The road less traveled in Y2K is the one that ponders the issue of "division of labor." In a technological-girded global economy a 1% loss of computers doesnt necessarily relate to a 1% decline in GDP, or whatever your favorite economic indicator(s) might be. Its not a straight line relationship. Think Jenga. Think Deep Blue. Thoroughly confused? Good! Right this way.

Our economy is much more efficient than it was in the pen and paper era. With the advent of computers, computer networks, fiber optics, satellites and other bells and whistles, people are able to accomplish much, much more in a business sense than their fathers, mothers or grandparents could. Specialties have blossomed in the modern era to the point where the division of labor is vast and incomprehensible. The impact of the economic interdependencies have no rival in all of antiquity. One goal of people following Y2K is accurately forecasting the impact on our society and indeed the world at large, if x percent of computers and related equipment and services fail. Also important is how long the downtime persists but that wont be dealt with here.

There was a popular game this past decade called Jenga. Fifty-four wooden blocks, approximately <" X 3/4" X 4" are arranged three side-by-side, with three more side-by-side on top of the previous three, but perpendicular to the layer below it. The third row is perpendicular to the second row and this pattern continues all the way to the topeighteen stories. Once the tower is assembled its about 14" high. The object is for players to take turns removing one block at a time from any place in the tower and placing the removed block back on top of the tower without toppling it in the process. The last person to remove a block without knocking the thing over wins. According to the makers of the game, expert players can transform the 18-layer tower into 36 layers (obviously there are lots of holes). From my Jenga experience usually about 20 to 30%of the blocks are removed and replaced before the tower crashes onto the living room table.

Jenga is a good analogy to how Y2K relates to the division of labor. Let each block represent 2% of the work force, or economic player if you will. If one block is successfully removed and placed on top of the tower without toppling it, assume, for the sake of argument, that represents 2% of the economy undergoing computer problems. As the tower generally stands strong in Jenga when only one block has been removed and replaced, so does the economy stay strong when only 2% of the participants are awash in computer downtime. Two blocks removed? Strong tower, strong economy. Only 4% of businesses struggling with computer problems. And so it goes. But eventually the tower crumbles. Just prior to the crumbling the tower appeared, for all practical purposes, as strong as the Rock of Gibraltar. And such is the concern with Y2K. We see a tower standing but dont care to consider the significance of the removed and replaced wooden blocks. In Jenga, if 51% of the wooden blocks are removed and replaced, 95+% of the tower falls, not just the 51% of wooden blocks removed and replaced.

And again, in Jenga generally if 30% of the blocks are repositioned that usually destroys the fate of the innocent 70% of untouched blocks (i.e. businesses, services, economic players). What doesnt happen in Jenga, and wont happen with Y2K, is untouched blocks, or businesses with functional computers, going unscathed when the minority of the moved blocks reach the crumbling point, or in the case of businesses, noncompliant computers begin to crash. Thats the impact of the division of labor. You could say the exposure of the surface area to a Jenga block is representative of the vulnerability or decline in a business. The greater the blocks exposure, the greater the damage to your business. You may be standing but youre weakened. If 25% of businesses have computer problems come 1-1-00 and youre not one of 25% you can rest assured your exposure and vulnerability parallels that of a Jenga tower thats up to twenty-seven layers or so.

Remember Deep Blue? The computer IBM designed to take on Gary Kasparov, the world chess champion at his own game? If my memory is correct Deep Blue won the majority of games. How would Deep Blue have done if its programs were flawed? It wouldnt move or if it did, it would move unwisely and lose. Running smoothly, Deep Blue, programmed by men with much less acumen in chess than Kasparov, was able to beat the champion at his own game. Lets pretend Deep Blue is crashed and has to run manually. The IBM men and women in white coats come running out from behind the curtain, they pool their knowledge and pour over hard copies of the programs they designed for Deep Blue. How efficient would this be? How long would it take the IBM eggheads to move their pawn if their level of competition remained equal to that of a fully operable Deep Blue? You might say this game would last for years.

An optimal functioning economy is dependent on Deep Blue, or the division of labor, working at normal operating speed. What evidence is there that a work force with 15% of its players hampered with computer problems simultaneously can produce as well as Deep Blue operating without a hitch? There isn't any. What evidence is there that Deep Blue could beat Kasparov if 15% of its programs were removed or shut down? Kasparov would smear Deep Blue, meaning the 85% of good programs still functioning in 'ol Blue were sent to computer hell with its tail between its programmable legs. Similarly, in our hypothetical example, the 85% of businesses not hampered by computer problems will take some severe shots, directly and indirectly, from the faulty members of the economic division of labor.

Understanding the division of labor is key to interpreting Y2K news, most of which is vague, bad and/or useless to begin with. Remember Jenga. Remember Deep Blue."

By Scott Parish, Jan 16th '99, oops 1999...

Andy

Two digits. One mechanism. The smallest mistake.

"The conveniences and comforts of humanity in general will be linked up by one mechanism, which will produce comforts and conveniences beyond human imagination. But the smallest mistake will bring the whole mechanism to a certain collapse. In this way the end of the world will be brought about."

Pir-o-Murshid Inayat Khan, 1922 (Sufi Prophet)

"We're doomed I tell ye, doomed!"

Private Frazer, Dad's Army, Walmington-On-Sea Home Guard, 1939 (Undertaker)

-- Andy (2000EOD@prodigy.net), January 23, 1999

Answers

Andy,

That is a really good example. The interconnected issue is the wild card when trying to come up with plausible Y2K scenarios. Another example that helps clarify and explain the cause and effect ripples of Y2K, and the "chain is only as strong as its weakest link" concept is this background piece on the lowly pencil...

http://www.fee.org/about/ipencil.html

"I, Pencil"

-- Kevin (mixesmusic@worldnet.att.net), January 23, 1999.

I understand that in championship chess matches players must make their moves within a specified time limit. This is a serious constraint for humans.

-- Tom Carey (tomcarey@mindspring.com), January 23, 1999.