Orwell that Ends Well?

Social Credit as Regulation for the Algorithmic Age

China’s Social Credit System (SCS) is a massive government-led initiative to promote data-driven compliance with law and social values. In the West, it is widely viewed as an Orwellian effort to crush resistance to the Chinese Communist Party. Such a picture is, if not wholly incorrect, decidedly incomplete. This Article offers a revisionist account of SCS and its implications for liberal democracies. SCS is, in fact, the world’s most advanced prototype of a regime of algorithmic regulation. As such it could well represent our future. Or it could be a cautionary tale that sets the West on a different path.

SCS is a sophisticated effort not only to embrace the capabilities of data analytics, but to restrain their potential abuses. Its three distinctive components are: (1) data as infrastructure; (2) feedback mechanisms which leverage the data to promote outcomes; and (3) an integral oversight regime of guiding principles and legal restraints. The system is imperfect, sometimes intentionally so. Yet both its merits and flaws are instructive.

Incorporating lessons from China’s system is crucial for resolving the great legal challenges we face in the emerging era of digital platform power, relentless data aggregation, ubiquitous artificial intelligence, and algorithmic control.

a. Kevin Werbach is Liem Sioe Liong/First Pacific Company Professor and Chair of the Department of Legal Studies and Business Ethics at the Wharton School, University of Pennsylvania. He examines business and policy implications of emerging technologies such as artificial intelligence, next-generation wireless, gamification, and blockchain. Werbach served on the Obama Administration’s Presidential Transition Team and helped develop the U.S. approach to internet policy at the Federal Communications Commission. His books include For the Win: How Game Thinking Can Revolutionize Your Business and The Blockchain and the New Architecture of Trust.

The full text of this Article is available to download as a PDF.