Black Boxes, Student Data & Playing Moneyball for Education

black-Box_2

We’re rapidly entering a world of evidence-based decision making in public education. These decisions will be powered by vast amounts of data run through proprietary black boxes that parents will have no way of understanding. The approach is called Moneyball and the goal is to justify ration resources to students –while investors make a tidy profit.

One of the most difficult challenges I’ve had as a parent is convincing other parents that the endless collection of our kids’ data isn’t benign and technology isn’t inherently benevolent.

Big Data, Like Big Brother, Isn’t Your Friend

As adults, we’ve chosen to ignore this cold hard fact: that by using electronic devices, we are allowing ourselves to become a product. Von Shoshana Zuboff calls this evolution in big data mediated economics surveillance capitalism:

It’s now clear that this shift in the use of behavioral data was an historic turning point. Behavioral data that were once discarded or ignored were rediscovered as what I call behavioral surplus. Google’s dramatic success in “matching” ads to pages revealed the transformational value of this behavioral surplus as a means of generating revenue and ultimately turning investment into capital. Behavioral surplus was the game-changing zero-cost asset that could be diverted from service improvement toward a genuine market exchange. Key to this formula, however, is the fact that this new market exchange was not an exchange with users but rather with other companies who understood how to make money from bets on users’ future behavior. In this new context, users were no longer an end-in-themselves.  Instead they became a means to profits in  a new kind of marketplace in which users are neither buyers nor sellers nor products.  Users are the source of free raw material that feeds a new kind of manufacturing process.

As adults we’re vaguely aware that certain choices we make will impact our credit report. The inputs seem arbitrary and frankly ridiculous. Unless, there’s a problem, THEN, the unfairness of the system quickly comes into focus.

How your credit report is determined is an example of a black box. Inputs go in, something happens inside the box, and then your credit report comes out. What happens inside the box? Who knows? It’s a proprietary predictive model.

What sorts of random digital bits could impacts your credit report? Things like what operating system you use, if you do your browsing using a desktop or cellphone, even what you decided to use as your email address.

This excerpt is from New Study Shows You Can Predict Credit Rating from Your Online Tech Fingerprint.

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Blockchain, Self-Sovereign Identity, and Selling Off Humanity

Reposted with permission from Wrench in the Gears.

facial recognition
refugee iris scans

Digital currency payments validated with biometric information like iris scans have been prototyped using refugee populations over the past few years (see the featured image). While the technology that undergirds it is complex, programmers are developing accessible interfaces that make using digital currency as easy as opening an app and verifying a transaction, financial or otherwise, with a thumbprint or facial-recognition scan.

It’s time activists began to develop a working knowledge of Blockchain and self-sovereign digital identity, because these are the mechanisms that will drive the transition to IoT monitoring for the purposes of Pay for Success deal evaluation. I created a slide share about Blockchain as part of a “Smart Cities” post I wrote last year, which can be accessed here if it helps to have visuals.

 

Blockchain Slideshare

 

The technology became public in 2008 when Santoshi Nakamoto published the whitepaper “Bitcoin: A Peer to Peer Electronic Cash System.” No one knows who Nakamoto actually is. Over the past decade Bitcoin digital currency has generated significant buzz, yet many believe Blockchain will be even more transformative, as big as or bigger than the rise of the Internet.

MIT is heavily involved in Blockchain research and development through its Digital Currency Initiative, housed within the MIT Media Lab. The program is led by Neha Nerula, formerly of Google who holds a PhD from MIT’s Computer Science and Artificial Intelligence Laboratory (CSAIL). Nerula served on the World Economic Forum’s Global Future Council on Blockchain from 2016-2017. Its faculty advisor, Simon Johnson, co-founded the Sloan School’s Global Entrepreneurship Lab and worked as chief economist for the International Monetary fund.

In an April 2018 article, “In Blockchain We Trust,” Michael Casey, global economics professor, goes into detail regarding the use of Blockchain to create “value” in virtual worlds by securing ownership of digital assets. As we kill off the planet and begin spending more and more time in online environments, there’s cold comfort knowing the forces of global monopoly capital are rapidly colonizing digital worlds, too.

Blockchain is the structure that underpins crypto-currencies like Bitcoin, but it’s much more than that. In its simplest terms, it’s a ledger that keeps track of transactions, all kinds of transactions that may or may not have a financial component. Unlike a dusty accounting ledger or its modern equivalent, something like Quick Books, data stored on Blockchain is distributed. This means multiple exact copies of the same encrypted data live on peer-to-peer networked computers, which supposedly makes it more secure. If one node goes down the information is not lost. It is portrayed as the ultimate “permanent record.”

Data stored on Blockchain is “verified” by computers that use a consensus process, competing to solve cryptographic puzzles in exchange for Bitcoin payments. This cryptographic authentication injects “trust” into transactions, enabling security without the need of a third party to ensure everyone is on the up and up. Once data is locked into Blockchain, promoters of the technology say it is immutable, unchangeable. Although, as with everything coded, there are still vulnerabilities and hacks as discussed in this MIT Technology Review article “How secure is blockchain really?”

It may be some indication of the level of actual “trust” developers have in blockchain that the Chamber of Digital Commerce and Coin Center created the Blockchain Alliance in the fall of 2015 to “pro-actively engage” with regulatory and law enforcement agencies. In the United States, government partners include: DEA, DHS, DOJ, FBI, US Marshal Service, US Secret Service, ICE/HSI, CBP, IRS-Criminal Investigation, FDA, US Postal Inspection, Commidity and Futures Trading Commission, SEC, FTC, FDIC, as well Attorney General’s Offices in California, Texas, New York, and Ulster County. Seems they have some rather powerful partners.

 

 

 

Some Blockchains are public, others are private. Data stored on private chains can be made accessible using a combination of matched public and private “keys.” A public key is used to verify and encrypt data. It is public and can be known by anyone. A private key decrypts data that has been encrypted with its paired public key. These keys consist of extremely long sets of characters, which can be shortened to a public key fingerprint or associated with biometric information via a biocryptic process.

Digital currency payments validated with biometric information like iris scans have been prototyped using refugee populations over the past few years (see the featured image). While the technology that undergirds it is complex, programmers are developing accessible interfaces that make using digital currency as easy as opening an app and verifying a transaction, financial or otherwise, with a thumbprint or facial-recognition scan.

Beyond their capacity to hold tokenized digital currencies, e-wallets are being used to hold all sorts of other information. They are touted as an effective means to manage the continuous flows of activity, money, and data that surround us. In the fall of 2016, the state of Illinois; home to many Pay for Success players including: James Heckman, JB Pritzker, Rahm Emmanuel, the MacArthur Foundation, and the Chicago Mercantile Exchange (trading financial and commodity derivatives), charged a Blockchain Taskforce with examining ways to use the technology to promote economic development in the state and “improve record keeping.” Their final report, issued in January, is available here. Below is a map of the players involved. Click here for the interactive version.

Included in the report is an info-graphic I have shared repeatedly. It depicts public welfare food benefits being put on Blockchain with “healthy” eating nudges built into the mechanics. Memorize this. Internalize it. This how they will deploy computer code to control the growing masses of the poor. See Carolyn Leith’s great post “Do you believe Universal Basic Income will save society? Think again.” Putting “friction” in the system is not limited to SNAP benefits. Similarly coded nudges could just as easily be inserted into “choice” options around education savings accounts, healthcare access, and housing vouchers. How about Sesame Credit? It’s not too much of a stretch to imagine citizen scoring being embedded into these systems as well.

In the fall of 2017, Illinois announced a partnership with Evernym, a Utah-based company that develops digital identity solutions. They plan to put birth certificates on Blockchain. Increasing attention is being paid to the field of self-sovereign identity. The premise, if you go along with it, is that you no longer need a centralized authority to recognize your identity. A person can simply build up a digital identity through recorded transactions stored on Blockchain. Un-housed people in major cities are being scooped up as test subjects.

Austin has undertaken such a program with financial support from Bloomberg “What Works Cities” Philanthropies. This population is also one that requires significant support, making them prime candidates for Pay for Success interventions. Of course the impact of the interventions must be able to be tracked and measured, because this is an investment market after all. Self-sovereign identity makes to possible to aggregate all of that data, streamlining deal assessment. Fummi is one app in development to support such programs.

Many “smart” cities are establishing municipal ID programs, touted as a “solution” for people unable to obtain state-issued identification. It sounds good, but I can’t help but wonder if the plan is to convert these programs to self-sovereign identity apps on Blockchain in the not too distant future. Oakland’s program links to a debit card, so there is precedent for tying these IDs into digital payment systems.

Last fall the city of Philadelphia issued a Request for Proposals for the development of a municipal ID program, though it appears to have since been cancelled. The RFP expressed a desire to incorporate tracking other public services, including library access and health records, onto the card. They also wanted to build in the ability to share data with private and non-profit partner organizations via magnetized strips. See screenshot below or read the full RFP here.

This link from the Worldwide Web Consortium discusses use of DIDs or Decentralized Identifiers as key element of this new form of identity management. Of course there are downsides to efficient identity systems. During a panel at the Advanced Digital Identity Summit last fall around  timestamp 26:00, Bitcoin entrepreneur Andreas Atonopolous, cautioned the audience that digital identity systems could pose risks, especially for populations living under authoritarian regimes where governments may use digital methods to control how people interact with society.

Antonopolous described conversations he’d had in places like Argentina where people expressed serious reservations about these systems, because their government had a history of throwing dissidents out of aircraft. If private keys are tied to biometric markers, it should be expected that people will at some point be compelled by authorities to open access to their data-using force to attain a face or fingerprint scan against someone’s will. Or even if brute force were not used, to withhold access to needed services, until the person has no other choice but to submit.

Other pilot programs underway in Illinois include land titling in Cook County, academic credentialing at the University of Illinois, logging green energy task credits, and state licensing for healthcare providers. That last one is interesting; a toe in the water, perhaps, to begin shifting Medicaid onto Blockchain?

The day after I wrote “Minding our Health: Digital Nudge Part Two,” I discovered a 2016 whitepaper by Institute for the Future (creator of “Learning is Earning” and edu-blocks) “A Blockchain Profile for Medicaid Applicants and Recipients.” The paper pitches the idea of creating Blockchain smart contracts to devise “smart” health profiles that would allow AI-mediated sale of healthcare insurance and IoT monitoring of prescriptions and patient compliance. Pretty overwhelming if you consider that IFTF also imagines a future where AI assistants are going to help people navigate their lifelong-learning/human capital management plans.

I have a nagging fear we’re looking at a future where Universal Basic Income stipends proffer subsistence, just enough to keep the masses alive and compel them to sell their data for the most modest luxuries, maybe a chocolate bar. Platforms are being developed right now that encourage the widespread sale of personal data for the purposes of AI development. Access to data is granted using pseudonymous protocols that permit it to be queried without the initiator of the query knowing the actual identity of the person whose data is involved. Proponents of big-data government really want us to believe it’s ok to allow our personal data to be poured into massive data lakes as long as it remains anonymized. Check out Ocean ProtocolEnigma, and datum. I’d love to hear what you think.

Personally, I think they’re aiming to use our digital exhaust to build HAL.

 

-Alison McDowell

Minding Our Health: The Nudge, Part Two

Reposted with permission from Wrench in the Gears.

Center for Health Incentives

The topic of the hearing was reducing healthcare expenditures on chronic illness, which they claimed would amount of hundreds of billions of dollars in “savings.” Given the amount of money on the table, it seems clear this sector is ripe for outsourced, outcomes-based contracts that will deploy emerging technologies like health care wearables. Six measures of good health were identified during testimony: blood pressure, cholesterol level, body mass index, blood sugar, smoking status and either the ability to meet the physical requirements of your job (or on this one the Cleveland Clinic person said unmanaged stress.)

This piece expands upon my prior post about digital nudging and behavioral economics. Disruption in the healthcare industry mirrors the ed-tech takeover that is well underway in public education. If you explore the webpage for Catalyst, the innovation PR outlet for the New England Journal of Medicine (remember, social impact policy makers and many investors are based in Boston), you’ll notice the language being used to direct health care providers towards big-data, tech-centered solutions is eerily similar to the language being used on educators and school administrators.

The FCC’s “Connecting America: The National Broadband Plan” of 2010 outlined seven “national purposes” for broadband expansion. Healthcare and education were the first two topics covered in that report. Both chapters focus on “unlocking the value of data.” Who will the big winners be as we further digitize our lives? My assessment is the telecommunications industry and national security/police state will come out on top. Locally, Comcast and Verizon are key players with interests in both sectors.

Education and healthcare fall under the purview of Lamar Alexander’s Senate HELP (health, education, labor and pensions) Committee, so the similarities in tactics shouldn’t come as a surprise. In researching the $100 million federal Social Impact Partnerships Pay for Results Act (SIPPRA) launch I attended in Washington, DC last month, I noticed one of the Republican Senators who presented, Todd Young of Indiana, had attended the Booth School of Business MBA program at the University of Chicago. Recent Nobel Prize winner in behavioral economics Richard Thaler teaches there, and I was curious to see if Thaler’s thinking had influenced Young. Interactive version of Young’s map here.

I located C-SPAN coverage of a Senate hearing on healthy lifestyle choices, which Young participated in on October 19, 2017 (transcript follows). Lamar Alexander and ranking member Patty Murray, who inserted Pay for Success provisions into ESSA, chaired that hearing. Behavioral economics was discussed extensively. Young’s remarks start at timestamp 34:00.

https://www.c-span.org/video/standalone/?435978-1/senate-panel-explores-healthy-lifestyle-choices

The topic of the hearing was reducing healthcare expenditures on chronic illness, which they claimed would amount of hundreds of billions of dollars in “savings.” Given the amount of money on the table, it seems clear this sector is ripe for outsourced, outcomes-based contracts that will deploy emerging technologies like health care wearables. Six measures of good health were identified during testimony: blood pressure, cholesterol level, body mass index, blood sugar, smoking status and either the ability to meet the physical requirements of your job (or on this one the Cleveland Clinic person said unmanaged stress.)

The claim was that if an insured person met four of the six measures, saw a doctor regularly, and had their vaccinations up to date they would avoid chronic illness 80% of the time. Of course the conversation was entirely structured around individual “choice” rather than economic and racial systems that make it difficult for people to maintain a healthy lifestyle.

This neoliberal approach presumes people have free time for regular exercise, not considering they may be cobbling together several gigs to make ends meet. It presumes the availability of healthy food choices, when many black and brown communities are food deserts with limited access to fresh produce. It presumes the stress in people’s lives can be managed through medicalized interventions and does not address root causes of stress in communities steeped in trauma. It presumes ready access to a primary care physician in one’s community.

It is a gross simplification to push responsibility for chronic health conditions solely onto the individual, giving a free pass to social systems designed to harm large subsets of our communities. By adopting a data-driven approach to health outcomes, as would seem to be the case with the above six measures (check a box health), the federal government and health care systems appear to be setting health care consumers up to become vehicles for data generation in ways that are very much like what is happening to public education students forced to access instruction via digital devices. Imagine standards-based grading, but with health measures.

The people who provided testimony at the October 19 hearing included Steve Byrd, former CEO of Safeway, now at Byrd Health; Michael Roizen of the Cleveland Clinic; David Asch Director of the Wharton School’s Center for Health Care Innovation; and Jennifer Mathis of the Baselon Center for Mental Health Law and representing the Consortium for Citizens with Disabilities. Mathis was the only one who testified strongly on behalf of the rights of the insured to withhold personal information and was very concerned about the discriminatory nature of incentivized medical insurance programs, particular with regards to people with disabilities.

In his testimony, David Asch, director of the Center for Healthcare Innovation based in the University of Pennsylvania’s Wharton Business School, described effective designs for health incentive programs, noting that concerns about losing money were more effective from the insurer’s point of view that interest in receiving financial rewards. For that reason Asch said taking away money from someone should be considered before offering a reward. Asch also noted that effective programs included emotional engagement, frequent rewards (tweaked to people’s psychological foibles to they didn’t have to be too large), contests and social norming, including the use of public leader boards.

The date of the hearing is interesting, because right around the same time, public employees (including the teachers) of West Virginia were facing dramatic changes to their insurance plans. These changes included compulsory participation in Go365 an app-based health incentive program that imposed completion of intrusive surveys, wearing a fit bit (if you didn’t there was a $25 fee imposed each month), and meeting a certain step count per day. I include a transcription of testimony from one of these teachers, Brandon Wolford, given at this spring’s Labor Notes conference at the end of this post.

The incorporation of mHealth (mobile health) technologies is a key element of the healthcare disruption process. Increasingly, wearable technologies will transmit real-time data, surveilling the bodies of the insured. mHealth solutions are being built into healthcare protocols, so private investors will be able to track which treatments offer “high-value care.” The use of wearables and health apps also permits corporate health systems to insert digital “nudges” derived from calculated behavioral economic design, into the care provided, and monitor which patients comply, and which do not.

At the moment, the tech industry is working intently to integrate Blockchain technology and Internet of Things sensors like fit bits and health apps on smartphones. Many anticipate Blockchain will become a tool for securing IoT transmissions, enabling the creation of comprehensive and supposedly immutable health data logs, which could be key to mHealth expansion. Last summer the Medical Society of Delaware, a state that touts itself as a Blockchain innovator, announced a partnership with Symbiont, to develop healthcare records on Blockchain. Symbiont’s website claims it is the “market-leading smart contracts platform for institutional applications of Blockchain technology.” The company’s initial seed round of funding took place in 2014 with a second round raising an additional $15 million in May 2017 according to their Crunchbase profile.

The July/August 2018 issue of the Pennsylvania Gazette, the alumni magazine for the University of Pennsylvania, features Blockchain as its cover story, “Blockchain Fever.” The extensive article outlines use cases being considered for Blockchain deployment, including plans by a recent Wharton graduate to develop an application that would certify interactions between healthcare agencies and Medicare/Medicaid recipients for reimbursement. The University of Pennsylvania Health System is deep into innovative technologies. David Asch, director of Penn’s Center for Health Innovation, testified at the October 2017 hearing. The Penn Medicine integrated health system was created in 2001 by former UPenn president Judith Rodin in collaboration with Comcast Executive David Cohen. Rodin went on to head the Rockefeller Foundation, and in the years that followed the foundation spearheaded the creation of the Global Impact Investment Network. GIIN fostered growth of the social impact investing sector, at the same time healthcare began to transition away from a pay-for-service reimbursement towards a value-based model predicated on outcomes met.

Below is a relationship map showing the University of Pennsylvania’s involvement in “innovative” healthcare delivery, which I believe stems from Rodin and Cohen’s connections to Comcast. It is important to note that the Center for Health Innovations claims to have the first “nudge unit” embedded within a health system. Asch is an employee of Wharton, and Wharton is leading initiatives in people analytics, behavior change via tech, and Blockchain technologies. Interactive version of the map here.

New types of employer-based health insurance systems have started to emerge over the past six months. Based on this New York Times article, it seems employees of Amazon, JPMorgan and Berkshire Hathaway will have a front row seat as these technological manipulations unfold. Last fall Sidewalk Labs, the “smart cities” initiative of Alphabet (parent company of Google), announced an expansion into managed healthcare. City Block(read Blockchain) will tackle “urban health” and populations with “complex health needs.”

Reading between the lines, it appears Alphabet aims to use poor black and brown communities that have experienced generations of trauma as profit centers. Structural racism has created a massive build up of negative health outcomes over generations. Now, with innovative financial and technological infrastructures being rapidly put into place, these communities are highly vulnerable. Ever wonder why ACES (Adverse Childhood Experiences) has scores? I expect those numbers are about to be fed into predictive profiles guiding social investment impact metrics.

How convenient that the “smart city” solutions Sidewalk Labs is likely to promote will come with IoT sensors embedded in public spaces. How convenient that healthcare accelerators are developing emerging technologies to track patient compliance down to IoT enabled pill bottle caps; sensors that allow corporate and government interests to track a person’s actions with precision, while assessing their health metrics in excruciatingly profitable detail. Technology platforms are central to City Block’s healthcare program. Many services will take place online, including behavioral health interventions, with the aim of consolidating as much data as possible to build predictive profiles of individuals and facilitate the evaluation of impact investing deals.

Interesting aside, I have two friends who had emergency room visits at Jefferson Hospital this summer and were “seen” by doctors on a screen with an in-room facilitator wielding a camera for examination purposes. This is in a major East Coast city served by numerous research hospitals. Philadelphia is not Alaska. Where is that data going? Where were those doctors anyway?

As these surveillance technologies move full steam ahead, it would be wise for progressive voices invested in the “healthcare for all” conversation to begin considering strategies to address the serious ethical concerns surrounding wearable technologies, tele-health / tele-therapy, and value-based patient healthcare contracting. If guardrails are not put in place that guarantee humane delivery of care without data profiling, the medical establishment may very well be hijacked by global fin-tech interests.

As someone who values the essence of the platform put forward by Alexandria Ocasio Cortez, I worry supporters may not understand that several key elements of her platform have already been identified as growth sectors for Pay for Success. If public education, healthcare, housing and justice reform are channeled by global financial interests into outsourced-based contracts tied to Internet of Things tracking, we will end up in an even worse place than we are now. So, if you care about progressive causes, please, please get up to speed on these technological developments. You can be sure ALEC already has, and remember that Alibaba (Sesame Credit) joined in December. It’s not too much of a stretch to imagine patient rating systems regulating healthcare access down the road if we’re not careful.

Senator Todd Young was the first person to respond to witness testimony during the hearing, and his line of questioning revealed he is a strong advocate of Thaler’s “nudge” strategies. The “nudge” is a key feature of “what works” “Moneyball” government that deploys austerity to push outsourcing and data-driven “solutions” that embrace digital platforms that will gather the data required prove “impact” and reap financial returns. See this related post from fellow researcher Carolyn Leith “A Close Reading of Moneyball for Government and Why You Should Be Worried.”

Young asked David Asch of Wharton’s Center for Innovative Health, what employers could learn from behavioral economists? He also posed several specific suggestions that would scale such programs within the federal government namely: embedding units charged with experimenting with behavioral economics into federal government programs; developing a clearinghouse of best practices; and bringing in behavioral scientists into the Congressional Budget Office.

Asch, a doctor employed by the Wharton Business School, runs UPenn’s Center for Health Care Innovation created in 2011 to test and implement “new strategies to reimagine health care delivery for dramatically better VALUE and patient OUTCOMES” (emphasis added). The 28,000-foot facility houses simulation learning labs and an accelerator where research on use of “smart” hospital systems, social media, and emerging technologies in healthcare is conducted. The accelerator aims to rapidly prototype and scale “high impact solutions,” read Pay for Success.

Besides the Acceleration Lab, the Center also contains the Nudge Unit, which according to their website is the world’s first behavioral design team embedded within a health system. The goal of the unit is to “steer medical decision making towards HIGHER VALUE and improved patient outcomes (emphasis added).” Sample healthcare nudges include embedded prompts in digital platforms (for screenings), changing default settings (to generic prescriptions), framing information provided to clinicians (not sure what this means), and framing financial incentives as a loss.

This is longer than intended and hopefully provides some food for thought. This life datifying impact investing machine we are up against isn’t just coming for public education; it’s coming for ALL human service. We need to begin to understand the depth and breadth of this threat. I’m still mulling over a lot of this myself, and my knowledge base in healthcare is much shallower than my expertise in education. I’d love to hear what folks think in the comments or if you know of others writing on blockchain and IoT in medicine with a critical lens send me some links. Below are transcripts from West Virginia teacher Brandon Wolford about Go365 followed by the Senator Young / David Asch hearing exchange.

-Alison McDowell

Go365 Transcript

Brandon Wolford, West Virginia Teacher: When I first began teaching in 2012 the insurance, in my opinion, was excellent, because I had worked for one year in Kentucky and I had known that the premiums were, although they were being paid five to seven thousand more than we were, they still had to pay much more for their insurance. So it balanced out. However, after the first year or two I was there, that was when they started coming after us with the tax on our insurance. First of all the premiums, we started to see slight increases for one, and another was they started to enforce this “Healthy Tomorrows” policy.

So, the next thing you know, we get a paper in the mail that says, you know, you have go to the doctor by such and such a date. It must be reported. Your blood glucose levels must be at a certain amount. Your waist size must be a certain amount, and if it is not, if you don’t meet all of these stipulations then you get a $500 penalty on your out-of-pocket deductible. So, luckily for me, I eat everything I want, but I was healthy. My wife on the other hand, who eats much better than I do, salads at every meal, has high cholesterol, so she gets that $500 slapped on her just like that.

Okay so, that was how they started out. In the mean time, we have been filling these out for a year or two, and they keep saying you know you have to go back each year and be checked. And then comes the event that awoke the sleeping giants. The PEIA Board, which is the Public Employee Insurance Agency that represents the state of West Virginia, they, um it’s just a board of four to five individuals that are appointed by the governor, they are not elected. They have no one they answer to; they just come up with these things on their own.

So they come to us and they say we’re raising your premiums. This was somewhere between November and December of last year. We’re raising your premiums. You’re going to need to be enrolled in a program called Go365, which means that you have to wear a fit bit, as well record all of your steps. You have to check in with them, and it included private questions like how much sexual activity do you perform, and is it vigorous? All of these things that they wanted us to report on our personal lives, and that was all included. In addition to that we had to report all of those things, and if we refused to wear that fit bit and record all of our steps, or if we didn’t make our steps, we were going to be charged an additional $25 per month.

So, when everyone sees this along with the increased premiums, then they’ve also introduced a couple more bills to go along with that, because the PEIA Board, they have the final say. Whatever they do, it’s not voted upon by the legislature. It’s basically just law, once they decide it. But in the meantime our legislature was presenting these bills. We were currently on a plan of sixty, uh excuse me, eighty/twenty we were paying out of pocket. Well, they had proposed a bill that would double that and make us pay sixty/forty.

So, they presented that along with charter school bills and a couple of other things that were just direct attacks on us. We had been going by a process of seniority for several years; and they also introduced a bill to eliminate seniority to where it was up to the superintendent whether or not you got to stay in your position. It was up to the principal and regardless if you were there thirty years or you were there for your first or your second year…they were trying to tell us you know, it’s just up to your principal to decide. The superintendent decides. They don’t want you to go, you’ve been there for thirty years and you have a masters degree plus forty-five hours, you’re gone. It’s up to them. Your seniority no longer matters. So those things combined with the insurance is actually what got things going in our state.

Excerpted Testimony Healthy Lifestyle Choices, Senate HELP Committee 10/19/17

Lamar Alexander: We’ll now have a round of five-minute questions. We’ll start with Senator Young.

Senator Todd Young: Thank you Chairman. I’m very excited about this hearing, because I know a number of our witnesses have discussed in their testimonies behavioral economics and behavioral decision-making. I think it’s really important that we as policy makers incorporate how people really behave. Not according to an economist per se, or according to other policy experts, but based on observed behaviors. Often times we behave in ways that we don’t intend to. It leads us to results that we don’t want to end up in.

So, Mr. Asch, I’ll start with you, with your expertise in this area. You’ve indicated behavioral economics is being used to help doctors and patients make better decisions and you see opportunities for employers to help Americans change their behaviors in ways they want from tobacco mitigation to losing weight to managing blood pressure and you indicate those changes are much less likely to come from typical premium-based financial incentives and much more likely to come from approaches that reflect the underlying psychology of how people make decisions, encouraged by frequent rewards, emotional engagement, contests, and social acceptance and so forth. And you said in your verbal testimony you haven’t seen much of this new knowledge applied effectively by employers, but there’s no reason why it cannot be. So, my question for you sir is what might employers learn from behavioral economists. Just in summary fashion.

David Asch, Wharton Center for Health Care Innovation: Sure. Thank you senator. I think I’ll start by saying there is a misunderstanding often about behavioral economics and health. Many people believe that if you use financial incentives to change behavior you’re engaged in behavioral economics, and I would say no, that’s just economics. It becomes behavioral economic when you use an understanding of our little psychological foibles and pitfalls to sort of supercharge the incentives and make them more potent so that you don’t have to use incentives that are so large.

So I think that there are a variety of approaches that come from behavioral economics that can be applied in employment setting and elsewhere. I mentioned one, which is capitalizing on the notion that losses looms larger than gains, might be a new way to structure financial incentives in the employment setting in ways that might make it more potent and more palatable and easier for all employees to participate in programs to advance their health. The delivery of incentives more frequently for example. Or using contests or using certain kinds of social norming where it’s acceptable to show people on leader boards in contests and get people engaged in fun for their health. All of these are possibilities.

Senator Todd Young: Thank you very much. You really need to study these different phenomena individually. I think to have a sense of the growing body of work that is behavioral economics. Right, so we need the increased awareness, and I guess the education of many employers about some of these tics we have. That seems to be part of the answer. In fact, Richard Thaler who just won the Nobel Prize for his ground-breaking work in this area indicated that we as policy makers ought to have on a regular basis not just lawyers and economists at the tables where we’re drafting legislation, but ought to have a behavioral scientist as well.

And the UK, they have the Behavioral Insights Team. The United States, our previous administration, had a similar sort of team that did a number of experiments to figure out how policies would actually impact an individual’s health and wellness and a number of other things. Some of the ideas that I think we might incorporate into the government context, and tell me if any of these sort pop for you; if you think they make sense?

We need to continue to have a unit or units embedded within government that do a lot of these experiments. We need to have a clearinghouse of best practices that other employers included might draw on. This doesn’t have to be governmental, but it could certainly be. We on Capitol Hill might actually consider aside from having a Congressional budget office than an official budget office, we might have an entity or at least some presence within the CBO or individuals that understand how people would actually respond to given proposals. Do any or all of those make sense to you?

David Asch: Thank you for your remarks. Yes, I think they all make sense. And one of the lessons that I guess I have repeatedly learned is that seeming subtle differences in design can make a huge difference in how effective a program can be and how it is perceived and that will ultimately care about the impact of these programs. So, I am very much in favor in the use of these programs, but in addition, greater study of these programs, because I think we need an investment in the science that will help all of us in delivering these activities, not just in healthcare, but in other parts of society.

Senator Young: That makes sense. I am out of time. Thank you.

 

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

A Close Reading of Moneyball for Government & Why You Should Be Worried

Moneyball for Government

But the idea of using “data” to ration resources struck a cord with both Democrats and Republicans. Politicians couldn’t resist the opportunity to use a real David vs. Goliath baseball story to sell the American public on lowering their expectations of what government could deliver. And it sounds scientific too!

Much has been made of the Oakland A’s 2002 season, where the out-resourced baseball franchise fielded a scrappy team which temporarily silenced its critics with a then record breaking 20 game winning streak.

General Manager Billy Beane is credited with this baseball miracle. How? By breaking with tradition and putting together his team using the power of “data” to acquire undervalued players –an approach which became know as moneyball.

Did the moneyball innovation take the A’s all the way to the World Series? Nope. The winning streak did enabled the A’s to clinch their division title and land a spot in the playoffs, where they were defeated in the first round by the Minnesota Twins.

But the idea of using “data” to ration resources struck a cord with both Democrats and Republicans. Politicians couldn’t resist the opportunity to use a real David vs. Goliath baseball story to sell the American public on lowering their expectations of what government could deliver. And it sounds scientific too!

It’s a compelling story, especially in the hands of a writer like Michael Lewis, who coined the term and penned the 2003 bestselling book of that name. At its heart, Moneyball is about crunching numbers and relying on hard evidence-not emotion or tradition-to drive decisions about how to allocate scarce resources. It’s also about determining what data matter and what don’t (in the case of baseball, concluding that on-base percentage matters a lot more than total home runs). When it comes down to it, it’s a way to get more with less.

Which raises important questions: Can data, evidence, and evaluations similarly revolutionize America’s government? Can we provide better services to millions more Americans while actually saving billions of dollars? Can we make this country a better place for children and families by investing in what works, by testing it and retesting it, and by holding ourselves to a higher standard? In short, can government play Moneyball?     Moneyball for Government, pages 3-4

In my opinion, using moneyball to allocate government resources is very similar to managing a fantasy sports team. It’s an imaginary world divorced from the complex, precarious reality most Americans live in. It’s a perfect playground for the managerial elites to work their devious magic, without dirtying their hands with actual face-to-face interactions with the downtrodden citizens they profess to care so much about.

Here’s a critical detail to remember: Professional sports has always been a cut-throat business. Players are treated as things to be inspected, judged, cut, or traded — all based on their numbers. This isn’t an arena where fairness –not to mention social justice — is valued. Just take a look at what happened to Michael Bennett after he decided to take a knee during the national anthem.

I read Moneyball for Government, so you don’t have to. Here’s my list of reasons why allowing politicians to run our government like a fantasy sports team is a very bad idea.

Moneyball is about rationing resources and not providing services to everyone who needs them.

The goal of moneyball is to create a compelling narrative that justifies and even celebrates austerity. Moneyball’s fundamental assumption is discretionary spending must continue to be cut and streamlined in the name of “funding what works”. This trick immediately removes from debate any discussion about cuts to non-discretionary spending –like the 50% of the federal budget that goes to defense.

The authors admit that denying services to everyone who needs them is unfortunate, but there’s always a silver lining: rationing services is a cheap way to create a randomized trial!

Resources are limited, though, and we can’t afford to give the most promising interventions to everyone who wants them. This is unfortunate, but it regularly creates a perfect research opportunity. If there are five hundred slots available in a new program, then instead of enrolling the first five hundred eligible people to sign up, we can let a thousand eligible people sign up, and hold a lottery to determine who among them participates. Just like that, we’ve created a randomized trial….         Moneyball for Government, page 18

Moneyball is about funding low-cost interventions with high rates of returns.

Ever wonder why reducing class size isn’t an intervention embraced by philanthro-capitalists like Bill Gates — even though there’s solid research supporting it?

Simple, lowering class size is expensive and takes a lot of real teachers to make it happen. This isn’t the moneyball way, which is low cost interventions with a high rate of return.

This also explains why Moneyball for Government celebrates the work of organizations like KIPP, City Year – Americorps, and TFA. Organizations that provide low-cost teachers and no-cost volunteers, and by doing so, offer interventions which don’t cut into the bottomline.

Moneyball is pseudo-scientific and far from the rigorous kind of research it claims to create.

Low cost interventions require low cost measurements of success. Remember how rationing access to services provided an opportunity to create a lottery –sorry– a randomized trial? Well, there’s plenty of pseudo-scientific short cuts used to cook up moneyball’s version of “rigorous evidence”.

Another frequently noted problem for the most rigorous kinds of research is cost….     Moneyball for Government, page 19

 

Still, the truth is that randomized trials aren’t always feasible….                                         Moneyball for Government, page 19

 

There are some great recent examples of research that have used low-cost methods to study low-cost interventions that have turned out to make a real difference in people’s lives….                                                                                                                        Moneyball for Government, page 20

Strong scientific research requires well designed studies which attempt to reduce all possible causes to the one variable being studied. How studies are conducted are just as important as the numbers plugged into them. That’s why studies are published so other scientists –who have no vested interest in the outcome– can critique the study’s design and publicly discuss how unintended bias could have been introduced into the results.

None of this happens with moneyball, if you can attach a number to something, it automatically becomes valid.

Moneyball creates a surveillance state and privacy nightmare. Citizens shouldn’t be experimented on by their government, without their knowledge or consent.

Again, for moneyball’s low cost interventions to be financially profitable, these programs require low-cost research, which would ideally run on no-cost data.  Preferably, this data would be collected and shared by federal, state, and local governments.

Have you noticed a lot of talk about interoperability and student data? Ever wonder what it’s all about? Here’s the definition of interoperability: The ability of computer systems or software to exchange and make use of information.

Here’s Recommendation 6 on how to get the bipartisan moneyball agenda rolling: Build cosscutting data systems that also protect privacy. (page 126) More detail can be found under Pillar 1: Relentlessly use data and evaluation to learn from experience. (page 116)

What does it all mean? I’ll let the authors explain:

Without a way of identifying what works and what doesn’t, progress in social policy is impossible. Until recently, the most sophisticated evaluations required a lot of time and money. Sometimes that’s still true, but not always. With modern data systems, we can do quick, sophisticated tests of different program designs. Think about a store chain testing different product placements in different stores –or a social-services agency testing different intake routines in different offices. To figure out cheaply what works, we can often use data that governments already collect. Think about a new textbook, rather than setting up a whole new approach to collecting data, we can just assign the book to half the classes (selected at random) in a district and compare the scores of kids who used the new text with the scores of those who didn’t, on tests the kids already take. And once we learn the best interventions, we can subject them to financial analysis to compare benefits and costs -and thus give policy makers an important tool to help make tough choices about different ways to spend limited resources.  Moneyball for Government, pages 116-117

Does this sound like the way to go about designing a rigorous scientific study? Hardly.

Did you get a hint of any concern about the protection of privacy? Absolutely not.

To me, this approach is more like the Silicon Valley startup mentality of code and release. A very profitable approach which usually runs on free data and lets the end users discover any flaws or bugs in the program – and suffer all of the consequences. Of course, the business may or may-not choose to clean up any of these bugs in a future release, if they feel spending time on the fix won’t negatively impact the bottomline.

It’s also important to point out that conducting a scientific experiment using a computer model to decide who does or who doesn’t get access to resources –without the subject’s knowledge or consent — is unethical.

It’s also alarming that the adherents of moneyball want the government to collect, store, and share vast amounts of digital information on its citizens. In short, create the infrastructure for a surveillance state. The Stasi Records Agency was able to wreck many lives with much less.

Moneyball is ripe for abuse and fraud.

Because the numbers used to justify interventions aren’t produced by actual controlled scientific studies, where this data come from creates a hidden opportunity for fraud and abuse.

For instance, numbers can be cherry-picked, others ignored. Unethical service providers could reverse engineer studies to create numbers that justify their intervention –and secure a contract for the services they provide.

Even the authors are worried:

One possible way to prevent the misuse of Moneyball -either through the politicalization of evidence or the use of less-than-rigorous studies as a justification for cuts in services -is to identify an impartial referee to evaluate studies and data that come through the door, wheter that be a nonpartisan office like CBO or a newly created one. Moneyball for Government, page 56

Forgive my cynicism, but I can think of one recent example where an “impartial referee” set up to prevent fraud in a world of data and financial speculation failed spectacularly, ruining the lives of millions of Americans.

Do you remember when all the credit rating agencies gave AAA ratings to a certain complex financial instrument which turned out to be junk? Do you also remember how this triggered the sub-prime mortgage crisis and the recession that followed?

I do.

When it comes to money, greed will find a way to bend, and other times break, the rules. It’s the one thing you can count on.

Now What?

Hopefully, I’ve convinced you that moneyball isn’t all it’s cracked up to be, but here’s a few education specific reasons to oppose the moneyball narrative:

If you want well resourced schools for every child, you can’t support moneyball.

If you want to end standardized testing, you can’t support moneyball.

If you want human teachers for kids instead of devices, you can’t support moneyball.

If you object to kids being used as guinea pigs for education reform, you certainly can’t support moneyball.

In the end, moneyball is just more too-good-to-be-true snake oil packaged in a shiny new Pay for Success bottle.

Don’t fall for it.

-Carolyn Leith

 

 

 

 

 

 

 

 

 

Is Robert Dugger setting up Robin Hood to steal from the poor?

Reposted with permission from Wrench in the Gears.

Dugger - Robin Hood

Patty Murray, a democratic senator from Washington state, crossed the aisle to collaborate closely with Lamar Alexander on the Every Student Succeeds Act, which included Pay for Success provisions. She also teamed up with Paul Ryan to push bi-partisan legislation, the Foundations for Evidence-Based Policymaking act, that would greatly expand access to program data, including student-level data on the nation’s children.

More on the people behind ReadyNation’s Global Business Summit on Early Childhood, November 1-2, 2018 New York City

Who is Robert Dugger?

Robert Dugger is the co-founder of ReadyNation and serves on the board of the Council for a Strong America. He began his career as an economist with the Board of Governor’s that oversees the Federal Reserve System, later serving as a senior advisor on banking and financial policy in the US House of Representatives and the US Senate. From 1988 until 1992 Dugger worked as policy director for the American Bankers Association where he was involved with the development of the Resolution Trust Corporation in the aftermath of the savings and loan crisis. He went on to become managing director of Paul Tudor Jones’s hedge fund, Tudor Investment Corporation, a position he held from 1992 until 2009. Dugger now runs Hanover Provident Capital in Alexandria, VA, while also serving on the boards of the Virginia Early Childhood Education Foundation and as the Chair of ReadyNation.

Tudor Investment Corporation and the Robin Hood Foundation

It is important to note Dugger’s ties to Paul Tudor Jones II, his employer for fifteen years. Jones created The Robin Hood Foundation in 1998. A 2007 feature in New York Magazine, “The Emperors of Benevolence: A Dossier on the Board of Directors of the Robin Hood Foundation where everybody either knows a rock star or is rich enough to buy one,” described the “anti-poverty” foundation as “one of the most influential philanthropic organizations of all time.” Robin Hood, associated with initiatives like the Harlem children’s zone, has only grown more influential.

Paul Tudor Jones and Bill Gates Gala

During the organization’s annual gala earlier this month, over $15 million was raised in minutes as Jones, according to Bloomberg’s coverage of the event, enjoyed fennel-braised beef with Bill Gates.

New York’s first social impact bond drew a $300,000 investment from the foundation. Clearly Robin Hood could have access to almost limitless capital if Pay for Success opportunities around Pre-K open up in New York. The New York State Early Childhood Advisory Council prepared a 2012 report, “Using Pay for Success Strategies to Increase School Readiness.” The clock is ticking…

The Robin Hood Foundation has developed a sophisticated system of metrics to track the programs they fund, which means they have considerable infrastructure in place to take advantage of social impact investment opportunities. They have an exhaustive list of very specific equations aligned to education, work readiness, and health outcomes. You can review the equations here and/or watch the video summary. Thanks to blog commenter Laura Chapman for that lead.

Sara Watson and the Pew Charitable Trusts

Dugger and Heckman both served on the advisory board of The Pew Center on the States’ initiative Partnership for America’s Economic Success that launched in 2006. Dr. Sara Watson ran the program in her capacity as senior program officer for the Pew Charitable Trusts. She has conducted extensive research in the pre-k investment space, including a 2014 analysis of Pennsylvania’s Pre-K Counts in partnership with ReadyNation and America’s Edge Pennsylvania. Below is a relationship map showing the connections between Dugger/ReadyNation and Watson/Pew. Click here for the interactive version.

During her tenure at Pew, Watson regularly joined Dugger to develop reports and speak at conferences promoting the economic impact of early childhood investments. Among these were presentations in 2007 in Washington, DC supported by PNC Financial Services; in 2008 to the Milken (Michael Milken, indicted junk bond trader and founder of K12, Inc.) Institute; the National Conference of State Legislatures in Washington, DC in 2013; and a Pay for Success conference sponsored by the Pritzkers in San Diego in 2015.

Pew Charitable Trusts joined the Chicago-based MacArthur Foundation in 2011 to spearhead a “results-first” initiative. It’s useful to know that Pritzker is also based in Chicago, and 2011 was the year BEFORE the first social impact bond came to the US. The goal of their initiative was to pressure states into adopting “evidence-based” approaches to funding social programs. States that participated agreed to a year-long analysis using return on investment as a key determiner as to whether a program would be included in the budget.

In 2016 “Results-First” joined the Urban Institute, The Brookings Institution, and the American Enterprise Institute in the Evidence-Based Policy Making Collaborative funded by the pension-busting, pay-for-success promoting John and Laura Arnold Foundation. Pew and MacArthur based their cost-benefit approach on work done by the Washington State Institute for Public Policy, created by the Washington State Legislature in 1983. Sara Watson worked in Washington state in the mid-1990s as an analyst for the Family Policy Council.

Patty Murray, a democratic senator from Washington state, crossed the aisle to collaborate closely with Lamar Alexander on the Every Student Succeeds Act, which included Pay for Success provisions. She also teamed up with Paul Ryan to push bi-partisan legislation, the Foundations for Evidence-Based Policymaking act, that would greatly expand access to program data, including student-level data on the nation’s children.

Sara Watson served as Executive Vice President of America’s Promise in 2012, the year it released a study promoting the use of Pay for Success Finance for workforce development programs. Page six of the document notes that in addition to relieving pressure on state and federal budgets, early childhood social impact bonds will be able to be bought and sold by investors, traded worldwide and aggregated into asset-backed securities.

In 2014 Watson joined ReadyNation as their global program director. ReadyNation International is doing work in Romania, Uganda, and Australia. Members of their taskforce promote the investment potential of early childhood interventions to bodies including the United Nations and the World Bank. In 2016 they held an invitation-only event with representatives from Switzerland, Belgium, the Netherlands, Portugal, Italy, Romania, and the United Kingdom in Marbach Germany. The gathering promoted “business activism” in the early childhood space and featured speakers from the World Bank, KPMG, and Bain & Co. Are these the people we want making decisions about our children’s care? People who see toddlers as human capital? Their education as an investment opportunity?

Absolutely not.

As I noted in my previous post, Pay-for-Success promoters are the sort who would elect NOT to feed hungry children unless they can make a return on their investment. Dugger/ReadyNation, Jones/Robin Hood, and Watson/Pew are not organizing business leaders to SOLVE global poverty. Rather, they are organizing business people to maximize the profit that can be extracted by strategically managing poverty and the securitized debt associated with public program service delivery. Their plan is to enrich the funders and non-profits that are willing to play the data-dashboard game, at the expense of humanity.

-Alison McDowell

Previous posts about the ReadyNation Global Business Summit on Early Childhood:

Pre-K Profit: ReadyNation Hosts Global Business Leaders in New York City This November: Link

Making Childhood Pay: Arthur Rolnick, Steven Rothschild and ReadyNation: Link

Galton and Global Education Futures Forum: Scientific Racism Looking Backwards and Forwards: Link

Heckman and Pritzker Pitch Apps as Poverty “Solutions” Yielding A 13% Rate of Return: Link

The Chicago School of Economics and George Soros: New Theories for An Impoverished World: Link

From Math to Marksmanship: Military Ties to Gamified Assessments

Reposted with permission from Wrench in the Gears.

HCeconomics

There is a difference between education and training. There is a difference between knowing just enough to carry out orders without questioning the chain of command and knowing enough to participate in civic life as a critical thinker. If educational-technology is an extension of military training/human engineering, which it is, we should give careful consideration as to what our society needs at this time, and if we should be allowing the military-industrial complex to data-mine and track our children’s innermost thoughts.

This past February, economist James Heckman convened a working group of social scientists to discuss new types of assessments that are being designed to capture data about children’s social-emotional traits and predict future behaviors. The researchers spent two days in an oak-paneled room at the University of Chicago where they collaborated on the new assessments and measurements. Impact investors, like Heckman’s patron JB Pritzker, need the metrics these tests will deliver to fuel their predatory, speculative pay for success schemes. Videos of the recorded presentations can be viewed here.

I will be excerpting segments of these talks on my blog, since I know most of you won’t have the time to sit through hours of viewing. This first segment highlights the intersection of educational technology and military training. For more information read one of my early pieces “How exactly did the Department of Defense end up in my child’s classroom?”

It is important to note that ReadyNation, sponsor of the Global Business Summit on Early Childhood, is a program of the Council for A Strong America. ReadyNation is their workforce development program. Another of the group’s five program areas is “Mission Readiness.” The website states this initiative is run by seven hundred “Retired admirals and generals strengthening national security by ensuring kids stay in school, stay fit, and stay out of trouble.”

There is a difference between education and training. There is a difference between knowing just enough to carry out orders without questioning the chain of command and knowing enough to participate in civic life as a critical thinker. If educational-technology is an extension of military training/human engineering, which it is, we should give careful consideration as to what our society needs at this time, and if we should be allowing the military-industrial complex to data-mine and track our children’s innermost thoughts.

Watch the clip here. Full talk here.

Timestamp 6 minutes 40 seconds

Jeremy Roberts (PBS Kids): I’ll hand it over to Greg. I wanted to give you a chance to talk about UCLA CRESST.

Gregory Chung (UCLA, CRESST) So, just quickly, you know what we bring to the project is expertise in the use of technology for measurement purposes. Whether it’s simulation or games. How do we turn that information about what we think is going on in their heads to their interaction with the game? So going through that whole analysis process from construct definition to behavior formation. And then just a general, we do research in a military context and in an education context, training, pre-k to adults. I joke that my motto is from math to marksmanship. (audience laughter)

Unidentified Audience Member: Can you say what the relationship is between the military and education?

Chung: Ah, it’s like…it is like… at a certain level they’re the same. Military training is about effectiveness. You train just enough to get someone to do some job. But integrated technology, adaptive systems give feedback. So all the instructional issues that you commonly apply to education, you apply to the military. But also you go from the military, who kind of created the whole instructional design system, back to education. And it’s really interesting when we have an intersection in say marksmanship, how do we measure skills (pantomimes shooting a rifle) with sensors, but then we bring in the educational assessment framework, like what’s going on in here (points to his head/brain), how that transfers to wobble and shake (points to torso).

Roberts: If the armed forces were to find out that say the students were not scoring sufficiently on the ASVAB to make them confident that they’d be able to operate the next generation of tank, for example, the army might be really interested in early childhood education.

Chung: (chuckling in audience) So, really they’re the same.

Heckman: It has, right? Already. And quite a few aren’t able to pass the ASVAB.

-Alison McDowell

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

Heckman and Pritzker Pitch Apps as Poverty “Solutions” Yielding a 13% Return on Investment

Reposted with permission from Wrench in the Gears.

Do You See A Child or Human Capital?

If you have time to watch the entire hour, I encourage you to listen as these two men discuss their plans to create tools that will measure non-cognitive skills in service of outcomes-based contracts and a futures market in infant and toddler data. They are creating the next “big short” right before our eyes, and this time it’s not homes hanging in the balance, it’s our children. As if IQ scores weren’t awful enough, now they are developing an IQ equivalent for Big 5 character traits: openness, conscientiousness, extraversion, agreeableness, and neuroticism. They want to define and rate our kids according to their “soft skills.”

This is the fourth in a series providing context for the Global Business Summit on Early Childhood that ReadyNation will be hosting in New York City November 1-2, 2018. The featured image is from an article pitching Waterford Upstart online preschool, piloted in Utah, a state experimenting with funding early childhood education using social impact bonds. The caption on the photo states that this four year old doesn’t have running water in her home, but she does have access to literacy education on a chromebook.

The focus of this post is Dr. James Heckman, a professor of economics at the University of Chicago since the early 1970s. Much of his research focuses on investments in early childhood as it pertains to labor markets. In 2000, Dr. Heckman was awarded the Nobel Prize in Economic Sciences for contributions to the field of micro-econometrics. James Heckman; Arthur Rolnick, former senior researcher at the Minneapolis Federal Reserve; and Robert Dugger, venture capitalist and ReadyNation advisor, have worked together for decades. Below is a relationship map for Heckman. See the interactive version here.

HeckmanDugger, and Stephen Durlauf, another professor of economics at the University of Chicago, lead the Human Capital and Economic Opportunity Global Working Group (HCEO). Launched in 2010, the initiative is run by the Center for the Economics of Human Capital Development and supported financially by the Institute for New Economic Thinking, a think tank established by George Soros in the aftermath of the financial collapse of 2008. Yes, Soros is funding human capital research conducted by a professor working out of the Becker (Milton) Friedman Institute for Economics at the University of Chicago. In the short video below, Heckman describes how HCEO fosters interdisciplinary research between 400+ academics who research poverty and then use that research to influence public policy.

HCEO’s six focus areas are closely linked to the social impact investment sector: childhood interventions, family inequality, health inequality, identity and personality, inequality measurement and policy, and markets.

With financial support from JB Pritzker via the Pritzker Children’s Initiative, Heckman’s academic work has been organized into an online tool kit to promote early childhood education as an investment opportunity, one they claim could yield a 13% annual rate of return once health outcomes are taken into account.

Suzanne Muchin’s branding firm Mind + Matter Studio developed The Heckman Equation website. Muchin served for four years as Vice President of programs for Teach for America and serves on the board of 1871, a tech accelerator based in Chicago’s Merchandise Mart launched by Pritzker in 2012.

Pritzker is a tech-oriented venture capitalist and politician. His sister Penny served on the Chicago Board of Education and later as Commerce Secretary in the Obama administration. In 2014, the Pritzker Foundation joined with the Gates, Irving Harris, and Kaiser Family Foundations and the Buffett Early Childhood Fund to create the First Five Years Fund to expand universal pre-k access. Pritzker has participated, as a funder, in two pilot early childhood social impact bond programs in the United States; one in Salt Lake City and the other in Chicago. If you are not up to speed on the history of and dangers posed by SIBs and pay for success programs, spend some time looking over the resources here.

In the trailer for a new documentary on social impact bonds, The Invisible Heart, Pritzker states:

“We are in the nascent stages of a social impact bond boom. Could be as big as the New York Stock Exchange…I’ve heard (people say), why are we letting investors make money off of our children. Well, that’s silly.” JB Pritzker

Pritzker is the Democratic candidate in Illinois governor’s race. He has also thrown money to the Silicon Valley Community Foundation’s campaign “Choose Children,” that is pushing to elect a governor of California who will be a “champion of young children.” Of course the subtext here is that Silicon Valley hopes to install a governor who will scale pay for success early childhood education programs, programs that will tap the state’s millions of vulnerable children as profit centers.

Heckman and Pritzker have been laying the groundwork for the early childhood impact investing market for years. The remainder of this post is comprised of clips and transcripts I pulled from a presentation the two men gave in San Diego in 2016. The passages that follow make it clear the formerly worthy idea of “whole child” education has been completely hijacked by global finance. It also explains why in some districts in Maine half the report card rubrics revolve around evaluations of “habits of mind.”

If you have time to watch the entire hour, I encourage you to listen as these two men discuss their plans to create tools that will measure non-cognitive skills in service of outcomes-based contracts and a futures market in infant and toddler data. They are creating the next “big short” right before our eyes, and this time it’s not homes hanging in the balance, it’s our children. As if IQ scores weren’t awful enough, now they are developing an IQ equivalent for Big 5 character traits: openness, conscientiousness, extraversion, agreeableness, and neuroticism. They want to define and rate our kids according to their “soft skills.”

Below are presentation highlights in case you don’t have time to listen to the clips:

  • Poverty it’s not just about money, it’s about “parenting, encouragement and skills.”
  • Investing in young children yields higher results relative to workforce and life outcomes than do investments in older children and teens.
  • The highest returns will be on interventions directed at ages 0 to 3.
  • Children have achievement gaps documented as early as age 3.
  • IQ doesn’t increase much after a child reaches the age of 10, but interventions can continue to shape a child’s “character skills” to improve workforce outcomes.
  • It’s not just about being smart; it’s about being motivated.
  • Heckman identifies non-cognitive skills as a “target of opportunity” for investors.
  • But first they need to develop an inventory of social emotional skills to assess, track, and measure non-cognitive traits. (For the purposes of predicting outcomes for impact investment evaluation).
  • Having the OECD (promoter of PISA) on board is a good sign.
  • By “improving outcomes” through interventions, they claim poor children will require fewer public expenditures in the future. Social impact bonds will then capture those anticipated savings as profit to be handed over to privateinvestors.
  • Factoring in health outcomes, the return on these investments could be as high as 13% per year, which is HUGE.
  • Pritzker plans to identify cheap, scalable interventions-like parenting apps. (Because all impoverished families really need is an app to tell them what they should be doing to parent their children.)
  • There has been push-back from both ends of the political spectrum against using Pay for Success to Fund early childhood interventions, but they were able to convince communities by using compelling financial structures and promising “results.”
  • In closing, Heckman says you have to get parents on board or the whole thing is going to fail.

Do you hear that parents?!

Their talk was sponsored by Education Synergy Alliance, whose director Laura Kohn came from Seattle where she worked as a state-level advocate for the Gates Foundation, and San Diego Grantmakers, a collaborative that has been promoting use of Pay for Success in program delivery. Connie Matsui, social entrepreneur and former chair of the San Diego Foundation, brought Heckman and Prizker to San Diego in 2016.

This two-minute clip is from JB Pritzker’s introduction. Watch it here.

(Pritzker) “Really, I’m just grateful for the opportunity to be here. I had the opportunity to be here earlier today, and so did Jim, to speak to the larger community foundations where they are doing amazing work and where so many communities from around the country that have large endowments and lots of donor advised funds are beginning to look at early childhood development as an important arena for them. I’m, of course, particularly grateful to be asked to join Professor Heckman and to share thoughts today on a subject that I care deeply about, and that I believe is maybe the most important issue facing us in the country today, early childhood development.

So in truth, I’m a businessman (fortune valued at $3.4 billion), and I’m not a Nobel prize winner. No one will ever claim I will win anything like that. I’m lucky to share a stage occasionally with Professor Heckman. So I’ll speak from my heart about what I care about deeply and from the position that I come from. I’m here to solicit you for your business. I want to make a pitch to you today. It’s a subject that I care about, that’s about making investments. And so if you’re ready for my pitch…if you invest with me, and you invest with Professor Heckman we can not only unlock human potential, but we can also get you at HUGE return on your investment. So, do you want to hear the rest of my pitch?”

The middle section of the presentation, between timestamp 23:30 and timestamp 35:00, features Dr. Heckman presenting his theories about the importance of character education in public schools; that non-cognitive (social emotional) skills are more important to workforce outcomes than cognitive (academic) performance. He goes on to discuss the importance of interventions linked to non-cognitive skills training to health outcomes. Heckman proposes that certain interventions will yield an impressive rate of return of up to 13% once health outcomes are considered. Watch a seven-minute excerpt here.

(Heckman) “Poverty, as we understand it now is not just money. Poverty, of course the way we measure it IS money, but actually it’s more than that. We’ve come to understand that it’s not JUST money. And that is what the great experiment was launched by Johnson. We’ve also come to understand it has to do with parenting, encouragement and basically this set of skills. And I think what we have now is a much more comprehensive notion.

So basically we think the early lives play a very important role for promoting social mobility, for promoting equality. And then miracle of miracles and we started following these people using the same kind of experiments that were started, but then stopped in the wake of the war on poverty, and head start. What we found was, yes, actually IQ did fade out after about age 10, just like Jenson said, just like everybody said.

And guess what? When we follow these people to age 40 and 50, these people have very high social and economic returns, and it came exactly through this mechanism of character skills and engagement. And surprise of surprise, even though these kids didn’t have any higher IQ, it also turned out they actually did have higher test scores. Why? Because these achievement test scores involve more than just being smart, it’s being motivated

We think about the skills problem, and JB referred to this skills problem, it’s an enormous problem. So we looked for examples at this measure, the civil international adult literacy survey that’s taken every few years. It’s basically America, the United States, when stacked up against all of the OECD countries is the worst in terms of percentages of people who are at the lowest rung of literacy and numeracy. We mentioned another dimension of this is the fact that among children, among males 16 to 26 eligible for military service, only about 25% are actually qualified. They’re mostly disqualified, a lot of it has to do with cognitive deficits and so forth. Now these are preventable, because we know from these interventions that we can do something about it.

We have the skills problem. But how do you promote skills? That leads to another issue if you…look at test score gaps, which is what sees a lot of attention between the haves and the have-nots; if you look at age 18 you see a tremendous gap between those kids who have parents who are college-educated and those whose parents are high school drop outs, mothers probably, ok. So if you look at the graph you’ll also see that that gap is there before they enter school, and it’s actually there at age three, which is the earliest age we can reliably measure these things.

So now wait a minute, you can say oh we’re talking about genetics, that’s a perfect eugenic argument, right? These people are born dumb to dumb parents and their dumb parents didn’t get education, so therefore this is just the manifestation of what Charles Murray was talking about. The answer is no, because what we’ve done is we’ve actually randomly assigned these children, put them in different environments, enriched their local environment, their parenting environment, the school environments. And we then track them against students who didn’t receive such supplementation early in life, and we find they’re much better performing. But we need a much richer inventory of how we decide what’s better and a deeper understanding of what the skills are that make them successful in life.

So, I think a good measure of how much the world has changed in terms of thinking about skills is a new report issued by the OECD. The OECD was the group that promotes the PISA exam, so every few years you know Shanghai is very proud and has some of the highest PISA scores in the world. And you go into China and you go into Hong Kong and they are lower and very envious. But the OECD now is getting the point. It only got it recently, but it’s now starting to say we need to inventory exactly these character skills, because they’ve been shown to be predictive, they’re also highly malleable, and they’re actually highly valuable even to somewhat later ages.

So even when we think we can’t boost IQ, that might be very difficult because the rank is stable and your ranking in the IQ distribution is pretty well established as JB was saying around 8, 9, 10 or somewhere in that zone. It is still true that these character skills are more manipulable (malleable?). In the sense they are actually our target of opportunity. So a much deeper understanding, and I think when we go in and look at what the economic and social benefits are of these interventions, we have a deeper and more comprehensive evaluation system looking at both cognitive and non-cognitive skills.

But to come to the economic return; we can see substantial benefits. So we have actually computed the rate of return, the kind of rate of return that venture capitalists worry about, and should properly worry about, and that many of you probably worry about. What we found was the rate of return on something like the Perry Preschool Program was somewhere between seven and ten percent per annum, per annum, which is extremely high. If you look at the US stock market average investment in equity between 45 and 2008, that’s above that. Great, ok so you’re actually finding it’s a very, very good investment. These are targeted towards kids who are disadvantaged; it’s providing family supplementation. We can talk about the details of those programs. Then, more recently, we did some studies and this blew people out; it blew me out. We also followed another group of children who are actually followed now in the wake of the Perry study, but in Raleigh Durham, North Carolina. We followed these children up to age 35, and we not only gave them the standard measures of unemployment, crime, participation in the larger society, but we also looked at health.

We asked how did they look in terms of health? What we found was that those children, now actually adults, have much lower risk factors for all the adult onset diseases: lower propensity for diabetes, lower cardiovascular conditions. And what we see is that there is not only a benefit that comes, but health. How can that be? It’s because of that same notion of regulation behavior, following numeracy, getting engaged in the larger society. We find less smoking, less drinking, less engagement in unhealthy lifestyles in the wake of having these higher levels of cognitive and non-cognitive skills. So, you know, we’re in the process of learning. But the fact of the matter is we’re getting a very high rate of return for that intervention. Preliminary evidence is suggesting somewhere between 11 and 13 percent IF we include the enhanced health benefits.”

This section is from the question and answer period and closing to the presentation. Timestamp 48:50, watch it here.

(Pritzker) “That expense that you talked about; gee, that’s a very expensive intervention? That’s taken into account in these returns, okay. So it’s not like, I mean, the expense gets you that return. So it doesn’t matter that your investment was a thousand dollars or a hundred dollars or five thousand dollars. The return is what you get on those dollars invested.

(Heckman) But in addition to the direct expense you’re also going to get the welfare cost of raising taxes, so that’s also factored in here, so the sum of ten percent or the return is after accounting for actually the direct cost of hiring the teachers and the cost of collecting taxes to finance those. So that’s why I think it’s a fairly compelling study…if you look at the evidence I’m happy to send you the papers we’ve written, and we’re writing more. But you are finding very strong precision about these estimates.

(Pritzker) And we’re not advocating for very, very expensive interventions specifically. There are lots of scalable, much less expensive interventions. In fact, that’s what I spend my time looking for and helping to evaluate the scalability of, because ultimately that’s how we’re going to get the federal, state, and local governments to adopt them. Right? They’ve got to feel less expensive, but the reality is the more expensive actually works, too…

(Heckman) It’s an area of evolution. We really want to find out what’s best practice and what’s cheaper, right?

(Pritzker) The returns on preschool are much lower than on 0 to 3. So the interventions on 0 to 3 that we know work are home visitation, just as an example. Home visitation works.

Now there’s an expensive version of home visitation, and there’s a less expensive version of home visitation. And there’s been lots of study on these home visitation programs, but the critical component of it is reaching the parent. The parent is the first and best teacher for a child and if you can reach a parent, almost every parent, almost, wants to be a good parent. So we know what works and we know what are some scalable versions. Some of them, by the way, are texting programs. So almost every poor parent in America has a smart phone, and there are programs just for reminding parents what things work, and they want to know and they want to do these things and they’ll find time to do them.

But back to getting communities to buy in, it is very hard, and we got involved, I’ll talk about social impact bonds. But basically bringing preschool to Utah, a state where the political environment for preschool is hard; we did it with a finance plan that made sense for Utah, for Salt Lake. It got community engagement in it and support for it, because, frankly because we showed them what the results would look like.

So we started with that. There was resistance on both ends for preschool for example and any kind of early childhood education. On one end of the political spectrum the resistance is, you’re interfering with the parent-child relationship; you’re somehow interceding, the government is being paternalistic and getting engaged in something that should be a private matter. That’s one side of the political spectrum. On the other side of the political spectrum are the views that well with a social impact bond is why are private investors getting involved in something government should do? The government should get all the returns on this, the taxpayers should get all the returns-I happen to agree with that, that the government should put forward. But how many people think, how many people have a surplus in their local, state or federal government right now? None.”

Previous posts about the ReadyNation Global Business Summit on Early Childhood:

Pre-K Profit: ReadyNation Hosts Global Business Leaders in New York City This November: Link

Making Childhood Pay: Arthur Rolnick, Steven Rothschild and ReadyNation: Link

Galton and Global Education Futures Forum: Scientific Racism Looking Backwards and Forwards: Link

-Alison McDowell

Making Childhood Pay: Arthur Rolnick, Steven Rothschild, and ReadyNation

Reposted with permission from Wrench in the Gears.

Pre-K Teachers Heart Tech

The push for early childhood education access is NOT being driven by a desire to meet the basic human needs of children. Rather financial interests that view children as cogs in a national workforce development program are pushing it; and they see preschoolers as lumps of human capital to be plugged into economic forecasts. This is all happening at a time when human services are being privatized in the name of scalable, outcomes-driven social entrepreneurship. The trailer for a new documentary, The Invisible Heart, on social impact bonds indicates how much capital is flowing into this new market.

This post provides additional background on the ReadyNation Global Business Summit on Early Childhood Education that will take place at the Grand Hyatt hotel in New York City November 1-2, 2018. No U.S. educators or policy advocates may attend unless they come with at least four pre-approved business sponsors. Review the draft agenda here.

This is the second in a series. Read part one here.

Where did ReadyNation come from?

The idea emerged from a conversation three men had on a conference call during the summer of 2003:

  • Arthur Rolnick, senior researcher at the Minneapolis Federal Reserve
  • Robert Dugger, financial policy analyst and venture capitalist
  • James Heckman, University of Chicago economics professor

Its first incarnation, the “Investing in Kids Working Group,” focused on researching returns on early childhood investments, developing finance mechanisms, and crafting policy recommendations. Over the past fifteen years Dugger, in consultation with Heckman and Rolnick and with support from the Pew Charitable Trusts, gradually built a structure to undergird a global investment market fueled by debt associated with provision of early childhood education services.

The push for early childhood education access is NOT being driven by a desire to meet the basic human needs of children. Rather financial interests that view children as cogs in a national workforce development program are pushing it; and they see preschoolers as lumps of human capital to be plugged into economic forecasts. This is all happening at a time when human services are being privatized in the name of scalable, outcomes-driven social entrepreneurship. The trailer for a new documentary, The Invisible Heart, on social impact bonds indicates how much capital is flowing into this new market.

Arthur Rolnick, Steven Rothschild, and Pay for Performance

Much of my research has focused on the Boston area (global finance), the Bay Area (tech), Chicago (blockchain), and New York (urban policy). So I was surprised to find what may be a key piece of this puzzle actually comes out of Minneapolis Minnesota. Though perhaps the fact that Minnesota is home to the nation’s first charter school, City Academy that opened in St. Paul in 1992, indicates local conditions favor neoliberal reforms.

Arthur (Art) Rolnick spent his 40-year career as a senior economic researcher at the Minneapolis Federal Reserve Bank. During that time he also served as an associate professor in the economics department of the University of Minnesota and was co-director of the Human Capital Research Collaborative in the Humphrey School of Public Affairs. The Collaborative houses the Chicago Longitudinal Study whose researchers are tracking the short and long term effects of early intervention on 1,000 students who attended Chicago’s Child-Parent Centers in 1984-85.

The Chicago Child-Parent Centers were service providers for one of the nation’s first two early childhood social impact bonds, begun in December 2014. The Chicago SIB included payout metrics tied to third grade literacy scores. Thus far the program has issued maximum payments to investors including Pritzker, Goldman-Sachs and Northern Trust. According to this report from the Institute for Child Success, it is possible that over the seventeen-year time horizon for the SIB, $34 million could be paid out on the initial $16.9 investment.

Click here for the interactive version of this map.

Rolnick connected with Steven Rothschild, a former vice president at General Mills who left the corporate sector and launched Twin Cities RISE!, an “innovative anti-poverty” program that provided workforce training for low income adults, in the mid 1990s. Rothschild arranged with the state of Minnesota to provide services via an outcomes-based contracting arrangement where the organization was only paid when the “economic value” they provided to the state by increasing taxes (paid by those placed in jobs) and decreasing state expenditures (reduced costs for social services or incarceration) met approved targets.

Arthur Rolnick and Gary Stern of the Minneapolis Federal Reserve worked with Rothschild and Twin Cities Rise! to develop the economic analysis in support of the outcomes-based contracting initiative. Rolnick’s work with Rothschild eventually led him to examine the economic implications of early childhood interventions using data from the High/Scope Perry Preschool Study. In 2003, the year Rolnick had that auspicious phone call with Robert Dugger and James Heckman, he and and Rob Grunewald, regional economic analyst, put out the following report for the Minneapolis Federal Reserve: Early Childhood Development: Economic Development with a High Public Return.

In a 2006 profile of Rolnick, Minnesota journalist and blogger Kevin Featherly notes that report catalyzed $1 million in seed money for the Minnesota Early Learning Foundation, a project of the Minnesota Business for Early Learning. It also put Rolnick and Grunewald on the lecture circuit for the next several years where they touted early childhood education as a prudent economic investment. Weatherly likened Rolnick’s schedule after the release of the report to that of a presidential candidate, sharing the stage with Jeb Bush at the National Governor’s Convention, the head of the Gates Foundation at the National Council of State Legislatures, and presenting to a global audience at the World Bank.

Rothschild who served on the boards of the Greater Twin Cities United Way and Minneapolis Foundation, went on to found the consulting firm Invest in Outcomes and write the Non Non-Profit, a book that exhorted non-profits to focus on the Return on Investment (ROI) and measurable economic outcomes of the services they provide. These ideas eventually led the Minnesota legislature to adopt the “Pay for Performance Act” in 2011 that appropriated $10 million for a pilot program to develop Human Capital Performance Bonds or HuCaps.

Rothschild provides a detailed explanation of how HuCaps function in a 2013 article for the San Francisco Federal Reserve’s publication Community Development Investment Review. HuCaps differ from social impact bonds in that they are true bonds and tap into the state bond markets; which, in theory, could give them access to significantly more capital-trillions of dollars rather than millions. In this podcast with the St. Louis Federal Reserve, Rothschild describes the model developed by Twin Cities RISE! as the basis for much of the social impact investing activities that have emerged over the past decade.

Source for this slide.

As structured in the Minnesota legislation, the service provider is the one that takes the risk rather than the investor. If the provider is not able to meet the target metrics they are the ones who will not be paid. As a consequence, HuCaps have not yet taken off; see Propel Nonprofit’s analysis here.

Source for this slide.

Nevertheless, there are those who have not given up on the Human Capital Performance Bond approach. Arnold Packer, former director of the education reform and workforce development SCANS 2000 Center based out of Johns Hopkins University, wrote about HuCaps for the Brookings Institution in 2015 (the co-chair of the Commission on Evidence-Based Policy Making is Bruce Haskins also of Brookings). He noted that Milton Friedman was among the first to float the idea of leveraging private investment in human capital development. Take a minute to watch this one-minute video, from Institute for the Future, that portrays a college student contemplating entering into an income-sharing arrangement in exchange for tuition.

The idea that states could issue bonds for human capital in the same way they do for infrastructure like bridges, and that future savings will be created as people attain higher paying jobs due to their improved human capital, is central to the HuCap premise. In order to justify future cost savings, those receiving services must be tracked, so their “outcomes” can be measured over time. According to Arnold:

“This reform requires a shift in thinking on all sides, investors in human resources (early childhood education falls into this category) will have to consider statistically estimated benefits in terms of future cost savings and revenue as equivalent to projected revenue from a toll road. Government agencies will have to coordinate in order to structure attractive Human Resource bonds, since different agencies at different levels of government, benefit from the savings resulting from earlier investments.” Source

This model of finance, if ever widely adopted, would demand all recipients of public services (including education) be part of the government’s statistical estimate. Because many early-intervention services are directed at families, a person’s predictive profile would likely start to be amassed prenatally; babies assigned a Decentralized Identifier (DID), before they are even born. Estimates would be made about the likelihood a person would need to access services in the future, what those services would be, and what they would cost. Assessments would be made about the anticipated tax revenue a person would in turn generate over their lifetime. All of this data would need to be calculated in order to determine the impact metrics for the investors and structure “attractive human resource bonds.”

Before the rise of cloud-based computing, such a level of tracking would have been impossible. Having access to data to make those predictions would have been difficult to obtain. But that is rapidly changing in this world of Big Data, digital identity and “moneyball for kids.” The bi-partisan Commission on Evidence-Based Policy Making concluded public hearings in February 2017, and the vast majority of those providing testimony favored creating enormous pools of data to inform public policy decisions.

Evidence Based Policy Making

Read the report.

Responsibilities of the Commission on Evidence Based Policy Making:

Things seem to be on hold for the moment with Human Capital Performance Bonds, but I feel strongly they may be simply waiting in the wings until Blockchain sovereign identity is normalized. An Illinois state Blockchain task force (note Pritzker, backer of early childhood SIBs is running a well-funded campaign for governor of Illinois now) has developed preliminary recommendations linking public service benefits to citizens using Blockchain technology. They even envision building in behavioral incentives tied to the provision of services through digital economic platforms. See the diagram below for an illustration of how they might incentivize food purchases.

Read the report.

Of course the implications of this type of manipulation for people who live in food deserts with limited access to fresh produce remains unaddressed. And it doesn’t take a stretch of the imagination to see how other choices might be economically incentivized: which online course to take (the evidence-based one); which training program (the evidence-based one); which therapy provider (the evidence-based one); which medical treatment (the evidence-based one). But by whose measure? Who sets the metrics? Who profits when “evidence-based” standards are imposed?

How will independently-owned, neighborhood-based child care centers fare in this new landscape? If they are shuttered, what will the economic impacts be for communities, especially in economically distressed neighborhoods where such businesses are important sources of employment? Will small-scale providers be willing to collect the “human capital” data required to take advantage of pay for success investments? If they are willing, would they even have the money to purchase the technology (smart tables, anyone?) required to gather their “impact” evidence?

Rob Grunewald, Rolnick’s collaborater on the Federal Reserve Early Childhood paper, is on the ReadyNation Summit planning committee. Rolnick is part of a workshop, “Scalable Success Stories in Early Childhood Programs,” at 11:45 on Friday, November 2nd.

The “pay for performance” finance mechanism dreamed up by Rothschild and Rolnick in the 1990s is particularly well-suited to this age of Internet of Things data collection, surveillance, predictive analytics, financialization, and economic precocity. This is why we should all be very concerned about ReadyNation’s Global Business Summit on Early Childhood; especially because it so clearly discourages early childhood educators and policy advocates from attending.

Next up, Dr. James Heckman and the Institute for New Economic Thinking.

-Alison McDowell

 

Pre-K Profit: ReadyNation Hosts Global Business Leaders in New York City this November

Reposted with permission from Wrench in the Gears.

Data Driven PreK

The rise of pay for success, social impact bonds, development impact bonds, and outcomes-based contracting will usher in privatization of vast new areas of public services, including education and training at all levels from infants through human resource management (lifelong learning, reskilling). This is not merely a phenomenon of the United States; this summit is intended for a global audience, a neocolonial project driven by late-stage capitalism.

Business executives, government officials, and representatives of non-profits and NGOs from across the globe will gather in New York City this fall to discuss the business of early childhood. These are not people looking to open childcare franchises. No, that is not their “business.” The intent is more sinister, transforming our youngest learners into points of profit extraction under the guise of social justice and equity. Through technology and forms of “innovative finance” they aim to catalyze a speculative market in toddler data, using the lives of young, vulnerable learners as vehicles to move vast sums of social impact venture capital.

ReadyNation, a program of the Council for a Strong America, is hosting the summit, set to take place at the Grand Hyatt Hotel on November 1-2, 2018. Council for a Strong America, a bipartisan coalition of leaders from the law enforcement, military, business, religion, and athletics spheres, has placed influencers guiding early childhood education policy in every state. Their intent is to promote public-private partnerships that will generate investment returns for global finance while shaping children into a compliant citizenry conditioned to accept economic precariousness and digital surveillance while doing the bidding of the power elite.

The rise of pay for success, social impact bonds, development impact bonds, and outcomes-based contracting will usher in privatization of vast new areas of public services, including education and training at all levels from infants through human resource management (lifelong learning, reskilling). This is not merely a phenomenon of the United States; this summit is intended for a global audience, a neocolonial project driven by late-stage capitalism.

Remember the 2007 housing market crash? The fraud Goldman Sachs perpetrated, misleading investors to purchase financial instruments tied to sub-prime mortgage bonds? The $16.65 billion penalty Bank of America had to pay, the largest settlement between the government and a private corporation? Seeing financiers from both companies on stage at a 2014 ReadyNation event promoting early childhood social impact finance should give us pause. Watch the hour-long talk here. The excerpt below is taken from a two-minute clip where the moderator, Ian Galloway, introduces a panel on potential financing structures. Watch that here.

“Christina Shapiro is a vice president at Goldman Sachs. You know, I’ve heard a lot that if you’ve seen one social impact bond, other people may have heard it, too. If you’ve seen one social impact bond, you’ve seen one social impact bond, right? That is true with one exception, and that is that just about every social impact bond out there has Goldman Sach’s fingerprints all over it. They are by far the leaders in the space. They are creating this marketplace out of thin air, and I commend Christina and her colleagues for their hard work on that front.”

Ian Galloway, Senior Research Associate, San Francisco Federal Reserve

To dig the hole deeper, the Council for a Strong America has accepted over $10 million from the Gates Foundation since 2006, including a $4.2 million grant in October 2015 to “engage stakeholders around the Common Core and high quality preschool.” Last summer in the run up to the fall 2018 elections, Gates granted the organization $300,000 to “educate potential future governors about the importance of college and career readiness in their state.”

Gates Grants to Council for a Strong America

ReadyNation’s speakers range from the World Bank, UNICEF, Omidyar Network, and the Girl Scouts to KPMG, the Massachusetts Business Roundtable, Learn Capital, and Sorenson Media (founded by Jim Sorenson, Utah tech entrepreneur and impact investor). A previous summit launched early-childhood campaigns in Romania, Australia, and Uganda in 2015. ReadyNation Romania and The Front Project (formerly ReadyNation Australia) will be participating.

What do summit attendees get for their $200 registration fee? ReadyNation touts the event as “the only training ground in the world for business people from outside the children’s sector to become unexpected and uniquely influential advocates for public and private investments in early childhood…Summit attendees from the U.S. must be business people or public officials; those from outside the U.S. can come from other sectors.” Children’s advocates and policy experts in early childhood education are specifically excluded from the conference unless they attend with at least four business people. In order to attend, one must to submit an online request.

Why is ReadyNation so emphatic about excluding early childhood educators and policy advocates? Find out in Part 2: Making Childhood Pay: Arthur Rollick, Steven Rothschild and ReadyNation.

-Alison McDowell

Competency Based Education (CBE) and ALEC Preparing Students for the Gig Economy

Reposted with permission from Educationalchemy.

job training office_3

If the history of public schools in America is the history of labor production and preparation (i.e. 19th c factory model schools for a factory society) it holds true that we are now trying to create gig-driven schools to prepare children for the new gig economy. Just as factory model schools prepared children for factory jobs, it’s no coincidence that the CBE framework is a “mini me” of the gig economy itself. And the CBE framework was developed and is funded by the same corporations and organizations like iNACOL and ALEC who are the profiteers of a new gig economy. Just think of how the gig-driven culture reflects the long awaited goals of ALEC model legislation which dismantle collective bargaining, living wages, and other labor rights.

Pearson, of course, was ahead of the pack as usual… developing a school- to -labor pipeline that suites the corporate masters.  As this blog explains, Competency Based Education becomes the framework for “badges” instead of credit hours and prepares students for career and college which is code for the new “gig” economy. According to Pearson: “Alternative learning credentials including college coursework, self-directed learning experiences, career training, and continuing education programs can play a powerful role in defining and articulating solo workers’ capabilities. Already badges that represent these credentials are serving an important purpose in fostering trust between solo workers, employers, and project teams because they convey skill transparency and deliver seamless verification of capabilities.”

I could -at this point -just say ’nuff said.

But I won’t.

CBE 101

First, a brief background: Competency based education (or CBE) has been a rapidly developing alternative to traditional public education. While proponents tout it as “disruptive innovation” critics examine how disruptive translates into “dismantle”, meaning that CBE is a system by which public schools can, and will be, dismantled. This is not ancillary. It was designed to create a new privately-run profiteering model by which education can be delivered to “the masses.” Think: Outsourcing.

CBE delivers curriculum, instruction and assessments through online programming owned by third-party (corporate) organizations that are paid for with your tax dollars. Proponents of CBE use catchy language like “personalized” and “individualized” learning. Translation? Children seated alone interfacing with a computer, which monitors and adjusts the materials according to the inputs keyed in by the child. See Newton’s Datapalooza here.

So gone are the days of “credit hours” earned by spending a certain amount of hours in a classroom. Instead, children move at an individual pace detached from the larger group or collaborative learning experiences which CBE pimps try to warn us are ‘keeping certain kids back” from their “true potential.”

The immediate advantages of control and profits for the neoliberal privatizers is quite evident and well documented. See Talmage for more on CBE history and my own summary here.

Let’s summarize what the outcomes of the CBE paradigm of public schools will be:

  • Disenfranchises teachers who are replaced by computers and third party providers (now LEA’s with access to student private data). This erodes a unionized teacher workforce.
  • Eliminates collaborative interactive learning activities in favor of individualized one-on-one learning with a computer program
  • Course credit will no longer be counted by credit hour but by completion of a series of exercises, tasks or data driven curriculum which provides the student with a “badge of completion” (see Pearson).  The amount of time spent in a classroom experience is no longer a determining factor in evaluating success.

In their own words, The Business Round Table explained how Career and College ready objectives are designed in the likeness of their corporate sponsors. The Common Employability Skills paper states: “Educators and other learning providers will also have an industry-defined road map for what foundational skills to teach, providing individuals the added benefit of being able to evaluate educational programs to ensure they will in fact learn skills that employers value.”

Let me restate that again: “EDUCATORS WILL HAVE AN INDUSTRY-DEFINED ROAD MAP.”

The industry road map today in 2016 leads to a gig economy.

What’s a Gig?

Meet the gig economy. What exactly is a gig economy? It’s what CBE becomes when it’s all grown up and graduated. According to gig economy critic Stephen Hill: The gig economy is “….a weird yet historic mash-up of Silicon Valley technology and Wall Street greed”  which is being thrust  “upon us (as) the latest economic fraud: the so-called ‘sharing economy,’ with companies like Uber, Airbnb and TaskRabbit allegedly ‘liberating workers’ ’to become ‘independent’ and ‘their own CEOs,’ hiring themselves out for ever-smaller jobs and wages while the companies profit”.

If the history of public schools in America is the history of labor production and preparation (i.e. 19th c factory model schools for a factory society) it holds true that we are now trying to create gig-driven schools to prepare children for the new gig economy. Just as factory model schools prepared children for factory jobs, it’s no coincidence that the CBE framework is a “mini me” of the gig economy itself. And the CBE framework was developed and is funded by the same corporations and organizations like iNACOL and ALEC who are the profiteers of a new gig economy. Just think of how the gig-driven culture reflects the long awaited goals of ALEC model legislation which dismantle collective bargaining, living wages, and other labor rights.

ALEC.png

In 2015 the ALEC Commerce Task Force “Celebrated the ‘Gig’ Economy” at an event in which they held workshops on the “Gig Economy” and “What’s Next for the ‘Sharing Economy’–A Discussion on Principles on Best Practices,” which will likely lay the groundwork for further efforts to undermine worker protections. Naturally, their model bills sponsored by the Education task force members directly intersect with the model bills put forth by the Labor task force as well.

In response to this 2015 event, ALEC bragged in their own website that, “With new policies ranging from reducing the income tax burden, to deregulating the ‘gig economy,’ to pension reform, good news in Arizona is plentiful.”

The National Network of Business and Industry Associations, calls itself “an innovative partnership that joins 25 organizations focused on better connecting learning and work.” Their goal is to develop tools that:

  • articulate the common employability skills required for workers across all career fields;
  • rethink how various professional organizations build credentials to help workers move easily between professions (think: Open Badges); and
  • increase the use of competency-based hiring practices across the entire economy (Pay for Success).

One can begin to see how easily CBE fits in with the BRT goal in their Common Employability Skills document where they write: “This model can take its place as the foundation for all industries to map skill requirements to credentials and to career paths.” They add that educational institutions will be EVALUATED based on their ability “to ensure students will in fact learn skills that employers value.”

So let’s summarize ….

In a gig economy, gone is the routine 9-5 work hours by which traditional salaries are determined. Instead gig jobs are paid by the completion of tasks regardless of the hours.

In a freelance world, where jobs are merely a series of gigs strung together, the new ESSA “pay for success”  framework fits right in.

Pay for Success is a gig framework for education.

So when jobs are free lanced there is little opportunity for a unionized workforce and there are no benefits (thanks ALEC). There is no collective work space or shared workforce experience. Most work can be done independently, online, and from home. After 12 years of schooling under this framework the future workers of America will be primed to fall right into their pre-ordained place in the gig economy, where they will now feel right at home.

Just as “manufacturing companies and Silicon Valley have begun increasingly to rely on private contractors to hire temps and freelancers” (Hill, 2016)  so have public schools, with the advent of the new ESSA bill, increasingly use private contractors to provide public education (temps being TFA and freelancers represented by Pearson, K12 Inc and the like).

Gig proponents might call it “independent” labor which “frees” workers from the messy attachment to brick and mortar workplaces and money tied to work hours. It’s the mirror image of CBE proponents advocating for students to be “freed” of credit hours tied to hours spent in brick and mortar classrooms.

The gig advocates mantra of “We don’t have to hold on to the model of the 40-hour workweek for a corporate employer” eerily reflects the CBE reform mantra of “students should not have to hold on to credit hours for a traditional model of education.”

Just as CBE has become the bastion of cost-effectiveness in education for profits to CBE delivery systems in a world of austerity (neoliberal capitalism on steroids), so the gig economy streamlines the costs to corporations- who can now eliminate messy expenses like your 401k, health insurance, unemployment insurance.

This project-to-project freelance society (as opposed to long term consistent employment within one organization) will not trouble a student who has freelanced their way through school, from Open badge to Open badge, with no sense of collaborative or collective sensibilities in their learning experiences, or familiarity with relationships between time and place representative of stability or community. In this freelance society and freelance education system, people cobble together a string of independent “gigs” in which they work independently at their own pace. Gig workers are never really “on the clock” because they are never “really off the clock” either–just as CBE students are never focused on time in learning, but are focused on pushing through each module of the CBE framework in order to accumulate “credits” as quickly as possible.

Another way of conceiving of Pay for Success is the “Learning is Earning” framework, which outlines how CBE and the gig economy work together.

According to Pearson:

“A decade from now, when solo workers comprise the majority of the American workforce, I think it will be common for all of us to point to digital credentials and badges as a better way to talk about our own expertise and the know-how of others. Trusted digital credentials will strengthen the new economy by removing some of the high-frequency friction and inefficiencies of project work. Digital, verifiable credentials owned by each worker will ease employer uncertainty while forming project teams. And at the same time, badges will help each of us to identify relevant new work projects and navigate toward just-in-time (aka “gig”) learning opportunities.

Also read about LinkedIn, CBE and gig economics here.

Gig employers and CBE policy makers tout this  as “freedom”—freedom from stability and security, for sure.

Nunberg, in his NPR commentary suggests, “If “gig” suggests the independence you get when you’re not tied down to a steady lifetime job, then just think of the freedom we’ll all enjoy when the traditional job is consigned to the scrap heap of history, and the economy is just gigs all the way down.”  I fear that public education, no longer tied down to time or place, like stable jobs, will too be consigned to the scrap heap of history.