Archive | March 17, 2015

Alternative Currencies Building Prosperity from London to Kenya*

Alternative Currencies Building Prosperity from London to Kenya*

The Brixton Pound, Koru Kenya, and Mazacoin are all attempting to achieve a common goal: empowering people in a monetarily unequal world, from the bottom up.

By Raúl Carrillo

Residents of Mombasa, Kenya, use local Bangla-Pesa currency. Photo courtesy of Bangla-Pesa

Death. Darkness. Deceit.

If you’ve been following recent headlines about alternative currencies, you probably find them … villainous. Last month, a Manhattan jury found Ross Ulbricht, otherwise known by the pseudonym “Dread Pirate Roberts,” guilty on seven counts, including narcotics distribution, identity fraud, and money laundering. Ulbricht also faces charges in Maryland regarding murder for hire.

Ulbricht committed his crimes while operating Silk Road, a massive online drugs marketplace. The website, hidden by the anonymity software Tor, allowed anyone to purchase not only drugs, but weapons and counterfeiting services via the crypto-currency and payments system known as Bitcoin.

Federal prosecutors didn’t have anything positive to say about Bitcoin or crypto-currencies more generally. Understandable. Crypto-currencies—so named because they use encryption to secure transactions and circulate units—have served a central role in digital black markets.

But the world of alternative currencies – those not issued by nation-states – is much deeper and broader than crypto-currencies or Bitcoin, and it is not limited to unsavoury activity. Indeed, people around the world have long used alternative currencies to empower their communities in the face of austerity and financial crisis. They are now being established in gritty South London, Kenyan slums, and Native American reservations. How do they help?

Money, credit, and currency

To understand the how and why of alternative currencies, it is helpful to know the history of money and the history of credit more generally. Today, most purchasing power—the ability to buy goods and services—is created by governments issuing money and licensed banks making loans. Yet long before the time of modern money, credit existed in the form of people exchanging IOUs without governments and banks acting as middlemen.

To better illustrate this distinction, Wartburg College economics professor Scott Fullwiler asks us to think of the use of sovereign currencies (like the U.S. dollar) as a “vertical approach” to funding economies. Governments and banks put cash into our hands and loans into our bank accounts. Simultaneously, the government requires us all to pay taxes, thus driving demand for its currency, which we need to avoid legal trouble.

At the end of the day, for better or worse, most money circulation in the present is backed by guns, courts, and jails. By contrast, Fullwiler sees alternative currencies as representing a “horizontal approach,” in which groups within the public generate, expand, and contract purchasing power. The cooperation required to make a horizontal system work can be facilitated by cryptography, as in the case of Bitcoin, or it can be generated by custom, law, or simply a high level of mutual trust.

With this distinction in mind, it’s easy to see how alternative currencies, especially crypto-currencies, are attractive to people seeking to avoid or subvert governments. Ross Ulbricht, like many other Bitcoin enthusiasts, is a self-described libertarian and fan of the right-wing Austrian School of Economics, as detailed on page 26 of the criminal complaint against him. Silk Road was, if nothing else, a paragon of deregulation. A crypto-currency like Bitcoin is an intuitive part of the network.

Yet dread pirates are not the only people who benefit from financial privacy or access to new sources of funding. Many low-income people struggle to access credit, and in an increasingly surveilled digital world, they are often treated unjustly when doing so. Interacting with most financial services providers means interacting with Big Data in one way or another, which can have harmful consequences. Just last month, the Federal Trade Commission (FTC) sued a data broker for allegedly selling payday loan applications to marketers, ad agencies, and far more nefarious clients. These loan applications, which included bank account information, Social Security numbers, credit card history, and other forms of personal financial data, belonged mostly to low-income people. The worst part is, the lawsuit offers only a glimpse into the dark side of financial surveillance.

The world of alternative currencies has been portrayed by the media as a sinister realm, defined by privileged access to complex technology for concentrating wealth. But such a picture is incomplete.

It is true that Bitcoin has done little to promote economic justice in any authentically democratic sense. But other currencies have been established for those who either don’t have enough traditional money, can’t access enough, or don’t want to ask for a loan because of privacy or security reasons.

Most importantly, alternative currencies can and are helping communities that have the physical resources for economic activity, yet lack money to facilitate the exchange of goods and services. At the very least, growth in the use of alternative currencies, as competitive or relatively unmonitored economic activity, might pressure governments and banks to be better financial stewards and provide for the basic needs of the public.

Local loyalty: The Brixton Pound

“When people think of Brixton, too many think of gangs, drugs, and riots. We’re trying to turn that notion on its head.”

That’s what Tom Shakhli, the general manager of the Brixton Pound, told me when I visited the team office at Lambeth Town Hall. A storied district in the middle of South London, Brixton is indeed an atypical home for a thriving local currency. As Tom notes, other local currencies in the U.K. are succeeding in suburban neighbourhoods full of “hippies.” By contrast, the 5-year-old Brixton Pound is humming in one of the U.K.’s most diverse and dynamic neighbourhoods, the heart of Black Britain, heavily hit by the recession.

Unlike Bitcoin, the Brixton Pound is a “complementary currency”: It’s not meant to subvert the national currency nor dethrone pounds sterling. Indeed, the Brixton Pound is officially both pegged and backed by pounds sterling at a 1:1 ratio. There is no issuer, per se. Rather, residents can exchange £ for B£ at various shops and public places across the neighbourhood. Because the Brixton Pound organization isn’t making loans, the U.K. Financial Conduct Authority treats the currency as a “voucher scheme,” and thus the team avoids entanglement in the legal morass that plagues small lenders and other financial services providers.

40% of local businesses now accept the Brixton pound. Photo courtesy of Brixton pound

At this stage, the goal of the Brixton Pound isn’t credit or value creation. So why use it? When the Brixton Pound launched, one economist accused the project of “not achieving anything meaningful” and interfering with already-existing existing incentives to buy cheap goods from outside Brixton. Admittedly, the main reason to use the Brixton Pound is precisely because it empowers local businesses and traders in the neighbourhood, 40% of which now accept the currency, Shakhli told me. Since you can only spend Brixton Pounds in Brixton, the currency stays around, at least until it is exchanged, maintaining the vibrancy of the neighbourhood’s world-famous markets and entrepreneurs.

Some government employees receive portions of their salaries in electronic Brixton Pounds.

“We don’t want to be part of Clonetown Britain,” Shakhli and his team of employees and volunteers are fond of saying.

That is, they don’t want people to get off the Underground and run into the same fast-food joints and convenience stores that pop up in most other London neighbourhoods. This is clearly a sentiment shared by many local businesses. In fact, many of them now offer discounts simply for using B£ instead of £. In return, they receive free advertising from the Brixton Pound organization, in addition to other benefits.

One of those perks is that it’s incredibly convenient. In 2011, the Brixton Pound followed the model of several services in sub-Saharan Africa by adopting pay-by-text—Shakhli estimates that 95% of transactions now occur with e-currency via SMS. The businesses pay lower transaction fees for this service than they normally do to debit card and credit card providers. The fees are then collected and pooled in a micro-grant scheme—money that will soon be reinvested in the community.

Without a doubt, the paper version of the Brixton Pound looks amazing: With pictures of locals like black feminist activist Olive Morris, the Miami Heat’s Luol Deng, and David Bowie, it’s the coolest currency I’ve ever seen. But texting is as easy as using a credit card. With lower fees, so many people go for the digital option.

As for security and privacy, the Brixton Pound stacks up fairly well. The paper currency contains similar security features to pounds sterling, which help prevent counterfeiting. Furthermore, when you exchange sterling for Brixton Pounds, the sterling goes into a local credit union, which is not only far more likely to lend to small businesses than a conventional bank, but succeeds at the expense of predatory and invasive payday lenders, which are becoming increasingly ubiquitous in low-income London. On a macro level, as the link between the Brixton Pound and the local credit union is strengthened, it is less likely that the pounds of Brixton residents will be subject to the hazards and punishment that come from dealing with unseemly lenders.

At this stage, the Brixton Pound is working for local economic empowerment. Shakhli says the currency succeeds because it is easily understood. The local government also supports it—indeed, some government employees receive portions of their salaries in electronic Brixton Pounds, and some business pay local taxes with them.

The future of the Brixton Pound may become more complicated: they plan to get their first ATM soon, thus stepping further into the realm of more traditional financial services providers. But, for now at least, Shakhli can confidently say that the Brixton Pound is both helping the neighbourhood and encouraging people to reflect on crucial modern questions:

“What is money, anyway? Where does it come from?”

Creating credit: Koru Kenya

Shakhli’s questions have long revolved in the mind of Will Ruddick, an American physicist who began his career studying high-energy particles but now works for Koru Kenya, a community-development organization headquartered in Mombasa.

Like the Brixton Pound team, Koru Kenya builds currencies that complement sovereign ones (although the organization now runs several “community currencies” in different locations across the country). Yet the scenarios could not be more different. Brixton is an admittedly hard neighbourhood in a massive metro, but in the slums and villages where Ruddick and his Kenyan colleagues work, needs are more basic. As Ruddick put it when I spoke to him, people in Mombasa are not “struggling” in the same sense that they are in U.K. or the U.S.:

“People here are starving.”

Accordingly, Koru Kenya’s currencies do something the Brixton Pound does not: They create credit where there is not enough – interest free.

When Ruddick arrived in Kenya from the United States five years ago, his co-founders introduced him to a world of both waste and opportunity. There were people who could work but weren’t participating in the local economy. There were plenty of goods, but they couldn’t be bought or sold. All for lack of particular pieces of paper and metal.

“If I have forks and you have spoons but we can’t engage in trade just because we don’t have money, I consider this is a human rights violation,” Ruddick asserts.

Shop owners in the Bangladesh neighbourhood accept Bangla-Pesas. Photo courtesy of Bangla-Pesa

That may sound intense to some readers, but this is what happens when a nation’s currency doesn’t reach all of it’s’ people: The public is separated from its own potential for physical abundance by mere lack of legal tender. Ruddick’s training as a physicist leads him to compartmentalize systems, and accordingly he sees lack of credit as a glaring yet solvable inefficiency in the economic machine:

“When you turn one knob, the monetary system, everything changes.”

Ruddick and his colleagues began turning knobs by issuing a new community currency, the Eco-Pesa, into three villages in the Kongowea Location on Mombasa’s north coast. Businesses agreed to trade with the paper currency, and community members could earn extra by taking part in monthly service projects. Every month, people could exchange the vouchers for Kenyan shillings with the Green World Campaign, an anti-poverty environmentalist group.

In 2012, the Koru Kenya team took the concept one step further and issued the Bangla-Pesa in Bangladesh, one of Mombasa’s worst slums. Residents adopted the currency quickly, with many local business groups agreeing to become issuers, handing out the paper from community centres, health clinics, and schools. The network expanded based on trust: All you need to receive Bangla-Pesa free of charge is four guarantors within the network will who vouch for you. Part of your grant is placed in an actual network trust, which is used for administration, marketing, and community programs such as health care for elderly. Then you’re on your way.

In May 2013, the Bangla-Pesa went official. About 200 participating businesses, 75% of them owned by women, received currency grants. The organization’s definition of a “business” is expansive: An individual teacher, sex worker, nurse, or farmer can qualify. This inclusivity has repeatedly borne results. Since the launch, Ruddick estimates that total sales in the neighbourhood of 8,000 have risen by 20%. Considering the financial paralysis of Bangladesh beforehand, this growth is tremendous. Still, some academics and analysts are cautious. The Brookings Institution, for example, wonders if the Bangla-Pesa might weaken linkages to the national economy or drive out “good money.”

For the most part, the national government and the banks haven’t stood in the way of Koru Kenya’s success … except for one small hiccup. On May 29 of 2013, Ruddick and some of his associates were locked in federal prison. Terrorism had struck, and Ruddick was lumped in with a secessionist movement in the resulting national security sweep. He and his associates had to make the case that the Bangla-Pesa was not meant to subvert the state nor destroy the Kenyan shilling. Indeed, the community currency is what Post-Keynesian and Institutionalist economists often refer to as an “automatic stabilizer”: When people can’t get enough shillings, they use Bangla-Pesa, but when the national economy is roaring, they inevitably switch back to using shillings.

Ruddick is adamant that, for now at least, Koru Kenya’s currencies will continue to be pegged to the shilling at a 1:1 ratio. Supporting the strength of this case, hundreds of academics from the community currency movement, friends, and eventually the Kenyan attorney general rallied behind Ruddick and his associates. They were released within a few days and charges were finally dropped in August.

Now, Koru Kenya enjoys more support than ever, and faces few of the regulatory hurdles that often stifle local currency projects in the North Atlantic. Ruddick will soon become a Kenyan citizen like his wife and daughter, and the organization is sharing its experience in implementing community currency programs across the continent, with a specific focus on gender equality and women’s empowerment. The group will soon rebrand as Grassroots Economics, signifying their growth into a full-fledged international foundation. Eventually they’ll go digital, with the localized nature of each currency serving as a buffer against fraud and speculation.

Perhaps more importantly, Ruddick has already talked with other African governments about supporting local currencies. Some officials hope that these currencies will provide a platform to finally tax the “informal sector” (Ruddick estimates anywhere from 50% to 80 % of people living in Africa don’t pay taxes at all). If the local currencies indeed become accepted for national tax purposes, currencies like the Bangla-Pesa will begin to blur the aforementioned line between simple “credit” and state-sponsored “money.”

Ruddick welcomes that prospect. He envisions a network of interlocking local currencies contributing to a more distributed banking system and a more democratic monetary system.

Money is what we make it. We should be asking, ‘What is real value?’” he says.

The implications of the vision are enormous:

“People won’t have to go into debt to the IMF or microfinance if they can just create their own community currencies.”

Demanding dignity: Mazacoin

On the Pine Ridge Indian Reservation on the South Dakota-Nebraska border, a small team of developers has been attempting to achieve not only economic growth, but economic self-determination—via the Internet. It’s a plan created out of a desperate situation. According to Oglala Sioux Lakota Housing Director Jim Berg, about 40,000 members of the tribe live on the reservation; 80% are unemployed and 49% live below the poverty line. Furthermore, the tribe has felt the wrath of austerity, facing million-dollar budget cuts from the U.S. federal government, which will worsen housing, education, and health services. It seems that if anyone could benefit from financial innovation in the painful absence of the U.S. dollar, it would be the people of Pine Ridge.

Fortunately, the Fort Laramie Treaty of 1868 with the U.S. federal government says nothing about the tribe relinquishing its right to maintain a currency. The Oglala Sioux can thus attempt to go beyond a complementary currency—like the ones in Brixton and Mombasa—and create a limited sovereign currency, to eventually substitute for the dollar.

It’s easier said than done.

When Payu Harris, himself of Cheyenne-Lakota heritage, started Mazacoin a year ago, it was marketed as a cure-all. At the peak of popularity, Harris told Forbes magazine that the crypto-currency could become the “new buffalo,” the foundation of a new economy. Within weeks, Mazacoin was all over the financial press. Although perhaps well-intentioned, the media attention backfired. Investors on online coin exchanges flocked at first, and then left when it became apparent that the currency didn’t have quite the backing from the tribal government that some thought it did. As a result, some crypto-currency investors considered—and still consider—Mazacoin to be a scam. From the perspective of the team that’s building the currency, however, things have cooled down, and they are preparing for a slower, less precarious hike.

Some of the volatility is to be expected. Operationally, Mazacoin works very differently from the Brixton Pound or the Bangla-Pesa. It is neither backed by the U.S. dollar nor pegged to it. There is no central issuer. Instead, Mazacoin is based on the software behind Bitcoin. Even though it is ostensibly used for different purposes, the currencies bear many technical similarities. As the website states, “at its core, Mazacoin is a software program that anyone can run on their PC or Android device, and some rules for computers to communicate.”

People send Mazacoins to each other’s (often encrypted) electronic “wallets.” To do so, all you need to know is the recipient’s address, unlimited numbers of which are generated freely with the click of a button. The addresses aren’t available unless they are shared by the recipient, and users are encouraged to use a new address each time they want to receive Mazacoins. This process purportedly maintains privacy and security without the need for a bank, a feature that is important to the Mazacoin team, just like it is paramount to other crypto-currency organizations.

As opposed to the more centralized monetary policy of the Bangla-Pesa, which essentially bases supply on real labour, Mazacoin uses the “mining” protocol of Bitcoin. Some users equip their computers to solve codes that are necessary for the upkeep of Mazacoin’s digital ledger and payment system. When the computers solve the codes, the users—or “miners”—are rewarded with Mazacoins for their service. They can then spend Mazacoins into the economy.

Unlike Bitcoin, however, Payu and his team have “pre-mined” 20 million coins to be held in a trust by the future Mazacoin Development Foundation, on behalf of the Oglala Sioux tribe. The trust is essentially a digital sovereign wealth fund, the value of which will be determined by the future performance of Mazacoin on the reservation, with neighbouring retailers, and in investment on the crypto-currency markets. Additionally, the coins in the trust can be used for price stabilization and distribution. The legal details of the trust are a bit murky; it is unclear how the coins would be allocated and how much of a share the Mazacoin development team might get.

Although Mazacoin isn’t worth much now, the founder’s hopes spring eternal. Perhaps most importantly, if Mazacoin ever does take off, the funds in the trust might be exempt from U.S. taxation. If retailers that now accept Bitcoin, like and Dell, ever accept Mazacoin, buyers could pay a lower tax rate to the Oglala Sioux than they would to the U.S. government. Although U.S. regulators would likely wade in with respect to nontribal transactions, there is potentially enormous upside.

This is all quite complicated. On a fundamental level, a digital crypto-currency isn’t as easy to comprehend as a paper voucher. For better or worse, many people on the reservation, including tribal officials, are understandably hesitant to embrace the idea. A Mashable documentary from last fall depicts some of the tension between Harris and residents on the reservation. Although the permission to create the currency doesn’t seem to be an issue, trust is, and in addition to the confidence of the public, Harris and his team need legal recognition from the tribal government if Mazacoin is indeed to take on aspects of a sovereign currency. Recently, however, Harris has indicated that he is working closely and productively with tribal officials.

Regardless of whether Mazacoin succeeds in its ostensible goal to become the crux of a new economy for Pine Ridge, or merely becomes a source of speculation and individual profit-seeking, it’s difficult not to see economic self-determination as a worthy goal. The reservation is in a perpetual depression. That it should have the ability to create financial wealth for its own people, especially when the United States isn’t exactly flooding the badlands with greenbacks, seems a tenet of fundamental justice.

Innovation vs. inequality

In their own different ways, The Brixton Pound, Koru Kenya, and Mazacoin are all attempting to achieve a common goal: empowering people in a monetarily unequal world, from the bottom up. In an age when governments and banks aren’t always the best stewards of communities’ financial growth, security, or privacy, people deserve the ability to provide for themselves. Collaborative innovations around the world, especially within impoverished communities of color, show reasons for cautious optimism. Most alternative currency projects are not indexed to murder and mayhem.

Alternative currencies have limited scope. Because they’re not issued by powerful governments, their abilities are inherently narrowed. Perhaps, in an ideal world, through either regulation or direct provisioning, sovereign governments and their agents would guarantee their people enough money to live apart from financial predators, support their own neighborhoods, participate in commerce, and maintain basic dignity.

But meanwhile, some brave people are pointing new ways forward and creating pressure from below. There will always be mistakes and mishaps. There will always be greedy pirates. But there are also people trying to create new treasure and put it in the hands of those who don’t have enough.


Related Topics:

Insulted By Big Bank Control, the Lakota Nation Create its own Currency*

By Design!? Bitcoin has Crashed*

Cashless Society: Use Credit Cards at Your Peril*

Replace the Gospel of Money*

BRICS Announce $100 Billion Reserve Bypassing Privately Controlled Central Banks*

Defying the US with the China-Led Development Bank*

Vermont Towns Vote to Start a Public Bank that Works for Them*

132 Nations Want Out of the Cabal’s Global Banking System*

One Public Bank’s Success Story Outperforms Goldman Sachs*

People Doing Time, Banks Doing Fine*

Canadians Sued the Bank Of Canada & Won*

The Federal Reserve Foreclosure

And One Ring to Bind Them All*

Defying the US with the China-Led Development Bank*

Defying the US with the China-Led Development Bank*

What difference does it make to the common man accept to secure the positions of governments fearful of the falling influence of the U.S. dollar?

By George Parker

France, Germany and Italy have all agreed to follow Britain’s lead and join a China-led international development bank, according to European officials, delivering a blow to US efforts to keep leading western countries out of the new institution.

The decision by the three European governments comes after Britain announced last week that it would join the $50bn Asian Infrastructure Investment Bank, a potential rival to the Washington-based World Bank.

Australia, a key US ally in the Asia-Pacific region which had come under pressure from Washington to stay out of the new bank, has also said that it will now rethink that position.

The European decisions represent a significant setback for the Obama administration, which has argued that western countries could have more influence over the workings of the new bank if they stayed together on the outside and pushed for higher lending standards.

The AIIB, which was formally launched by Chinese President Xi Jinping last year, is one element of a broader Chinese push to create new financial and economic institutions that will increase its international influence. It has become a central issue in the growing contest between China and the US over who will define the economic and trade rules in Asia over the coming decades.

When Britain announced its decision to join the AIIB last week, the Obama administration told the Financial Times that it was part of a broader trend of “constant accommodation” by London of China. British officials were relatively restrained in their criticism of China over its handling of pro-democracy protests in Hong Kong last year.

Britain tried to gain “first mover advantage” last week by signing up to the fledgling Chinese-led bank before other G7 members. The UK government claimed it had to move quickly because of the impending May 7 general election. The move by George Osborne, the UK chancellor of the exchequer, won plaudits in Beijing.

Britain hopes to establish itself as the number one destination for Chinese investment and UK officials were unrepentant. One suggested that the White House criticism of Britain was a case of sour grapes:

“They couldn’t have got congressional approval to join the AIIB, even if they wanted to.”

The US Treasury said on Monday night that it recognised the need for greater infrastructure investment around the world. However, it said any new institution should “incorporate the high standards that the international community has collectively built”, and that new members of the AIIB should “push for the adoption of these same high standards”.

Privately, U.S. and Australian officials have suggested that the British decision to break ranks and join the bank was driven by commercial considerations and that London was blind to the broader geopolitical implications in the Asia-Pacific region.

South Korean media have reported that Seoul will also now rethink its decision not to join the AIIB. Japan, the US ally in the region that is most worried by China’s growing influence, is not expected to become a member.


Related Topics:

Would 11 Asian Nations be Stupid Enough to Enslave Themselves in a Trade Deal with the U.S.?*

As Putin Signs BRICS into Law 100+ U.S. Armoured Vehicles Turn-up in E. Europe*

The World Bank and Money Laundering

China and the New World Order‏

The Tolkien Allegory of the NWO*

NWO: Central Banks Imposing Biometric ID in Developing Countries First*

NWO: Common Purpose aka Agenda 21*

Cabal Rule Continues to Collapse*

1984: Just When You Think U.S. Education Couldn’t Get Any Worse*

1984: Just When You Think U.S. Education Couldn’t Get Any Worse*

By Leo Hohmann

Technology is increasingly being used by schools to gather data on students, testing not just their knowledge of subjects like reading, math and science but subjective “social skills.”

Parents and students have been “opting out” of high-stakes testing in record numbers over the past year, saying the standardized tests waste valuable instruction time, cause undue stress and often measure “skills” that have nothing to do with academic knowledge.

Rather than merely asking for a right or wrong answer to a math, history or science question, the new assessment industry is capable of boring into a child’s attitudes, values, opinions and beliefs, all of which parents and privacy advocates say is no business of the government’s.

The pushback has led some state education systems to recommend a reduction in the amount of high-stakes testing in public schools.

But, parents beware, the sudden realization that maybe too much testing is going on is not going to lead to less data being collected. Quite the opposite.

In fact, traditional testing may no longer be needed. Schools have found they have better, more efficient ways to collect even more data on your child, without resorting to paper and sharpened No. 2 pencils.

Oregon’s Gov. John Kitzhaber, for instance, assigned a task force to this problem recently and after a year of private meetings, the group is ready to unveil its recommendations which are expected to include replacing standardized tests with high-tech “observation” tools.

Fewer tests might sound like a relief to stressed-out students and wary parents.

But what if your child’s teacher could have access to a software application that allows her to collect data on your child in real time, without ever rolling out a test?

Enter the BOSS app. It is just one of countless new data-collection products available to school systems looking to collect data on the sneak.

BOSS stands for Behavioral Observation of Students in Schools. The app was designed to “enable psychologists to observe” patients but is now being marketed to schools interesting in tracking students’ behavioral patterns.

Created by the British-based textbook giant Pearson, the BOSS app can be loaded onto a smartphone and used to secretly monitor every move of targeted students in the classroom.

Does little Johnny fidget in his seat a bit too much? Does he socialize with the students around him in an appropriate manner? Does he tend to stare aimlessly out the window when he should be paying attention to the teacher?

All of this information can be pulled in and stored in an individual dossier for later analyzing and assigned an intervention and remediation that will deal with Johnny’s shortcomings, whether they be laziness, lack of assertiveness, over-aggressiveness or whatever psychological problem the app may discover.

BOSS app can be downloaded from iTunes for $29.99 and comes in age-appropriate versions from pre-K through 12th grade. The product description boasts that BOSS is able to

“record students’ behaviours in real time. The BOSS software uses interactive buttons labelled to a particular behaviour for the observer to press while observing a student during a given duration. The software keeps track of the amount of times a behavioural button is depressed during an observation.”

The app tracks “a student’s active or passive engagement in activities” and will collect data and email it to the teacher “for future use to help support a disability diagnosis,” the Pearson promotional material states.

The BOSS app is not the only new technology percolating in the education industry that has the ability to invisibly assess students in real time without their knowledge, or the knowledge of their parents.

Below is a small sampling of other apps being marketed to educators:

  • “You Can Handle Them All”: This app, produced by Master Teacher, describes 124 behaviours that teachers may encounter in their students and identifies the primary cause of each. A teacher using this app places each student into a category, with options that include “The Blabbermouth,” “The Blurter,” “The Boss,” “The Bully,” “The Complainer,” “The Disengaged” and “The Class Clown.” It then prompts the teacher with suggestions on how to remedy each unwanted behaviour.

  • “Pearson Dash”: Another product by Pearson, Dash, according to the iTunes product description, enables teachers to “Organize and track your students” according to classroom seating charts, to “record, edit, and e-mail observational notes on your students,” to “View student performance and mastery of skills with SuccessTracker data.”
  • “What Would You Do at School If”: This app focuses squarely on social skills. Put out by Super Duper Publications, it seeks to elicit answers to sensitive, revealing questions that help schools develop a psychological profile on each student. Instead of a test, this app is presented to a young child as a fun “game” while collecting data on the child’s parental upbringing and personality.

“Select the cards you want students to see, and have them work on solving problems and practicing good social skills as they discuss situations in and around school,” the product description says. “The prompts include questions like, ‘What would you do if … you forgot your homework?’ and, ‘What would you do if … your classmate teased you about the new shirt you wore?’”

Students are then graded based on how many “right” answers they give in what is clearly a test of one’s attitudes, behaviours, values and beliefs. The problem with such questions, say privacy experts, is that the “right” answer is clearly subjective and has nothing to do with a student’s ability to acquire and retain objective academic knowledge.

For instance, a parent may teach a boy to defend a weaker boy or a girl who is getting beat up by a bully. But what if the “right” answer in the role playing game is to go and tell a teacher or principal? Will the child get marked down if he answers that he would intervene and physically stop the bully’s attack? What will the remediation for this “wrong” behavioural skill be?

According to promotional details on iTunes, the “What Would You Do at School If” app lets teachers:

  • Track correct and incorrect responses for an unlimited number of players.
  • Receive feedback for incorrect and/or correct responses
  • View results in a graph and see which questions a player missed during a session.
  • Print, E-mail and share your results.

The same vendor, Super Duper Publications, puts out a separate app called “Super Duper Data Tracker” that allows teachers to “increase the accuracy and efficiency of your data collection” on each individual student.

There are literally dozens of these apps out there being downloaded by teachers, often at the behest of administrators, and many of them come tailored to the Common Core national education standards.

One teacher who reviewed the Super Duper Data Tracker on iTunes said he liked it but wished the data came with increased portability and could be more easily integrated into other platforms.

“It would also be great if this was tied to a website where teachers had an account and could input large amounts of data on something other than the small screen or tempermental (sic) keyboard of an iPad/iPhone,” the teacher said.

“Then everything would be backed up, we could share data with other team members (especially in situations where many people see one student!). It is a great app, I just think in the day of icloud and spreadsheets it is BEGGING for a big overhaul.”

Playing video ‘games’

Another hot trend is using role-playing computer games to assess students. The games would be programmed to scoop up data based on every reaction the child has to the challenges presented in the game. The questions could then be changed “on the fly” to probe areas of weakness and collect more data.

One of these games, called the MineCraft Behavioral Improvement Plan, can be programmed to pose a series of ethical dilemmas to which students are asked to respond. It has the ability to adjust the line of questioning depending on the student’s answer to the original set of questions.

“How is it legal or even remotely ethical for untrained teachers to be expected to use devices like these to assess the psychological status of your child?” asks Charlotte Iserbyt, a former aide to President Ronald Reagan’s Education Department and now a blogger on education issues at The ABCs of Dumb Down.

Iserbyt calls the replacement of high-stakes testing with high-tech data-collecting a “bait and switch” tactic that many parents won’t pick up on.

As one YouTube instructional video cited by Iserbyt explains about the personified video games,

“We know whenever you click. We know how long you stood waiting to make a jump. We can take in vast amounts of data and if we want, dynamically alter the experience [of the student] based on that data.”

The New York Times recently reported that MineCraft is highly addictive and can quickly become an obsession for many students. Schools around the world are taking advantage. Schools in Stockholm, Sweden, for instance, made the game mandatory for 13-year-old students to learn about sustainable city planning and environmental issues.

While these games might have some value if programmed to build and evaluate students’ knowledge of math equations or science principles, they could be dangerously invasive when used to gauge students’ personalities, ethical responses, political views and emotional makeup.

All of the above apps and games are marketed for use on students in general-instruction classrooms, not just students in special-ed classes with known, serious behavioral problems.

Privacy advocates say technology meant to collect data on a student’s academic knowledge is one thing, but they question whether teachers should be acting like psychologists and collecting data on a student’s “social skills” and personality traits?

Some critics are sounding the alarm that schools will be building a psychological dossier on their students through the use of this technology, and they are starting to ask questions.

Who will have access to this data besides the teacher in the classroom who is collecting it? Where will the data ultimately be stored and for how long?

Who ultimately owns a child’s private data? The school, the school system, the state or the parents? And who has the right to view it?

Will this data be made available to any third-party contractors outside the school, the school district or the state? President Obama took executive action to weaken the FERPA (Family Education Rights and Protection Act) in 2011 giving third-party contractors access to some student data, lending more reason for concern among parents.

And what rules will be set to make sure these new tools are transparent for parents who actually want to know what their children are being taught or tested on?

Iserbyt poses a chilling question:

“If parents can’t even get a hard copy of the current high stakes assessments that their children are taking now, how are they EVER going to get evidence, much less be aware of, the assessments given to their children via computer games or teacher smart phone apps based on a child’s experiential or project-based work, or any of the other invisible assessment model coming down the pike?”

So far, at least, the jury is out on all these questions.


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