Will Y2K Problems End Our World?

The short answer is, No. The fundamental reason is economic, not technological. The market system provides incentives for firms to correct Y2K problems. As evidenced by the smooth transition to the Euro and the calm passing of January 1, 1999, progress has been made. This progress will continue through the coming year.

The marketplace responds equally to rational problems (Y2K coding) and irrational problems (Y2K panic). Some entrepreneurs are capitalizing on the fears surrounding the coming millenium and profiting. Some are busy making money actually fixing the problem. More importantly, when left unfettered, the free market can produce the seemingly impossible like cheaper, more powerful computers year after year. Or it can get you package across the globe overnight.

Economics: An example

The interaction of supply and demand occurs in all sectors including the oft mentioned by Y2K doomsayerspower supply. Let me make a few points. First, we are not consuming power at 100 percent of productive capacity. Second, our current level of consumption does not reflect any meaningful conservation efforts. I drive everywhere, leave my computer on 24 hours a day and basically wallow in cheap power. I imagine many readers do the same. Under different circumstances (higher energy prices) my behavior would change.

As Americans, we consume about 40 percent of the world's power. We have about 5 percent of the world's population. If we needed to shave back our use of power, I imagine we could. Witness the oil shortages of the early 70s and the subsequent effects (e.g., small cars). Given an understanding of market economics, it is difficult to imagine how shortage of power will have terminal results (no pun intended).

If allowed, energy prices will increase to a new equilibrium. If some power producing entities fail, others will reap the profits of greater market share. This same supply/demand equilibrium will occur in every sector of the economy, unless the government intervenes. As long as theres profit in power, there will be power.

The power system is interdependent. An interdependent system is not, by definition, fragile. Our capitalist system provides multiple redundancies. During the Cold War, the Soviet Union often questioned the efficiency of a country where multiple firms produce the same product. While we are in the longest peacetime expansion in history, the former Soviet Union struggles towards a market-based economy. Who do you think was right?

Capitalism is not perfect, but it will solve most Y2K problems. Of course, there are forces that can exacerbate Y2Kpublic panic and government intervention. The true danger of Y2K is economic recession or depression due to public panic and a subsequent loss or personal or economic freedoms through government intervention. As a nation, staying calm and rational will deter centralized government "solutions."

What Y2K will not destroy Y2K will not destroy physical infrastructure nor will it destroy the sum of human knowledge. We do not lose our knowledge base with Y2K, just (possibly) some of our technological infrastructure. A mysterious destruction of railroads in 1875 would have greatly accelerated the development of truck traffic. Barge and ship traffic would have boomed. There would have been economic difficulties, but the market will find a way.

Y2K and statistics

"Go, No-Go" analysis leads to false statistical results when applied to macroeconomic phenomena. Social and economic activity is not a coin toss. Computer or embedded chip failures reduce efficiency. In extreme cases, efficiency can be reduced to zero, but this is an exception rather than a rule. Some level of activity will continue in all economic sectors, at least with some level of reduced efficiency.

Bad things can happen. There is a reasonably high probability the earth will be struck by an interstellar object. Of course, it may take another billion years. I am not losing sleep over this, even though it is a "non-zero probability." Nor do I lose sleep over the nonzero probability I will win a Nobel Prize. The real question, at what point do you change your daily behavior? Do you stop driving to work because of the inherent danger of an automobile accident? Do you drive, but wear a helmet? Do you drive a tank? Do you move to the country, dig a bunker, cache food and shoot anyone who drives by?

Much of the Y2K writing on the Internet has been dedicated to the proposition that one failure will domino into a systemic failure. The rate of failure argument is logically flawed. Take a complex set of devices like those in the Apollo space program (1960s technology). Based on the incredible number of components and the mean time between failure, on paper the Apollo missions never make it off the pad. On paper, your car never makes it out of the driveway. No one survives Y2K... on paper. This is wrong. While there will be some failures, very few are mission critical for the survival of civilization. (Do you think wed even notice if some Federal departments did not operate?) Human intervention solves some crises (Apollo 13). We ride out the rest.

Y2K and history History demonstrates that we can survive panics, speculative bubbles, civil war, government unrest, bank failures, depression, recession, terrorism, natural disasters and even politicians. Apocalyptic writers are usually successful. We have a fascination with the end of the world, and probably always will.

Y2K and riots

Inside the heart of every free American is not a looter waiting to plunder the local Thrifty Mart. The Y2K doomsayer mindset would have post-war Europe and Japan living in mud huts fighting with clubs. Both regions quickly returned to first world country status after a war that devastated their physical infrastructure. And, to the egocentric American, the Marshall plan was a small factor.

Y2K and economic depression

The few living Americans who were adults during the Great Depression can tell you it is not prettybut it was not a return to the 1830s. Believe it or not, we do understand more about macroeconomics than 60 years ago. We have the ability to mitigate some economic damage. Witness the absorption of the failed S&Ls. A failure to resolve Y2K problems may result in a recession, but it will not turn the clock back 100 years.

Y2K and computer programmers Among the LEAST qualified individuals to discuss social collapse are computer programmers. Society does not operate like a computer program... period. I am much more interested in the comments of economists, historians or other social scientists. In fact, our current situation has interesting parallels to the year 1000. See Charles Van Doren, "The History of Knowledge."

Y2K and panic There is a chance of economic disruption if enough people panic. This has happened before, and it will happen again. But panic is difficult to sustain. After the initial shocks, there will be a tremendous incentive to normalize economic activity. For the entrepreneur, it will be a time of excellent opportunity. Y2K and Internet experts

Some of the information promulgated on the Internet is from sources with a vested interest in Y2K preparation. Others, like Gary North, have a religious agenda. As such, it is reasonable and scientific to verify claims through an independent source. All unverified data must be treated as subjective opinion rather than fact. It is also important to note that there are groups of individuals with ongoing apocalyptic fantasies. Claims made by these individuals or groups must be subjected to intense scrutiny.

Y2K and the media

If I may summarize the Y2Knewswire post... no matter what anyone says about Y2K compliance, they are lying. And where, one might ask, is the empirical foundation for this conclusion? The logic (or lack thereof) underpinning the Y2Knewswire is shared by conspiracy theorists everywhere. Y2K doomsayers have long ago concluded that Y2K is "unfixable." (Just like the folks who concluded aliens landed at Roswell.) Any reports of mitigation, therefore, must be lies, half-truths or exaggeration. Another variation on this theme, large firms or public agencies cannot fix Y2K, but have a vested financial interest in not reporting the true situation. (I believe this was the theme of an episode of "Millenium" entitled "TEOTWAKI.") Because of secret government mandates to conceal the problem or corporate/government conspiracies, false, positive Y2K stories are provided to the media. It is impossible to argue with conspiracy theorists. The most compelling counter-argument: How can we assume the government is coldly efficient at anything let alone activities as complex as conspiracy.

Y2K and Gary North

Based on a survey of his previous writings, it is clear Mr. North has taken a "Chicken Little" view for over two decades. He has predicted the end of the world due to nuclear war, banking collapse and AIDS. Y2K is simply the latest scare. Mr. North has a clearly documented agendaChristian Reconstructionism (CR). CR advocates an overthrow of our constitutional republic and a new theocratic regime of Old Testament law. Lest you doubt, heres a direct quote of Mr. North:

The long-term goal of Christians in politics should be to gain exclusive control over the franchise. Those who refuse to submit publicly to the eternal sanctions of God by submitting to His Church's public marks of the covenant--baptism and holy communion--must be denied citizenship, just as they were in ancient Israel.

While many may argue America needs more moral fiber, I dont think many subscribe to Mr. Norths extremism. If you doubt the CR views, please read the original texts.

[Not bad, eh?]

-- Ken Decker (kcdecker@worldnet.att.net), March 03, 2000

Answers

"Inside the heart of every free American is not a looter waiting to plunder the local Thrifty Mart. The Y2K doomsayer mindset would have post-war Europe and Japan living in mud huts fighting with clubs. Both regions quickly returned to first world country status after a war that devastated their physical infrastructure. And, to the egocentric American, the Marshall plan was a small factor. "

Film footage of post-war Britain taken around the time peace was declared clearly showed British citizens fighting over the scrapings of the inside of a garbage can. People were shoving these scrapings into their mouths frantically. Women and children lived inside piles of rubble. Children as old as three years looked like young infants due to starvation. They may have recovered, but they sank very low. Starving people WILL do things they would otherwise never consider doing.

My history teacher showed a series of these very old films. These films were stored at Oklahoma State University. I don't know if they're still available or if copies were made, but they were real. He said we needed to know what people under extreme duress looked like. I hope I never see something like this firsthand.

-- anon (donot@have.one), March 03, 2000.

Mr. Decker, there are those, who are religious zealots, tainted kool aid in hand, while there are others, who have a belief that extends beyond the Church teachings. How can I say this, I attended a Church, two times, in 1985, Preacher said "you wives, should be submissive to your Husbands" Well, my dander was set on end, since my husband has just abscounded (sp) with savings account, and seeing filly on the side. I have a Religion, which is my own. I do not wish to own the World, nor do I talk religion to others, unless they start conversation. My aim at religion, to outsiders, is to say "Good Morning", to one I pass by, it is a donation to a soup kitchen. And before you get on a high horse about me me being a "wealthy do gooder". I submit to you, that I have been broke, after the basics, for nine months. My auto, is 9 years old. Heaven help, to keep it running.

-- Princess (flicker@spirit.com), March 03, 2000.