Incentivizing Pre-K Online Gaming With Digital Sticker Books and Pornography (For The Adults Says Heckman, Half Joking)

This is another post with clips culled from talks given at the Center for the Economics of Human Development’s working group, Measuring and Assessing Skills: Real Time Measurement of Cognition, Personality and Behavior. It was held at the University of Chicago in February 2018. I previously shared a segment called from “Math to Marksmanship” with Nobel Prize economist James Heckman, Gregory Chung of UCLA-CRESST and Jeremy Roberts consultant to PBS Kids.

Below are ten additional excerpts from that talk. I watched all two hours and pulled highlights, so you don’t have to.  Topics covered include: game-based learning for pre-schoolers; how to get pre-readers to create online accounts; how digital games can be used to identify “Big Five” behavior traits; and a real doozy, Dr. Heckman’s half-joking suggestion that gamification and incentives of pornography for adults could encourage parents to have their children use online games more often. No, really.

Below is a relationship map of the organizations mentioned in the presentation. You can access an interactive version here.

PBS Kids Gamification

PBS Kids is a media content provider for children ages 2 to 8 years old. Nearly 65% of all children in that age range interact with PBS Kids’ content at some point during any given month. Their apps have been downloaded 45.5 million times, and they deliver 276 million streams per month across multiple digital platforms. Their key strategy is to try to be wherever the kids already are: desktop, television, mobile, and classroom (whiteboards/chromebooks). They don’t develop their own content, but instead curate properties created by others such as: Daniel Tiger’s Neighborhood (social emotional learning, Mr. Roger’s Neighborhood); Curious George (engineering/math); Pinkalicious (art); and Cat in the Hat (engineering/science).

PBS Kids Measure Up Screenshot

The US Department of Education recently awarded PBS Kids their fifth consecutive, $100 million, five-year Ready-to-Learn Grant. Each cycle has a different focus. The focus of their current grant is science, informational text, and personalized/adaptive learning. A quarter of the budget is allocated for research carried out in partnership with UCLA CRESST, SRI International, Rockman, and CAST.

PBS Kids is also collaborating on learning analytics with Kidaptive, an AI online learning platform developed in association with Stanford, and with EnLearn, which was created with Gates Foundation funding at the University of Washington Game Science Lab. Games discussed in the presentation included the Measure Up and Super Vision platform, Fish Force, and Kart Kingdom, a starter online multi-player game.

Even though it takes place later in the talk, I want to begin with this excerpt, because it provides a true glimpse into how these people see parents. During another part of the talk Roberts notes that the audience PBS KIDs is focusing on for their grant’s ethnographic study is comprised of Title One parents and those they perceive of as “underserved.” Heckman’s comments are laden with derogatory race/class inferences.

1. Getting Parents to Prioritize the App…Using Pornography Incentives?

Timestamp: 1hour 14 minutes 20 seconds

Clip here

Roberts: The idea here is for us to tease apart any effects that we find that are pursuant to the use of the parent application (Measure Up and Super Vision). Um, yes there’s a lot of debate right now about what you have to do to get parents to want to engage with the tool. Is this just a no-brainer? Are they going to use it? No, it’s a key challenge.

Parents will tell you that they really care, and they will tell you that they want to be a good parent, but it’s aspirational. They will repeatedly give you false information about their expectations for how they will use the product. It isn’t until you pin them down with crafty, crafty strategies before you can start to get the truth.

One example would be the third time…I had them tell me what we wanted to hear through two different trials and finding out what they think about it. Finally, on the third trial the innovation in the design was to have them plot their day BEFORE we show them any products or ask them anything about this, plot their day. Then we had them circle the parts of their day where they think they’re actively involved in parenting. So they did that. Then we showed them all the products, and then we said, hey would you use it? And they told us the same story, yes we would. And then we said now please point on the diagram of your day when you would actually use this, and then they FINALLY they all said, oh yeah, oh, I don’t know, I’m not sure…because they’re so busy.

Other Person: But don’t you think being able to tie it to something that would directly show their school readiness might be able to get parents more involved?

Roberts: I want that to be true. Yeah. Are you asking what I want? (laughter from the table)

Other Person: Is that something, a strategy, that you’ve explored further?

Roberts: Uh, it’s something that we’re looking at now. We’re definitely not giving up on this. This is key. We already know that when the parent IS involved, that the outcomes are way better.

Heckman: (interjects) But what about a “build-a-child” game for the parent? You know? No, in other words you gamify it for the parent. You’re making the parent into some kind of wise educational administrator. They’re not. So you could even have pornography, I guess. Something that would entice them. I’m just, you know. Nah, sorry about pornography, but I’m just thinking how to motivate the parents.

Roberts: We need to innovate here. We need to use some psychology on parents. We need to meet them where they are. We need to use what they have, and we need to let them do…um so, yeah.

2. Gathering Home Life Background Information

Timestamp: 16:05

Clip here

Roberts: We have telemetry on parent use of recommendations associated with the near time kid use of the app.

Heckman: What about the parents’ environment? Some measure of the home in addition to what you see parents are doing with your product.

Roberts: Currently very limited. I would say, right. No we’re not…

Heckman: So you wouldn’t know kind of what effect you might be having?

Roberts: No, but that kind of background information would be amazing. Like that’s the kind of thing…

Heckman: Right, and do you have plans to do that?

Roberts: Not currently, but that doesn’t mean we couldn’t consider it. We have some discretion in terms of what the out years of the grant do in terms of study.

Heckman: Because we see in some of these analyses tremendous changes in family structure, in family approach to the child…

Roberts: Oh sure, poverty, how many words…uh

Heckman: No, exactly, but literally the change in the parental strategies…

Roberts: Change. Yep, no, that’s great. I’d love to talk more. One of the things I would like to get out of this meeting, selfish aspect from my perspective, is I would love to crowd-source ideas about the highest-value study we might permit on datasets like this. Because from my perspective there is more than we could possibly every do based on the data sets we’re collecting. So, where’s the…what’s is the high value? Like, I would love to hear opinions about that.

Heckman: Well right now you’re not, I mean parents are part… you’re using them to leverage what you’re doing. I mean…well, I don’t want to focus…

Roberts: No, it’s ok. So, the short version is we are doing ethnographic studies of parents and their environment, but it’s not connected with this data and telemetry studies, so I won’t be able to line it up. We do have distributions and an idea of our audience, especially Title One and low income. We try to focus on the underserved, so we know a lot about what’s going on, but this particular data telemetry study isn’t lining up.

3. Designing Games that Encourage Pre-Readers To Create Online Accounts

Timestamp: 31:20

Clip here

Other Person: You might want to suggest…do students have free accounts where you can tell how they did on their first ever play of the game and then…Of course, you might probably have a selection of kids who continue to play based on them being good enough.

Roberts: Distinguished ability and identity is key to all of this work. But, you can’t ask a kid that can’t read yet or understand virtual identity to create a full account. At the same time, even kids who can, if you WANT them to create an account, it doesn’t mean that THEY want to create an account. So, they have to WANT to create an account. There has to be a motivational structure or incentive. And so there are a number of different strategies in play that all when taken together constitute our strategy, which is: what they’re able to do; what can we make them want to do; and now we have that level of distinguishability or identity.

So, we do have account systems. You can create full credentialed account systems-safe, private. Uh, but not that many kids do unless we go out of our way to make pieces of media that they can create themselves and then save. When they self-express their own identity through interactives and can save their own user-generated content then care enough to go do that kind of thing. But until we make something they understand and care about, it’s pretty much a non-starter.

4. Game Play Patterns and Social Emotional Behavior Tracking

Timestamp 44:40

Click here

Heckman: But what do you make of that? But just to relate to some of the other measures, if we go across the games these people are playing…is there some way of developing an inventory of social and emotional skills? Or…

Roberts: We are at the very beginning of this, the learner profile. I see it in two huge buckets. One is get all of the things you think might be relevant and co-locate them so that you can organize them by individual. The second is a free-for-all interpretation. I’m not sure what the strategy is there, but we will be able to compare, in theory, this game and that game, did they watch this video, did they NOT watch that video. What are all the slices and dices of what we think might be important and see what’s true about that subset?

Heckman: Is there any way to kind of project these people to get some baseline measure of some…We talk a lot about the Big Five or some other inventories, a suitable gauge. Is there some way to look at your measures and relate them for at least a subset?

Roberts: I think so. I think that if you have a player who consistently, across operations, different games, consistently exhibits powering through you might make an argument that that is something like conscientiousness. And then there’s all the grit, persistence, determination. Stuff like inhibitory control and self-regulation that are so important that I think plays into some of that. I mean the Big Five, each term, each label of the Big Five, subsumes so many constituent concepts. So, I think it would be about modeling the connection and being careful that you actually are only getting one time. But the end game here is that if you have enough tiny little pieces it makes for great evidence.

5. Tracking Behaviors in Games-The Tea Party

Timestamp 48:50

Clip here

Heckman: So far you’ve done it game by game. But I’m saying you link performance across multiple games for the same child.

Roberts. We’re working towards that. It’s specific to the game mechanics in each case; the interactions are situated.

Heckman: Couldn’t you design games that were sort of more intensive in conscientiousness? More intensive in curiosity, you know? I’m just using the Big Five.

Roberts: There’s a game we have that has nothing to do with math at all. You sit down at a big table, and all of your character friends are there for a tea party. You get to hand out cookies, and you get some feedback from time to time. You didn’t give any cookies to this person, and you know observe that… And we (the game platform) would know if you shared equally in the first place and if, when prompted, did you correct any inequity? And things like that.

Heckman: So does the tea party really capture interaction though among groups? I mean it’s a virtual tea party.

Roberts. Yes, these are NPCs, but do have a virtual world.

Heckman: And you still have a virtual player where you are interacting with a virtual bot.

Roberts: So we can model.

Heckman: Yeah

6. Branding to Get Kids to “Groove Out” on the Games

Timestamp: 1 hour 7 minutes 30 seconds

Clip here

Heckman: How do you entice the child to get into it? So…I’m just getting back to how easy it is to enroll…suppose you have a group of preschoolers that you want to target say in a Los Angeles community…how do I get all of them…

Roberts: It is intended primarily for the home use case, but if you were running a preschool and you wanted them to use it you would go to the app store…

Heckman: You can download them (the games), but just ignore them. So how do you get them to groove out on this?

Roberts: They have to WANT to. So, it’s a strategy involved in the design to make it appealing. Use characters that they love.

Heckman: And you’ve experimented with that. You know how to apply this stuff?

Roberts: The people who make the media, I think they do, yeah. They have a track record of great success in getting kids to care. We sink or swim based on the kids’ choices. If we don’t make something the kid wants to choose over Toco Loco (sp?) or other things we’re sunk. A lot of our effort goes into engagement strategies. In fact, our learning model has a giant engagement factor that multiplies everything. It doesn’t matter how good your instructional strategies is, if your engagement goes to zero, you’ve lost the entire game. Everything depends on getting the kid to care. We try to do it in trustworthy ways (laughter).

7. Digital Sticker Books, Behaviorist Incentives

Timestamp: 1:11:05

Clip here

Roberts: Am I able to take game play up to an assessment and predict the performance on the assessment? And can I revise that over time as they reengage? Because the kids will engage and re-engage and re-engage until they get bored or age out…So, the media strategy here is working in tandem with the instructional strategy.

Heckman: Did they have a set of goals within the, over multiple trials? Yes, ah. So they keep an inventory? So the incentive structure is cumulative…I’m now climbing Magma Peak, I guess a volcano, so I go up at 10,000 feet. You’re about to go to 11,000 or something…

Roberts: As you go, you’re unlocking pieces of a statue for a Statue Island that rises up out of the water. The statues are of your favorite characters and you’re unlocking sticker books and you’re unlocking additional interactives. And so as you go you’re getting immediate rewards and you can then build like a puzzle into your favorite character in addition you’re getting other things kids really love like sticker books. Sticker books are a BIG DEAL to a three year old.

Heckman: But do you give punishments, too. Suppose they fail? Does their island start to collapse? No, I’m just curious about your experimental incentive structure.

Roberts: I don’t think we punish them in the honest sense of that word, but we do give feedback intended to help them to go meta-cog about certain things that maybe they’re doing related to the game. So we can say, oh, I don’t think that’s going to work at all or that kind of thing.

8. Making Predictions From Tidbits

Timestamp 2:02:57

Clip here

Roberts: With the whole set up ultimately, what I’d like to do is have enough representations of force and motion; and enough representations of this math skill; and enough representations of the social emotional; all feeding into a vector of the learner that itself has a layer of interpretive layer on top of it that we could argue for years about all the hypotheses of how to take all the inputs turn them and do all the analysis for all of those high value inputs and determine what they are predictive of. So, I am not necessarily trying to maximize any individual outcomes at this time. I AM trying to make a system by which we have reasonable extraction of high-value tidbits about individuals, and we co-locate those things so that we can take that profile and try to do productive things with it.

9. Surveillance Via Facial Recognition and Age Detection Software

Timestamp: 2:03:50

Click here

Michelle LaMar: So that gets to something that I’ve been wanting to ask. How can you be certain what you are seeing is the child, a particular individual interacting with the app, rather than a parent helping them, a sibling, a friend…or is there some sort of co-op mode?

Roberts: There is definitely going to be some noise. We’ve done some prototypes on facial recognition and age detection. It’s early in that space. I don’t have a lot of confidence in it right now, but the idea was to determine whether there’s more than one peer or an adult and child scenario going on at the same time and passed back and forth. There are some self-selection strategies we tried that worked pretty well when it’s kids. They effectively go down the safe slots. The idea that you can create your own little avatar and you create your own slot and there are multiple slots available to you. Because when you give kids things they can create and save and care about, they want to keep them in their own toy box, that kind of thing. We’ve done some things to try and get the kids to tell us, but we may never solve that problem.

10. PBS Kids, A Huge Intervention

Timestamp 2:06:19

Click here

Brent Roberts: So let me just say I’ve loved you guys since I was a kid. You’re just awesome. You are, to be honest, a huge confound in every developmental study ever done. You’re like lead, right? Unmeasured, pervasive and having a huge effect on everybody; and we don’t measure.

So…if I am running a study, any study… at least half my kids are doing your product. You’re a huge intervention, right? Instead of thinking in terms of like how do you bridge from what you’re doing to doing clean experiments and or measuring things, because it seems really hard. You’ve got dozens if not hundreds of longitudinal teams in the field right now working with kids. If you can create a system where you simply give them in a research capacity the ability to tap into your system and track the kid, you get the IRB approval from the parent, the PBS folks will work in coordination.

So you don’t do anything; you don’t design studies. You just give your information to those researchers who can design studies, who are measuring these things. That’s the easier way to do this than to toil through all the different necessities. You got tons of people out there, and you are so pervasive. I mean I don’t see how a developmental researcher wouldn’t want to know.

Kart Kingdon

Mr. Krasner, I have some questions about that Chan Zuckerberg arrangement.

Dear Mr. Krasner,

To understand our country, you have to recognize that black people were never meant to be free. It’s a phrase I’ve heard my friend Ismael say often. The weight of it, however, hit hard last week when he and his wife approached a manager at a local theater to resolve an issue with an incessant beeping that disrupted the family’s enjoyment of the movie. They waited over an hour; no one came. After finally obtaining a refund, they were told they could not go back in to retrieve their young sons.

The theater escalated the situation, and within moments eight police officers arrived on the scene. My friends were seen not as concerned parents, but as imminent threats because of their race. It was traumatic for the entire family, which included four young children. The Philadelphia Tribune covered the incident here. This comes a few months after Philadelphia was in the national spotlight over the unfounded and racially charged arrests of two black men in a downtown Starbucks.

Jimenez Family

Our city doesn’t just have an incarceration problem; we have profound problems with policing, power and racism. Whiteness wraps many in comforting myths of freedom and justice for all under the law, but black and brown Philadelphians know the harsh truth. Our city embodies the Jimenez family’s 40th and Walnut Cinemark encounter more than the experience of the tourists who pass by the Liberty Bell and through the Constitution Center any given day. We must own that before we can move forward and do the work needed to transform our city for the better.

Ismael is a tireless advocate for racial justice and co-chair of the Caucus of Working Educators. Many dedicated teachers, whose work on Black Lives Matter at School drew national acclaim, canvassed for you last fall. They believed in your commitment to progressive change and your willingness to take on the intractable problems of our city’s prison industrial complex.

Yet now the District Attorney’s office has entered into a collaboration with the Chan Zuckerberg Initiative, which leaves me wondering if the teachers’ trust in you was misplaced. I hope you will read Emily Talmage’s “Dear Mark” letter in which she shares her concerns about the “personalized learning” programs Facebook is promoting. These platforms are dehumanizing and grounded in surveillance, data-mining and predictive profiling. Anyone who truly cares about justice for oppressed people surely knows the manipulative oligarch Mark Zuckerberg can be no ally.

Chan Zuckerberg Krasner

Your new partner is a for-profit, Limited Liability Company established in 2015 with $45 billion proceeds in Facebook stock. Because it is not incorporated as a non-profit, Mark and his wife Priscilla maintain a high level of privacy, control, and flexibility over Chan Zuckerberg’s “investments” in charities and for-profit companies. In other words, they have complete discretion over how they use that money to influence policies that can benefit their other corporate interests. The public has no right to know how those funds are spent.

David Plouffe, who leads their policy and advocacy team, was a campaign manager and senior advisor to Obama and later served as a Senior Vice President of Strategy for Uber. You can’t get much more neoliberal than that. The head of their justice program, Sasha Post worked as a program officer and assistant to the director of US Programs at Open Society (Soros) from 2005 until 2009. George Soros made a $1.45 million contribution to the Philadelphia Justice and Safety PAC that put $300,000 into ads supporting your campaign.

Soros Justice and Safety PAC

Do you really expect us to believe that Zuckerberg’s predatory corporate enterprise, one that has been integrated into the state surveillance network, that monitors the emotional states of vulnerable people for advertising purposes, that traffics in personal data and biometrics, and prides itself on devising ever more sophisticated means of manipulating online behavior, is shadowing the operations of the Philadelphia District Attorney’s office for the purposes of BETTER serving subjugated people caught up in the prison-industrial complex and improving our safety?

Facebook Sad Teens

The online systems designed to monitor the cognitive and non-cognitive traits of public school children through programs like Facebook’s Summit Basecamp, are readily transferred to prison populations. In fact, programs like Edovo, piloted in 2014 in Philadelphia with financial support from the MacArthur Foundation, are already up and running. This predatory business model, launched by Brian Hill who did work on Social Impact Bonds while attending law school at Northwestern outside Chicago, pushes tablet-based online “education” and “behavioral therapy,” paid for by the cash-strapped families of incarcerated people. Once prisoners jump through enough hoops (and generate the requisite amount of data), they can access entertainment on the device. Who knows what data is gathered and how it is used?

Edovo Overview

And Edovo is just the tip of the iceberg when it comes to social impact “solutions” for those involved in the justice system, and those perceived of as being “at risk” of being incarcerated. There are whole non-profit industries springing up around anti-recidivism and “opportunity youth” with exuberant bipartisan support, because evidently in this Third-Way political moment even Democrats feel bold enough to to gut the public sector without fearing any real consequences.

Edovo Payment

Pay for Success, or social impact partnerships, outsource public services to private interests that agree to meet performance targets to receive payment. Services are consequently reverse-engineered to meet data-driven metrics. Consider the ways in which standardized testing compromised authentic education, narrowed the curriculum, and opened up huge markets for test-prep oriented education technology. As a result, those receiving services (toddlers in public pre-K programs, incarcerated people awaiting trial, substance users seeking treatment) will be subject to intense data collection for the purpose of deal evaluation. That data will be gathered via online platforms, dashboards and portals, which means more and more services will need to be delivered digitally.

We know investors will figure out ways to game the system and claim “success,” even if the lives of those ostensibly being served are not benefitted or are perhaps even harmed in the process. See concerns around problematic impact metrics associated with the Salt Lake City pre-K Social Impact Bond agreement in this article from New York Times, “Success Metrics Questioned in School Program Funded by Goldman.”

Picture for a moment the corruption of the charter school industry, spread it across ALL public sectors, and dial it up to eleven. Imagine, say, a Luzerne County, PA “Kids for Cash” scenario, but this time put it in Philadelphia and add predictive analytics, e-carceration (electronic monitoring), and “Pay for Results” family interventions to the mix. What does that look like in a city like ours of such deep, deep poverty and “intractable” social problems? Chilling, right?  Well, the venture capitalists operating accelerators like Good Company Ventures are seeing dollar signs.

Impact Economy Philadelphia Intro

There will be significant pressure for non-profit organizations to pull more and more youth and their families into “social innovation” systems so they can be “processed,” “fixed,” and “impacted,” even if flawed screening tools and bad data have to be used to do it. In this new model, children like my friend Ismael’s sons could become targets for those wishing to profit from the management of black and brown minds and bodies. I fear a next-generation New Jim Crow is emerging, one where incarceration and commodification of life is digitally imposed, a new method yet one no less vicious than the slavery and mass incarceration that preceded it.

These impact interventions will not remedy the structural causes of poverty or the racist origins of mass incarceration, because the business model FEEDS off of poverty and bondage. For that reason it can NEVER be eliminated. While these programs will anoint a chosen few to model the “up-by-the-bootstraps,” gritty, resilient, growth mindset mentality, the machine will insist on “solutions” that keep a majority of the poor in their place.

The MacArthur Foundation, which is driving the push to eliminate bricks and mortar schools and replace them with learning ecosystems comprised of online learning modules and community-based projects, is also putting considerable resources into Criminal Justice “Reform.” A few months ago I posted online what an equivalency might be for the carceral state. This is the somewhat dystopian scenario I came up with:

  • Developing “better” algorithms
  • Sending more people “home”with an Alexa-type minder
  • Deploying complex systems of biometric monitoring
  • Enforcing compliance with online education and therapy programs
  • Requiring work-based learning with minimal wages paid
  • Amazon food delivery-linked to your fit bit (added to your bill)
  • Drone surveillance
  • Predictive analytics that create a marketplace for impact investors to direct resources to certain people for “development” purposes

Each of the above will fuel the technology-based, data-driven, social impact investment market, but will not provide “freedom” to those forced to live within the confines of the digital carceral systems.

In 2016, the Economy League of Greater Philadelphia prepared a whitepaper, Growing the Impact Economy in Greater Philadelphia, describing the untapped financial opportunities “intractable social and environmental challenges” offer to innovative entrepreneurs and corporate leaders. Perhaps your chief of staff Arun Prabhakaran, briefed you on this? He now serves on the advisory committee of ImpactPHL, the social impact engine for Southeastern Pennsylvania. That year he also accepted an award from Social Innovations Partners, a key promoter of social impact investing regionally, on behalf of his employer, the Urban Affairs Coalition. The award was for being a “Behind the Scenes Rainmaker.”

Arun Prabharakan Social Innovations

Solving Philadelphia’s “safety” problem doesn’t require Mark Zuckerberg’s billions. It doesn’t require “big data” consultations. It can’t be reduced to an impact metric. This important work demands intense community participation and strategic development of interventions around ending cash bail, exploring prison abolition, implementing restorative justice, halting police violence and killings, confronting structural racism, and addressing poverty and hunger.

Meanwhile, not only have we not made amends for past injustices, we continue to perpetrate them and all the while structural racism is being baked into the coded algorithms that increasingly define how each of us is allowed to lives our lives. What happened to my friends’ family shows just how far we have to go and what is at stake.

Philadelphia, the time has come for some deep soul-searching as the Fourth Industrial Revolution looms large on the horizon. Despite all the catchy slogans, the “what works,” “data-driven” future being plotted in back rooms at Davos promises fewer living wage jobs, eternal austerity, automated decision-making, Blockchain identity and militarized policing grounded in drone surveillance, facial recognition software and predictive policing. Incidents like the ones at Starbucks and Cinemark are mere harbingers of the escalating altercations that are bound to come if we don’t embark on the hard work of confronting our toxic past founded in settler colonialism and the Trans-Atlantic slave trade.

Four Industrial Revolution

And if we feign ignorance, continue to look the other way, refuse to face that past and imagine new possibilities? Our future will be an economy built on “un-jobs” where wealthy investors view the “value” of the subjugated as confined solely to the data they generate attempting to live their lives confined within the impact-fueled, non-profit surveillance system. Profit will be extracted as citizens are reduced to data,  their perceived human capital traded in futures markets as social impact derivatives.

Mr. Krasner, cancel your arrangement with Chan Zuckerberg. Philadelphia is better off without Silicon Valley’s interventions. You’ll find your answers here among the people. In fact, we’re the only ones with the ability to chart a proper new course. A true progressive would not allow social impact investors to remake prison reform as twenty-first century market for digital e-carceration systems. That’s one plan, but we can stop it right now, if we choose to.

See below for a relationship map of players mentioned in this post. Interactive version here.

Krasner Map

 

A $100 Million “Secret, Bipartisan Political Plan” to Privatize the Public Sector

I travelled to Washington, DC on Thursday June 21, 2018 with fellow activist Ismael Jimenez, an acclaimed teacher of African American history at Kensington CAPA High School in Philadelphia, PA. A week earlier the search engine gods had serendipitously delivered up an Eventbrite link for the launch of the Social Impact Partnerships to Pay for Results Act Fund (SIPPRA), “Pay for Success: Making the New $100 Million Fund Work to Improve Lives.” How could I not go?

SIPPRA was incorporated into the Bipartisan Budget Act of 2018, signed by Trump on February 9, 2018. The legislation allocates $100 million in federal funds to held by the Secretary of the Treasury for outcomes-based payments tied to Pay for Success contracts. It also establishes a Federal Interagency Council on Social Impact Partnerships and a Commission on Social Impact Partnerships.

I compiled a list of elected officials who sponsored or co-sponsored the federal legislation in the House and Senate here. Pennsylvanians should know that DFER (Democrats for Education Reform) Congressman Dwight Evans was a co-sponsor, as was former Congressman Patrick Meehan. I don’t think it is any coincidence that former Pennsylvania Governor Tom Ridge’s merchant banking firm, Ridge-Lane, issued a press release touting their expansion less than a week later. The firm has positioned itself as offering advisory services in education, real estate, IT, and sustainability at the “apex of the public and private sectors.” Clearly they feel the Pay for Success, P3 era has arrived.

Tweets with the hash tags #PayForSuccess and #SIPPRA give a sense for how promoters viewed the event. I was grateful that Ismael, a powerful voice for racial justice in education, was able to come and be another set of eyes, because there was so much to absorb.

My goal for this post is to document how I experienced the event, so I can refer to it in the future. It’s long; so for those who prefer a summary, here are a some highlights:

  • 200 + people gathered at the Dirksen Senate Building in Washington, DC for a privately-sponsored event to celebrate the passage of long-awaited legislation hoping it will jumpstart a wave of Pay for Success, outcomes-based contracting of social services.
  • It was a bipartisan group, composed primarily of those who anticipate providing services and brokering and evaluating the deals, plus a few foundation and venture capital interests.
  • Even though the hosts, Results for America and America Forward, have ties to data-driven education reform, neither early childhood nor K12 education were directly mentioned, which surprised me.
  • All of the presenters were white. No discussion of race or racial justice at all.
  • There was a heavy Utah presence with Senator Hatch and James Sorenson keynoting. Andrea Phillips, former Goldman Sachs vice president who was involved with the questionable Salt Lake City pre-k social impact bond, participated in the panel discussion. See Tim Scott’s important piece on SIBs here.
  • Everyone agreed it was difficult to explain complex policy proposals to elected officials; but after many years and considerable effort, congressman and senators finally “got it.” (Or, rather were convinced their political careers depended on going along with the Pay for Success public fleecing;  since there are scant few bipartisan initiatives out there, and many deep-pocket interests want to see this profit-driven outsourcing move forward.)
  • If you’re going to do these deals, keep the metrics simple (check a box simple).
  • Don’t call them social impact bonds. The new language is “social impact partnerships,” which sounds friendlier.
  • In one-on-one conversations afterwards, attendees tried hard to convince themselves they were “doing the right thing” and had little regard for the serious dangers presented by racially-biased algorithms, data-profiling, internet of things compliance and monitoring, and digital identity that could be tied into PFS contracts.
  • Some, however, definitely knew and were surprised to be confronted by someone who knew the truth. Jessica Ramakis of the US Department of Education, for example had a rather icy stare for me as I gave her my handout.

IMG_E1358 (1)

I didn’t go thinking I would change minds, but felt that it was important to be there even if all I could do was bear witness, document it, and confront those perpetrating this hostile takeover. During the reception I pulled out my banner and held it up in protest, drawing curious stares. I brought copies of the half-sheet above and approached every person in the room who stayed for the reception, though I’m sorry to say I missed Mr. Sorenson, who slipped out before I could catch his attention.

I must have handed out at least forty flyers alerting people to pre-k surveillance play tables, the type of technological “solution” that Pay for Success programs will incentivize. Most were indifferent. A few engaged in discussion, including a researcher for Sorenson who was a father of young kids and a social impact investor who wanted to know more about blockchain, because she was starting to have misgivings. She was the one who took our picture holding the banner at the end of the event. I recorded the presentation to make it publicly available. It’s about 90 minutes long. Apologies for the quality, I was holding it in my hand the whole time.

In one of the handouts left on our seats, America Forward describes SIPPRA as “Little Known Legislation with Big Implications.” During the toasts, one person proclaimed it a “secret bipartisan political plan that no one knows about.” It is a plan intended to leverage $100 million to hijack $104 BILLION in taxpayer funds. These are funds earmarked for public services, including education, for cities with a combined population of over 31 million people. See this map from Results for America’s “What Works Cities” web page. This is a travesty. We have to do all we can to stop it.

What Works Cities Map

Additional Background:

Results for America and America Forward, an initiative of New Profit, arranged the gathering. Both organizations promote “evidence-based” policies and outcomes-based contracting for public services. Results for America created the “Moneyball for Government” campaign (see Cheri Kiesecker’s important post “Moneyball for Kids” regarding David Medina’s testimony to the Commission on Evidence Based Policy Making). Medina opened the event. Note John King’s presence in the Moneyball screenshot below.

Moneyball for Government

Results for America manages the “What Works Cities” program on behalf of Bloomberg Philanthropies. Philadelphia’s former mayor Michael Nutter is a “What Works” senior fellow.  Click here for a full list affiliates. In addition, Mayor Kenney’s Policy Director, Anjali Chainani, is Results for America Local Government Fellow. In 2016, Chainani launched the nation’s first municipal level “nudge unit.” Her two-person staff works with six city departments and partners, including academic researchers at the University of Pennsylvania and Swarthmore, to pilot programs in the emerging field of behavioral economics. You can read a 2018 report on the program here. Results for America has also partnered with Chiefs for Change (Superintendent Hite is one) on the Evidence in Education Lab through which state education fellows push Pay for Success initiatives enabled by the Every Student Succeeds Act.

America Forward promotes workforce-aligned education on behalf of their parent organization New Profit. They were instrumental in lobbying to have Pay for Success provisions included in the Every Student Succeeds Act in 2015 and shaped the Workforce Innovation and Opportunity Act in 2014. America Forward and New Profit were key players in the 2009 launch of the Social Innovation Fund, housed within the Corporation for National and Community Service. Since that time, SIF has directed over a billion dollars into “evidence-based solutions.” New Profit manages an extensive innovative investment portfolio of tech-based, education holdings that currently includes: the Highlander Institute, ImBlaze, UnboundEd, Leap Innovations, PowerMyLearning, and Enlearn.

The event was held in an expansive room on the ground floor of the Dirksen Senate Building. Two hundred seats were eventually filled, with another twenty or so people standing around the edges of the room. It was a largely white crowd with few people of color in attendance. There was a mix of veteran policymakers and junior congressional staffers. Most attendees seemed to have either been involved in the passage of the legislation or were hoping to position their non-profit or consulting firm to take advantage of the $100 million windfall.

Among the organizations seen were: AIR, LISC, Boys Town, Goodwill, AYPF, Save the Children, Children’s Defense Fund, Rails to Trails, CHIP, TFA, Jobs For America’s Graduates, UVA Pay for Success Lab, Georgetown, US Impact Investment Alliance and the Urban Alliance. I’m certain it wasn’t expected that members of the general public or actual consumers of social services would attend. Several people were puzzled by our presence. I simply identified myself as a researcher, and Ismael identified himself as a teacher/university instructor.

We arrived early and were greeted by event coordinator Jeremy Ayers, former Alliance for Excellent Education (Future Ready Schools) staffer now Vice President for Policy for Results for America. Shortly after we told him we’d come down from Philadelphia, Ismael and I were approached by Sara Vernon Sterman. Sterman, a Wharton alum and former Teach for America program director in North Carolina, is the Vice President of Strategic Investments for the Reinvestment Fund based in Philadelphia. The Reinvestment Fund, linked to ImpactPHL, announced the creation of a  $10 million Pay for Success fund in May 2017. Vernon is charged with managing new investment approaches for their “healthy communities” projects, which include childcare and education.

Sara Sterman Reinvestment Fund

With the exception of the entourage from James Sorenson’s social impact investment enterprises and former Goldman Sachs VP Andrea Phillips, I saw few people from the global finance sector or from the big foundations, though I did briefly speak with someone from the Annie E. Casey Foundation and at least one person from the Ford Foundation tweeted from the event. Perhaps the deep-pocket reception was invitation-only with something tonier than house wine and chocolate-covered strawberries on tap? Still, it was an impressive crowd, the size of which drove home just how many middlemen will be required to outsource public services at scale.

It was, in a very real sense, a private reception masquerading as a public event in a Senate building on Capitol Hill. The program’s fourteen sponsors expose the varied interests that stand to benefit from this hostile takeover of the public trust: nonprofit service providers, program evaluators, higher education researchers, community development agencies, deal brokers, and of course the venture capitalists driving it all. It was the embodiment of public-private partnerships writ large and rather breathtaking to experience first hand, having spent so many hours following leads in the virtual, online world. Below is a graphic showing the sponsors. Click here for the interactive version.

SIPPRA Sponsors

The agenda featured many of the key players behind the roll out of Pay for Success and social impact investing in the United States. Two of them, Phillips and Wilkinson participated in Michael Nutter’s 2015 “Capital for Communities” event held with the Philadelphia Federal Reserve at the Jewish Museum, which I reference in this post. Phillips and Sorenson also made an appearance in Philadelphia this past April for the “Total Impact” conference at the Cira Center (see tweet below).

Total Impact Conference Philadelphia April 2018

I created a map of the day’s featured speakers and their associations. For the interactive version, click here. It’s a dizzying assortment of self-dealers of all stripes from liberal to Libertarian; among them a political operative who served under Ed Rendell AND Nikki Haley, a Teach for America alum who runs the Pay for Success lab at the Urban Institute, and a Goldman Sachs social impact bond expert who spun off her own venture capital firm. There was also a brief appearance by a ghostly Orrin Hatch (Note: James Sorenson is from Utah, Hatch’s home state).

SIPPRA Speakers

IMG_1386 (1)

The elected officials who spoke that day were all Republican. If you didn’t know better you might be tempted to see this as a conservative program; when fact it was the Obama-created White House Office of Social Innovation and Civic Participation that got the ball rolling. David Wilkinson, who ran that office and is now with Connecticut’s Office of Early Childhood, participated in the panel discussion. A 2016 article in Time magazine written by Social Finance’s Tracy Palandjian describes the ways in which the social impact finance space attracts supporters from both sides of the aisle. The article mentions Pay for Success programs initiated by both Haley in South Carolina and Malloy in Connecticut. Both programs were discussed by the panelists.

There was a period for questions, and I was able to ask about the use of social impact bonds to finance social emotional learning programs, which is being floated on the website of Social-Emotional Learning Alliance of Massachusetts. Evidently I didn’t state my concerns about the ethical implications of identifying young students as being “at risk” for addiction and/or incarceration and the intrusiveness of them being tracked over time in order to satisfy the terms of outcomes-based contracts clearly enough. The panelists earnestly offered suggestions about how to make such an initiative work. Afterwards a consultant with Social Capital Valuations even came over proffering a card, sharing how her company had developed ways of forecasting whether students were “on the right track” using proximate indicators. It seems most in attendance couldn’t imagine anyone ever questioning the supposed merits of their Pay for Success “privatization” business model.

Dirksen Senate Office Building Tweet Results for America

To hear them talk, the passage of SIPPRA had been a long time coming. America Forward worked with select members of Congress for over five years to bring it to fruition. Several people expressed frustration that the Pay for Success market had not yet fully taken-off, but the consensus was this infusion of federal money could be the long-hoped-for catalyst. As JB Pritzker has said, “We are in the nascent stages of a social impact bond boom…could be as big as the New York Stock Exchange.”

My guess is we won’t hear much about “social impact bonds” moving forward. Formal SIBs are complex instruments that have been very hard to scale. Pay for Success and Outcomes Based Contracting are easier to structure and offer more flexibility. I also suspect when the focus group results came back, “bonds” weren’t an easy sell when talking about human services; too evocative of “bondage” perhaps? It seems the language will be shifting to “Pay for Success” and “Social Impact Partnerships.” Winners get out in front and frame the conversation to their advantage. To fight this, we’re going to have to devise pithy statements that deflate their assertions that outcomes-based contracts are about “success” and “partnerships.”

But we can do that. Why not get started? Feel free to leave your suggestions in the comments.

Below are screenshots taken of the handouts provided at the event:

IMG_1372

IMG_E1374

 

IMG_E1375IMG_E1376 (1)

IMG_E1377 (1)

IMG_E1378 (1)

IMG_E1379

IMG_E1380

IMG_E1381

IMG_E1382 (1)

Childhood Captured: Pay for Success and Surveillance Pre-K Play Tables

James Heckman and Robert Dugger, with support from philanthropies like the Pew Charitable Trusts and venture capitalists like JB Pritzker, have carefully honed a sales pitch for investment in early childhood education. After years of practice, it is now a well-oiled machine. The Heckman Equation promises high rates of return to investors willing to swallow the repugnant premise that through “evidence-based” programs, the character traits of at-risk toddlers will be “fixed.”

Heckman Equation

A new industry of social-emotional interventions is emerging that will supposedly assess, tweak and maximize a child’s human capital potential; set aside for a moment the fact that we’ve absolutely no idea what society’s human capital needs will actually be in the coming era of AI and automation. According to Heckman’s logic, once assessments indicate a child (likely a Title-One child) is not predicted to be a burden on society, their claims to future public services can be forfeited and diverted to “socially conscious” investors as profit. Should circumstances result in children needing public services as an adult? Too bad, that money will have long ago been channeled over to the coffers of Goldman Sachs.

Chicago Pre-K

Of course, this whole twisted plan is predicated on turning children, toddlers, into data; turning their behaviors into data; developing assessments to track those behaviors; and making predictions about their futures as workers. The entire market runs on data. It’s the data that makes it appear to be a legitimate enterprise. The data is the raw material that can be massaged to show “growth,” to justify a 13% annual rate of return. Clearly, they need a lot of data, and it needs to be acquired as cheaply as possible. But how best to capture it?

Hatch Classroom

A review of some of the products being offered by Hatch Early Learning provides a few clues about where the educational technology sector for pre-k is headed. Hatch is based in Winston-Salem, NC. Their technology division sells a range of pre-k classroom technology “solutions,” including iStartSmart. This product includes an adaptive tablet-based learning system for pre-k students as well as a teacher tablet that captures “documentation” on progress towards kindergarten readiness. They’ve partnered with Teaching Strategies, a national provider of early childhood curriculum. TS Gold is a mandated curriculum in the publicly funded preschools of many states including Colorado and California. It is a curriculum that turns the teacher into a data manager.

With this curriculum, teachers are required to spend significant amounts of time collecting and analyzing student data. The data-intensive nature of the curriculum compromises the delivery of authentic, age-appropriate learning and makes it increasingly hard to develop meaningful human relationships in preschool classrooms. Nevertheless, business and impact investment interests continue to double-down on data-driven, gamified instruction, because it extracts the “proof of impact” required to game the early-childhood “Pay for Success outcomes-based contract systems.

Using Hatchsync, pre-k students play online math and reading games, and documentation of their “progress” is sent in real time to the teacher’s data dashboard. Hatch’s website claims 45,000 children now play these online games at least 30 minutes per week with over two million iStartSmart gaming sessions logged. Imagine how those numbers will rise once “Pay for Success” money starts to flow.

Saving Teachers Time

Online games are an increasingly common way to capture cognitive data. But workforce leaders are now demanding information about the “soft skills” of children, too. They want to know about collaboration and cultural competencies. They want metrics on the Big 5 skills (Openness, Conscientiousness, Extroversion, Agreeableness, and Neuroticism). Who’s a leader? Who will be a responsible follower? Who will work hard? Who has the most grit and resilience? They need to know how to slot children efficiently into an increasingly stratified workforce.

Play Well Together

While tablet based games are useful to track cognitive (academic) tasks, those pushing social-emotional learning investments require ever more sophisticated tools to capture behavioral data linked to group dynamics. Like, perhaps, a digital surveillance play table? The tech sector is hoping to convince parents and teachers that sand and water tables are obsolete now that twenty-first century data-mining and digital surveillance has become ubiquitous.

Hatch Smart Table

With the WePlaySmart table, children interact with a tabletop screen as a group activity. The digital platform captures data about their behaviors automatically. Hatch has patented a photo ID login that allows nonreaders to sign in and start to play immediately, and “just in time game instructions” enable unsupervised play. Instead of playing with actual toys, toddlers move virtual objects around on a two-dimensional surface. Not because this is a better approach to education, but because it facilitates data aggregation.

According to the Hatch website, the WePlaySmart multi-touch sensory table (for ages 36 months and up) is designed to promote “literacy and math skills and promote social-emotional and cognitive skills needed for academic success. The WePlaySmart Table helps teachers monitor social-emotional development over the course of a school year, capturing authentic video clips of strategic game play moments as children work together to complete fun activities.”

 

 

This two-minute video describes the capture of audio documentation tied to progress monitoring of four SEL categories: social competence skills, behavioral skills, emotional skills and executive function. Based on these recordings, which are organized under quarterly headings, children are assigned a number from one to five rating their progress in each area. It is not clear how this number is assigned. The video makes it seem it is NOT the teacher making the assessment. We do not know if this rating is coming from a machine learning algorithm or an off-site human evaluator.

Page 7 of their catalog talks about a built-in 190-degree fish-eye video lens that “captures and documents children’s progress in a more relaxed and inclusive environment. The video camera provides automated progress monitoring data and records children’s interactions as they play.” To me, the word “automated” makes it seem as though they are using machine learning to rate behaviors.

According to a video, recorded by Children’s Technology Review at the 2009 NAEYC (National Association for the Education of Young Children Conference) a WeStartSmart table cost $8,000 at that time. Surely most family-run, neighborhood-based preschool programs won’t be able to afford such an expensive surveillance device. Nor would they be likely to install it. So will that mean those childcare providers will be cut off from accessing public funds for universal pre-k programs? Will “smart” tables and gamified instruction be the cost of admission for providers looking to take part in such programs. If you do not agree to track the behaviors of toddlers and offer up the data to “Pay for Success” evaluators, will you be excluded?

Hatch Table Monitoring

The promoters of this form of early childhood instruction are priming children in public pre-k programs, children who are predominately black and brown and come from economically distressed families, to accept constant surveillance in their social interactions with others. These children are being conditioned to accept that their lives are merely the sum total of the data they generate.

The use of Pay for Success contracting will further dehumanize instruction for our nation’s youngest and most vulnerable learners. Surely the behavior data will be used to identify a few outliers to be promoted for their grit and bootstrap mentality. They will be held up as exemplars in attaining the “American dream.” Meanwhile the toddlers who do not conform or who haven’t yet grasped the importance of conforming will be triaged by algorithm and redirected to  serve the system as human capital in the prison or military industrial complexes. The future of labor is uncertain, with Softbank’s robots waiting in the wings to take over more service-sector jobs (including education). There is an imperative to scale mass profiling and social control quickly, before things get out of hand. People need to be aware of what they are signing on for with Pay for Success. It’s very, very ugly, but ultimately also very, very American.

Pepper Robot

 

From Math to Marksmanship: Military Ties to Gamified Assessments

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 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.

 

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

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.

ReadyNation:Pew Map

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.

Kauffman ReadyNation SIB 2

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?

ReadyNation International

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.

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

 

 

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

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

Blockchain SNAP Nudge

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.

Janis Dubno

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.

Food for Children

(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.

 

 

 

 

The Chicago School of Economics And George Soros: New Theories for an Impoverished World

The Human Capital and Economic Opportunity Global Working Group (HCEO), referenced in my prior post, is run by James Heckman, Stephen Durlauf, and Robert Dugger. It operates out of the Center for the Economics of Human Development (CEHD) at the University of Chicago, and its fiscal sponsor is the Institute for New Economic Thinking (INET), an entity that emerged in the aftermath of the global financial crisis of 2008. INET funds research, grooms young economists, and convenes gatherings promoting the work of its 1,100+ experts. George Soros pledged $50 million from Open Society to create INET as a vehicle to explore “new thinking and new rules for the world economy.” Heckman, Dugger, and Durlauf are all involved in the operations of INET.

Interactive link to map below here.

HCEO Map

The 2.5-minute video below features Soros speaking about why he created INET and what he hopes to accomplish.

(Soros) “The prevailing paradigm of the efficient markets hypothesis, rational choice theory, has actually run into bankruptcy-very similar to the bankruptcy of the global financial system after Lehman Brothers. The first phase of INET was to show the bankruptcy of the existing, and that-I hate to use this term-is “mission accomplished.” …That phase is now pretty well done as far as INET is concerned. We are now at a phase where we have to produce a new theory.

So, it’s now a constructive phase, and that has to be primarily directed at academia, at the economics departments of the universities. But it has to also address the burning policy issues, and we now have Senior Fellow, Lord Adair Turner (chair of the UK Financial Services Authority 2008-2013) joining us who will be in charge of developing that aspect of INET. In the long term I hope that this very rapid development can be maintained.

What is new economic thinking? A fundamental rethinking of assumptions and axioms on which economic theory has been based, because economics has been trying to come up with universally valid laws similar to Newtonian laws in physics. That, I think, is an impossibility, so you need a new approach with different methods and also different criteria of what’s acceptable.” George Soros, link to video

In 2013, Soros’s Open Society commissioned a working paper entitled, Impact Investing in Education: An Overview of the Current Landscape, from D. Capital Partners. The paper surfaced the following opportunities for private capital deployment, primarily aimed at the Global South: 1) provide education services in areas where the government is absent 2) spur “innovation” where governments are under-resourced and 3) develop alternative, “premium” choices where free public education is already established.

The featured image for this post identifies key players targeting “base of pyramid” populations for “investments” in infrastructure, people (student loans), and technology. D. Capital Partners described the latter as “a particularly promising arena for impact investors to seed innovations that have crosscutting commercial potential, especially if they can be deployed in large-volume markets.” The controversial tech-oriented education network, Bridge International Academies, funded by the Chan Zuckerberg Initiative, the Gates Foundation and Omidyar Network, became the largest education network in Kenya in 2013, the year the report was released.

Interactive link to map below here.

INET

INET’s other major funder is William Janeway, Managing Director of Technology, Media, and Communications for Warburg Pincus. Warburg Pincus is a private equity firm led by Timothy Geithner who served as CEO of the New York Federal Reserve then as Secretary of the Treasury under Obama where he oversaw the Troubled Asset Relief Program (TARP). This January Warburg Pincus closed an investment deal, in partnership with Genesis Capital, for $120 million in D-round financing for Zhangmen, China’s most popular online education tutoring app. In 2015 the company invested $60 million in the predictive analytics software firm Civitas Learning for the development of an applied data science platform that would provide “personalized” insights into higher education instructional delivery. Janeway’s wife Weslie, the President of the Pyewacket Foundation, has an interest in and funds genetics research.

While pitching in a relatively small contribution of $10,000 in 2015, it is notable that Drummond Pike, former head of the Tides Foundation, is also part of this project. The Tides Foundation distributes hundreds of millions of dollars each year to social causes; see their 2016 990 tax form here. The Maker Education Initiative (Maker Ed), an outgrowth of Dale Dougherty’s Maker Faire movement, is one of the Tide Center’s sponsored programs.

My fellow Philadelphians should note Richard Vague contributed $25,000 to INET. Vague, a managing partner for Gabriel Investments (1735 Market St), exited his business ventures in the energy and credit-card sectors and now serves on the boards of Penn Medicine and several regional museums and cultural institutions. Local business, HappyCog (1430 Walnut St), was hired to do the website rebranding for INET in 2015. There are ties right here in my hometown to INET’s global operations.

In 2015, INET distributed over 100 grants totaling $1.8 million. Most were in the $40,000 to $60,000 range and funded economic research proposals addressing such issues as: Managing a Changing Global Financial System, Measuring Structure and Risk in the Financial System, Behavior and the Economy, Environmental Economics, and Political Economy of Income and Wealth Distribution and Inequality Dynamics. The University of Chicago received $500,000 for “inequality,” presumably funneled over to HCEO. INET’s grants are primarily to academic and research institutions in North America and Europe, though a few awards in 2015 were directed to individuals and to universities in South America. Below is one page of fifteen that comprise the INET grant list for 2015. See the full list here.

INET Grants 2

The largest grant in 2015, $994,000, was to the University of Oxford where the Institute for New Economic Thinking at the Oxford Martin School is based. See image below for their nine programmatic research areas.

INET at Oxford

 

In June of 2011 Heckman and Dugger participated in an inaugural conference call for the INET-funded HCEO working group focused on “Markets.” Introductory remarks were given by Dr. Lance Lochner, economist from the University of Western Ontario who specializes in the development of human capital over a person’s lifecycle. Next Heckman described the vision of INET and the role of HCEO, noting the importance of interdisciplinary research and the need to address “issue pockets that the markets have not addressed.” The remainder of the call was given over to Dugger who presented their plans to reform early childhood development interventions using “innovative” financial mechanisms like social impact bonds. This was the year BEFORE the Riker’s Island SIB, the country’s first, was launched in 2012.  The Salt Lake City pre-k SIB came online the following year. The screen shots below are notes from the call HCEO posted online. You can read the full three-page document here.

INET HCEO Call 2011 -2

INET HCEO 2011 Phone Call

In the video above, Soros, identified a need for a new criteria of “what is acceptable.” Which leads me to wonder how will INET and HCEO’s 1,100+ economists set those criteria? Is an indigenous child getting a chromebook pre-k education, who has no running water in her home “acceptable?” Is a “school in a box” instructional model delivered by scripted educators in sub-standard learning conditions in Africa “acceptable?” Is it “acceptable” for Chicago’s black and brown children to be compelled to learn and deliver standardized test scores in classrooms where cleaning services are MIA while investors like Goldman Sachs reap maximum payouts on their pay for success investments? Will we allow economists like Heckman and pitchmen like Dugger to offer up equations and justifications so billionaires like JB Pritzker can assign “value” to an infant, anticipate the child’s future needs, “fix” them in advance with cheap, scaleable technological “solutions” so their public benefits can be raided for private profit?

It’s time to speak up for those who need us. Unplug these children and give them the human contact and care they deserve.

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

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

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.

Heckman Little Sis

Heckman; Dugger, 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.

HCEO Funding

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.

Heckman Equation

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 the 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.

Choose Children CA

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 now 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.”

Kauffman ReadyNation SIB 2

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 private investors.
  • 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.

Heckman Pritzker

(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 Heckman Panel

(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.

Ready4K

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

 

 

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

Psychology, Economics and Human Capital

I spent much of my weekend researching Dr. James Heckman, Nobel prize-winning professor of economics from the University of Chicago who specializes in research around investments in human capital. I plan to write a more extensive piece on him shortly. In the meantime you can check out his Little Sis map-in-progress here. Heckman is a colleague of Arthur Rolnick (see my previous post) and Robert Dugger, host of the upcoming ReadyNation Global Business Summit on Early Childhood.

I believe the research Heckman has been conducting with “grit” expert, Angela Duckworth is extremely dangerous. The two are principal investigators for the Research Network on the Determinants of Life Course Capabilities and Outcomes based in the University of Chicago’s Center for the Economics of Human Development. I will share several excerpts from the publication they co-authored in 2008 for the National Bureau of Economic Research with Lex Borghans and Bas Ter Weel, The Economics and Psychology of Personality Traits.

Duckworth’s research for the publication was supported by the Templeton Foundation. The image below shows the program areas to which Templeton gives: Science & The Big Questions; Character Virtue Development; Individual Freedom and Free Markets; Voluntary Family Planning; Genetics; and Exceptional Cognitive Talent and Genius.

Templeton Foundation Funding Areas

 

Heckman’s research was supported by the National Institutes of Health; the J.B. Pritzker Consortium on Early Childhood Development, a funder of the Chicago early learning social impact bond; and the Pew Charitable Trusts, sponsor of the Invest in Kids Working Group that became ReadyNation.

Their work makes it clear Social Emotional Learning (SEL) data collection is about developing profiles for economic and labor forecasts.

Heckman Duckworth Econ:Psych 2008

I found the next quote incredibly disturbing. Our children’s personalities are not theirs to mine for “soft skills.” Our children are not human capital to be molded to the demands of a dysfunctional economy, offered up to future employers at the lowest possible wage. This sexist, racist excerpt shows why it is imperative that our children’s social-emotional lives not be shoved into rubrics, NOT be collected, and definitely NOT be allowed to fall into the hands of the kinds of people who would put forth pronouncements like this. Keep in mind this research was, in part, funded with money from the National Institutes of Health, NIHR01-HD043411.

Heckman:Duckworth Econ Pych 2008-2

The next section makes it clear the psychological data collected will be used to benefit those who are managing labor, and employees should expect to be profiled and manipulated through the use of incentives that pressure them to fall into line.

Heckman:Duckworth Econ:Psych 2008-3

The final excerpt amplifies concerns I have had about neuroscience and “learning engineers” in public education. See my post about Melina Uncapher’s work at Neuroscape at UC San Francisco here.

Heckman:Duckworth Econ:Psych 2008-4

After finishing the report I couldn’t help but feel I’d been transported back to the time of Duckworth’s role model, Sir Francis Galton, a Victorian pioneer in the field of eugenics; only now with genetic sequencing, machine learning, and artificial vision. Note the feature image at the top of this post taken from a clip of one of Duckworth’s Coursera lectures, timestamp 55 seconds.

Global Education Futures Forum: Future of Education Map

Later that morning, I got caught up in an online discussion about educational technology with an “innovative” educator and a software engineer both of whom felt any concerns parents may have with 1:1 device implementation in schools must simply be ones of improper implementation. It was difficult to get them to understand that technology use in classrooms is increasing in order to generate data that will facilitate evaluation of social impact investments. I tried to emphasize my concerns about student data collection and the profiling that was taking place via classroom devices. I wanted them to grasp the power behind the policy changes we are seeing, so I directed them to the Global Education Futures Forum website. One of the people threw out the “tin foil hat” line, at which point I asked them to review the list of GEF advisors.

These are the members based in the United States:

Howard Rheingold, Stanford University

Charles Fadel, Harvard Graduate School of Education

Tom Vander Ark, Learn Capital (Former Education Director, Gates Foundation)

Henry Etzkowitz, Stanford University

Leah Rosovsky, Vice President Strategy and Programs, Harvard University

Andrea Saveri, Bay-Area Consultant, Former Research Director Institute for the Future

They had to agree those people are hard to dismiss.

I was glad the conversation had taken place, because it presented an opportunity for me to revisit the Future of Global Education Map. It had been some time since I’d looked at it, and it was stunning to see many items echoing emerging developments in digital economy, blockchain digital identity, neural interfaces, augmented and virtual reality, inappropriate use of technology for our youngest learners, de-professionalization of teaching, human capital engineering, and direct talent investment. I took a screenshot of a portion of the map to post on that thread, and then thought it would be good to pull some of the items to share more widely as a follow up to the information I had found in the above publication and my prior piece on Rolnick’s and Rothschild’s work on Human Capital Performance Bonds.

GEF Human Capital Slide

The map spans the timeframe 2015-2035, but the items featured below are all positioned between 2016 and 2020. You can look over the complete infographic here. It’s breathtaking in terms of what is envisioned, and how quickly we’re progressing.

From the website:

“This map has been created as part of a Global Education Futures initiative, prepared by the Re-engineering Futures Group. This map is the result of five years of work that brought hundreds of Russian and international experts into co-creative vision building for the future of education. This map represents key trends driving the transformation of educational systems, and the forecast of events and technologies that will make significant impact on the future of education. In the context of this project, education is understood as a multitude of institutions that support training, nurturing, professional and personal development throughout our human life-including kindergartens, schools, colleges, universities, and other types of educational institutions.”

“Obligatory universal net ID is introduced.”

“Independent digital currencies become real alternatives to national currencies.”

“Crisis necessitates cuts in education budgets. New education formats are in high demand.”

“Establishment of a platform converting alternative merit-based currencies or earned points to pay for online education services.”

“Crowd-schooling: self-organized schools where boundaries between teachers and students disappear, and curriculum is assembled by crowdsourcing measures.”

“IT companies emerge as leaders in the global education market.”

“Successful passage of a computer game counts as education course.”

“Online virtual games form personal values.”

“Pre-school and primary school become playgrounds that use augmented reality technology.”

“New models of investment into promising youth – “human futures” – adopted by pension funds and private investors.”

“Personal data and advanced big data models allow efficient mass-scale recommendation services for education and career tracks.”

“Periodic online assessment of psychophysical status to adjust individual educational trajectory.”

“Free will donations via social networks to people one considers important in advancing their career.”

“Technologies that enable prenatal education based on big data, audiovisual stimulation, and biofeedback.”

“Students get individualized recommendations on their education in accordance with their genotype.”

“Virtual jail-compulsory education of prisoners occurs in virtual reality simulators.”

“Developing countries attract students by creating educational spaces free from strict state regulation.”

See the complete info-graphic of the image below here.

GEF Education Finance Map

So, are we ready for this?