Digital Nudging: Data, Devices & Social Control

Reposted with permission from Wrench in the Gears.

Digital exhaust, virtual selves

…“Choice architects” create these systems and weave them into public policy. Through strategic application of “nudges,” citizens,  otherwise “irrational actors” in the market, can be guided to conform to economists’ expectations. Through nudges, human behaviors are redirected to fit mathematical equations and forecasts….

The way we live our lives generates enormous amounts of data. Keystrokes; online payments; photos with embedded meta-data; cell tower pings; fit bits; education management apps; search histories; avatars; social media posts all contribute to a cloud of digital exhaust that threatens to engulf us. Our world is being increasingly data-fied as smart phones mediate our daily activities, and Internet of Things (IoT) sensors become integrated into our homes and public spaces.

In the coming decade we’re going to have to navigate environments defined by ubiquitous computing and surveillance. Virtual and real worlds will meld in unsettling ways. The threat of state repression will intensify, especially for black and brown people, immigrants, refugees, the poor, and dissidents. As the former CIO of the City of Philadelphia Charles Brennan noted at the end of an October 22, 2017 meeting, the future of policing will encompass predictive analytics, facial recognition software, and drone surveillance.

With UPenn’s GRASP lab currently managing a $27 million contract with the US Army Research Lab to develop distributed intelligence, autonomous weapons, it’s not too soon to be thinking about what comes next. To get a feel for where we could be headed, the write up, “Singapore, City of Sensors” describes what it’s like to live in a “smart nation”  where EA3 devices track “Everyone, Everywhere, Everything, All The Time.”

Bits and bytes of data build up like passes from a 3-D printer; and as the data is aggregated, our digital doppelgangers emerge. Of course they’re merely shadows of our true, authentic selves. They magnify certain aspects of our personalities while suppressing others. The data of our online counterparts can be incorrect or incomplete, yet even with all those flaws our online profiles and reputations have begun to profoundly influence our offline lives.

As Eric Schmidt of Alphabet (Google’s parent company) says: data is the new oil, so valuable nation states will fight over it. From Cambridge Analytica to Cornell-Technion’s Small Data Lab to Wharton’s Behavior Change for Good program, social scientists are teaming up with venture capital, government agencies, and NGOs to devise new and intrusive ways to monitor people and extract profit from the management of our data-filled lives.

The relationship map below (click here for the interactive version) features individuals and organizations associated with the Small Data Lab, a program of Cornell-Technion based on Roosevelt Island in New York City. This research and development program is backed by influential impact investors and technology companies, including Google. If you know your way around social impact bonds, you’ll see quite a few familiar names: Goldman Sachs, Bloomberg Philanthropies and Atlantic Philanthropies. The aim is to come up with sophisticated ways to analyze digital exhaust and devise technological “solutions” that pressure individuals to conform to neoliberal economic conditions. The technological underpinnings of these app-ified “solutions” enable the capture of “impact metrics” that will fuel the growing social investment sector.

Cornell-Technion also aims to grow the STEM/cyber-security human capital pipeline, having recently accepted at $50 million gift from Tata Consulting, one of India’s most highly-capitalized IT companies, to build an innovation center on their campus. The program plans to do outreach into New York City schools to promote skill development in AI and human-computer interaction.

PTB Ventures, Project Trillion Billion, is one example of a company positioning itself for this new market. A financial backer of Learning Machine, spun out of the MIT Media Lab and specializing in Blockchain education credentials, PTB has also invested in Callsign (digital identity authentication), Element (biometrics), and DISC Holdings (digital payments and credit on blockchain). Their website states the company anticipates a future where trillions of devices will be connected to billions of humans and create trillions of dollars in economic value. These investors hope to use connected devices and sensors to mine the lives of the global poor and dispossessed for the economic benefit of the social impact and fin-tech sectors.

Proposals for online platforms are beginning to emerge that aim to combine decentralized identifiers (DIDs used to create self-sovereign digital identities), e-government transactions, and online payment systems (including public welfare benefits) with “digital nudges” grounded in behavioral economics. See the screenshot taken from the Illinois Blockchain Task Force’s January 2018 report. It shows a desire to digitally incentivize healthy eating purchases for people receiving SNAP benefits.

Behavioral economics is the study of how psychological, cognitive, emotional, social, and cultural factors influence the economic choices a person makes. It challenges the idea of homo economicus, that people maintain stable preferences and consistently make self-interested choices in relation to market forces. The field was popularized in the United States by Nobel-prize winning psychologist Daniel Kaheneman. University of Chicago economist Richard Thaler built upon this work. Thaler won a Nobel Prize in Economics for his research last year.

Thaler worked closely with Cass Sunstein, who headed Obama’s Office of Information and Regulatory Affairs. In 2008, they co-wrote Nudge, a book espousing “libertarian paternalism.” People make “choices,” but systems can be designed and implemented to encourage a preferred “choice,” generally one that prioritizes long-term cost-savings. “Choice architects” create these systems and weave them into public policy. Through strategic application of “nudges,” citizens,  otherwise “irrational actors” in the market, can be guided to conform to economists’ expectations. Through nudges, human behaviors are redirected to fit mathematical equations and forecasts. David Johnson’s 2016 New Republic article Twilight of the Nudges, provides useful background on this technique and the ethical implications of applying nudges to public policy.

Sunstein Obama

The first “nudge unit” was established in the United Kingdom in 2010 as the Behavioural Insights Team (BIT). It operated as a cabinet office for several years before reinventing itself as a global consultancy in 2014. BIT is now owned in equal parts by staff, the UK government and NESTA, a social policy innovation / impact investing foundation funded with proceeds from the UK lottery system. Thaler is on their Academic Advisory Team. From 2015 to 2018 BIT had a $42 million contract with Bloomberg Philanthropies to support development of their “What Works Cities” initiative in the United States. Results for America, the organization that co-hosted the $100 Million “Pay for Success” celebration in Washington, DC last month, currently manages the What Works Cities program on behalf of Bloomberg Philanthropies.

Ideas42 has also been very active at the intersection of social science, behavioral economics and impact investing strategies. It was founded in 2008 as a program of Harvard University with support from scholars and experts at MIT, Princeton, the International Finance Commission (IFC), and the Brookings Institution. Focus areas include education, healthcare and financial inclusion. Numerous mega-philanthropies that are actively implementing the Ed Reform 2.0 agenda have partnered with the organization: Gates, MacArthur, Arnold, Lumina, HP, and Dell. Other partners are involved in deployment of global aid: USAID, the World Bank, the International Rescue Committee (see my previous post re BIT and IRC involvement with Syrian refugee children), and the UN Environment Programme. There are representatives of global finance including Citi Foundation and American Express; insurance companies, MetLife and the Association of British Insurers; and impact investors focused health and wellness, the Robert Woods Johnson and Kellogg Foundations.

Over one hundred experts are allied with this program, including Angela Duckworth and Katherine Milkman of the University of Pennsylvania. They created the ninety-second video “Making Behavior Change Stick” as part of their application to the MacArthur Foundation’s $100 Million and Change challenge. While the proposal was not a finalist, Duckworth and Milkman’s research continues to move forward with private support, housed within the Wharton Business School. Their first $1 million came from the Chan Zuckerberg Initiative (founded with Facebook stock), that interestingly enough is also currently working with the Philadelphia District Attorney’s office (Larry Krasner) on criminal justice “reform.” More opportunities for our technological overlords to encourage “good” decision making while completely disregarding “broken on purpose” social programs, I suppose.

Take note of the partners identified in Duckworth and Milkman’s MacArthur proposal:

Duckworth and Milkman’s premise is that technology can be used to encourage people to make “good choices,” which the begs the question, “Good for whom?” I suspect what will make a certain choice “good” is the likelihood it will enrich social impact investors while furthering the austerity that drives reduction in public services, increases outsourcing, and fosters the creation of public-private partnerships. The desires of those needing to access services will not be factored into the computer code that sets up friction points and establishes preferred outcomes. Citizens are simply inert, raw material to be molded, for profit, by inhumane digital systems. In the nudge model, economic systems that create mass poverty are not addressed. Instead, the impetus is placed upon the individual to better navigate existing systems steeped in structural racism.

As you may remember from my previous post, Duckworth has been working closely with human capital and labor economist James (7-13% ROI on Early Childhood Education Investments) Heckman. She is one of five leaders of the “Identity and Personality” division of his Human Capital and Economic Opportunity Working Group, based out of the University of Chicago and funded by the Institute for New Economic Thinking (INET). In May 2017, Duckworth brought an interdisciplinary group of experts in behavior change to the University of Pennsylvania for two-day conference sponsored by the Center for Economics of Human Development. Fourteen presentations, including  a “Fireside Chat With Daniel Kahneman” were recorded and are viewable here.

The prior year, Philadelphia became the first city in the US with its own municipal level “nudge unit.” Though Duckworth does not appear to be directly involved, Evan Nesterak, a researcher in Duckworth’s Characterlab, co-founded The Philadelphia Behavioral Science Initiative (PBSI) with Swarthmore Professor Syon Bhanot. Bhanot is involved with theSwarthmore Professor Syon Bhanot, as well. According to a 2018 report on PBSI published by Results for America, the initiative’s other academic partners include: the University of Pennsylvania, Drexel, Temple, St. Joseph’s, Yale, Columbia and Princeton. The report, viewable here, was funded by the John and Laura Arnold Foundation. John Arnold, a hedge-fund billionaire who made his fortune at Enron, has since moved on to education reform, gutting public pensions, and promoting pay for success “evidence-based” finance.

“Innovative” programs are being incubated within the planning and policy departments of many US cities now via fellowships and loaner “experts” who plan to advance an “evidence-based,” “big-data,” “platform-government” agenda. Anjali Chainani, Mayor Kenney’s Policy Director and Manager of the city’s GovLab, has gone through the Results for America Local Government Fellow program.  The Philadelphia Behavioral Science Initiative is an outgrowth of the City Accelerator and GovLabPHL, which she manages. While the initial program areas are strategically uncontroversial (it would be difficult to speak against seniors taking advantage of discounted water bills or public bike sharing), it seems likely an “evidence-based” campaign of nudges, once normalized, will be extended into more lucrative and ethically-dubious areas like policing, health care delivery, family services, and behavioral health.

Below is an extensive relationship map that shows interconnections between data-driven public policy / privatization programs originating out of the Harvard Kennedy School of Government, the global financial interests represented by the members of Citi Group’s “Living Cities” program, and how those interface with government operations in the city of Philadelphia. Many of these programs were put into place by our former mayor, Michael Nutter, who went on to become a senior fellow for Bloomberg’s “What Works Cities” program. His wife Lisa is now a principal with Sidecar Social Finance, an impact investing firm.

Click here for the interactive version.

Feeding this machine is our gradual yet irresistible slide into a financial world of digital economic transactions. My next post will focus on that. Please take some time to explore the maps above. They are complex but convey a great deal about the forces at work. Sometimes a nudge is actually a shove. I think our city is being positioned for some serious shoving.

The footage above is from the violent July 5, 2018 police intervention against peaceful OccupyICEPHL protestors at 8th and Cherry Streets outside Philadelphia’s ICE detention center.

-Alison McDowell

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Test Scores and Child Hunger: The Cold Calculus of Pay for Success Predators

Reposted with permission from Wrench in the Gears.

Food for Children

Through outsourcing and the imposition of hard metrics, “what works” lobbyists intend to push the poor, and those teetering on the brink of poverty, into an abyss of impact-driven digital slavery. They’ll pull the non-profits in, along with their clients, since “what works” government hinges on their complicity. Moving forward, non-profits will increasingly run outsourced programs and will be required to deliver the data demanded by outcomes-based contracts. Services will be reengineered to fit the constraints of data dashboards-human life reduced to numbers to meet the demands of global capital.

When I give food to the poor they call me a saint. When I ask why the poor have no food, they call me a Communist. Dom Helder Camara, Brazilian Catholic archbishop and important figure in liberation theology (1909-1999)

Wrench in the Gears is primarily a blog about education, and the dehumanizing influence technology wields over classroom instruction. In doing this work, I’ve come to understand that, at its root, the shift to digital “education” is about aggregating vast datasets on children than can be mined for profit in the impact-investing sector. This tactic is not limited to education. In fact, it threatens to engulf ALL public services.

Through outsourcing and the imposition of hard metrics, “what works” lobbyists intend to push the poor, and those teetering on the brink of poverty, into an abyss of impact-driven digital slavery. They’ll pull the non-profits in, along with their clients, since “what works” government hinges on their complicity. Moving forward, non-profits will increasingly run outsourced programs and will be required to deliver the data demanded by outcomes-based contracts. Services will be reengineered to fit the constraints of data dashboards-human life reduced to numbers to meet the demands of global capital.

The Bipartisan Budget Act of 2018, signed into law this February, created a new $100 million Pay for Success Fund at the US Department of the Treasury. Merchant banking firms like Ridge-Lane have marshaled teams of advisors to get in on the action. Financiers and tech billionaires are grooming candidates across the country, hoping their chosen ones will usher in a wave of Pay for Success initiatives that will rival the stock market.

At its core, the new theory of “economic thinking” promoted by INET is riddled with rot. While George Soros, James Heckman, and Robert Dugger attempt to cast social impact investment programs as socially conscious and “progressive,” the public deserves to know the truth. That truth is that these predators will NOT feed hungry children UNLESS they can profit from it.

Feeding people through mutual aid has always been a radical act. The Black Panther Party knew it, which is why those in power considered their free breakfast program so dangerous. In January a dozen activists associated with Break the Ban were issued criminal citations for feeding the homeless in a public park in El Cajon, CA. In the aftermath of Hurricane Maria, mutual aid became the backbone of recovery efforts in Puerto Rico. Food is central to the human experience. Food insecurity drives poverty.

After reading the exchange below it appears impact investors have not YET found a way to track cost-offsets for feeding people, but they are trying. It is likely the tool they need will come in the form of digital identity systems linked to public assistance benefits. The Illinois Blockchain Taskforce is already envisioning ways they can use blockchain technology to track and manage a person’s food choices. See the screenshot below taken from the Illinois Blockchain and Distributed Ledger Taskforce Final Report to the General Assembly, January 31, 2018

The built-in incentive to make a “healthy choice” is part of a larger shift that will combine digital identity and payment systems with choice architecture to control the behaviors of all who utilize public benefits. We definitely need a Plan B lined up before THAT program comes online.

Below is an exchange shared during the Q&A portion of a Federal Reserve-sponsored panel presented in January at an impact investor gathering in Salt Lake City, Utah. Janis Dubno moderated the panel. She works with the Sorenson Center, served as a Pay for Success Fellow at the US Department of Education in the lead up to the passage of ESSA and designed the Salt Lake City pre-k social impact bond. Click here for interactive map.

Participants discussed Pay for Success initiatives involving justice-involved youth. The conversation between Gina Cornia of Utahans Against Hunger and the promoters of social impact investing lays bare the truth of “innovative” finance. Far from being a silver-bullet for poverty, Pay for Success doubles down on inhumane, neoliberal practices that flow from a culture of white supremacy.

The upshot is if they can’t figure out a way to predict and track a future cost savings, they won’t pursue it. What is so very sad is that instead of confronting the panel about the inhumanity built into this “innovative” finance system, Cornia attempts to figure out a way her non-profit can work WITHIN the oppressive structure…perhaps as a strategy rather than a stand-alone outcomes-based contract? It sickened me to listen to adults saying they may be able to fund a child’s breakfast if they can link the food to a rise in third grade test scores. This is an abomination that cannot be tolerated. The machine we are confronting is not just eviscerating education; it’s so much bigger than that. The stakes are so high. Now is the time to create a Plan B. Who is doing that work in YOUR community and how can you support them?

Watch the video clip here.

(Gina Cornia, Utahans Against Hunger) Hi, my name is Gina Cornia. I work for a policy advocacy agency, Utahans against hunger. And in my experience just in talking about a lot of these issues, nutrition is frequently just not even mentioned. We talk about housing. We talk about healthcare. We talk about a lot of things like that, but food insecurity and hunger is not, I mean hardly ever, mentioned. So to what extent are your projects looking at food insecurity both on the family, on the family level, and on the kids who are going into juvenile justice? Thank you.

(Caroline Ross, Sorenson Impact) Sure, I’ll go ahead and speak to that. I think it’s such an important issue, and in a couple of our projects we’re looking at actually integrating food security components. For instance in our homelessness projects integrating a piece where at least there’s food, sort of as a consideration, or provided as part of the program. As far as outcomes-based payments, we haven’t really thought to that level. Again, I’m curious if folks, anybody else on the panel has thoughts?

(Ian Galloway, San Francisco Federal Reserve) I’m so glad you asked that question, because it’s such a great example of what I kind of consider to be these sorts of nested outcomes. And there’s a lot, always you know, a lot of these determinants of success, and some of those more narrow determinants are difficult to fund with a performance-based contract or an outcomes-based funding stream. There are a lot of reasons for that; part of it has to do with the fact that it’s difficult to find savings in the system.

I know I just went on a diatribe about how we shouldn’t use that as a basis for establishing value, but the truth is a lot of people do. And you know improving nutrition; it’s hard to follow the money if you can’t follow the money to an agency that saves when you increase nutrition, then it’s difficult to re-route that money to pay for projects that address the underlying needs. So that’s one of the big reasons that we don’t do this. The larger challenge is that it’s one of many component pieces to a larger anti-poverty strategy that tends to not get included as much as I think we all wish it were.

I say that coming from, I believe and I don’t think I’m making this up-I think Oregon is the most food insecure state in the country-which is kind of nutty, because it’s an agricultural state and if it’s no longer number one it’s certainly up there. So it’s an issue that is very personal to me, working in the state of Oregon. But I have not seen any examples of using a Pay for Success contract to address food insecurity and nutrition, yet.

(Gina Cornia) I don’t, I guess I’m not suggesting it as a Pay for Success project, but using access to nutrition to improve your outcomes in Pay for Success.

(Ian Galloway) So just, yeah, I think you’re spot on. I think that this is one of the beauties of paying for outcomes instead of programs. If your outcome that you’re being paid for, for example just to sort of set up the straw man, is improving third-grade reading scores. Well if kids are not adequately, you know, being fed at home, and their nutrition is poor…good luck, right? So that is a really important building block to academic success, but what we need to do is recognize that the outcome that we want is an education outcome, but the intervention is a food intervention. And that’s one of the things that Pay for Success and Outcomes-based funding hopefully makes a little bit easier, but we haven’t seen it yet.

(Gina Cornia) But I would encourage you that that should be the first conversation you’re having as you look at Pay for Success projects, especially in education. Are kids getting adequate nutrition? Do they get breakfast in the classroom? Are their families eligible for SNAP? Because, you know hungry kids can’t learn, and if that’s not the first thing you’re talking about then I don’t think the programs will be successful.

-Alison McDowell