For the most part, scientists publish in the highest prestige journal possible, because that counts the most toward tenure/ pay raises/ grant application chances; the most prestigous journals are -- for historical reasons -- still closed since they are profit centers for big for-profit publishing houses like Wiley.
On the other hand, all the scientists I know wish they could give their papers away for free because it builds their reputation to have people use and cite them, even undergrads at state colleges that can't afford the bigger database subscriptions.
Except for textbooks, scholars almost never make royalties, so the profit incentive isn't what you might think. A scholar makes more money by getting raises from the university, speaking and consulting fees, and publishing undergrad textbooks (sometimes). All of these are increased if their is a wider dissemination of their work.
Finally, .... in the US, almost all research is funded by taxpayers, directly or indirectly, it's just NIH funded stuff that must be free.
Finally, finally .... if it weren't for the fact that the prestigious journals are a ticket to tenure and promotion, there would be no reason to publish anywhere except for Arxiv: so called "peer review", to be honest, is a broken system...
Peer review happens the following way: editor gets manuscript, if it passes first cut (it's not obviously crazy) sends to three elder scholars in the (hopefully) appropriate subfield, they send it back after about 3 months with snarky comments based on cutting edge work their advisors did done 10-20 years previous, rinse repeat In the social sciences, it takes about 2 years from submission to paper publication.
In the pre-internet days, peer review like this prevented some bullshit from wasting the relatively scarce resources used by paper / USPS distribution and storage. Today it is just goofy, and only serves as a weird sort of evaluation procedure of scholars who rack up "scholarship points" just like some weird game of monopoly.
What about all the crap that gets "published" electronically, you ask? Almost by definition a "subfield" is a collection of people able to evaluate each other's work; if everybody in a subfield gets emails when a new paper is available, they ALL evaluate it via the internet (chat/ email/ etc), and they are all peers, and we see the old school scholarly distribution system to be parasitic ...
.... except there is no other way to rack up "scholarship points", so people continue to submit to the old school journals with their crusty old reviewers and their bullshit.
There's some truth to what you say, but I think it's a little over-cynical. I know the biology/chemistry world so that's all I can speak on. In bio/chem the peer review system has flaws, but it's largely effective, IMHO. I've never seen a paper take longer than 6 months from submission to publication (I've published 22 papers) and the majority take ~3 months. There are bad reviewers out there that are unscrupulous, lazy, or incompetent... but there are also plenty of good ones and a good editor can tell them apart and adjudicate appropriately.
As to the purpose of peer review and whether it's still needed: Biology/chemistry is huge and there are probably 100-200 journals that each publish ~50 papers/month that are potentially relevant to my work. I skim them all (and use e-mail alerts to notify me of anything especially relevant) but I certainly don't have time to read them all with sufficient depth to be critical. As such, I rely on editors and reviewers to pre-screen papers and only let the highest quality research into the most-prestigious journals. The system is, of course, flawed in many ways... but, if nothing else, the competitive-ness of the top-journals "keeps the riff-raff out". With the exception of articles that are directly relevant to me, I only take a close look at papers that appear in the top ~5 journals because most of the lower-tier journals are pretty boring. My behavior is pretty typical, from what I've seen in my field.
In a perfect world I'd have enough time to evaluate everything on it's own merit, but I don't (no-one does). But if a paper has made it into a good-to-great journal, that at least means that (a) an editor thought it was interesting and (b) three or four respected scientists read it carefully and thought it was pretty good. As you pointed out, there are lots of places where this system can err, but overall it does a pretty good job and serves my needs well. It's sort of like the point-system on HN: good comments sometimes get missed, and bad comments sometimes get up-voted... but overall it's a pretty effective way to help people separate the interesting from the banal or trivial.
Bio / Chem seems better than social sciences. That doesn't really surprise me, unfortunately, and is possibly due to the actual verifiability and lack of ideological baggage in hard sciences.
No, to paraphrase is to summarize or re-word [1]. I changed the meaning (from democracy to peer-review [2]). I'm not sure misquote was the best word-choice, but I definitely wasn't paraphrasing.
If you google "to paraphrase Winston Churchill", you hit the figure of speech that you've used. It's a pretty common turn of (para)phrase.
PS: Don't rely too much on dictionary.com, it's not the best. E.g. the New Oxford American Dictionary correctly gives the second meaning of "paraphrase: a rewording of something written or spoken by someone else".
On the other hand, all the scientists I know wish they could give their papers away for free because it builds their reputation to have people use and cite them, even undergrads at state colleges that can't afford the bigger database subscriptions.
Except for textbooks, scholars almost never make royalties, so the profit incentive isn't what you might think. A scholar makes more money by getting raises from the university, speaking and consulting fees, and publishing undergrad textbooks (sometimes). All of these are increased if their is a wider dissemination of their work.
Finally, .... in the US, almost all research is funded by taxpayers, directly or indirectly, it's just NIH funded stuff that must be free.
Finally, finally .... if it weren't for the fact that the prestigious journals are a ticket to tenure and promotion, there would be no reason to publish anywhere except for Arxiv: so called "peer review", to be honest, is a broken system...