The Lessons for Us About AI From the ATM | Opinion

For context, the development of artificial intelligence may be the most significant scientific breakthrough since the atom was first split.

Key points

• According to Bessen and others, branch banking expanded by as much 43 percent and the work that ATMs could not do rose in value.
• Its advent introduced customers to a virtual banker that dispensed cash, received deposits, didn't close at lunchtime and was open after 3 p.m.
• He can be reached by email at [email protected] and followed on social media @TheRoffDraft.
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• When politicians talk regarding the need to protect residents from technological innovations, they're doing harm, not good.

By Peter Roff Newsweek Contributing Editor. Newsweek is a Trust Project member.

As is usually the case with change of this scale, that's predictable. AI's arrival as something more than a futuristic notion is generating a climate of fear the guardians of the status quo have tapped into and spread, driving the narrative that the only wise course for us is to leave them in charge, regulating and controlling our progress.

Well, no thank you. I understand well the human cost of such developments, but I'm all for creative disruption. Let the market sort it all out. It will since it is a spontaneous transfer of more critical information than even the most advanced supercomputer can handle.

As powerful as AI is now-or ever becomes-it won't take over our lives. We've seen these predictions before. Paul Ehrlich, author of The Population Bomb and other predictions of gloom, was wrong regarding just concerning everything. Technological luddites would leave us in the relative Dark Ages. Why look to them and obey the great caution they urge now?

There is a fear that AI will displace workers. Relax. It will, just as other innovations have for centuries. Most of the time, things turn out for the better, leading to higher standards of living, greater prosperity and the lifting of entire nations out of the historical muck in which much of humankind has dwelt throughout its time on earth.

Think of the advent of the automated teller machine (ATM). As it has created greater convenience, expanded choice, empowered consumers and improved the global financial system, it is one of the thousands of technological innovations that have contributed to workforce displacement.

Unleash Prosperity co-founder Stephen Moore reviewed the history of the ATM in a recent column, tracing it back to the first one installed in 1969 at a Long Island, New York, branch of the long-ago-disappeared Chemical Bank. Its advent introduced customers to a virtual banker that dispensed cash, received deposits, didn't close at lunchtime and was open after 3 p.m. And on weekends.

As Moore observed, this change could only lead to bank tellers joining the ice man and elevator operators on the line of the permanently under- and unemployed, to some. They didn't see the opportunity. It wasn't all that long before ATMs were everywhere, changing our behavior. College students, instead of writing Mom and Dad for funds, carried little plastic cards that let them withdraw funds to purchase books, pay for meals and enjoy the pursuits that college students throughout history have pursued after parents deposited funds in the bank back home.

Business travelers going from city to city had ready access to cash at all hours of the day and night, without having to find a place that would accept an out-of-state check. As national banking took hold for real in the '90s, dealmakers could deposit checks where they obtained them, rather than having to wire funds or have checks couriered home, eventually.

Now, there are more than 600, 000 ATMs throughout America-not just in or just outside bank branches, but in malls, gas stations and convenience stores that, in some cases, are miles away from the nearest financial institution. ATMs brought the bank and your funds to you, wherever you are.

It enhanced consumer choice and additionally generated jobs in the banking industry. The number of bank tellers in the U.S. Rose rather than fell. Plenty of of them became personal bankers, involved with more than just changing capital behind a window on an abbreviated work schedule we still refer to as "bankers' hours."

Boston University economist James Bessen, cited by Moore as the author of the definitive study of why things happened the way they did, explained the installation of even a single ATM reduced the number of tellers required by an average urban bank branch from 20 to 13. That lowered personnel costs and reduced the amount of space necessary in existing branches, creating savings that could be put into opening extra branches in the same geographic footprint without adding to the bottom line.

According to Bessen and others, branch banking expanded by as much 43 percent and the work that ATMs could not do rose in value. Some jobs were eliminated, permanently. There was no longer a need, for example, for individuals to sit in a back office checking signatures on checks. Instead, we obtained "relationship banking, " as residents were freed from mundane tasks now done by machines and were paid more to employ their imagination and judgment to improve the customer experience.

For context, the deregulation of the banking industry. It admittedly had a few fits at its start, became feasible as of automation. Technology created national and international branch banking real. Now you can obtain funds from an Iowa bank out of an ATM in London faster than it takes to hail a cab in Westminster.

As Moore and others have remarked, this is no coincidence. It's a result, and we're living better lives for it. Just as we will since of AI. Things are still changing, and individuals don't really thrive when administration steps in to protect them from the impact of new products and procedures. That kind of protectionism lets China and other countries obtain ahead of us as their concept of social costs is different from ours.

When politicians talk regarding the need to protect residents from technological innovations, they're doing harm, not good. They may sound virtuous, but they are actually denying individuals who are willing and able to take advantage of opportunities to benefit from market changes. A better future comes from being open to AI and seizing its promise, rather than pointedly protecting individuals from potential peril. Intent matters, so let's obtain this right by staying out of the way.

Notably, a veteran journalist and commentator, Newsweek contributing editor Peter Roff is additionally chairman of the Transatlantic Leadership Network's Free Media Initiative and appears regularly in policy debates on global television. He can be reached by email at [email protected] and followed on social media @TheRoffDraft. The views expressed in this article are the writer's own.

Taken together, the developments around the Lessons for Us About AI From the ATM point to a situation that is still moving, and the coming days should bring more clarity.