Polling Critic #44 - The Lessons of Y2K – 1st Global Technological Meltdown Averted

The Lessons of Y2K – 1^st Global Technological Meltdown Averted ~ #44
By Alan F. Kay, PhD
© 2005, (fair use with attribution and copy to authors)
Jan. 10, 2005

Five years after Jan 1., 2000, the Y2K problem is a forgotten, seldom mentioned, non-event. Within a month or so after the new millennium began, the thousands of websites, covering every aspect of the battle to beat the millennium bug, rapidly vanished from the World Wide Web leaving a tiny few discontinuance notices. The $500 billion (yes, billion) that the world had spent to solve the problem became history and the history was largely forgotten. Not one article or book has been written about the significance, impact, or consequences of Y2K in the five years since. If you Google "Y2Km" "history of Y2K," and similar search combinations, you will find nothing -- no article, book or website -- published after 2000. If you search Amazon.com for Y2K books, there are dozens explaining how to survive Y2K and what to expect from competitive/cooperative commerce in the late 1990s As for books written after 2000, there are exactly none, nada, zero. All the old books are selling for pennies on the dollar. Everybody seems to assume that there is nothing new worth saying. Let's see why that is wrong.

Any child could understand what the Y2K problem was. How it arose was just a little more complicated. In the beginning of the computer age, storage space was expensive, so data was entered as compactly as possible. By 1950, programmers were universally specifying the year by its last two digits. (e.g., "1996" became "96"). In the intervening 50 years almost all commerce became heavily dependent on computers. Problems arose when the new century loomed and it became increasingly clear that errors of calculations based on dates were embedded in almost all commercial sectors and at almost all levels. Tackling the required fixes was largely postponed until the last few years of the 20^th century. To fix the errors with adequate reliability by an un-postponable date (a situation unique in human history) was enormously difficult. Initial fixes were new hardware, new software, and for older software, the tradition of patches-upon-patches was tried once more. Fixes of various kinds were put in place by tens of thousands of companies and governmental and organizational entities. These fixes would often not only themselves be erroneous or lead to new errors, but also could be incompatible with the interaction required by all the entities with their suppliers, contractors, prospects, agents, customers, etc. This interaction could lead to untraceable and cascading failures encompassing almost all of commerce, local, national and international. In the late 1990s, commerce disintegrating into a "tower of Babel" seemed to some as possible, serious, and leading to chaos. Even most experts in computers were not sure how serious Y2K would turn out to be.

My colleagues, Fred Steeper and Hazel Henderson, and I conducted three public-interest surveys (ATI#30, #31, and #32, 1998-1999) focusing on the challenges of the year 2000. These surveys were unique in several ways. The early ATI surveys, #1 through #29, started when there was no World Wide Web, and no ATI Survey Reports appeared on our website www.publicinterestpolling.com.

Surveys #30-32 (including the entire Survey Report for each) were the first to be published on this site. They can be found by clicking on the survey number at the bottom of the home page. Amazing results came from this survey series but they will have to wait for inclusion in a future column, after this column makes the point that Y2K had much more significance than was thought -- making the findings of the three studies worth knowing.

What was about to happen beginning on New Year’s Eve was apparently not imagined by any of the pundits or experts in advance, and was not going to be fully known for several years after. I have to confess that I was as far off the mark as anyone. In hindsight, all was perfectly logical, predictable, and even obvious. Yet to this day few people have connected all the dots, and in the subsequent five years, I have not found any pundit or expert analysis that explained the amazing story of the outcome of Y2K and its consequences.

Who would have thought that the natural reaction of the media to the heavenly or astronomical events that accompanied Y2K would largely determine the seriousness of the outcome? Not I. One idea did occur to me. As midnight of New Year’s Eve occurred in New Zealand, dawn was going to be breaking in the eastern United States, where sitting over his coffee and listening to the news from East Asia, a financial speculator in a few hours could get an idea how the Y2K bug was behaving. If Y2K appeared to be more serious, or less serious, than expected, armed with a plan on buying/selling stocks sensitive to Y2K, the speculator could make snap purchase/sale decisions well before the market closed. Perhaps some tried that. I thought it unlikely that much gain could come of such a strategy and dropped the idea almost as soon as I thought of it.

I was right about the Earth's rotation part, but missed the consequence of one detail. New Year’s Day would start in New Zealand at the stroke of midnight and exactly hourly thereafter bring a new time zone into the year 2000. In hindsight, of course, it was obvious that in many, if not all, time zones we could expect to see media people broadcasting live video and audio and recording the scene in major cities.

Assuming electric power had not failed in the city, the scene would be a view of the city brilliantly lit, with search-light beams, celebrations, fireworks, bands playing, performers dancing, officials speaking, and tens of thousands everywhere, milling, singing, cheering, screaming and overjoyed. And that was what the remote viewer did indeed find from city to city during the 24-hour period when Y2K finally covered the entire globe. If the lights did not go on, the media would not cover that zone. Who wants to stare at an all-black screen for an hour? But the lights and the audio would mean that Y2K was a success, wouldn't it? The media types basking in the brilliantly lit city for a whole hour had to say something interesting. Part of what they would naturally toss out, just to pass the time, so to speak, was joking about how foolish were the nay-sayers, the doom and gloomers, including all the computer geeks, who thought Y2K would be serious. The geeks were not there to defend themselves. They were in their offices all around the world in the early hours of Jan. 1, 2000, making sure that all the other computerized commercial functions, not just electricity, worked. They found plenty of glitches, many of which they were able to fix – and some that they could not.

As for the rest of us, of course we were delighted that electricity flowed, but over the next few weeks many received erroneous invoices, returned checks, requests for payment, some missing transaction items, some duplicates, some just with late dates. These had to be settled with customers, suppliers, vendors, donors, etc. Small stuff. Not very expensive. Y2K was not a non-event, but it was not very serious, and that was a blessing. The $500 billion cost was worth it. Did it have to be so much? Nobody could say. The world had survived its first technology induced global challenge. Congratulations all around.

One of the ways that businesses, governments and organizations had solved their Y2K problems was deciding to buy new, Y2K-compatible (8 digit dates) computers and software throughout 1999 and earlier. By thus greatly alleviating their Y2K problems, such buyers gave a big boost to IT sales in the late 1990s, especially during 1999. Such sales disappeared after Jan. 1, 2000. The year 2000 witnessed a drop in computer sector sales. With almost nobody anticipating that the consequences might be the beginning of the dot.com bubble bursting, that is exactly what happened. The IT sector on Nasdaq and other exchanges, peaked in March 2000, just after the first quarter drop in expected computer equipment sales. It took another two years for the dot.com meltdown to reach its nadir. The dot.com collapse was an enormous consequence of Y2K. By March 2002, an increase in military sales and some other factors brought the IT sector back to where it had once been, and thereafter it pursued a general slow upward rise or sideways drift in the most recent years. To my knowledge, nobody has noted the dot that connects Y2K to the dot.com meltdown.

Now that you know how important the global resolution of theY2K problem was, you will be ready to learn the great public-interest findings of the three ATI surveys in a forthcoming column. Promise.