I have the exciting opportunity to participate in a panel discussion with members of the Poor People’s Economic Human Rights Campaign at the Left Forum Conference coming up this weekend June 28-30 in Brooklyn, New York at Long Island University. The focus of our two-hour workshop will be building a Poor People’s Army. Here is a link with more information about our session. Would love to see you there!
My role on the panel is to introduce pay for success finance and how it will prey upon the poor. This understanding is crucial as we develop new ways of organizing outside the non-profit industrial complex, which is largely underwritten by vulture-philanthropy. This opportunity was the perfect chance for me to attempt to distill three years of research into an eight-minute introduction. I like to work collaboratively and want to express appreciation to those who engaged with me on this topic over the past couple of weeks in social media, phone, and email. This piece is much better and tighter for all of your insight and input. So thanks Mary, Roxana, Matt, Nick, Tim, Susan, Tonya, Carolyn, Maggie, Sara, Brian, Cynthia, Charlotte, Asantewaa, Sue, Lea, Sheila, Peter, Catherine, Barbara, and Belinda. What follows is a slightly longer version than I will present at the panel, but since blogs don’t have space limitations, I wanted to share the final version in full. I plan to share the images at the end as workshop handouts.
How Pay For Success Finance Will Prey Upon The Poor
One of the biggest things we’re up against, and something few people are talking about, is social impact investing and pay for success finance. Within the hollowed out shell of the welfare state, which admittedly was always inadequate and used for purposes of racialized social control, global finance has built a new machine that will use predictive analytics, artificial intelligence, and wearable and screen-based technologies to monitor the global poor and profit from their misery.
This effort is being carried out in partnership with the non-profit sector, higher education, think tanks, and global foundations. Many involved identify as liberal, even progressive. Successful resistance will require stopping Trump, the Koch brothers, and ALEC, as well as a corporate, militarized Blue Wave that has every intention of stabilizing late-stage capitalism with technocratic “evidence-based” solutions. Make no mistake; this is a fully bipartisan enterprise.
Outcomes-based contracts are this machine’s operating system. Contracts employ pay-for-performance agreements that reimburse service providers IF they produce specified success metrics. These metrics are narrowly defined and chosen for their ability to be gamed. Contrived solutions offer up fake “success” to enrich investors at the expense of vulnerable populations. Think standardized test scores as success metrics for education or fit-bit step counts for preventative health.
This machine requires a steady supply of people labeled deficient by those in power. Like batteries in the Matrix, the poor are meant to be the fuel. The machine does not care for their actual wellbeing; its sole purpose is to maximize profit. In that it is similar to the capitalist Western medical model where Big Pharma opts for chronic disease management over research leading to cures. Pay for success will not empower the poor, but instead manage them and harvest their data, indefinitely.
The infrastructure for this system was put in place in the years leading up to the financial crisis of 2008. After toxic mortgages imploded, financiers needed another way to keep global capital circulating. It had to be even bigger than real estate debt, since global wealth continues to become more and more concentrated. The next BIG target would be financialized public benefit systems. Through financialization, resources are siphoned from the real economy into the financial sector where demands for short-term profit lead to instability, overwhelming debt, income inequality, and wage stagnation.
To justify this shift, proponents of pay for success insist governments will never have sufficient resources to care for their people. Services MUST be outsourced. This in turn opens up vast global markets for speculative investment in human capital. The big money isn’t to be had running human services, which are admittedly hard to turn a profit on, but rather in the trade of debt associated with providing those services. Such a development isn’t surprising, given the power finance and technology interests like Alphabet and Goldman Sachs, hold over elected officials. Governments have been captured, and as hostages of transnational capital, they’re compelled to go along with this brutal scheme.
After its fin-tech makeover, the new welfare state will essentially function as a maze into which poor people are forced by social work navigators. Technologies will track, predict, and influence behavior. The digital dust the poor generate as they attempt to negotiate punitive bureaucracies will flow to social sector dashboards, informing hedge fund bets in real time. With their varied portfolios of trauma, vulnerable populations will replace real estate in the lead up to the next Big Short.
Investors don’t put money in markets they expect to dry up. Thus logic dictates turning poverty into a global investment market will only increase poverty. Social impact markets require an ever-expanding supply of people deemed cheaply fixable according to the terms investors set. The fixes offered aren’t meant to materially improve lives long term. That would require redistribution of resources, something unthinkable for the likes of Bill Gates, Jeff Bezos, and Mark Zuckerberg. While poverty may be reduced somewhat, it is an essential feature of the design. For pay for success to thrive, homelessness, addiction, mental illness, hunger, violence, unemployment, broken families, and uncertainty must remain the norm. Hedge funds hate stability, and they’re the ones driving social impact investing. If everyone had enough to live a stable life, the gambling would have to come to an end.
Vulture philanthropies seeded this market. After many grant cycles the non-profit sector has been conditioned to impose toxic solutions without question, collecting the data needed to justify venture capital’s profit taking. Having been integrated into the machine, these partners in crime are tasked with managing populations that black box algorithms have identified as “at risk.” These artificial labels will, of course, be disproportionately applied to Black and Brown communities. The system demands broken people. Broken people are the raw material. As a result, the system is incentivized to manufacture data and create as many broken people as hedge funds require to keep global capital in optimal circulation.
Social sector workers are also part of the human capital pipeline, caught in this web along with the poor. The system intends to extract as much data and impose as much surveillance as it possibly can, which is why those administering harmful solutions must get creative in identifying others with whom they can organize. This shift will be catastrophic for educators, healthcare providers, therapists, and social workers across the globe. Effective resistance will need to unite people across diverse workplaces.
The United Way is a partner in these efforts as is Strive Together out of Ohio. They’ve identified a permanent underclass for “collective impact” processing called ALICE: Assets Limited, Income Constrained, Employed. These are the households of the working poor: children with unstable housing, indebted college graduates, workers living paycheck to paycheck, patients with chronic illness, disabled veterans, the elderly. Pay for success “solutions” will process them as commodities via ed-tech, tele-health, tele-therapy, and “smart” housing.
Soon large segments of the population will find their life choices subject to digital engineering, forced onto prescriptive pathways, jumping through hoops into which structural racism has been embedded in computer code. Smart phones will play a major role as benefits are moved to online platforms and linked to digital identity. It is the phones with their biometric capacity that facilitate transfers of value and data and enable tracking and analysis of impact. Phones will be the minders of the poor. Those with phones can have no expectation of privacy.
Such systems are being piloted on unhoused people in Austin now with backing from Bloomberg Philanthropies, a major impact investor. The state of Illinois also has a working group setting up Blockchain birth certificates and is looking to digitize SNAP benefits so coded nudges can be used to push “good” food choices. As the poor have their welfare inputs evaluated against their economic and behavioral outputs, the rich will sit on the sidelines placing bets. Either way the rich win, because there’s always someone willing to take the short position.
Beyond financialization of human life, these data-driven systems also legitimize increased surveillance of large segments of the population, especially Black and Brown communities already subject to militarized policing. Resisters will be viewed as insurgents and subject to violent counter insurgent interventions as we saw in Ferguson and at Standing Rock. Wearable and screen based technologies and interoperable data systems, like Project Unicorn headquartered a few blocks from here, will feed a vast network of signals intelligence to monitor the behavior of the poor, predicting the likelihood of push back. The Minerva Research Initiative was set up by DARPA (the Defense Advanced Research Projects Agency) for exactly this purpose. It’s not hard to imagine the impact such intelligence will have on resistance movements.
So, what does social impact digital surveillance look like?
It looks like behavior tracking apps for low-income mothers.
It looks like play tables that video record toddlers and score their social behaviors.
It looks like online preschool.
It looks like brain wave monitoring headbands and executive function enhancing video games for students.
It looks like wearable tech that tracks vital signs for substance users.
It looks like online cognitive behavioral therapy for prisoners.
It looks like fit bits and Internet of Things pill caps for Medicaid patients.
It looks like “smart” supportive housing with integrated IoT monitoring.
It looks like tablet-based overseas monitoring of seniors.
It looks like virtual reality death simulation training for hospice workers.
Once you peek under the hood, you realize what a grotesque business social impact investing actually is. These tools are built on 400 years of racial capitalism. It is the Doctrine of Discovery with Blockchain replacing double-entry bookkeeping and smart phones and digital identity systems replacing shackles. It is a system that arose in tandem with cloud-based computing, broadband, 5G and the Internet of Things. These advancements are inextricably inked to the interests of the US military and intelligence community, which is why we must recognize that as much as we have come to rely on our devices, true liberation will never come through digital channels. It can’t; our opponents run the cloud.
We’re living through a period of orchestrated mass confusion and distraction. Some are sitting like frogs in simmering pots, distracted on their phones as the steam billows around them. Others are forced to play real-life games of Frogger, heads down, crossing dangerous highways, dodging crises right and left with little opportunity to see, let along plan for, what is coming.
South Africa and Australia have piloted public benefits on Blockchain linked to digital identity. The state of Illinois is looking into it as well. We need to stop them politically and we must develop alternative networks of support outside existing government and non-profit structures. We need to get out of our simmering pots and look up to the horizon. We need to do it soon.