The Funding Fallacy

People on both the right and the left routinely commit the funding fallacy when they assess research and writing. This fallacy is a variant of the hoary rule, Follow the money. The idea is that if an institution or person funded an analyst’s work directly or indirectly, that analyst was ipso facto a hired gun who merely strove to do the funder’s bidding.

I have been around university and think-tank research and writing for half a century, and I can testify that this belief is, as a general rule, incorrect. Not that no specific instances occur; of course they do, especially in think tanks and related organizations, but sometimes in universities as well. Nevertheless, the more accurate general rule is that analysts do what they believe to be good work regardless of who funded the work or why.

In my own case, for example, the great bulk of my research and writing took place without any specifically related financial support other than my regular salary from a university or my fee for service (e.g., editing a journal, evaluating research proposals, or lecturing) from a think tank. Dedicated funding for a specific project more often comes from sources that wish to support a specific type of research or a specific researcher than it comes as a prepayment for the services of an intellectual prostitute.

The recent hullabaloo about Nancy MacLean’s book is illustrative. She argues that James Buchanan’s career amounted to carrying water for the Koch brothers in a quest to destroy democracy and establish plutocracy in the United States. Some of her critics turn around and argue that she received funding from the federal government and hence was simply waging another battle in the state’s ongoing war on free markets and their proponents. I am confident that both claims are wrong. Jim Buchanan did not do dirty work for pay; I knew him long enough and well enough to know that for sure. I do not know MacLean, yet I strongly suspect that in writing her book she was simply telling a tale that, inside her ideological bubble, seemed eminently sensible to her, however remote its claims might be from well-founded and documented historical reality.

For people who have not spent years inside universities or think tanks, the funding fallacy seems compelling. But the actual situation in these institutions is not so simple. If it were, controlling the quality of research and writing there would be much easier than it actually is. For fifty years, I waited for the cash in a plain brown wrapper to arrive on my doorstep. It never came, just as—I am sure—it has not come to most others in this line of work.

Robert Higgs is Senior Fellow in Political Economy at the Independent Institute, author or editor of over fourteen Independent books, and Editor at Large of Independent’s quarterly journal The Independent Review.
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