework.” (p. 2, first link of http://www.aau.edu/policy/COI_policies.aspx?id=10096)

While your recent documentation appears to focus on health care, if there is any truth to the film’s claims, in whole or part, the statement would apply to (segments of) academic economics, arguably with even broader societal significance than healthcare.

I hope that AAU is participating in, if not leading, development of and/or increasing awareness of conflicts policy and training in economics, if in fact you find this to be appropriate. Additionally, if academic economics was significantly misrepresented in the film, even while it showed some academic economists in a positive light as commentators, then this misrepresentation (again, in whole or part) could be appropriate subject matter for commentary in the Scientific Enquirer.