The Big Tech Funding Sideshow

The ‘industry buys academics’ narrative has received significant coverage last week at the Stigler Center conference on Digital platforms and Concentration.

But this time, in relation to a dead person.

In a short exchange, Gary Reback and Bill Kovacic find themselves discussing Phil Areeda’s 1975 Harvard Law Review article on  predatory pricing.

Reback manifestly finds the paper too defendent-friendly.

The ‘funding bias’ attack comes at 49.55′.

Reback throws a:”that research was paid for by IBM“.

Kovacic replies with: I have “looked at that“, but confidentiality restrictions from Harvard university on Areeda’s archives make it impossible to “test that“.

Reback, however, does not leave it here.

He adds: “Bill Baxter told me“.

And follows with “that paid for academic research might be the most influential paid for academic research in the history of antitrust jurisprudence“.

Kovacic’s reply?: “by far … an AVC test for a company with high fixed cost and lower marginal costs … terrific! …“.

Kovacic’s sense of irony speaks volumes.

Attacking a person’s credibility on grounds of disclosed or suspected funding is an effective yet logically wrong way to discredit an opponent’s idea. It is one variant of Schopenhauer’s 38 logical fallacies, namely argumentum ad hominem (and in the case of an attack on a dead person, it falls close to the quandary of proving a negative).

As I wrote elsewhere, the proper way to think about this is counterfactually: but for private sector funding, would we consider that the same research is sound and worthy of discussion. Or, to make the thought experiment even easier: imagine that the originator of the idea is a fictional academic who has not received funding. Would we talk to him?

What I mean to convey here is a suggestion to the tech academics, policy makers and practitioners. The “paid for academic research” narrative is a sideshow, a waste of time.

If f you are not convinced, think carefully about the following questions:

  • Can’t people who inherited a family business talk about employment and job market reform?
  • Can’t people who enjoy substantial wealth make a political career or hold public office in welfare programme institutions?
  • Shall we no longer use the Haber-Bosch process because it was essential to the German War effort?

My personal hunch is that the answer to all three questions is no.

An idea is good or bad, regardless of the person that invents it.

So let’s not get carried away too much by this sideshow.

PS for European readers: I recall that René Joliet’s seminal book on the Rule of Reason started with an acknowledgment that he had received a scholarship from GE. Yet, no one has ever attacked him for excessive proximity to the private sector.


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