I think having a social credit system is unethical. Let me explain why.
There are a lot of benefits to a system like this. When somebody wants to hire someone, they can see how “good” (I will talk about this later on) the other person is on a scale, which sounds fantastic for anyone who looks forward to doing business with anybody else. When schools want to register a student, they know about the student’s parents. When somebody wants to rent a house or a business property to someone, they want to know more about the person that is interested in their property.
In addition to giving people a better idea of people they interact with, it also encourages people to have good social behavior. For example, it promotes people to drive better. It also prevents them from doing illegal activities, which can be as small as littering or as big as a felony.
If we exclude all privacy aspects of a system like this, I think it would be a great addition to society. I would advice against judging people solely based on their social score, since a number cannot possibly represent a person.
Now we get to the issues of a system like this. First of all, this system requires surveillance of all people at all times. It is an automated system that automatically awards or deducts points based on people’s actions, and being recorded at all times has obvious privacy issues.
The next problem comes from the fact that you cannot judge an action solely based on itself. The score itself cannot represent how “good” somebody is as humans are extremely complex. An example of this would be if someone is driving their injured child to a hospital while passing multiple red lights, which is obviously wrong, but given the circumstances and the severity of the injury can be justified especially with light traffic going on. How will the system react to this? Is a parent in said situation a “bad” person?
My last issue with this system is that a corrupted government can turn their country into a police state and effectively shut down their opposition. The entity that is in charge of this system has too much power. Having too much power almost always corrupts people. A corrupt entity in charge of this system will ensure that anybody with a different political alignment fails and they will try to silence any one who opposed them.
My biggest issue is the privacy aspect of this system. Transparency solves my last problem, but there is no fix for recording everyone at all times. We generate too much data on our daily lives, which can be used against us. For example, all insurance companies see your daily behavior, and they notice that you care a lot about your health insurance. Then they decide to increase your premium because you will pay for it no matter what.