The lessons for us about AI from the ATM | Opinion

The development of artificial intelligence may be the most significant scientific breakthrough since the atom was first split. Heretofore, such stuff has been the province of science fiction. Now that it’s fact, it’s scary because it has the potential to change everything, including how we think.

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 because 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 about just about 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). It is one of the thousands of technological innovations that have contributed to workforce displacement, as it has created greater convenience, expanded choice, empowered consumers and improved the global financial system.

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.

To some, 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. 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 money, carried little plastic cards that let them withdraw funds to buy 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. Eventually, as national banking took hold for real in the '90s, dealmakers could deposit checks where they got them, rather than having to wire funds or have checks couriered home.

Now, there are more than 600,000 ATMs across 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 money to you, wherever you are.

It enhanced consumer choice and also generated jobs in the banking industry. The number of bank tellers in the U.S. rose rather than fell. Many of them became personal bankers, involved with more than just changing money 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 additional 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 people to sit in a back office checking signatures on checks. Instead, we got “relationship banking,” as people were freed from mundane tasks now done by machines and were paid more to use their imagination and judgment to improve the customer experience.

The deregulation of the banking industry, which admittedly had a few fits at its start, became possible because of automation. Technology made national and international branch banking real. Now you can get 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 said, this is no coincidence. It’s a result, and we’re living better lives for it. Just as we will because of AI. Things are still changing, and people don’t really thrive when government steps in to protect them from the impact of new products and procedures. That kind of protectionism lets China and other countries get ahead of us because their concept of social costs is different from ours.

When politicians talk about the need to protect people from technological innovations, they’re doing harm, not good. They may sound virtuous, but they are actually denying people 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 people from potential peril. Intent matters, so let’s get this right by staying out of the way.

A veteran journalist and commentator, Newsweek contributing editor Peter Roff is also 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.