A Letter to Chicago’s Teachers On the Perils of Pay for Success Finance & Wrap Around Services

I am writing this letter to the teachers of Chicago as you continue your strike.

I realize you probably won’t have time to read this until after your contract is resolved, but I felt it was important to put my thoughts down now while they are fresh in my mind.

I know you care deeply for your students, colleagues, and the communities you serve.

As the parent of a Philadelphia public school graduate, I know conditions for teaching and learning in under-funded urban districts are deplorable, and that is by design.

I commend the networks you have built to make your vision for well-resourced public schools a reality.

I appreciate the sacrifices you have made to bargain for “the common good.”

I am heartened to hear that you’ve already secured agreements to limit pre-k class sizes, ensure adequate staffing, and safe facilities, as well as guaranteeing the basic human right of toddlers to nap for an hour each day. Bravo.

In reading this contract briefing from July I sense your frustration with CPS’s cost cutting around staffing, especially with regard to the attempted automation of enrollment services. As CPS aims to open over 100 new pre-k classrooms by 2020, I’m confident you will continue to fight for the wellbeing of the children in your care.

Be advised that this will very likely require taking strong stands against pay for success finance and digital identity. Blockchain identity is being set up to underpin a new system of human capital speculation that will target the poor.

That Illinois Blockchain pilot?

Those Blockchain birth registries?

That data pouring into Evernym in Salt Lake City?

These are tools of racial capitalism that build on the Amply pre-k Blockchain identity app implemented by Innovation Edge in Cape Town, South Africa. Several of the parties involved in its development participated in a business-only, global pre-k summit held in New York last fall. The host, ReadyNation, has close ties to Pritzker and Heckman.

Amply is a social impact scheme where pre-k providers are reimbursed via Blockchain impact tokens earned through children’s daily attendance in the program. All the data runs through an app and children build “social capital” on Blockchain, while their families are monitored for compliance.


It’s the type of system that could easily evolve into social credit scoring of the type we’re hearing about in China. Last October GovLab, a MacArthur (Chicago) and Google-funded venture, based out of NYU’s Stern School created a case study for the Illinois Blockchain birth certificate pilot.

The value proposition presented was that individuals would eventually be able to aggregate into their “native digital identity” experiences and attributes “that they have gained throughout their lifetimes that allow them to do certain things or be eligible for certain benefits.” Universal pre-k and early intervention programs are being groomed to be the launch pad for imposition of digital identity. The crew from GovLab did a case study for Amply the very same month. The formatting is identical. It’s a package deal.

IL Blockchain Birth Certificate Social Credit Scoring

Source: Case Study Registering Births on the Blockchain Illinois

Blockchain and pay for success are well established in Illinois, and as the Chicago Teachers Union continues to advocate for equity, it is vital that members invest in the research they will need to grasp the immense threat that this “innovative” system of human capital finance linked to digital identity poses and to be able to articulate that threat to others.

As unions across the nation embrace social justice and expand bargaining positions to include community needs, there is a dire need for members to be able to effectively communicate to one another and their communities the ways in which emerging technologies and finance have combined to codify and automate longstanding systems of structural racism.

A good place to start is a report, Connecting Finance to Results: Can Emerging Technologies Make Impact Bonds More Impactful, that was prepared this spring by Frontier Technology Livestreaming for UK Aid. It features five platforms linking digital identity and Internet of Things tracking to outcomes-based finance funding for “social impact” initiatives.

Emerging Tech Impact Bond UK AID

Source: Connecting Finance To Results

Pay for success initiatives use a veneer of progressive language, like “engineering opportunity gaps,” to candy coat their poison pill of financialization. It is moving forward with bipartisan support, characterized as “what works” government. We need to teach people to decode their duplicitous messages and inoculate themselves against the propaganda that is to come. As the story goes, be careful what you wish for, because you just might get it. When  you do, you could find strings attached that create even greater problems than the ones you already had. Housing is a big concern in that regard.

Chicago Student Homeless

Source: Chicago Teachers’ Strike Highlights Student Homelessness

Imagine a union winning services for students experiencing housing insecurity, BUT the financing follows the  Project Welcome Home model. Well that is going to be a BIG problem, because this “homelessness breakthrough” was launched in Santa Clara, California and utilized a social impact bond that runs participant data through Palantir! Yes, Palantir, Peter Thiel’s evil company that develops secretive predictive policing software and maintains contracts with ICE. The pay for success projects in Santa Clara also pulled in regional health systems with ties to Catholic Charities, the largest community foundation in the nation, and Rocketship education. It’s a very messy business, which you can read more about here. Be sure to note the scorecards for poor families designed to track their “self-sufficiency” metrics. Grim stuff, very much in the vein of Boots Riley’s “Sorry To Bother You.”

Palantir Santa Clara

Source: Palantir “Welcome Home”

The co-founder of Palantir, Joe Lonsdale launched a cloud-based “government performance management system” in partnership with researchers from Stanford University back in 2012 to advance data-driven government using California local government budgets as case studies. It was framed as an effort to provide “efficiency” and  “transparency” in the post-economic crisis climate of enforced austerity.

The name of the venture was OpenGov, and it is one of a number of emerging civic-tech enterprises that will ultimately meld “smart” city, 5G,  Internet of Things sensors (that is Array of Things Chicago) with device-based government service provision. As “federated citizens” of the cloud, we will emerge as free-market data commodities. The growing ranks of the poor, even though they have limited purchase power, will continue to offer value to predator investors, this time as rich data commodities. Their compliance (or not) to the terms of pay for success will fuel the deals managed by Palantir among others.

The idea of “open” government data is meant to sound like a positive thing, but it was Robert Cheetham who successfully lobbied for open data policies in Philadelphia. He then used our data, a public asset freely handed over to corporate interests, to create predictive policing software that was then SOLD to the Chicago police department, among others (see HunchLab). People are not looking critically at these digital systems as they are being set up to control us. Big-data oversight is being integrated into the social welfare programs that caring teachers, including all of you in Chicago, have been demanding for students.  If you don’t have this information and can’t see the bigger picture the results for vulnerable families may end up being exactly the opposite of what you had intended.

Meanwhile, Opengov just completed another $50 million venture capital round. Their major backers include Andreessen-Horowitz, Emerson Collective, JC2 Ventures, and 8VC. The first two are heavily invested in disruptive education ventures. Additional investment has also come from Thrive Capital, managed by Josh Kushner, Jared’s brother.

OpenGov Palantir

Source: OpenGov The $50 Billion Startup

The affordable housing you seek for your colleagues? That too is a pay for success market. See below the teacher housing social impact bond set up in Richmond, CA.

Richmond Teacher Social Impact bond


The Federal Reserve System is deeply involved in pay for success affordable housing finance. Their success metrics focus on achieving “mobility,” that is moving low-income families OUT of their neighborhoods with “choice” vouchers. The vouchers are a tool that is being used to facilitate displacement and catalyze gentrification of properties that were subjected to redlining and disinvestment for decades.

I have seen this first hand in North Philadelphia, where a historically-Black community in a formerly red-lined zone had thousands of properties leveled and taken by imminent domain by the government for “affordable housing.” Four years later very little housing has been built and the lots are being flipped to New York developers for market rate developments. All of this overseen from the new $45 million HUD-funded headquarters of the Philadelphia Housing Authority. Long time tenants are being pushed out of PHA housing and sent to the outer suburbs as the neighborhood’s rich Black history is eroded with each new pre-fab townhouse condo.

Now that these communities are becoming attractive to higher-income folks looking to move back into cities, the pay for success “mobility” program (Opportunity Atlas) provides cover to remove Black and Brown residents from their own neighborhoods. Of course the “improvements” in their life outcomes data is what creates the profit for the private investors in the pay for success deals. All of it amounts to abuse and cultural erasure. All those news articles about the benefits of moving a child from one zip code to another to “improve” their lives. Yeah, ultimately it’s about global capital shuffling the poor around to suit their own purposes. Did you think those in power would put a pause on austerity to redirect resources into communities for the CURRENT residents? Um no, not happening.

PFS Affordable Housing San Francisco Fed

Source: Leveraging The Power of Place Using Pay For Success To Promote Housing Mobility, San Francisco Federal Reserve

It is important to note the success metrics in the excerpt above. In this case the ones referenced are health and academic performance. You might ask how they intend to capture that impact data through housing. That is where Internet of Things sensors come in: home monitoring systems (NEST), virtual assistants (ALEXA), “smart” appliances (RING doorbells), digital content for education or mental health. All of this can become embedded in “supportive” housing, and it doesn’t have to be some futuristic house, many people already have these items in their homes. As with the Obama phones, these monitoring systems will be provided to low-income families in order to collect their behavioral data for the deals. Their right to shelter will become conditional on having their digital shadows harvested for global finance.

This excerpt from a white paper, Proof of Impact: Unlocking the Intrinsic Value of Impact Through Global Capital Impact Markets, outlining IoT “impact” verification tied to digital identity and finance shows the intended progression of the tracking systems as they become increasingly automated. They start out with individuals self-reporting with the ultimate goal being a reporting system that doesn’t involve humans at all, “end-to-end machine verification.” Some sensors exist in mobile phones: GPS, cameras, and biometrics. While others like satellite imagery and QR codes are become more commonly used. The price of obtaining real-time, “verifiable” data is dropping all the time. The data flows are what will drive the derivatives markets linked to the debt in the pay for success deals. That is why it is so important that the data collection be massive and always in motion, so the gamblers can play their games.

Proof Of Impact Sensor Blockchain

Source: Proof of Impact: Unlocking the Intrinsic Value of Impact Through Global Capital Impact Markets

Tiny houses are a perfect set up for IoT impact data capture, because they can be readily fabricated with all the required wiring and once complete become self-contained pods for individual data-extraction. They also limit social gatherings. It’s hard to organize mass movements in 200-square foot sheds. You get a sense of this watching a video promoting integrated ALEXA and NEST systems in a tiny house model using the Intel hub. While the appointments are slick and modern, you can’t help but get the feeling this is the new manifestation of the carceral state, life in a panopticon (see Yevgeny Zamyati’s 1923 novel WE for a preview). The finishing touches might be inserting a chip in the hand and a drone outside your door. Don’t think the tech oligarchs haven’t been thinking about this already…

If unions plan to wade into the affordable housing debate, their members need to know the terrain, ALL OF IT. Real estate developers eyeing up opportunity zones and hedge funders sizing up human capital in Promise Neighborhoods have staked out their positions. They’re planning to lead folks into the quick sand, so it’s best to know where you’re headed up front, stay focused, be clear, and keep on the right path.

Pay for success is not new to Chicago. Your city issued one of the first education social impact bonds in 2014 shortly after Salt Lake City. But Rahm and Pritzker did one better, because your city’s bond extends all the way from pre-k to third grade and includes reading scores as a success metric. In 2016, Goldman Sachs netted an initial maximum “success” payment for kindergarten readiness. There are many more payments to come. Pay for success has been incorporated into the Every Student Succeeds Act and there is seed money flowing in from the Social Impact Partnership Pay for Results Act. The technocrats are working really hard to bring this to scale.

Goldman pre-k SIB Chicago


In the July contract briefing Mayor Lightfoot noted her intention to expand pre-k access and wrap around services in “Education Zones” through a variety of funding mechanisms including “business and philanthropic communities.” That last bit is what you really need to pay attention to. The hedge funds are planning to target low-income communities, Promise Zones, for human capital investment schemes that will short the lives of children. It’s sickening, but true, and you need to be prepared.

James Heckman, a Nobel-prize winning economist based out that hotbed of neoliberalism the University of Chicago, developed a toolkit with funding from Pritzker that guarantees a 7-10% rate of return on private investments in early childhood programs. The catch is that the “success” metrics they want to use in their outcomes-based contracts are tied to character change. This requires the capture and analysis of social-emotional data that is increasingly pulled from software systems.

For your youngest learners this could look like digital surveillance play tables with fisheye lens cameras.

Hatch Table Monitoring

For older learners platforms created by hometown companies like OTUS, NWEA’s data partner, will be tracking behaviors including neuroticism. Only they’ll find another other more “user-friendly” term, because they don’t intend to pack the school board meetings with angry parents.

OTUS Neuroticism.jpg

OTUS and the neuroticism tracking clip here.

As you lobby for wrap around services to be offered IN schools, you must be mindful that since Obama gutted FERPA, data collected there is not nearly as secure as data collected in healthcare settings. Pay for Success has now been linked to Medicaid through value-based payment systems. This “innovative” form of finance relies on big data and predictive analytics to assign people degrees of anticipated brokenness, so investors in “evidence-based” “solutions” can take their profit. In this sick worldview, lead poisoning, asthma, diabetes, anxiety, and depression become potential sources of profit, cost-offsets for impact investment interventions.

Texas Telemedicine School.jpg


To secure private investment for these interventions copious amounts of data must be collected to prove the deals. Thus the “care” delivered must increasingly be mediated through devices so it can be precisely measured and efficiently scaled. As a result, we see growth markets in school-based telemedicine and tele-therapy. We are also seeing new markets develop in gamified digital medicine, which is pretty terrifying. It is not hard to imagine there will be strong financial motives to medicalize students and channel them into “evidence-based” treatments. When this happens will parents have the right to refuse? Or will access to public education be conditioned on agreeing to treatment programs that are designed to profit pay for success investors?

Teletherapy on Screens

Source: Teletherapy Fills K12 Mental Health Worker Gaps

You’re asking for more social workers, and I agree there are tremendous needs and deep trauma in our public schools. However if systems being set up to “help” families are also funded through pay for success, we will see families pushed onto “pathways” that involve prescriptive “non-solutions” designed to milk their poverty. In the world of “smart” Internet of Things-mediated digital surveillance, non-compliance will become harder and harder.

As mass ACE screenings are being advanced in California with growing interest in other states, we should pause to consider how those “scores” might be used in ways that reinforce existing systems of oppression and stigmatize children. There are indications that pay for success is being woven into ACEs treatments, too. Given the serious ramifications of putting sensitive information into hackable cloud-based systems, we must use great caution as we seek to find humane solutions that will truly heal communities rather than reinflict harm.

Social workers, while they may individually be very caring people, are ultimately agents of the state who are compelled to carry out policies with which they may not agree. I’m sure you can, as teachers, relate to being forced to work in ways you know are fundamentally harmful to children. I encourage you to watch this short video about Kathy, a community health coordinator whose job it is to assign treatment plans to multiple members of a formerly incarcerated person’s household. Kathy is paid each time a member of the family jumps through their assigned hoop. The world of social work is becoming more and more automated, data-driven. Their autonomy has been eroded. It is situation with which you can empathize.

I live in a city with extremely high rates of family separation from child protective services. You are probably aware that the State of Illinois had used an artificial intelligence program, Eckerd Connects, tied into its social welfare data system to predict abuse. The contract ended after disastrous results occurred, mistakenly flagging thousands of children as at risk. As you expand in-school services, an unintended consequence could very well be more families losing their children if their housing instability or food insecurity becomes officially known, uploaded as data to the cloud where algorithms might surface it later in unexpectedly damaging ways.

What Works Centre Machine Learning AI

The question is will the treatments offered be ones of care or coercion? When we know Goldman Sachs is lurking around in the shadows, how do we ensure children get the help they need without becoming a data commodity? Their needs, including housing, must not become the basis for a new data-extractivist economic house of cards. Their futures must be their own.

You all in Chicago are on the front lines of a coming techno-dystopia. You can’t wait to get what you bargained for and THEN ask about the financing. Don’t wait for the bait and switch, because once it happens it will be too late to roll back.

We need to demand structural change that addresses systemic racism and creates communities of care rather than pre-carceral systems of soft social welfare policing.

Let us work together on that. Your destiny is our destiny. Solidarity!








3 thoughts on “A Letter to Chicago’s Teachers On the Perils of Pay for Success Finance & Wrap Around Services

  1. Karen Bracken says:

    Bottom line is we are literally screwed. This train is so far down the tracks and there is so much money to be made unless parents can get their kids out of the system in mass numbers it cannot be stopped. Even if parents would organize huge sick outs across the nation at the local level hitting their profit is all they will understand and our kids ARE the source if their profit. Time to STARVE THE BEAST and I have been saying this for years. Get government out of education and all 3rd party hedge fund investors.

  2. Laura H. Chapman says:

    Another great post. I’ll guess that these programs–pay for success and social credit systems like those in China–are not yet a priority for any teacher unions in any city.

    Please, if you can, get your work into the hands of our candidates for president. Everyone should have a plan/policy to keep social credit systems from becoming the new norm for financing social services and addressing “the common good.”

  3. Linda says:

    The economics department at Notre Dame got money from John Arnold for a wrap around service program targeted at community college students, “Stay the Course”. Knowing the program has links to a hedge fund/Enron billionaire, one can’t escape the irony of the quote about the program, “human capital over financial capital”.

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