Will you ever trust this site again? BusinessWeek reveals that our friend economist Tom Lehman wrote an article for the Mises Institute while taking money (maybe as much as $2,000) from an institution that turns out to be funded in part (shill!) by the very institution that Lehman was defending against government attacks: the payday loan industry. It’s true that we did not know ahead of time (the article appeared to be logical and persuasive), but nonetheless, here is the incriminating evidence of just how just how embroiled the Mises Institute is in this payola scandal: an actual article written for our monthly publication. What capitalist shills we turn out to be!
Of course we are in full crisis mode. We must hire one of those pricey consulting firms that specialize in dealing with the press during PR meltdowns, and we are all scrambling and having strategy sessions on how we should proceed. Should we admit it with full disclosure? Apologize to the world? Denounce Lehman and separate us from him forever, while piously proclaming that our editorial space is not for sale?.
When the bright lights glare down on us for our 60 Minutes interviews, we’ll be wearing plenty of powder, but surely our suffering will still be evident on camera.
Maybe we can add a note to his article: “The poor and embattled payday-lending industry, under heavy regulatory attack from the usual suspects, is so worried about the fate of its freedom to provide services that it sensed the need to pay an academic economist, the author of this piece, through an intermediary, as much as $2,000 to defend the rights it should have in a free society, and also to explain to the public what he already knows as a trained economist: that the pay-day loan industry actually serves a social purpose and should not be crushed.”
Even with this frank disclosure, will the Mises Institute survive this scandal? Just wait until all the revelations and shock concerning the money the federal government gives to nonprofits (umm, not the Mises Institute), many of whom turn out to be nothing but government shills. Oh wait: that will never happen.
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Is this purely a PR thing, or are there possible legal ramifications?
Well, if he took the money in the form of a loan, then I would suppose the piece would be written from first-hand experience and thus that much more credible.
Then again, even if it were direct payment in return for favorable press, it doesn’t necessarily invalidate the reasoning in the article. I for one have found it to be persuasive when I first read it.
I guess I really should add a note that says that my post is intended to be sardonic. There is no crisis. Actually there is no revelation at all beyond this post, even though the details here are entirely true.
Professor Lehman apparently did write that excellent piece on the encouragement of the Consumer Credit Research Foundation which was apparently established by the payday loan industry as a means of defending itself against government attacks. I just can’t seem to be outraged about this at all.
Full disclosure: the Mises Institute is funded by tens of thousands of generous people from around the world, many of whom have worked hard in the private sector to provide jobs and create wealth; in giving to the Mises Institute, they hope to support a body of ideas that makes the case for free markets and the classical liberal society, as understood in the tradition of the Austrian School of economics.
Scandalous.
I haven’t helped purge people in a long time. Do we get to build a bonfire or something? Nothing says “forgive and forget” more than a cindering clump of ashes that used to be the town library or in this case, the self-serving Ward and Massey libraries.
I see no issue here if Mr Lehman paid the $250 to the payday loan place to cash the check.;-)
Horrah to the the Mises Institute for doing nothing against the writer who like anybody else has works for a living. It is the ONLY information source that rightfully points out that it does not matter what the motivation of the writer has, only that he is defending EXISTING rights of another party to pursue happiness through mutually beneficial exchange.
Lehman should have disclosed to his readers that he had taken the money. However, the essay itself was based on sound reasoning.
On disclosure, I’m not sure that we’ve ever dealt with this kind of thing before. It’s true that syndicates require disclosure as a matter of contract, but it never to occured to anyone here to require that from authors.
In thinking through this, let’s say we received an email from Professor Lehman that said, oh, just to let you know, I received $2,000 from such and such foundation, which is funded by the payday loan industry, as an honorarium for writing this.
I suppose that we would have added to this to the bio, but there is also something vaguely annoying about this attitude that somehow private money taints everything it touches. Would such a pious disclosure have introduced a kind of suggestion that all the arguments in the piece should be regarded as suspect? I’m not sure that I know the answer.
Imagine a case in the Soviet Union in the 1930s, when collectivization was causing famines. Imagine one brave intellectual soul, not a party member, who stood up for private land ownership. Let’s say all publishers in the country felt required to make these disclosures, so that an opinion piece by him had to be tagged: “the writing of this opinion piece was paid for by members of the private landowning class of exploiters, so draw your own conclusions about the merit of his points.”
Would journalistic ethics actually require such disclosures? Or by making such disclosures is the publication unwittingly reflecting regime priorities? Would such a disclosure actually endanger the work of the intellectuals and expose the private interests to political relation? These are legitimate questions. I’m curious if anyone has thoughts on this.
I would like to think that the quality of arguments is more important than who ‘paid’ for it, especially where opinion articles are concerned. After all, how can they be considered bribes if you have no real power to provide favors or privileges? Where’s the corruption?
I don’t see what the big deal is. The government constantly hires and PAYS economists to tell lies about economic policies. Anyone remember some of the economists backing Clinton minimum wage when they were working for the administration although they had written works against minimum wage? That is far more astounding. Lehman is just getting paid he’s not even contradicting himself yet!!
I am uneasy about this. The fact that he is PROFESSOR Lehman suggests that he is a tenured professor, whose salary is paid regardless of the direction in which his research takes him, since that is the freedom tenure provides a university professor. And if he was a chemistry professor, doing work on a drug with a grant from a pharmaceutical company, would he be free to publish regardless of where the science led? Did the PR firm that paid his honorarium know beforehand the conclusions his article would make? If so, is he not working as a representative of the PR firm and not as a university professor. And, if not, would he have received the honorarium regardless? I cannot help but feel there is an ethical question here.
I’d be more convinced about no-harm-no-foul if you didn’t come across sounding defensive.
You would have been a great help at the Salem enquiries. I bet a lot of them sounded pretty defensive.
Geez, people, don’t you get that this article was posted for its humor value? I was giggling as I read it, but some of you actually sound like you’re serious! Get a grip!
All money is ultimately private money. So even the government’s grants to non-profits are “tainted” by private money. Every op-ed written by a government funded non profit writer is motivated by some rent seeking or redistributionist ambition. Whether the policy being advocated results in more funding for a contractor or regulatory restriction of a competitor, there is usually an economic benefit to a special interest.
Peter, I realize that this is not really a problem for the Mises Institute, at least at this time, but it is still a serious issue for the media, and perhaps at some time in the future MI will have to deal with it, too.
Maybe it will become an issue someday but it is hard to imagine how. We have a rule against work-for-hire type grants. If we are putting out a book on banking and some financial firm liked it and wanted to help out, that’s fabulous. Please donate to the cause. If the same firm wants us to undertake a study to conclude that Regulation X,Y,Z is a great thing, we won’t do it.
In any case, if such a firm really wants to buy intellectuals, there are much more marketable commodities out there. The Mises Institute attracts idealistic donors, not people on the make and take.
Through the years, we’ve variously been approached by companies on contract with the government. They have cash they would like to spread around in order to beef up the case for some new product they are throwing together. We don’t even give them the time of day.
I recall that some space-contraption firm wanted us to do a “study” showing that some thingamajig was a great contribution to society. Like the fools that we are, we asked why they needed a study if they already knew what they wanted to conclude, and why they wanted us to “study” the issue at all if we already knew what the conclusions were supposed to be. The guy on the other end of the phone said something like “you just don’t get it, do you?” and hung up.
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