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Thursday, November 29, 2018

Strategic CSR - Social credit

The radio segment in the url below details China's exploration of a "social credit score" for all of its citizens:
 
"China is testing a new plan. Its stated aim is to make it easier for citizens to do business and help them to trust each other more. It's similar to the American credit score, but much more sweeping. It tracks far more than financial transactions and is called the Social Credit score."
 
To suggest this idea is "similar to the American credit score" is to understate its implications. The article explores the background to the idea in some detail:
 
"… a lack of trust in people and businesses has held China's economy back. So when China decided to make a centralized score, the government turned to people's behaviors to extrapolate trustworthiness from them. And you know who has lots of data on how people behave? Companies, especially big companies like Alibaba. That is China's version of Amazon. Alibaba owns one of the largest online payment systems in the country and has its own credit scoring system called Sesame Credit. So the government has been working with Alibaba in the development of people's Social Credit score."
 
So, in essence, the government is planning to use the company's data to track everyone's online behavior (cross-referencing payment history with purchase patterns) and develop a proxy for how trustworthy a person is:
 
"The way people are scored, it's not simply whether they miss a bill. It could be what they buy online. I mean, I think the example that the head of Sesame Credit publicly gave the press was, you know, if you buy nappies, you're responsible. So your score will go up. But if you're buying video games, you're lazy, so your school will go down."
 
Aside from the assumptions that are being made in linking purchase patterns to personality, it is the detail of what is being proposed that is striking. This is particularly so in terms of the potential consequences:
 
"The Social Credit system is not scheduled to be rolled out nationally until 2020, but we got a glimpse into how it might work because China is testing out versions of it in pilot cities across the country. … everyone in the city starts with a score of 1,000. … And there's a whole letter grade system behind the points. So from 960 to 1,000-plus points is an A, 850 to 955 points is a B. Eight-forty-nine to 600 is a C. And this is considered a warning level. Below that, you are a D. You're labeled an untrustworthy citizen. You can gain or lose points for all kinds of reasons. Get a DUI? That is an automatic downgrade to a B."
 
Moreover:
 
"And if you spread rumors online – minus 50 points."
 
And, what are the consequences for being labelled "an untrustworthy citizen"?
 
"If your Social Credit score is low, or if you end up on something called the list of untrustworthy people, you can be banned from certain kinds of travel or even subjected to public shaming. Life gets hard."
 
In spite of the creepy nature of all of this, there are some broad societal benefits to coercive behavior modification:
 
"Before the pilot program, being a pedestrian in Rongcheng was just terrifying. You basically had to hurl yourself across the street when you saw a break in traffic. But now, after the changes have happened, the cars, they will wait for you."

Additional information on this topic can be found here and the idea even has its own Wikipedia page here. Failing that, you can just ask Facebook for a printout of all the data they have on you – it kind of works the same way! :-)
 
Take care
David
 
 
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China Tests a 'Social Credit Score'
October 31, 2018
National Public Radio