Invest Like the Best with Patrick O'Shaughnessy
· John Arnold
[00:00:00] S1: Any institution gets less effective over time. I think it's true of companies. I think it's true of countries or governments. I think it's true of foundations. You have your best, most innovative times when you're still relatively young as any organization. So I'm very cognizant of some of the downsides of having perpetual foundations. One of the roles of a foundation is to take risks that the private sector and governments aren't incentivized to take. There might be political risks, there might be economic risks. Because there's less accountability on foundations, they can provide that capital and resources to try things that others aren't willing to do. But those are risky. Oftentimes, those will fail. I think organizations become more bureaucratic, more risk-averse over time, and so they're not able to do one of the main functions of a foundation. There's this difference between charity and philanthropy. Charities often are designed to meet short-term needs, and philanthropy is more on trying to create long-term solutions. We do both of those. We're mostly on the long-term solution side, but we also give money to our local food bank. We give money to help the local hospital. It's harder work. It requires having bigger staff. It requires having a longer time frame, and being willing to live with ambiguity and likelihood of failure on many of the things that we're doing. I talk about, the easiest money to raise is a university that's going to build a new building, because a donor has trust in that institution. They know that if I give a dollar, I can point at the brick that my dollar went to. Sometimes you even have your name on that brick. You see directly where your money's going. A lot of the work that we do, which is based on trying to improve these big systems in America, whether that is the healthcare system, or the criminal justice system, or infrastructure, our public finance system, education. It is long-term work and progress is slow, but we really act as this conduit between researchers and policymakers, trying to do this experimentation, and do evaluations and research about what works and what doesn't in these systems, and help people think about new ideas, and how will you test them, and how can we translate them into something that's useful for policymakers to improve the outcomes of these systems.
· Patrick O'Shaughnessy
[00:00:00] S0: What about criminal justice? Describe your work in that part of the world. What progress have you made? What progress do you think needs to be made to that system?
· John Arnold
[00:00:00] S1: We first got involved in this – we just started passively funding the Innocence Project. The Innocence Project tries to go look at cases of people that have been convicted of a crime, and do new DNA testing on some of the evidence, and see whether that evidence that was used as part of the conviction actually points to them as the perpetrator of the crime or not. The Innocence Project has been able to overturn many, many, many convictions. There’s a lot of very sad individual stories there. But I think most important from the Innocence Project is they're really looking at what was this process that led to this wrong conviction, and how do we improve the system to lead to fewer incorrect prosecutions and convictions. So they were using the individual to try to improve the system. With that entry, we started looking more and more into the criminal justice system. We heard a lot of anecdotes about some of the inefficiencies or failures of the system. We took a step back and said, "Okay, where can we try to help in this system?" A lot of the criminal justice principles came from the great crime spike that happened in the 60s, 70s, 80s in this country. It culminated with a bipartisan crime bill under Bill Clinton in the early 90s that was really about getting tough on crime, and it was about increasing the penalty for if you're caught doing things. Meanwhile, the researchers have known for years that what's more important than the penalty if and when you're caught, is the probability you get caught. A lot of people who are committing crime don't have the ability to process, "If I get caught, will I have a five-year sentence or a ten-year sentence, and that's going to change my behavior?" A lot of it is more, "Am I going to get caught or not?" There were lots of questions about things like, how do you do pre-trial detention? This time between when you're arrested for a crime and when you're convicted in courts of a crime. What should happen to you in that time frame? We got asked to come into New Jersey to help them think about that. Kentucky, a Republican state, was one of the first to really try to redesign the system when their existing system was deemed unconstitutional. So, thinking about what's important in that decision process – what many states have decided is what's important is, are you a threat to others?
· John Arnold
And what's the likelihood that you're going to come back for your trial? That should decide, do you need to be detained before you're convicted of the crime, or can you be released back into the community? Meanwhile, we have this cash bail system that's largely based upon, do you have money to post to get out or not? We've worked with a number of states, both Republican and Democratic states, over the years, trying to think about how you align the process with what the goals of society are. This criminal justice reform movement has had its ups and downs. We were one of the very few philanthropies that was looking at it when we got started close to 15 years ago, particularly on the adult side, and then it became a very popular movement. A lot of the people that were coming into it were coming in from a social justice and racial equity perspective. I think one of the things that distinguishes us is we always try to think about, what are all the goals of the system? Here’s the goals of the criminal justice system. First and foremost, you can never lose public safety on it. So any reform you do can't have a trade-off of public safety. But social justice and racial equity are certainly goals in that system. We look at a lot of ideas about how to improve it, and we try to figure out what are the trade-offs that exist, try to quantify them to the extent that we can, try to figure out, are there trade-offs? If you do one thing, it could improve social justice or racial equity, but there could be a trade-off on cost or a trade-off of public safety.
· Patrick O'Shaughnessy
[00:00:00] S0: Do you think that the best place to improve things is just that subjective probability that you'll get caught? Using technology especially, is that where we should invest the outsized amount of our time and attention? Because it seems, all it takes is one case of some guy whose probability is low, so you let him go and he commits another really bad violent crime or something, and everyone freaks out and says, shut this down. It's like nuclear. Three Mile Island happens, and then we get no nuclear forever. Does that mean that we should focus our attention on making people more scared that they'll get caught, as the number one lever in this system?
· John Arnold
[00:00:00] S1: I think so. The way you do that in a society where, number one, there's not the public funds at the city level to really significantly increase the number of police. Second is that communities are hesitant to have a lot more police in their neighborhood. It's weird, in that communities don't want to lose the police they have, but you also ask them, they don't want a lot more police coming in, and the status quo bias associated with it. The question is, if you don't have a lot more money and communities don't want a lot more officers just walking around, then what's the solution? I think there’s a lot of interesting technologies that are being developed. There's always this trade-off about security versus surveillance, or security versus privacy. I think this is one where each community has to figure out where they want to be on that spectrum. And different communities are going to choose different equilibriums there. You walk down midtown Manhattan, it might be the most surveyed place in the United States. It's also one of the wealthiest. I've been in the Real-Time Crime Center in Beverly Hills and there’s cameras everywhere and they have drones. Everything's being filmed. So the wealthy communities have decided, "We want this, and we're willing to trade some of our privacy for security." Meanwhile, a lot of the debate happens – the assumption is that low-income people don't want that, and that they want more privacy at the expense of security. I think there’s real questions about that. You see the positive response that people have whenever crime goes down. The privacy that we're willing, as individuals, to give up on the internet in order to get something we like. The rewards of the internet, we're willing to give a lot of our privacy. So I think there is this broad rethink now about this trade-off, and what tools are available and how to use the tools that don't lose the trust of the public and that minimize the chances that people are going to misuse any of these tools.