<nettime> [interdoc-y2k 243] responding to the y2k problem

[Roberto Verzola <rverzola@phil.gn.apc.org>]

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Millennium Bomb (I):
Responding to the Crisis of 1999-2000
by Roberto Verzola


     The Millennium Bomb is the software time bomb slowly ticking away
in millions of computers and automated machines as the year 2000 (Y2K)
approaches.

     That software time bomb lies planted within thousands of
mainframe computers and millions pieces of automated equipment that
store the year as two digits instead of four, to save two bytes of
data space. At the turn of the millennium, these machines' year 99
(i.e., 1999) will become year 00, making time appear to have moved
back by a full century.

     The time between 23:59:59 of 12/31/99 and 00:00:00 of 01/01/00
will be not one second but more than minus three billion seconds, or
minus 100 years. All computations of the time elapsed between an event
taking place before midnight of December 31, 1999, and one taking
place on or after January 1, 2000, will be wrong by the same amount.

     That error can lead to unpredictable consequences.

     Some computers and other machines will stop working; others will
generate astronomically high -- and perhaps negative -- figures; still
others will provide reasonable but nevertheless wrong figures.
Wherever computers and other machines automatically control industrial
production or financial transactions 24 hours a day, with no human
intervention, the implications are enormous. In the industrial and
financial centers of the world, such machines are the technological
nerve center that keeps the economy going, and even minor disruptions,
especially if they occur simultaneously, can trigger a cascade of
failures that could lead to economic collapse.


The spectre of public panic

     On December 10-11, 1998, the United Nations hosted an
international meeting in New York, held specifically for some 120
member-countries to discuss the Y2K problem. Finally, although too
late, governments were acknowledging the problem.

     In his statement, the U.N. Under-Secretary-General for Management
Joseph E. Connor warned: "The essence of the Year 2000 dilemma is that
it is impossible to accurately predict the effect on our world." While
Connor hedged and said that the problem could "either paralyze our
civilization, or just confound simple systems, or anything in
between," his warning made it clear that he saw a global emergency.
Here are some of Connor's warnings:

     * "Disruptions are unavoidable" and "many cross-border activities
will be affected, ranging from transportation to energy distribution,
from defense to telecommunications."

     * "No matter how much we prepare, there will be aspects that will
be overlooked and will only manifest themselves in the new
millennium."

     * "Failures may occur in many processes and many places at the
same time" (multiple simultaneous failures). "In an increasingly
networked world, non-compliant systems may create a 'domino' effect,
affecting even compliant systems." [Compliant systems use four-digit
years; non-compliant ones use two digits only.]

     * "The spectre of public panic has been raised by several
publications and many stories in the press indicate that a number of
countries may be developing plans to handle civil disorder or panic -
from massive cash withdrawals from banks to looting."

     So now it is official: even the U.N. is warning its
member-countries that bank runs and food riots are possible and the
U.N. is hinting that governments should develop contingency plans for
such emergencies.

     As Connor's warnings indicate, Y2K problems may spread through at
least four levels, with problems in one level triggering new problems
at the same or at another level. These levels are the computing
infrastructure level, the production and distribution level, the
financial level and the psychological level.


Failures in the automated backbone

     Given the lack of time for correcting the problem and testing
those corrections, it is almost certain that parts of the automated
backbone of all modern societies are going to fail at the turn of the
millennium. Some will fail immediately. Other failures will happen
intermittently. Still others will happen only under a combination of
conditions. The countries that depend on computers and other automated
machines for their most basic daily needs are going to be hit the
hardest.

     Software conversion involves identifying all two-digit-year data
fields and converting them to four digits, going through every program
to identify and modify every line which relies on two-digit years and
then testing every change. The requirements of Y2K conversion, like
many other software conversion projects, are very often grossly
underestimated. Once such projects are well underway, putting more
people to work on them can delay rather than speed up the project.
Even minor changes in software can introduce new errors (the industry
experience is one error for every 14 lines of code modified). The time
needed to test the software thoroughly may approach or even exceed the
time it took to write the software. Because of the immovable Y2K
deadline, the pressures are much greater.

     Even more difficult to convert are the embedded microprocessors
inside almost all types of modern automated equipment. There may be
billions of these deployed all over the world. Unlike mainframe
software, which can be conveniently edited on video terminals,
embedded software is generally burned-in, i.e., permanently etched on
microchips called ROMs (read-only memories) which are themselves often
soldered on printed circuit boards bolted inside all kinds of
equipment. Such programs are also invariably written in opaque
lower-level assembly languages. Thus, they are much more difficult to
debug, modify, reinstall and retest than their high-level
counterparts.

     Department-wide, company-wide or industry-wide networking
complicates the matter, because it couples many vulnerable systems
together. As part of a network, even Y2K-compliant software or
equipment can fail if it is connected to failed non-compliant software
or equipment. Non-compliant data can corrupt a compliant database.
Some of these problems can lie undetected, then spring a nasty
surprise at the worst moments.

     Because of the sheer volume of work needed to defuse the Y2K bomb
-- identifying all software and equipment that use two-digit years,
testing to see which are vulnerable to failure, upgrading or replacing
them, then retesting upgraded or replaced systems thoroughly to ensure
compliance -- there is not enough time to do what is required.
Software and equipment failures are definitely going to happen.


Disruptions in production and distribution

     All automated production is at risk, including oil drilling,
refining and distribution; electrical power; land, sea and air
transport; and communications systems. Failures in these vulnerable
strategic industries can bring down many other industries, including
those that are fully Y2K-compliant and even those that are not
automated.

     Today's global firms usually rely on parts from subsidiaries and
independent contractors in countries around the world. If any overseas
supplier fails to deliver, then the final product itself cannot be
assembled. Client don't get the product, the firm and its suppliers
don't get paid, the creditors don't get paid either, and workers get
laid off.


Financial crisis at the periphery as well as the center

     Finance has become a complicated web of transactions among global
and local players, with transactions averaging nearly $1.5 trillion
each day. Problems in one part of the system can quickly spill over to
other parts, with repercussions that can, in turn, cause new problems
that feed back into earlier ones.

     Failures in Thailand, Indonesia, South Korea and Russia - all on
the periphery of the financial system - triggered the present global
financial crisis and then threatened larger economies like those of
Brazil and Japan. Even without the Millennium Bomb, the crisis remains
unresolved and is requiring extraordinary measures by the IMF as well
as the U.S. Federal Reserve.

     With the Millennium Bomb, simultaneous multiple disruptions will
occur not only in the periphery but also in the very centers of
international finance, which are even more dependent on computer
equipment for their most basic operations. Financial shocks in the
center can create even more serious problems than the shocks that have
been radiating from the periphery since July 1997. The threat of a
sudden breakdown is more real than ever.


Early panic: the 1999 wild card

     The uncertainties are greatest at the psychological level. The
public can respond unpredictably to rumor. That is the 1999 wild card.
How that card turns out decides whether the Y2K crisis will, as U.N.
Under-Secretary-General Connor put it, "paralyze our civilization, or
just confound simple systems."

     Self-fulfulling Y2K fears can lead to panic even in 1999, before
any failure has happened.

     The U.S., U.K. and Canada, for example, have began advising their
citizens to stock up several weeks' food in anticipation of a possible
breakdown in distribution. Such advice can trigger a rush in other
countries, and by those who can afford, to stock up food. This can
lead to artificial shortages and panic-buying not only in food but
also in other essential items. Hoarding can further lead to a
socially-explosive situation where food may rot in the storerooms of
the well-to-do, while others go hungry because there is nothing left
to buy or the prices are sky-high.

     The financial system is even more sensitive to psychological
factors. By creating credit instruments, stock markets, currency
markets, futures markets, hedge funds, derivatives, etc., it has
bloated the total amount of financial instruments far beyond the
actual value of real goods and services: some $20 to $50 of "hot
money" circulates today for every dollar of real goods and services.
Critics have warned for some time that this bubble will eventually
burst.

     Widespread panic-buying in 1999 can easily burst the bubble. When
$20 to $50 of money and money-equivalents desperately bid for every
dollar of real goods, money's value can plunge very quickly.

     Should bank depositors decide to withdraw large amounts -- to
stock up food and other essentials, or to spare themselves of possible
disruptions in banking and credit card services -- their actions can
lead to panic. Most banks only keep five to 15% of their deposits in
reserve, the rest being invested or out on loan. If a bank suddenly
withdraws an investment or loan from a business, it can bankrupt a
business or force it to layoff employees. If the banking system
cannnot cope with simultaneous heavy withdrawals, bank runs can happen
-- whether the banks in question are Y2K-compliant or not,
computerized or not. If depositors can't withdraw their money, expect
the situation to be very explosive. Bank runs in one country can
trigger runs in other countries.

     By 1999, the Millennium Bug will be a major public concern. It
will increasingly get blamed -- justifiably or not -- for plane
crashes, ship collisions, hospital deaths, industrial accidents, and
bank mistakes. Television programs and movies will exploit the issue's
entertainment and box-office potential, bringing it even closer to the
popular psyche. As the world ticks towards the new millennium, the
sense of tension, hysteria and panic will build.

     Panic can also be triggered by the apocalyptic messages of
millennarian groups, as their doomsday scenarios in anticipation of
the new millennium reach a crescendo. Every comet, eclipse,
earthquake, volcanic eruption or flood will tend to acquire
millennarian significance, fueling apocalyptic expectations and fears.
This will aggravate the situation even more, as the millennarians'
doomsday warnings and the public's justified anxiety over the
Millennium Bomb reinforce each other.


More ecological crises on the horizon

     In addition to these Y2K-related problems, all peaking in the
year 2000, other long-term ecological crises are also coming to a
head, due to accelerating widespread ecological destruction from
industrial activities. Some of their early impacts will coincide with
the peak of the Y2K crisis.

     Global warming, for instance, is breaking temperature records
worldwide. It is also bringing with it extreme unpredictability in
climate and weather patterns that threatens our food production
systems. The destruction of watersheds and the pollution of fresh
water sources may lead to scarcity of clean water for drinking and
household use in the 21st century. The indiscriminate use of
antibiotics both in human medicine, in animal husbandry and in genetic
engineering has raised the spectre of supergerms which are beyond the
control of current medical technologies. The proliferation of toxic
substances in our food, water, home and the environment is resulting
in widespread cancers, mutations, fetal problems, and disruptions in
the human endocrine system.


Responses to the millennium crisis

     There have been at least six types of responses to the Y2K
problem. These are:

     * early warning,
     * denying the problem,
     * frantic problem-solving,
     * individual survivalism,
     * local sufficiency, and
     * systemic transformation.

     In a way, because the Y2K crisis is an ominous precursor of worse
economic and ecological crises in the future, these responses probably
represent similar typical responses to other global crises which are
looming on the horizon.


Early warning

     A few people had the foresight to anticipate the consequences of
a two-digit year and to do their best to initiate early corrective
measures. Often, however, their early warnings were ignored by
decision-makers who preferred to overlook the problem. Among the
earliest was IBM specialist Robert Bemer, whose frustrating experience
is related by Robert Sam Anson in his January 1999 article for Vanity
Fair entitled "Nightmare on Main Street: The Approaching Y2K
Disaster."

     As early as 1960, Bemer had campaigned hard to make four-digit
years a universal computer standard. Anson relates: "As a practical
matter, the only opinion that counted was that of the Department of
Defense, the largest computer operator on earth. For
bigger-bang-for-the-buck reasons, it was unshakable on the subject of
year dates: no 19s."

     Bemer lobbied succeeding U.S. administrations, to no avail. In
1970, Bemer changed tack, Anson writes, and "beseeched private
organizations to call for a voluntary four-digit-year option. But once
more, the Pentagon's position prevailed. Mindful of government
contracts, big business went along."

     When Bemer retired in 1982, nothing has changed, although he
assumed that "Y2K would be ironed out long before it did any damage."


Denying the problem

     Bemer was confronted by the policy-makers' typical response to a
future problem whose solution will cost a lot of money, with no
corresponding gain to show for it. They deny the problem, and thus
postpone the costs of solving it. In the context of a short planning
horizon, the postponed costs do not figure in current decision-making.

     As far as the Millennium Bomb is concerned, problem denial has
become increasingly untenable. However, the bureaucratic and corporate
mindset behind it still dominates today.

     Problem denial was the government's and industry's typical
response to obvious and serious global problems like tobacco-induced
health problems; the cancers and mutations caused by toxic chemicals
like DDT, PCBs, dioxins, etc.; the generation of greenhouse gases; the
mass extinctions of species, now comparable to the prehistoric mass
extinctions; the field release of genetically-engineered organisms;
the depletion of fossil fuels and other non-renewable resources; and
the increasing disparity between rich and poor. Because these have no
fixed deadlines and their impacts are diffused over time, they are
even easier to deny.

     Where governments and businesses have been forced by persistent
citizens' movements and concerned groups to grudgingly acknowledge a
serious problem, they have invariably delayed solving it to postpone
costs and to continue profit-making operations for as long as they
could.


Frantic problem-solving

     By the time the Y2K problem appeared within the planning horizon
of most governments and businesses, there wasn't enough time to solve
the problem.

     Many of those who had earlier denied the problem are today
switching quickly to frantic efforts to catch up and solve the
problem. Because these efforts are late, they can at best reduce the
severity of the problems.

     Some governments and businesses are actually denying the problem
publicly, but are frantically solving it privately. Businesses do so
to avoid loss of confidence by their customers, suppliers, creditors
or stockholders. Governments do so to avoid alarming the public and
causing mass panic.

     The late and frantic efforts to solve major problems is clearly
an unacceptable response. They are the result of denying problems and
postponing solutions until it is too late. Yet, governments and
corporations continue to deny many of our ecological and economic
problems, although the risks are much greater. Will we resort to
frantic problem-solving again when the terrible consequences of these
problems overwhelm us?


Individual survivalism

     Among those engaged in frantic problem-solving, an increasing
number are coming to the conclusion that a crisis of major proportions
is inevitable.

     They are now anticipating some of the worst-case scenarios that
pessimistic Y2K assessments draw. Working within the old paradigm of
getting the greatest gain for themselves from whatever situation, they
will react competitively, stock up food and other essential goods and
position themselves to take advantage of new opportunities for
profit-making. They see the looming crisis as a situation where the
"only the fittest will survive", and they want to make sure they
belong to those who will.


Local sufficiency

     Among those who are preparing themselves for the crisis, there is
a smaller but nevertheless growing number who are approaching it not
from the individual but from the community perspective. They realize
that to cope with the increased Y2K risks, it is better to cooperate
than to compete, to share resources than to monopolize them, and to
adopt local-sufficiency in basic needs among the highest priorities of
the community. Thus, they are organizing their community to confront
the crisis together, to support each other, and to help the most
vulnerable members of the community.

     The concept of community and national self-sufficiency has a long
history of debate with the opposite idea of interdependence and
globalization, with the latter emerging dominant in recent decades.
Threatened with the Y2K crisis, however, communities have been forced
to rediscover the importance of ensuring that the productive
facilities for meeting much of their basic needs are within local
reach and local control, and they are now preparing themselves
accordingly.

     Such highly self-sufficient communities will be the most prepared
to weather the looming millennium crisis.


Systemic transformation

     To allow a simple problem like a two-digit year to persist until
it was too late to correct reflects a deeply-flawed thinking process.
Such flawed thinking can cause us to miss other equally obvious and
serious global problems until it is too late to solve them. Ecological
problems immediately come to mind.

     If we managed to solve our Y2K problems, but left intact the
flawed thinking patterns -- or mindsets -- which are leading us to
technological, economic and ecological crises, we can expect more
serious problems to beset us in the future.

     The Y2K crisis provides us a perfect occasion for initiating a
thoughtfully-planned process of systemic transformation: identifying
these flawed patterns of thought and action, discrediting them, and
proposing better alternatives. (Exactly what these flawed patterns are
will be the subject of the second part of this article.) As a matter
of fact, many social critics have long raised fundamental questions
about today's dominant paradigms which include the philosophy of
mechanistic reductionism, the economics of neoliberalism and
globalization, and the culture of materialist consumerism. The Y2K
crisis, together with other looming ecological and economic crisis
ahead, are a strong argument take seriously these critics' messages.

     Many of these critics have been slow -- perhaps even slower than
governments -- in recognizing the implications of the Y2K problem.
Hopefully, they will quickly realize that this problem provides a very
good opportunity for discrediting old flawed paradigms and advancing
the alternative paradigms which they had been advocating for decades.


Towards an appropriate Y2K response

     We are past either early warnings or denying the Y2K problem.
Government and corporate responses today involve much frantic
problem-solving, while an increasing number are preparing for
individual survival. These responses generally assume -- after some
period of disruptions -- a future "business as usual" scenario.

     Unfortunately, such a future will mean that we have not learned
at all from the Y2K fiasco. We will have suppressed the symptom but
left the disease intact. Our society will be as sick as ever, and the
next attack will be more life-threatening.

     The first step towards a real cure is to move towards local
sufficiency among our communities and regions, to organize and build
resilient communities which can meet much of their basic needs with
resources and facilities within easy local reach and control. An
increasing number of communities are now taking this step.

     But the decisive step is to launch a supreme effort at universal
soul-searching and social catharsis, to identify the deeply embedded
flawed mindsets of industrialism, and to free post-2000 societies of
their pre-2000 flaws.

     Until this systemic transformation happens, we will remain mired
in 20th century problems.
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