position at a school in an affluent district in northern Virginia. So thanks to a highly questionable model, a poor school lost a good teacher, and a rich school, which didn’t fire people on the basis of their students’ scores, gained one.
Following the housing crash, I woke up to the proliferation of WMDs in banking and to the danger they posed to our economy. In early 2011 I quit my job at the hedge fund. Later, after rebranding myself as a data scientist, I joined an e-commerce start-up. From that vantage point, I could see that legions of other WMDs were churning away in every conceivable industry, many of them exacerbating inequality and punishing the poor. They were at the heart of the raging data economy.
To spread the word about WMDs, I launched a blog, MathBabe. My goal was to mobilize fellow mathematicians against the use of sloppy statistics and biased models that created their own toxic feedback loops. Data specialists, in particular, were drawn to the blog, and they alerted me to the spread of WMDs in new domains. But in mid-2011, when Occupy Wall Street sprang to life in Lower Manhattan, I saw that we had work to do among the broader public. Thousands had gathered to demand economic justice and accountability. And yet when I heard interviews with the Occupiers, they often seemed ignorant of basic issues related to finance. They clearly hadn’t been reading my blog. (I should add, though, that you don’t need to understand all the details of a system to know that it has failed.)
I could either criticize them or join them, I realized, so I joined them. Soon I was facilitating weekly meetings of the AlternativeBanking Group at Columbia University, where we discussed financial reform. Through this process, I came to see that my two ventures outside academia, one in finance, the other in data science, had provided me with fabulous access to the technology and culture powering WMDs.
Ill-conceived mathematical models now micromanage the economy, from advertising to prisons. These WMDs have many of the same characteristics as the value-added model that derailed Sarah Wysocki’s career in Washington’s public schools. They’re opaque, unquestioned, and unaccountable, and they operate at a scale to sort, target, or “optimize” millions of people. By confusing their findings with on-the-ground reality, most of them create pernicious WMD feedback loops.
But there’s one important distinction between a school district’s value-added model and, say, a WMD that scouts out prospects for extortionate payday loans. They have different payoffs. For the school district, the payoff is a kind of political currency, a sense that problems are being fixed. But for businesses it’s just the standard currency: money. For many of the businesses running these rogue algorithms, the money pouring in seems to prove that their models are working. Look at it through their eyes and it makes sense. When they’re building statistical systems to find customers or manipulate desperate borrowers, growing revenue appears to show that they’re on the right track. The software is doing its job. The trouble is that profits end up serving as a stand-in, or proxy, for truth. We’ll see this dangerous confusion crop up again and again.
This happens because data scientists all too often lose sight of the folks on the receiving end of the transaction. They certainly understand that a data-crunching program is bound to misinterpret people a certain percentage of the time, putting them in the wrong groups and denying them a job or a chance at their dreamhouse. But as a rule, the people running the WMDs don’t dwell on those errors. Their feedback is money, which is also their incentive. Their systems are engineered to gobble up more data and fine-tune their analytics so that more money will pour in. Investors, of course, feast on these returns and shower WMD companies with more money.
And the victims? Well, an internal data scientist