There's obviously ghostwriters and ghostwriters. Some ghostwriters are acknowledged by name (eg in various autobiographies, including Hilary Clinton's, but also in acknowledgments of biomedical journal articles). What these ghostwriters basically do is to grab existing drafts or manuscripts fragments and draft them into a polished whole, but without adding contents of their own. This, arguably is an above-board type activity, provide due credit is given.
Then there's other ghostwriters, such as authors who write whole biomedical journal articles for pharmaceutical companies where at a later stage other authors' (usually senior professors) names are added. This is clearly a fraudulent activity, because the supposed authors in question had no hand in conceptualizing, and drafting the research paper in question. There have been quite some occasions where they didn't even have a hand in the research that was reported. This clearly is unethical, because they made false representations about their research activity in the process. They made their readers believe that they undertook the research in question, and that the paper published under their name was truly theirs.
Equally as bad is the ever-growing industry of for-hire essay and thesis writers that floods university campuses with its advertisements offering to write student seminar papers and theses (even PhD theses!) for a fee. There is plenty of evidence that this industry is significant in size, and that the fraud that is being undertaken here is undertaken by many students at all levels of their studies. Here and here are examples of how this works from the perspective of people paid to write all these fake essays and theses.
All this stuff is pretty bad news, not only because we graduate students unable to write their own contents, but also because these students and we as degree granting institutions make false representations about the then graduates' competencies. The former, of course, make these false representations knowingly. They're fraudsters. Universities, by virtue of awarding degrees make false representations on some occasions, not knowing of course, how many of our graduates are serial cheats. In fact, it seems to be the case that we as academics have remarkably few tool available to us that would permit us to identify customers of paper mills.
It's all somewhat frustrating. I can't think of any efficient means to actually deal with this problem.
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