The Chinese Social Credit System: Utopia or Dystopia?
Does China’s Social Credit System lead the way to a dystopian future? In this online symposium organised by Liav Orgad (EUI/WZB/IDC) and Wessel Reijers (EUI/WZB), we have asked a number of eminent scholars to take sides in this timely controversy concerning an unparalleled effort of social engineering that will soon influence the lives of over a billion citizens.
‘How to make the perfect citizen?’ This question might have crossed the minds of the Chinese government officials who, in 2014, formulated the idea of a Social Credit System. China is a vast country, with thousands of local units of government, innumerable businesses, and far over a billion inhabitants. Governing such a giant, while taking care of rampant corruption, public unrests, and fluctuations in the global and local economies is not an easy task. Yet, ‘fortunately’ for the Chinese government, the last decade has brought about a huge shift in the infrastructure, which has been transformed from a pre-digital ecosystem of cash payments and messy real-world interactions towards an ecosystem of digital payments through Baidu Pay, the online distribution of goods through Alibaba, and the sharing of millions of messages and data files through WeChat. This infrastructure offers new prospects for the Chinese government’s idea of the Social Credit System. It has handed it effective tools to monitor its citizens’ behaviours, giving each citizen a ‘score’ based on behaviour, and implementing a connected system of incentives.
The Chinese Social Credit System gets easily likened to dystopian science fiction scenarios in the West, which at least in part seems to be related to the authoritarian character of the Chinese state. However, it seems wrong to assess the system merely in relation to the potentially nefarious tendencies of Xi Jinping’s administration, exemplified by rampant human right abuses, oppression of minorities, and political persecutions. Notwithstanding these terrifying practices, we should ask: is the implementation of a Social Credit System leading to a dystopian political system? More specifically, I ask: is such a system more akin to a digital republic or a digital dictatorship? The answer I give is that the ‘making’ of citizens implied in Social Credit Systems both limits the political freedom of citizens to act virtuously and promotes dictatorial rule.
In terms of the technical properties, I define a Social Credit System as any system of governance that uses surveillance capacities of the state and/or private entities to trace behaviours of citizens, assigns scores to citizens, and incentivises behaviours by means of awards or punishments based on the scores. I depart from what I believe is the crucial difference between such a system and other means for either keeping public order or scoring individuals based on their behaviour. This essential difference lies in (1) tying the score based on multiple behaviours to who someone is, as an entity that persists through time (i.e., to a person’s moral character), (2) tying the score to a person as a citizen, and not merely for instance as a taxi passenger (e.g., in getting an Uber score) or a car driver (e.g., in getting traffic penalty points).
With regard to the first issue, I would like to point at considerations for tying offences such as major crimes to a person’s permanent criminal record and for excluding minor offences from such a record. Tying offences to a permanent record entails something about the person in question: they become part of someone’s history as a good or bad citizen in the eyes of the public. A Social Credit System extends the notion of a permanent record tied to a person to many kinds of everyday behaviours. The second point can be illustrated by referring to the notion of civic virtue invoked by the Chinese policy document on the Social Credit System, which does not merely relate to being a good civil servant or a good consumer, but to being a good citizen. In other words, it is not just the score but also its integral character (i.e., linking heterogeneous activities such as jaywalking to having access to train tickets) that sets it apart from other scoring systems.
Promoting Civic Virtue?
Essentially, a Social Credit System aims to make good citizens, qua citizens, through promoting civic virtues such as ‘trustworthiness’. This aim seems to resonate with republican thought, which emphasises the vital importance of the cultivation of civic virtue. However, the dispositions cultivated by a Social Credit System cannot be rightfully designated as civic virtues for two reasons: (1) because a score constitutes an aim external to any ‘virtuous action’, and (2) because the resulting activity tends to conformity rather than to distinction in the public sphere.
First, as Aristotle indicated, we can consider three ‘ultimate goods’ of action – pleasure, honour and eudaimonia. ‘Pleasure’ and ‘honour’ are not self-contained, meaning that pleasure depends on some external stimulus (e.g., consuming food) and honour depends on the external approval of others (e.g., having a reputation in making a work of art). Only actions aimed at ‘eudaimonia’ are self-contained, meaning that their aim is achieved in acting (e.g., courage is attained in acting courageously). Virtue, according to this reading, is the disposition that aims at eudaimonia and does not entail aiming at anything external, such as money or reputation. A Social Credit System seems to contradict this notion of virtue. On the one hand, it promotes activities such as labouring for the community because it offers a standard of reputation, which can be a source of honour – for instance, in aiming at getting the highest credit score in the neighbourhood. On the other hand, it promotes activities based on expected pleasure (e.g., receiving discounts on certain consumption items) or pain (e.g., being put on a blacklist).
Second, as Hannah Arendt argued, virtuous action requires a citizen to be able to distinguish her/himself in the public sphere. Crucially, this means that the outcomes of a citizen’s actions can always be unexpected because they constitute what might be an exceptional, hence ‘excellent’ activity. In other words, acting virtuously is not merely acting in an agreeable manner or following known social conventions, but it means standing out by distinguishing oneself. This notion of the distinction entails that for virtuous actions there can be no fixed measurements or standards based on past, generic behaviours. A Social Credit System contradicts this notion of virtuous action. In order to score citizens, a certain list of categories or a catalogue need to be established, based on observable, expected behaviours that lead to either positive or negative evaluations. For instance, donating money to charity is a measurable, observable type of behaviour that could be positively evaluated. However, it in no way constitutes an activity by which a citizen distinguishes herself in the public sphere. By subjecting ‘good’ and ‘bad’ actions to upfront categorisations based on what can be expected and measured, a Social Credit Systems promotes conformity and therefore demotes civic virtue.
Hence, it is highly questionable that a Social Credit System would lead to the emergence of a ‘digital republic’, neither in China nor elsewhere. Would it contain a tendency towards a digital dictatorship? To answer this question, we would first need to clarify the meaning of a dictatorial governance. This type of governance derives from the master-slave relation of the ruler and the ruled, characterised by the absence of political freedom. I argue that Social Credit Systems contain a tendency towards dictatorial rule, which I explicate according to (1) its output (i.e., the resulting behaviour of the ruled), and (2) its input (i.e., the method of governance applied by the ruling).
Firstly, I claim that the Social Credit System promotes ‘slavish’ behaviour. Being a slave means essentially to be unfree, which can be explicated as (1) being subject to necessity (i.e., having to ‘make a living’ through labour), and (2) being excluded from the public realm in which one can act and speak amongst other citizens. By linking civic behaviour, such as having online discussions, with production and consumption, such as having access to train tickets or cleaning the neighbourhood, the incentives mechanisms of a Social Credit System can become part of life’s necessity. Certainly, many of the behaviours linked to the categories of the Social Credit System remain voluntary (e.g., one can choose to donate to a designated charity), but reckoning with the social credit score itself becomes a necessity. In Arendt’s terms, civic behaviour in the public realm gets progressively transformed into labour, the human activity aimed at continual production and consumption, which is essentially an unfree activity. The more people’s lives are dominated by a-political or anti-political concerns ‘in public’, such as by labouring for the sake of the social credit score, the less they are free to participate in political activities. Hence, the more citizens will have to reckon with the effects of their everyday actions on their credit scores, the less they will be free to engage in political action in the public sphere.
Secondly, I argue that the type of governance involved in a Social Credit System promotes master-like rule. The prototype of such rule is the mastery of a craftsman over his craft, because it implies full control over both means (e.g., materials, instruments) and ends (e.g., a function of a technical object). For this reason, Plato likened his ideal statesman to a craftsman, who would use his social engineering skills to control his populous. It is not hard to see how the Social Credit System implies an effort of social engineering, but what sets it apart from other forms of social engineering is its instrumentalisation of the citizen. While the factory would instrumentalise the worker, the worker would be free from its control outside of its walls and outside of the bounds of the working day. Citizenship, however, permeates public life, which led Aristotle to ask whether the good citizen is in any way different from the good human being. The underlying notion of a Social Credit System is therefore that the ruler, be it one man or a collective, instrumentalises his subjects, and treats them as means towards a definite end – which in the Chinese case is social order and the centralised power of the Communist Party.
We ought to be suspicious of Social Credit Systems like the one that is implemented in China, because of their tendency to demote civic virtue and promote dictatorial rule. However, we need to make some reservations concerning this conclusion. First, a perspective of Western political philosophy is likely to be incompatible in some respects with the Chinese Confucian political philosophy. Second, matters of scale and scope of any Social Credit System should not be neglected. Although we did not discuss those, it becomes immediately clear that a scoring system is less problematic when applied to a limited set of activities (i.e., limited scale) or not to a person qua citizen but only for instance qua responsible traffic participant (i.e., limited scope).
 Legal Reform Agenda of the Fourth Plenum (2014), Translated version accessed at https://chinacopyrightandmedia.wordpress.com/2014/10/28/ccp-central-committee-decision-concerning-some-major-questions-in-comprehensively-moving-governing-the-country-according-to-the-law-forward/ on 16-11-2018.
 Diab, R. S. (2017), ‘Becoming-Infrastructure: Datafication, Deactivation, and the Social Credit System’, Journal of Critical Library and Information Studies, 1(1), pp. 1–23.
 Creemers, R. (2018), ‘China’s Social Credit System: An Evolving Practice of Control’, SSRN. University of Leiden. doi: 10.2139/ssrn.3175792.
 Human Rights Watch (2017), ‘China, Events of 2017’. Accessed at https://www.hrw.org/world-report/2018/country-chapters/china-and-tibet on 18-01-2019.
 Aristotle (1999), Nicomachean Ethics, Irwin, T. (ed.). Indianapolis: Hackett Publishing Company.
 Arendt, H. (1958), The Human Condition. Chicago: University of Chicago Press.
A Social Credit System rewards citizens who are seen as virtuous and punishes those who are not. Consider someone with a low social credit rating resulting from traffic violations, a few missed loan repayments, a divorce, and clipping nails in a public space. Would it be fair to ban this person from flying? Few would think that is particularly fair. Indeed, the Chinese Social Credit System, in particular as presented by the Western media, is widely seen as the height of technological dystopia.
But is that intuition well founded? Wessel Reijers has sought to identify features that he takes to justify a rejection of the Chinese Social Credit System, but forgoes an equally critical consideration of the alternatives. Relying on the market, the default solution of Western societies is not more just. Indeed, as I argue, while Social Credit Systems may have their flaws, (i) we tend to be very reluctant to apply similarly stringent moral criteria to Western capitalist institutions and, in fact, (ii) a Social Credit System may actually serve to make Western societies more just. Nonetheless, while I am more sanguine than Reijers about shaping the behaviour of citizens through Social Credit Systems, I agree with him that it is potentially an incredibly powerful and therefore a dangerous social technology. We should not focus on the technology itself, but rather on the political institutions that govern it.
What is a Social Credit System?
In its 2014 Planning Outline for the Construction of a Social Credit System, China formulated the objectives of the Social Credit System as that of ‘raising the honest mentality and credit levels of the entire society’. To this end, it ‘uses encouragement to keep trust and constraints against breaking trust as incentive mechanisms’. The Outline promises that the system will mark a major step in ‘comprehensively implementing the scientific development view and building a harmonious Socialist society’.
The 2014 Outline goes on to list a wide range of pathologies that the Social Credit System is meant to solve. Most fundamentally, there are not enough social institutions to incentivise trustworthy behaviour. For the Chinese state, being trustworthy means primarily complying with the law and adhering to contracts. This has become a problem in China because the rapid economic development has eroded traditional social structures and given rise to a semi-autonomous private sphere that is instable and plagued by a range of social pathologies. Amongst those that the Outline identifies are ‘grave production safety accidents, food and drug security incidents […] commercial swindles, production and sales of counterfeit products, tax evasion, fraudulent financial claims, academic impropriety and other such phenomena’, which ‘cannot be stopped in spite of repeated bans’. In addition to flaws in the legal system, financial markets are underdeveloped, services provided are insufficiently regulated, and ‘the mechanisms to protect the rights and interests of credit information subjects are flawed’. There is a widespread discontent about these matters and ‘a difference between the extent of sincerity in government affairs and judicial credibility, and the expectations of the popular masses.’
Because these problems are so diverse, it is not surprising that 2014 Outline has prompted an incredible range of initiatives at the levels of the central government, local government, and the private sector. There is, accordingly, not one Chinese Social Credit System, but a range of initiatives aimed at documenting behaviour of citizens to punish breaches of social trust and reward trustworthiness.
Defending the Social Credit System
The 2014 Outline lists severe problems facing China today. If Social Credit Systems indeed contribute to the trustworthiness and responsible use of autonomy in the private sphere, that would be a strong case in its favour. If, instead, all it does is to create fear and oppression, inhibiting individuals from using the freedom that the private sphere provides them, that would be a strong case against the Social Credit System.
The truth is somewhere in the middle and I do not think we should expect too much from the Social Credit System. Unlike Reijers, I do not take the justification of the Chinese Social Credit System to depend on big questions such as our ideas about citizenship and utopic visions of the just society. It also strikes me as unfair to cast the Social Credit System as a dystopian technology by invoking moral standards, which we forgo applying to our Western institutions. Indeed, as I show, political philosophers tend to apply quite modest moral standards to Western capitalist institutions.
The reason why philosophers have been less demanding in theorising the moral demands that apply to Western institutions, in particular those specific to a capitalist society, is that they do not do very well in giving individuals what they morally deserve. Consider some well-established failings of a market economy. First, in response to the specific concern raised by Reijers, markets, too, ‘make’ citizens by incentivising a set of behaviours, which are unlikely to correspond to standards of virtuous action. The price mechanism that underlies market exchanges is mostly sensitive to the skills needed to anticipate market prices successfully. Second, even where the market does reward virtuous actions, it rarely does so in a way that is proportionate to individual virtue. People who go to work diligently all their lives are rarely those who are most rewarded, while many markets provide high rewards to only a small group of participants. Even perfectly competitive markets do not reward contributions in proportion to their benefit to others. Finally, the price mechanism is past-focused. It tends to look more at what parents of beneficiaries have done than what they themselves have done. This is, in part, due to the dramatic failure of the existing system of private credit assessment, one of the issues that the Chinese system is meant to address, but also reflects a more general backward-looking tendency of the price mechanism.
Faced with these well-established facts, those who favour markets have tended to give up on the idea that societal institutions should be evaluating in terms of how they reward virtue. Indeed, this is a striking point of convergence between authors on the (moderate) left, such as John Rawls and Elizabeth Anderson, as well as right-wing thinkers such as Friedrich Hayek. While these authors assign an important role to the individual autonomy that the market enables, they believe that markets should not be expected to reward virtue. Rather, markets should be evaluated by asking whether its outcomes are justifiable. Unequal outcomes are just as long as they are to the greatest benefit of the least advantaged. Hayek and Anderson have their conceptions of justice, but they agree that, if markets are justifiable, there is no further question of whether virtue is adequately rewarded. By this standard, the Social Credit System seems to do just fine.
A Social Credit System for the West
Let me go further and suggest that a well-designed Social Credit System might make Western capitalist societies more just (although not all systems currently promoted by the Chinese state are Social Credit Systems in that sense).
Similar to Reijers’s definition, I take a Social Credit Systems to be an institution that has two features: (i) a centralised way of rating the virtuousness of citizens based on observable traits, linked to (ii) societal rules that reward individuals with high ratings and punish those with low ratings. In light of these criteria, some systems introduced under the Social Credit System-heading are better understood as traditional coercive punishment systems. They focus on specific behaviour, such as entering the cockpit during a flight, and involve proportionate punishments, such as losing access to credit or being banned from air flight.
A Social Credit System is different than a punishment system in that a social credit rating mediates between behaviour and individual freedom. The Chinese Social Credit Systems seek to incentivise a range of behaviours associated with adherence to promises and rules as well as other social virtues. To this end, a Social Credit System can rate individuals for behaviours that are neither legally prohibited nor morally wrong – e.g., parking cars, divorcing, and clipping nails on public transport. Based on such a broad set of socially desirable behaviours and personality traits, the SCS rates the virtuousness of individual citizens, which in turn affects the opportunities and resources that are available to them.
Social Credit System of this targeted kind can ameliorate all three objections that I listed. First, although a Social Credit System will be coercive on the individual level, its design can result from collective, democratic deliberation and thus it is potentially sensitive to a much wider range of behaviours that are seen to merit reward. Basically, any behaviour that can be reliably measured is a potential input for a social credit rating. Second, ratings can be designed to ensure a reward in proportion to a social virtue. Finally, a social credit rating is future-oriented in that it seeks to predict individual behaviour, rather than merely rewarding virtuous behaviour that occurred in the past.
The Politics of Social Credit Systems
There are many moral objections that critics might wield against Social Credit Systems, and I do not want to suggest that there are no real worries. In particular, there is a range of concerns that, while they do not apply to Social Credit Systems per se, illustrate the need for an appropriate set of background institutions. For one, there are procedural concerns over the design and operation of the Social Credit System. For the Chinese Social Credit System, it is currently not possible to appeal both individual ratings and the consequences of these ratings for individuals. Likewise, there is a serious concern regarding privacy stemming from the fact that its aggregative ratings are based on widespread surveillance of individual behaviour. Finally, the rules that govern the assignment of ratings are often opaque. Without wanting to downplay any of these objections, I think it is fair to say that they are not about Social Credit Systems per se, but rather about the set of political institutions in which they are embedded. All of this is not surprising, since Social Credit Systems are potentially an incredibly powerful social technology, which comes with potentially large benefits and yet equally with risks.
 Made available in an English translation by Rogier Creemer. Accessed at https://chinacopyrightandmedia.wordpress.com/2014/06/14/planning-outline-for-the-construction-of-a-social-credit-system-2014-2020/