Open access to science helps us all

The Wellcome Trust has been praised for its decision to compel research it funds to be freely availa

Every year, governments and charities invest billions of pounds supporting scientific research with the aim of advancing discovery and its application for economic and societal benefit. The primary mechanism through which scientists disseminate the results of this research is through publication in peer-reviewed journals, with access to this content typically being managed though library subscriptions. However, in recent years there has been a growing recognition that the traditional subscription-based access models are not serving the best interests of the research community, and a growing movement to support open-access publishing – in which research papers are freely available to all at the point of use. To cover publication costs, open access journals typically levy an up-front payment, which is usually met by the research funder.

As a global charitable foundation dedicated to achieving extraordinary improvements in human and animal health, the Wellcome Trust is dedicated to ensuring that the outputs of the research we fund are made widely available in a manner that maximises the resulting health benefit.

Our support for open access publishing was a natural progression of our involvement in the international Human Genome Project during the 1990s and early 2000s, where the decision to place the human genetic sequence in the public domain immediately as it was generated helped to ensure this key research resource could be used by scientists the world over. A recent study estimated that a $3.8 billion investment in the project had achieved an economic impact worth $796 billion, a clear indication of the power of open access to scientific information. 

SME’s also benefit from unrestricted access to research findings. A study published in Nature Biotechnology laments the poor access biotech companies have to the published literature. In one case, a company suffered a six-month setback to a drug development programme because a paper was missed in a subscription journal. Other research (pdf) has shown how companies could benefit from reduced costs and shortened development cycles by having greater access to UK research outputs, which, in turn would generate around £100m worth of economic activity for the UK economy.

Since 2005, the Wellcome Trust has required that research papers that arise through the research we support be made freely available as soon as possible, and in any event within six months of publication. We view the cost of dissemination as an integral part of funding research, and provide dedicated funds to the institutions we support for the payment of author fees associated with open access publication.

Since we first established our policy, there have been many encouraging developments. Many funders now explicitly require published outputs to be made freely available. We have seen the rapid growth of fully open access publishers, including the Public Library of Science and Biomed Central.  And, many existing publishers now offer open access options alongside subscriptions.

But whilst the move towards open access is gathering pace, there is still a long way to go. At present, only around 55 per cent of research papers we support comply with our policy. For this reason, we have recently decided to strengthen the manner in which we enforce our policy.  We will also ensure that where we pay an open access fee, the content is freely available for all types of re-use (including commercial re-use). This is in line with a recent draft policy published by the UK Research Councils, which we strongly support.

We are also working in partnership with the Howard Hughes Medical Institute and the Max Planck Society to develop eLife, a new top-tier and fully open access online-only journal, which we will launch later this year. eLife will make ground-breaking research freely available to all, and develop cutting–edge approaches and tools to enhance accessibility and use of on-line, open access content. We hope that in doing so it will spark change in the wider publishing sector and accelerate the transition towards a world where open access is the norm.

We believe that this is a pivotal moment in the open access debate, and political will is growing in the UK and internationally. Here, the UK Government has highlighted (pdf) the potential of open data to stimulate innovation and economic growth. Access to research publications has been recognised as a key element in this, and the Finch Group, which was established by David Willets to look at ways to enhance access to published scientific information, will report in the Summer. Meanwhile, in the US, the failure of the Research Works Act – which sought to row back the current policy of the US National Institutes of Health to require that publicly-funded research articles be made freely available – demonstrated that the current course towards open access is now irreversible.

We all have a fundamental obligation to ensure that scientific research which is funded by taxpayers and through charitable funding delivers the greatest possible return to society, and open access publication is key to achieving this goal. We therefore call on all those involved in the supporting science and innovation to help make open access a reality.

J. Craig Venter smiles in front of a map of the human genome. The project was the impetus for Open Access. Credit: Getty

Dave Carr is a policy officer for the Wellcome Trust, and Robert Kiley is the head of digital services at the Wellcome Library

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We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?