Predictive analytics: How capitalism’s “knowledge economy” profiles us all

by Joel Wendland-liu

People’s World | January 20, 2020

Predictive analytics: How capitalism’s “knowledge economy” profiles us all

Dermalog Identification Systems GmbH via AP Images

“Communicative capitalism,” writes the communist philosopher Jodi Dean, refers to a phase of knowledge- and technology-based commodity production in which information on a massive scale is produced, gathered, and sold for profit. What we now call the “information society” or “knowledge economy” sees the large-scale proletarianization of often highly-educated people in low-paying (often low-skilled) jobs, precariously scraping by to pay student loans, cover health insurance, and living paycheck to paycheck, wondering what happened to the “American Dream.”

Another more insidious feature of communicative capitalism is the role of technology companies in exploiting the participatory features of the knowledge economy (especially social media, digitized personal information archives, search engines, and online shopping) to harvest, store, organize, and sell consumer information to other companies. We all know something happens to the information we share on Facebook, input into Amazon or Google when we search, and are rarely surprised anymore when we see ads in our feeds and email for commodities that are similar to what we’ve searched for.

Dean characterizes this aspect of the knowledge economy as free labor producing commoditized data for technological capital. Whenever we participate by watching the latest hit on Netflix, buy something from our favorite online store, or add information to our LinkedIn account, we are producing bits and pieces of our lives and interests that are transformed into products by technology companies. We do it for free and spend hours and hours on it.

Books by Jodi Dean:

The Communist Horizon

Crowds and Party

Blog Theory

Technology companies are able to construct significant digital images and profiles of consumers, their needs and desires, their work and habits, their movements, alignments, and affiliations. I know it sounds like a scary science fiction movie, but it is true. The “knowledge economy” is most effective at using our desire for connection, for collectivity to promote the commodities that we help to build back onto us in ways that promise, but fail, to make up for the lack we experience under alienating capitalism.

It successfully tweaks our desires and needs to negate our yearning for collectivity and convince us that our individuality is most important for a healthy life. It uses this false belief to divide us one from another and to absorb our dissent or criticisms or desire for political actions into its commodity-building software.

One dimension of this commodity-producing information behemoth is higher education. Once the domain of elites who transmitted the culture and civilization of the wealthy, higher education, by the mid-twentieth century had become a domain of working-class struggle and class mobility. The G.I. Bill after World War II, Pell Grants during the war on poverty, taxpayer-funded land grant universities, and low-cost tuition made access to higher education affordable and in many places free. In-state undergraduates in the University of California system paid an annual “fee” of $150 in the 1970s. As late as the early 1990s, I paid less than $2,500 for annual full-time tuition at a highly ranked state school. Today, the average in-state undergraduate student in Michigan today pays close to $15,000 annually for tuition.

In addition to skyrocketing costs, employers now demand college degrees and certifications for almost any job that pays a living wage and necessary benefits. No wonder Americans owe $1.6 trillion in student debt and can expect to be forced to work, often doing things they never imagined, just to keep on top of that debt. In the 19th century, critics of this form of economic activity called it debt peonage.

Part of what makes this transition to higher education debt trap possible is that the neoliberal stage of capitalism constitutes a systematic dispossession of the public sphere, from healthcare to education to utility and transportation systems, to prisons and law enforcement, to military and natural resources.

Public higher education is steadily losing its “public” character. The resources, workforce, cultural capital, and prestige of U.S. universities are being pressed into the service of profit. After decades of neoliberal policies, universities have been starved of needed resources. Dozens of Republican Party-authored-tax cuts in the state of Michigan since the 1990s, for example, paired with stringent restrictions on how resources are spent and who gets them, mean that Michigan students have been positioned so precariously.

Into this fiscal crisis step for-profit education companies offering a mixture of devious dispossession, futuristic technology, and high-pressure sales pitches—none of which will save the modern public American university from its crisis.

High-tech education companies sell a software package they claim is a magic bullet. Those companies have convinced hundreds of universities and colleges facing the crisis of vanishing resources and steep competition for students that technology will help them cheaply recruit students.

According to recent research by the non-profit think tank New America, the software uses “predictive analytics.” One of the first known uses of predictive analytics in a networked system was a database created by the U.S. Department of Defense during its war on Vietnam. Contracting with a private company, CIA and Defense Department technicians designed a database and data collection system. U.S. military advisors populated the database with information collected from more than 11,000 hamlets of South Vietnam, according to recently published research by international relations scholar Oliver Belcher.

That data was regularly uploaded to IBM computers, creating time- and location-specific dynamic maps of resources, pockets of anti-American resistance, and levels of economic and social development. Military technicians could then make recommendations about which people needed to be killed, hamlets destroyed, occupied, or resources shifted to or from.

The project further dehumanized millions of people regarded as worthy of slaughter and manipulation for the imperialist goals of the U.S. government.

Today, the technology isn’t always connected to war and carnage. Still, it does result in the dehumanization and manipulation of everyday people. And this time the purpose is profits for billionaires. It is being used in “predictive policing” to control poor or African-American, Latinx, or other racialized communities and in health care to predict costs of care to manipulate profits for insurance companies and healthcare providers.

Here is how it works in higher education. Universities want to recruit students who will apply and enroll, and then attend and succeed. Access to public resources depends on both enrollments and on rates of retention and graduation. Further, private donations for new buildings and big sports arenas are tied to a university’s ranking as a school that successfully graduates students. This cycle of rewards and punishments creates a market-dependent “incentive system,” according to New America researchers, that requires public universities to play by market rules.

To compete, universities contract with companies like EAB or Civitas Learning to help them identify potential students. Predictive analytics uses data about a potential student’s race, gender, geographical location, and ability to pay as critical parts of a scoring system that ranks those students based on the likelihood of applying, enrolling, and succeeding. Once the potentially most successful students are identified, public universities can spend rare resources on recruiting the highest-ranked students.

None of the people involved here will admit they believe a person’s race or social class or gender determines their future success. Still, predictive analytics can only rely on data that mirrors existing structural inequalities in the U.S., like racism, sexism, or classism. Students who come from white, affluent families and places will have a decided advantage. Recruiters will target students with more resources. Poor or working class, Black or Latinx, or rural students will continue to face structural hurdles to higher education.

Colleen Webster, of Renton, Wash., holds a sign opposing U.S. Education Secretary Betsy DeVos, Oct. 13, 2017, outside the hotel where DeVos was speaking. | Ted S. Warren / AP

Inequality is a persistent feature of U.S. society, despite its ideological myths about social mobility and success. The new twist is that private companies get to profit from inequality in public education.

The current incentive system will foster more deep-rooted inequalities and divisions in U.S society. “While colleges can be encouraged to focus on social mobility and help end institutional racism,” the New America researchers argued, “until the types of incentives change, it will be hard to make these changes systemic.” As long as the current incentive system rewards for-profit companies for manipulating an exclusionary university admissions system, powerful actors will work hard to preserve it.

One of those powerful actors is billionaire Secretary of Education Betsey DeVos. When Donald Trump appointed her to head the Department of Education, ethics requirements forced DeVos to report her financial holdings publicly. A massive private network of shell companies, trusts, and secret holdings brought to light in that report, according to the Wall Street Journal, but many of her family’s shady financial networks remain secret.

One of the companies that her family held a financial interest in at the time of the report was a software company called Vista Equity Partners. Vista owns EAB, which specializes in predictive analytics for higher education. Ethics documents showed that DeVos also held stakes in numerous private education companies that have profited by disrupting public education. This nexus of profit, power, and policy led education scholar Steven J. Courtney, to characterize DeVos as “a major actor in facilitating and enabling corporate interests to flourish at the expense of the public good.”

Resisting this insidious trend in higher education by electing national presidential candidates that will fight for student loan debt forgiveness, affordable tuition costs, and higher rates of unionization among education workers would be a brilliant start to reversing this trend. But, even that would only be the start of a big, collective fight.

Joel Wendland-Liu
Joel Wendland-Liu

Joel Wendland-Liu teaches courses on diversity, intercultural competence, migration, and civil rights at Grand Valley State University in West Michigan. He is the author of The Collectivity of Life: Spaces of Social Mobility and the Individualism Myth, and a former editor of Political Affairs.

One thought on “Predictive analytics: How capitalism’s “knowledge economy” profiles us all

  1. I contend the “knowledge economy” produces nothing useful. What subtle mind-manipulation has transformed “customers” into “consumers”? What genius in the surreal world of techno-babble knows how to grow his own food or sheer a sheep? If the techno-world collapsed today, what of value would we lose, except the electric grids and the other add-ons people have come to depend on for survival?

    Turn off the television and the computer for your sanity’s sake. Learn how to knit a pair of socks.


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