The Reference Frame column by Robert Laughlin raises very interesting issues concerning the economic inducements to commit fraud in science and technology. It is always a pleasure to find physics writers sensitive to the industrial world, not just the university one.
It was striking, however, to observe how fixated Laughlin was on his peculiar idea of “property.” I counted at least nine times he used the word, with uniformly negative connotations. For Laughlin, at least as far as the sciences are concerned, property is the root of all evil. It would appear that he has little or no industrial experience himself, or else learned little from what experience he had.
Ironically, he has things exactly backward. In government and university occupations, researchers who commit fraud are putting just what at risk, personally? Perhaps their reputation, if they are caught. Perhaps their job, if the sin is egregious. Susceptible to fashions, the government and university sectors have a strong incentive to protect researchers and their work and to overlook little flaws that may tend to advance common interests. And with little or no need to produce a commercial product, university and government researchers are subject to no mechanism for independent test of value, other than the so-called peer review of other soldiers in the same army. If and when somebody is exposed doctoring data, still nobody really loses. The researcher is “promoted sideways” (found another job in another lab or agency), a polite retraction is issued by the sponsors or department head, and the money keeps flowing. In last year’s most newsworthy revelations of physics fraud, not one of the coauthors of the perpetrator’s papers admitted even secondary responsibility (“I just assumed he was providing good data,” they whined), let alone suffered the slightest financial or career setback. Except for one man, the fraud was free.
In industry, by contrast and as Laughlin correctly noticed, the stakes are much higher. Industrial research, far from being insulated from self-correcting (market) forces, experiences the strongest possible discipline daily. Consider where the high stakes of investment costs and the potential value of intellectual property really lead: not to fraud but to truth. Senior people in high-tech companies who pursue fraud do not just lose their reputations, they lose their homes, their fortunes, their livelihoods, and sometimes even their families under the stress.
Just as a successful discovery or development can make you rich, a false one can ruin you. Entrepreneurs bet everything they own on the value of their ideas, discoveries, developments, products. They have little time to waste on data or ideas they know to be false or worthless, because they literally cannot afford failure or wasted effort. They are paying for the work themselves. Naturally, ideas, discoveries, and developments result in intellectual property, sometimes of the very highest value. But the property has value only to the extent it is valued by others. Once a private enterprise brings a new discovery or product to the market, consumers will test the work immediately and without pity. If it is without merit, or if its value is significantly less than the developers claimed, customers and competitors quickly crush the developers with rejection. That market scenario contains very little room for fraud and the greatest penalties when fraud is exposed. I would suggest that somebody enroll Laughlin in Economics 101.
