Fraud, scientific and otherwise

This NYT editorial about faked research at Bell Labs misses the central point about scientific fraud. The research in question, as the NYT points out, seemed destined for a Nobel prize until it was exposed as bogus (the guy involved is still denying fraud, but his own admissions are enough to discredit the research). The point is that faked research of Nobel quality will always be exposed, because other people will try to replicate it and fail (think of cold fusion). Then they’ll go back to the original papers and , inevitably, find the tell-tale discrepancies that point to fraud (in this case, the same graph appeared for two different experiments).
The lesson is that, if you want to commit scientific fraud in relative safety, fake results that are just interesting enough for publication, but boring enough that no-one will bother to replicate them. Of course, this is ‘scientific fraud’ only in the sense that it’s committed by someone employed as a scientist. In ordinary language it’s the equivalent of ‘goofing off’, ‘goldbricking’ or ‘taking a sickie’ – you pretend to be working when you’re actually taking it easy.
In the large, science is self-correcting. Unimportant false results can stand up for a long time, but important ones will be exposed.
There is, I think, a lesson in all this for corporate governance. There is no way of completely eliminating fraud and bogus accounting, just as there is no way of eliminating fraud by scientists. But in a system where executive pay is relatively modest, and where only a long career will bring big rewards, no-one sensible will commit the kind of large-scale fraud or dodgy accounting that brings a company to its knees. Such fraud is always followed up and brings discredit to all those involved.
In the current environment, though, this doesn’t matter. A sharp CEO or senior manager can reap millions of dollars in a matter of months from cosy deals and sharp accounting. As long as they avoid criminal prosecution and lawsuits with punitive damages, they get to keep it even if they are subsequently exposed as charlatans (think Jodee Rich and Brad Keeling). In these circumstances, the self-correcting properties of the system break down.