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  • Hubert Österle

Social Scoring – The future of economy and society?

Updated: Jan 23


In Shenzhen, pedestrians who cross a red light at an intersection receive a ticket before they reach the other side of the street. A facial recognition camera identifies them, the traffic surveillance system sends them a ticket via WeChat and they merely have to confirm payment via Alipay. And the authorities reduce their social score.


Something similar happens when car drivers speed, when tenants pay their rent too late, children are absent from school without a valid excuse, households do not separate garbage properly, or passengers eat their food on the Transrapid. Citizens can improve their social score by helping old people, working in an association, or donating to charity.


A low social score can result in citizens not being able to get a plane ticket or a ticket for the Transrapid, not having access to bank loans, not being able to send their children to the school of their choice or not being able to get an apartment in their preferred area. Conversely, a high social score facilitates the life of the holder in meeting these needs, or ensures preferential treatment in hospital, or a prioritized handling of administrative acts.


The social scoring system in China is an expression of a totalitarian regime. The communist party is thus building an instrument of mass oppression. At least that's what it sounds like in the Western media. I maintain, on the other hand, that this social scoring system can be an extremely promising way to manage human coexistence and the social responsibility of companies and institutions fundamentally better than in free-market multi-party democracies. If it is done properly! We should observe developments carefully and learn from them.


Chinese social scoring is based on a central database, on black lists for transgressors and on rules for penalties and rewards. The use of the internet, sensors in many everyday devices along with cameras and microphones provide a data image of every citizen, described by Melanie Swan or Deborah Lupton as early as 2013 as the Quantified Self. Chinese social scoring determines desired activities (e.g. charitable donations) and undesired behavior (e.g. violation of traffic regulations or criticism of the government) and condenses the data points into a social score.


Never before in the history of mankind has there been such detailed data on the behavior of individuals, companies and other institutions. Never before have we had such powerful tools to evaluate the gigantic datasets and been able to learn so much about human behavior. Never before has it been possible to provide so many people with incentives to comply with desired behaviors so quickly.


The published goal of social scoring is to steer the economy and society for the benefit of human beings. If this improves traffic safety, if the passenger finds a clean seat and table on the train, or if the reminder system for late payers is eliminated, this contributes to a life with less hassle. We traditionally try to achieve the same by educating people at home and at school, through ethics and religion and, ultimately, with the penal code. The strongest weapons against unwanted behavior are the police, the judiciary, and prisons. If, as estimated by the WPB (World Prison Brief), the USA had 655 prison inmates per 100,000 inhabitants in 2019 (China 118, Switzerland 81), this is not an indicator of a particularly pleasant coexistence in a free, pluralistic country.


Such comparisons and indications of possible causes are of course not scientifically sound statements, but at best food for thought. Chinese social scoring is only being used in pilot regions and therefore does not determine the cause of a low incarceration rate. It is at most an indication of another culture from which social scoring originated, and it remains to be seen whether social scoring achieves the desired effect. For a discipline called "Life Engineering", a central research topic is whether and how the new opportunities arising from digitalization can be used to control the economy and society to the benefit of people's quality of life.


In the Western world, Chinese social scoring immediately arouses fear of total surveillance, of being controlled by the communist party, and ultimately of being oppressed by a small party elite. If one observes the history of autocratic systems, be it states, religions or even companies, it is noticeable that sooner or later a small ruling class always establishes mechanisms with which it consolidates power, keeps dissenters in check, and takes advantage of or exploits those without power. In the Western world, these are the mechanisms of capitalism and the power that comes from capital, so here too a small elite controls development. The frequently discussed social divide, i.e. the widening of the gap between rich and poor, can support this statement. The rapidly growing lobbying organizations in the Western capitals exert a massive influence on legislation and the executive in the interests of capital and the elites. Lobbying spending e.g. in the U.S.A. reached 3.4 billion USD in 2018.


This comparison can be countered by the fact that there is no social scoring system in the Western world. In fact, companies use credit scoring, insurance companies collect data on the health status of the insured or on driving behavior, the Flensburg Central Register documents traffic offenders, Google Scholar, ResearchGate and other scientific networks evaluate the status of scientists, Uber makes the quality of drivers and Airbnb that of apartments transparent and the datenkraken have built up a vast knowledge about our behavior in consumption, on the internet, in traffic, etc. Companies that grant a loan or recruit an employee, courts that decide a release on bail, and especially providers of any products on the internet use all this knowledge. In his book "The Metric We", Steffen Mau shows impressively how far the quantification of the social has progressed in our Western societies.


For decades, the idea of the transparent human being has triggered fears and easily leads to a basic mood of hostility to technology. But the digitalization of human beings cannot be stopped. As borne out on a daily basis, there are always people, companies, and states that utilize the new possibilities of technology and bring innovative digital services to the market. And even the big critics, or at least their children, use these services because they are convenient or necessary for presenting themselves. Whoever leads in the development of technology determines the values that are pursued with it.


We need a discipline called Life Engineering to tell us what is good or bad for us and how we can align our behavior with what is good for us. To do this, Life Engineering needs access to anonymized personal and factual data collected by companies and states. From this, it can derive more and more rules on how behavior determines quality of life. Ultimately, it could lead to the development of digital assistants that help us individually and as a society to achieve a higher quality of life.


This idea sounds theoretically high-flown and unrealistic. If the findings of the book “Life Engineering” are correct, however, we are in the process of implementing precisely such mechanisms. When the navigation system remembers where we have parked our car, when the social network notifies us of friends' birthdays, when the fitness app asks us to climb stairs, and when the digital information service selects media news to suit our inclinations, these are examples of diverse, voluntarily used digital assistants.


For decades, science, but also practice, has been dealing with mechanisms to supplement financial goals of business with humane and social goals. Research on corporate social responsibility has even led to an international standard (ISO 26000). The US Business Round Table has formulated a plea for social entrepreneurship, which 200 entrepreneurs and board members have signed, interestingly without mentioning ISO 26000. The German Federal Network for Consumer Research has founded an initiative for Corporate Digital Responsibility. And even the financial markets, usually under the heading of sustainability, are working toward an economy in the interests of quality of life. The new technological possibilities facilitate such efforts with automatically collected and objective data and evaluation options. Life Engineering is intended to provide us with scientifically sound foundations for actually using these instruments for human benefit.


The abovementioned efforts toward a more humane economy have been proclaimed again and again for decades without actually achieving anything approaching the intended improvements in quality of life. Perhaps many "fighters for a better world" are more likely to aim for positive public relations for themselves and their companies than for decisions that are likely to be painful, such as not advertising fattening energy drinks or rejecting politically questionable but financially rewarding advertising campaigns in social networks. Automatic data collection and the machine recognition of correlations offer an unprecedented opportunity to verify the achievement of corporate social responsibility goals and to make them effective in the management of companies.


This contribution is not a vote in favor of abolishing multiparty democracy or the liberal market economy, but a call to use the present and future possibilities of digitalization to gear the economy to the quality of people's lives and to replace the millennia-old mechanisms of punishment with fine-grained instructions on socially desirable behavior. Ideally, it is not a government-imposed steering system perceived as coercion, but a voluntarily used digital personal coach, which we accept just like a messaging service or an electronic calendar. Would we use a digital coach who records our behavior from shopping to entertainment and mobility and makes behavioral recommendations based on this personal data? According to Kostka, 80% of those surveyed welcome the Chinese social scoring system.


If we compare the data collections of the Chinese social scoring system with the data collections of our Western states and if we were to expand both to include the data collections of private companies from Facebook to Alibaba and look at the consequences, such as refusing a purchase if creditworthiness is insufficient, for the personalization of advertising and news and the recruitment of employees and tenants, the seemingly major contradictions disappear.


Data and information technology are creating an unprecedented potential for guiding the behavior of consumers or citizens. It is up to us to use this potential for human benefit. To achieve this, a discipline called Life Engineering must improve our understanding of the interrelationships as well as testing mechanisms for steering the economy and society. It is gratifying to note, for example, that research at bidt (Bavarian Research Institute for Digital Transformation) is examining the Chinese social credit system for transferability to Germany. In the end, the digital services should be so convincing that people will accept them voluntarily. The decisive factor is who determines what is good for human beings and how people are prepared to contribute to their quality of life.


References

Osterle, H. (2020). Life Engineering. Machine Intelligence and Quality of Life. Springer International Publishing. https://doi.org/10.1007/978-3-030-31482-8.


World Prison Brief, Institute for Crime & Justice Policy Research.

https://www.prisonstudies.org/highest-to-lowest/prison_population_rate?

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M. H. Schmiedeknecht and J. Wieland, "ISO 26000, 7 principles, 6 key issues," in Corporate Social Responsibility. Responsible corporate management in theory and practice, Berlin, Heidelberg: Springer Gabler, 2015.


D. Lupton, The Quantified Self. A Sociology of Self-Tracking. Cambridge, UK: Polity Press, 2016.


M. Swan, "The Quantified Self: Fundamental Disruption in Big Data Science and Biological Discovery," Big Data, vol. 2, no. 1, pp. 85-99, 2013.


https://www.bidt.digital/bidt-foerdert-neun-forschungsprojekte-zur-digitalisierung/


https://www.opensecrets.org/news/2019/01/lobbying-spending-reaches-3-4-billion-in-18/

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