Stian Sandberg explores the consequences of China’s proposed Social Credit System; a plausible future where trust is quantified.

Imagine a normal day, except everything you do is recorded and judged by an algorithm whose parameters are entirely out of your control. The purchases you make at the supermarket, what news outlet you read, who you spend your free time with, all of which are used to calculate a number that represents just how trustworthy you are as a citizen.

This is an upcoming reality for many in China, where the government has proposed to implement a national social credit system. The system, if put in place, will grant every single citizen a number to represent how socially trustworthy and decent they are.

In an era characterized by rising totalitarianism, where government control and surveillance has become a real concern, this hits alarmingly close to home. The question then becomes, what are the implications to society when we quantify trust?

The System
In 2014, China published a document titled ‘Planning Outline for the Construction of the Social Credit System’. The proposal suggests a system where each Chinese citizen is given a numerical rating representing how socially trustworthy they are. This number is based on several judgements made on (among others) behaviour, purchasing history, whom your friends are, and in typical Chinese fashion, how positive you are towards the government. With the system’s current trajectory, widespread mandatory enrolment will be implemented in 2020.

Social Credit is not a new idea in China. For several years, Ant Financial — a subsidiary of Alibaba and the company behind Alipay — has implemented their own rating system entitled Sesame Credit. Sesame Credit gives users a score between 350 and 950 points based on five different categories: credit history, fulfilment capacity (i.e. the user’s ability to fulfil their contract obligations), personal characteristics, behaviour and preference, and interpersonal relationships. Alipay has a user base of over 520m; combined with data from other similar companies that Ant Financial partners with, this results in a vast amount of data for the Sesame Credit algorithm to evaluate individual users and present them with a rating. The details of the algorithm remain a company secret.

China is a natural contender for a national social credit system, as alongside well-established technology companies like Alibaba and Tencent, the political sphere consists of a one-party system. Consequently, this lets China dictate the rules of the system. As a positive attitude toward the government will be rewarded on the platform, an incentive against free speech is created, causing political activists who speak regularly against the regime to be punished by the system. The Chinese government dictates the meaning of positive behaviour, which further oppresses those who dare speak their minds. This is also made possible by China’s increase in national surveillance. For example, in the northwest region of Xinjiang, members of the Chinese Communist Party have invested heavily in securitization, introducing checkpoint grids, security cameras, a mandatory installation of a government ‘spy app’ intended to record every detail of your phone, and even the collection of DNA after medical check-ups. In this specific region, these measures are taken to keep a historically rebellious Turkic-speaking minority in check. One can see how these measures could be extrapolated to keep other minorities and groups considered a threat by the government under control — an oppressive mind-set lending itself to be exploited by the social credit system.

The dystopian nature of this system is obvious, as shown by how rewards and punishments will function on the system. A low score could have huge implications for consumers, as many restrictions will be imposed on those who are judged untrustworthy. The list is extensive and includes punishments such as reduced internet speeds, restricted access to certain types of travel and the inability to receive loans. Meanwhile, good behaviour is rewarded with privileges such as skipping airport security, deposit-free car rentals, and priority for a European Schengen visa application. Another striking example is shaming people for jaywalking. To tackle jaywalking, the act of illegally crossing the road, China has installed screens by the side of the road to immediately post pictures of the jaywalker, should he be caught by a surveillance camera, consequently leading to a reduction in social credit.

It should be mentioned that China isn’t the only country with a rating system for its citizens. In the U.S. for instance, everyone has a FICO credit score that is used to judge whether you are eligible for a mortgage or a new credit card. Most western countries have a similar system, the difference being — of course — that none of these systems directly judge behaviour, only financial history.
The introduction of this system leads us to ask some interesting and fundamental questions about how we interact with society, and — perhaps most importantly — each other.

A New Variable
A social credit system poses an interesting problem for economists and how we model society, as now a new and previously unquantified variable is introduced: trust.

Many economists and researchers from other fields have found trust, a concept dubbed ‘social capital’ by Harvard professor Bob Putnam, to be an important indicator of economic growth. Social capital also correlates to non-economic factors such as life satisfaction and suicide rates. Therefore, one can argue that a Social Credit system could lead to an increase in social capital by incentivising trust, which, in turn, could lead to higher economic growth. Thus, there is an argument to be made for the benefits of social capital, although costs such as lack of personal freedom and free speech lead to question whether national social credit truly yields economic benefits.

Interestingly, a study done by World Values Survey shows that China exhibits a very high level of social trust on par with that of many Nordic countries like Norway and Finland. It is curious that a nation with already high levels of social trust feels inclined to implement a system quantifying trust. Perhaps it is simply a natural evolution of increased government control in China, combined with the newfound technological capabilities to implement them. In what might be the biggest all-encompassing system ever to be implemented, China clearly has motives other than increasing social capital. Whatever these motives are, the implications are vast. When something so fundamental and human as trust becomes yet another variable, life becomes an optimization problem, where the objective is set by a political agenda.

It is impossible to say with certainty how this system will affect China, and how it will play a role in the lives of the individuals it will touch. It is easy to imagine the Black Mirror-esque reality that a Social Credit system could impose on society, and even more worrying is the power the Chinese government could wield over its citizens to steer them towards certain behaviours in line with their political agenda. It will not be long before users realise how to maximise their score on the system, and in doing so they may start adapting behaviour that doesn’t reflect their personal beliefs. It would seem an ironic side-effect of quantifying trust, is incentivising dishonesty.


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