In May, the European Union imposed sweeping laws on technology companies that shift control of data to the customers, protect privacy, and require curation to stop libelous and hate content. Facebook, Google and others must from now on obtain informed consent from users that their data can be repurposed or monetized, allow users to opt out of consent immediately, allow them to invoke the right to be forgotten (or expunged from the internet) or to transfer data to another organization, and provide them with the right to transparency regarding use of their data and by whom.
By contrast, America remains devoted to laissez-faire capitalism where technology giants such as Facebook have been able to flout laws protecting privacy for years, and to sell private information to the highest bidders, be they advertisers, cults, or closeted Russian cyber warriors.
The two models represent a clash of cultures: Europe’s concerns are rooted in fear of the type of Big Brother and Stasi-style governments that devastated the continent before and since the Cold War, while Americans and their lawmakers remain mostly oblivious to profiteering, in tech or guns or whatever, even when these provably damage society.
But now there is a third way. In 2020, China will roll out its ubiquitous, and creepy, technological template for the future called the Social Credit System. There are already pilot projects underway, but in two years its government will have access to all the data generated from its 1.4 billion citizens, millions of businesses, and government entities. It is currently building the world’s most extensive surveillance system involving hundreds of millions of cameras, facial recognition software, and trillions of sensors. The system will handily capture crooks, terrorists, and corrupt officials, but is also being designed to modify the behavior of people and businesses to be more honest and trustworthy through a “scoring” system.
Here’s how it will work. By 2020, everyone must be registered, given an ID number, and from then on everything they buy, sell, and do will flow into the national database. Individuals will start with a baseline of 100 points and scoring will be based on actions and transactions benchmarked against socially redeemable criteria. For example, bonus points of up to 200 can be earned by doing charity work or by volunteering to do tasks such as separating and recycling garbage or taking care of elderly people. One jurisdiction is awarding six points to those who donate a pint of blood.
Already, companies are amplifying these incentives and persons with 600 points will have access to a low interest loan of up to $700 from online retailers to buy their goods. At 650 points, a registrant can rent a car without leaving a deposit or be given fast-track check-ins at hotels or airports. If more than 700 points are racked, the government will waive the need for supporting documents for international travel and accelerate visa approvals. Other noted benefits for high social credit scores include free access to gyms, cheaper public transport, and shorter waiting times in hospitals.
Put simply, China’s Social Credit System is Big Brother meets Air Miles.
This is a nation-state’s “loyalty” program based on doing good works and was the brainchild of the Central Comprehensively Deepening Reform Commission established in 2013 under China’s Politburo. The goal began as a financial credit system then became a means to create a “sincere culture” and raise “the awareness for integrities and the level of credibility within society” to perfect the “socialist market economy.” Now it is a combination of a credit score, to identify deadbeats, and a “national reputational system” in the hopes of making the people and businesses and officials in this gigantic and crowded country behave honorably toward one another.
To modify behavior, there must be deterrents, as well as incentives. For instance, an individual’s score will plummet if convicted of a crime, fired from a job, or flunked out of school. Financial information and the scores of family and friends will be included in the mix. Those who don’t pay debts, or have too many, will have points deducted. Those who have friends and family who are low-scorers will also face deductions.
Low scorers cannot hold management jobs in state-owned firms or big banks, and their children cannot get entry to good schools. To date, the Social Credit System has blocked low-scoring Chinese from taking 11 million flights and four million train trips. And 17 people who refused to carry out military service last year were barred from enrolling in higher education, applying for high school, or continuing their studies, Beijing News reported.
Clearly, this is chilling. The Confucian-cloaked goal of building a “sincere culture” is window dressing for building the world’s first Orwellian police state.
To be fair, proponents argue that China’s society needs remediation because traditional values of family and social responsibility are increasingly ignored. Elder neglect, corruption, illegal migrants in cities, consumer fraud, safety issues concerning food, counterfeiting, and regional income disparity are rampant and have resulted in an uneven distribution of prosperity and a rise in social unrest and misbehavior. Across China, cheating on exams has become so commonplace that college entrance exams use facial recognition and fingerprints to ensure that test takers are not impostors. Crime flourishes and childcare centers only unlock doors to faces registered in their systems due to the threat of kidnappings. Theft is so considerable in public washrooms in China that toilet paper dispensers have been installed using recognition technology to limit usage by each person to 2 feet of paper every nine minutes. Culprits are captured on camera and arrested immediately.
It is easy to condemn China for creating such a potentially nightmarish system, but not for coming up with a means of rewarding ethical behavior and punishing errant or unseemly behavior. After all, this is what any responsible parent does, and China is the world’s biggest parent responsible for 20 percent of the humans in the world.
If one accepts that the goal of the Social Credit System is to remove bad players from the economy, bench, and government in order to improve economic and social behavior for the betterment of all—and that criteria and scoring will be ethical too—then the system is invasive but not oppressive. But the danger is evident and China’s track record is blemished.
On the other hand, is any state involvement out of line? The private sector is hardly a paragon of trustworthiness—witness the role of Facebook in the U.S. elections. These concerns, and others such as concentration of ownership, convinced Europe to intervene to protect users and society from tech’s worst excesses and instincts.
These are the three models of governance on offer now as the world hurtles toward a systemically digitized existence. By 2020, there will be China’s gigantic Social Credit System designed to protect society from crime and corruption and to improve human and corporate behavior. There will be Europe’s regulations and commitment to curb the private sector. Or there is the made-in-America Big Brother future that will be owned and operated by a handful of tech trillion-dollar-somethings.
Clearly, the choice is Hobson’s.