Intelligent software didn't avert the current financial crisis
November 7, 2008 Leave a Comment
Business Week – What the Market Crash Taught Me About Tech:
For years I’ve listened to software companies tell us that, with technology, our decision-making will be made easier. And we’ll be making better decisions. We’ll have better facts. We’ll be able to do better analysisÂ—in small businesses, large enterprises, and financial-services firms.
And yet, the markets still crashed despite all this cutting-edge magical stuff. Where were the alerts? The safeguards? Those special programs and whiz-bang tools that so many tech companies promised? It didn’t do much for Bear Stearns, Merrill Lynch, and AIG. Those guys had a lot of great and expensive technology, but they still tanked.
This financial crash has taught me that even the best technology doesn’t do a very good job predicting anythingÂ—or even helping business owners and managers make decisions. At best, technology can help us do something faster. But we are a long way off from artificial intelligence. So, the next time some software sales guy tries to tell me that his business application will do anything more than increase productivity, I’ll be hard-pressed to believe it.
If that strikes your interest, read Jaron Lanier’s year 2000 piece One Half of a Manifesto about the ongoing failure of artificial intelligence to live up to its claims:
An official Turing Test is held every year, and while the substantial cash prize has not been claimed by a program as yet, it will certainly be won sometime in the coming years. My view is that this event is distracting everyone from the real Turing Tests that are already being won. Real, though miniature, Turing Tests are happening all the time, every day, whenever a person puts up with stupid computer software.
For instance, in the United States, we organize our financial lives in order to look good to the pathetically simplistic computer programs that determine our credit ratings. We borrow money when we donÂ’t need to, for example, to feed the type of data to the programs that we know they are programmed to respond to favorably.
In doing this, we make ourselves stupid in order to make the computer software seem smart. In fact we continue to trust the credit rating software even though there has been an epidemic of personal bankruptcies during a time of very low unemployment and great prosperity.
We have caused the Turing test to be passed. There is no epistemological difference between artificial intelligence and the acceptance of badly designed computer software.