China’s Move To Rate Every Citizen To Reward Or Punish Behavior Promises A Terrifying Future

Miscreants will no longer be welcome aboard China’s trains and aeroplanes from May 1 onward. A record of misdemeanours such as spreading false rumours about terrorism, creating a ruckus on flights, smoking on trains or using expired tickets will land you on a travel blacklist, as reported extensively over the past week.  A laudable move, you might say—but this is only a tiny part of an unprecedented exercise in totalitarian control where the Communist Party will put the lives of every one of its subjects under the microscope as part of the so-called Social Credit system.

Economic and political theorists have reason to look askance at all this—until recently, the term ‘social credit’ referred exclusively to the eccentric vision of C.H. Douglas, published in a 1924 book, in which he applies his engineer’s mind to the inadequacies of the market economy. He devises a system where the state would compensate consumers with a portion of the price of the goods they purchase in order to balance out the gap between the cost of production and consumer income.

 The Chinese system is nothing of the sort. The word translated as ‘credit’—xinyong—is reportedly a Confucian term that refers to one’s trustworthiness in general, and in recent times has been applied specifically to financial probity. The system is a digital initiative intended to assign an integrated rating to each and every citizen based on a number of factors: misdeeds both criminal and non-criminal, as well as economic and social behaviour and status. There are rewards for ‘good citizens’, including access to good gyms and cheaper public transport, whereas those less upstanding may find that they have difficulty booking rooms in good hotels, in addition to facing travel restrictions.

 This move to push citizens to conform to the government’s standard of behaviour through incentives and disincentives happily coincides with President Xi Jinping’s consolidation of absolute power, but it has been in the works for quite some time. A more limited version designed to assess the financial creditworthiness of firms and individuals was first mooted in 2007 during Hu Jintao’s tenure, while a 2014 document outlined the full system now being implemented. Private players such as e-commerce giant Alibaba have their own established systems that harvest consumer data including social connections and educational qualifications. Alibaba’s system, called Zhima Credit, punishes customers with low scores by charging them more for products. A Wired report last year quoted Zhima Credit’s CEO as saying, with terrifying simplicity, that the system “will ensure that the bad people in society won’t have a place to go, while good people can move freely and without obstruction.”

Big Data will be a pillar of Social Credit’s architecture, as everything harvested by the aforementioned private schemes will be, or perhaps already is, plugged into the state’s system to provide a truly comprehensive picture of citizens to bureaucratic eyes. Indeed, despite the fact that this move has only just been announced, there is evidence that the system has been in place for some time with little fanfare, as millions faced travel bans last year.

 Implementing Social Credit has three immediately obvious large-scale consequences. First, the restrictions on the economic activity of citizens for the sake of behavioural correction is a gamble that may or may not pay off. If large numbers of potential consumers continue to ‘misbehave’ and thus have their spending restricted, it may well be the Chinese state itself that feels the pain.

Second, enforcing conformism in such a way without the need for a threat of violence is something that the Gestapo could only have fantasised about in its wildest dreams. Normalisation and acceptance of such a system seems far easier when citizens do not have a constant reminder of abnormality in the form of coercion hanging over their heads and are instead nudged to behave in the right way by incentives and disincentives. It may soon become a facet of everyday life to sneer at your low-score, half-imprisoned neighbour—or report his undesirable activities to get him blacklisted. Many are already rejoicing at a number of supposedly corrupt government officials having been blacklisted, apparently without considering whether they were truly corrupt or simply political undesirables jettisoned in a way that serves simultaneously to consolidate the regime’s power and appeal to the masses.

Third, this creates a new node of power in the form of whoever administers this necessarily copious system. The power and the rewards of corruption would be immense, and would perhaps even offer a chance to subvert the party hierarchy—is the party creating a rival for itself with this move?

The idea of ‘nudging’ people to ‘improve’ their behaviour, alluded to above, is evocative of Nudge Theory, which was made famous by Nobel Prize winner Richard Thaler and his colleague Cass Sunstein. They propose a gentle paternalism on the state’s part, and go out of their way to state that “the intervention must be easy and cheap to avoid.” China’s nudges are far more intrusive and all-pervading, and thus fail to satisfy this definition—but they do hold up a dark mirror to it, showing what happens when a nudge becomes a mighty shove.