From: nnburk <nnburk@cobain.HDC.NET>
Date: Sat, 26 Sep 1998 15:15:02 +0800
To: cypherpunks@cyberpass.net
Subject: The Year 2000: Social Chaos or Social Transformation?
Message-ID: <360D63AA.744B@yankton.com>
MIME-Version: 1.0
Content-Type: text/plain



The Year 2000: Social Chaos or Social
                                 Transformation? 

                    by John L. Petersen, Margaret Wheatley, Myron 
Kellner-Rogers 

                    version in PDF (Adobe Acrobat)       Download Acrobat 
      

Editor's Note:  This is a draft of an article scheduled for publication 
in the October 1998 issue of THE FUTURIST.  Due to the
time-sensitive nature of the material, it was posted here to create 
greater awareness of the issue as well as elicit comments and questions
before final publication. Please send your comments and questions to the 
authors at johnp@arlinst.org and the editors at
cwagner@wfs.org .

     The Millenial sun will first rise over human civilization in the 
independent republic of Kiribati, a group of some thirty low
     lying coral islands in the Pacific Ocean that straddle the equator 
and the International Date Line, halfway between Hawaii and
     Australia. This long awaited sunrise marks the dawn of the year 
2000, and quite possibly, the onset of unheralded disruptions
     in life as we know it in many parts of the globe. Kiribati's 81,000 
Micronesians may observe nothing different about this
     dawn; they only received TV in 1989. However, for those who live in 
a world that relies on satellites, air, rail and ground
     transportation, manufacturing plants, electricity, heat, telephones, 
or TV, when the calendar clicks from '99 to '00, we will
     experience a true millennial shift. As the sun moves westward on 
January 1, 2000, as the date shifts silently within millions
     of computerized systems, we will begin to experience our 
computer-dependent world in an entirely new way. We will finally
     see the extent of the networked and interdependent processes we have 
created. At the stroke of midnight, the new millenium
     heralds the greatest challenge to modern society we have yet to face 
as a planetary community. Whether we experience this as
     chaos or social transformation will be influenced by what we do 
immediately. 

     We are describing the year 2000 problem, known as Y2K (K signifying 
1000.) Nicknamed at first "The Millennial Bug,"
     increasing sensitivity to the magnitude of the impending crisis has 
escalated it to "The Millennial Bomb." The problem
     begins as a simple technical error. Large mainframe computers more 
than ten years old were not programmed to handle a
     four digit year. Sitting here now, on the threshold of the year 
2000, it seems incomprehensible that computer programmers
     and microchip designers didn't plan for it. But when these billions 
of lines of computer code were being written, computer
     memory was very expensive. Remember when a computer only had 16 
kilobytes of RAM? To save storage space, most
     programmers allocated only two digits to a year. 1993 is '93' in 
data files, 1917 is '17.' These two-digit dates exist on millions
     of files used as input to millions of applications. (The era in 
which this code was written was described by one programming
     veteran as "the Wild West." Programmers did whatever was required to 
get a product up and working; no one even thought
     about standards.) 

     The same thing happened in the production of microchips as recently 
as three years ago. Microprocessors and other
     integrated circuits are often just sophisticated calculators that 
count and do math. They count many things: fractions of
     seconds, days, inches, pounds, degrees, lumens, etc. Many chips that 
had a time function designed into them were only
     structured for this century. And when the date goes from '99 to '00 
both they and the legacy software that has not been fixed
     will think it is still the 20th century -- not 2000, but 1900. 

     Peter de Jager, who has been actively studying the problem and its 
implications since 1991, explains the computer math
     calculation: "I was born in 1955. If I ask the computer to calculate 
how old I am today, it subtracts 55 from 98 and announces
     that I'm 43. . . But what happens in the year 2000? The computer 
will subtract 55 from 00 and will state that I am minus 55
     years old. This error will affect any calculation that produces or 
uses time spans. . . If you want to sort by date (e.g., 1965,
     1905, 1966), the resulting sequence would be 1905, 1965, 1966. 
However, if you add in a date record such as 2015, the
     computer, which reads only the last two digits of the date, sees 05, 
15, 65, 66 and sorts them incorrectly. These are just two
     types of calculations that are going to produce garbage."1

     The calculation problem explains why the computer system at Marks & 
Spencer department store in London recently
     destroyed tons of food during the process of doing a long term 
forecast. The computer read 2002 as 1902. Instead of four more
     years of shelf life, the computer calculated that this food was 
ninety-six years old. It ordered it thrown out.2

     A similar problem happened recently in the U.S. at the warehouse of 
a freeze dried food manufacturer. But Y2K is not about
     wasting good food. Date calculations affect millions more systems 
than those that deal with inventories, interest rates, or
     insurance policies. Every major aspect of our modern infrastructure 
has systems and equipment that rely on such
     calculations to perform their functions. We are dependent on 
computerized systems that contain date functions to effectively
     manage defense, transportation, power generation, manufacturing, 
telecommunications, finance, government, education,
     healthcare. The list is longer, but the picture is clear. We have 
created a world whose efficient functioning in all but the
     poorest and remotest areas is dependent on computers. It doesn't 
matter whether you personally use a computer, or that most
     people around the world don't even have telephones. The world's 
economic and political infrastructures rely on computers.
     And not isolated computers. We have created dense networks of 
reliance around the globe. We are networked together for
     economic and political purposes. Whatever happens in one part of the 
network has an impact on other parts of the network.
     We have created not only a computer-dependent society, but an 
interdependent planet. 

     We already have frequent experiences with how fragile these systems 
are, and how failure cascades through a networked
     system. While each of these systems relies on millions of lines of 
code that detail the required processing, they handle their
     routines in serial fashion. Any next step depends on the preceding 
step. This serial nature makes systems, no matter their
     size, vulnerable to even the slightest problem anywhere in the 
system. In 1990, ATT's long distance system experienced
     repeated failures. At that time, it took two million lines of 
computer code to keep the system operational. But these millions of
     lines of code were brought down by just three lines of faulty code.

     And these systems are lean; redundancies are eliminated in the name 
of efficiency. This leanness also makes the system
     highly vulnerable. In May of this year, 90% of all pagers in the 
U.S. crashed for a day or longer because of the failure of one
     satellite. Late in 1997, the Internet could not deliver email to the 
appropriate addresses because bad information from their
     one and only central source corrupted their servers. 

     Compounding the fragility of these systems is the fact that we can't 
see the extent of our interconnectedness. The networks
     that make modern life possible are masked by the technology. We only 
see the interdependencies when the relationships are
     disrupted -- when a problem develops elsewhere and we notice that we 
too are having problems. When Asian markets failed
     last year, most U.S. businesses denied it would have much of an 
impact on our economy. Only recently have we felt the extent
     to which Asian economic woes affect us directly. Failure in one part 
of a system always exposes the levels of
     interconnectedness that otherwise go unnoticed-we suddenly see how 
our fates are linked together. We see how much we
     are participating with one another, sustaining one another. 

     Modern business is completely reliant on networks. Companies have 
vendors, suppliers, customers, outsourcers (all, of
     course, managed by computerized data bases.) For Y2K, these highly 
networked ways of doing business create a terrifying
     scenario. The networks mean that no one system can protect itself 
from Y2K failures by just attending to its own internal
     systems. General Motors, which has been working with extraordinary 
focus and diligence to bring their manufacturing plants
     up to Year 2000 compliance, (based on their assessment that they 
were facing catastrophe,) has 100,000 suppliers worldwide.
     Bringing their internal systems into compliance seems nearly 
impossible, but what then do they do with all those vendors who
     supply parts? GM experiences production stoppages whenever one key 
supplier goes on strike. What is the potential number
     of delays and shutdowns possible among 100,000 suppliers? 

     The nature of systems and our history with them paints a chilling 
picture of the Year 2000. We do not know the extent of the
     failures, or how we will be affected by them. But we do know with 
great certainty that as computers around the globe respond
     or fail when their calendars record 2000, we will see clearly the 
extent of our interdependence. We will see the ways in which
     we have woven the modern world together through our technology. 

What, me worry? 

     Until quite recently, it's been difficult to interest most people in 
the Year 2000 problem. Those who are publicizing the
     problem (the Worldwide Web is the source of the most extensive 
information on Y2K,) exclaim about the general lack of
     awareness, or even the deliberate blindness that greets them. In our 
own investigation among many varieties of organizations
     and citizens, we've noted two general categories of response. In the 
first category, people acknowledge the problem but view it
     as restricted to a small number of businesses, or a limited number 
of consequences. People believe that Y2K affects only a few
     industries-primarily finance and insurance-seemingly because they 
deal with dates on policies and accounts. Others note
     that their organization is affected by Y2K, but still view it as a 
well-circumscribed issue that is being addressed by their
     information technology department. What's common to these comments 
is that people hold Y2K as a narrowly-focused,
     bounded problem. They seem oblivious to the networks in which they 
participate, or to the systems and interconnections of
     modern life. 

     The second category of reactions reveals the great collective faith 
in technology and science. People describe Y2K as a
     technical problem, and then enthusiastically state that human 
ingenuity and genius always finds a way to solve these type of
     problems. Ecologist David Orr has noted that one of the fundamental 
beliefs of our time is that technology can be trusted to
     solve any problem it creates.3 If a software engineer goes on TV 
claiming to have created a program that can correct all
     systems, he is believed. After all, he's just what we've been 
expecting. 

     And then there is the uniqueness of the Year 2000 problem. At no 
other time in history have we been forced to deal with a
     deadline that is absolutely non-negotiable. In the past, we could 
always hope for a last minute deal, or rely on round-the-clock
     bargaining, or pray for an eleventh hour savior. We have never had 
to stare into the future knowing the precise date when the
     crisis would materialize. In a bizarre fashion, the inevitability of 
this confrontation seems to add to people's denial of it. They
     know the date when the extent of the problem will surface, and 
choose not to worry about it until then. 

     However, this denial is quickly dissipating. Information on Y2K is 
expanding exponentially, matched by an escalation in
     adjectives used to describe it. More public figures are speaking 
out. This is critically important. With each calendar tick of
     this time, alternatives diminish and potential problems grow. We 
must develop strategies for preparing ourselves at all levels
     to deal with whatever Y2K presents to us with the millennium dawn. 

     What we know about Y2K 

          a technological problem that cannot be solved by technology 
          the first-ever, non-negotiable deadline 
          a systemic crisis that no one can solve alone 
          a crisis that transcends boundaries and hierarchies 
          an opportunity to evoke greater capacity from individuals and 
organizations 
          an opportunity to simplify and redesign major systems 


                          Figure 1 

The Y2K problem, really 

     We'd like to describe in greater detail the extent of Y2K. As a 
global network of interrelated consequences, it begins at the
     center with the technical problem, legacy computer codes and 
embedded microchips. (see Figure One) For the last thirty
     years thousands of programmers have been writing billions of lines 
of software code for the computers on which the world's
     economy and society now depend. Y2K reporter Ed Meagher describes 
"old, undocumented code written in over 2500 different
     computer languages and executed on thousands of different hardware 
platforms being controlled by hundreds of different
     operating systems . . . [that generate] further complexity in the 
form of billions of six character date fields stored in millions
     of databases that are used in calculations."4 The Gartner Group, a 
computer-industry research group, estimates that
     globally, 180 billion lines of software code will have to be 
screened.5 Peter de Jager notes that it is not unusual for a company
     to have more than 100,000,000 lines of code--the IRS, for instance, 
has at least eighty million lines. The Social Security
     Administration began working on its thirty million lines of code in 
1991. After five years of work, in June, 1996, four
     hundred programmers had fixed only six million lines. The IRS has 
88,000 programs on 80 mainframe computers to debug.
     By the end of last year they had cleaned up 2,000 programs.6 Capers 
Jones, head of Software Productivity Research, a firm
     that tracks programmer productivity, estimates that finding, fixing 
and testing all Y2K-affected software would require over
     700,000 person-years.7 Programmers have been brought out of 
retirement and are receiving extraordinary wages and
     benefits to stick with this problem, but we are out of time. There 
aren't nearly enough programmers nor hours remaining
     before January 1, 2000. 

     Also at the center of this technical time bomb are the embedded 
microprocessors. There are somewhat over a billion of these
     hardware chips located in systems worldwide. They sustain the 
world's manufacturing and engineering base. They exist in
     traffic lights, elevators, water, gas, and electricity control 
systems. They're in medical equipment and military and navigation
     systems. America's air traffic control system is dependent upon 
them. They're located in the track beds of railroad systems
     and in the satellites that circle the earth. Global 
telecommunications are heavily dependent on them. Modern cars contain
     about two dozen microprocessors. The average American comes in 
contact with seventy microprocessors before noon every
     day. Many of these chips aren't date sensitive, but a great number 
are, and engineers looking at long ago installed systems
     don't know for sure which is which. To complicate things further, 
not all chips behave the same. Recent tests have shown that
     two chips of the same model installed in two different computers but 
performing the same function are not equally sensitive to
     the year-end problem. One shuts down and the other doesn't. 

     It is impossible to locate all of these chips in the remaining 
months, nor can we replace all those that are identified. Those
     more than three years old are obsolete and are probably not 
available in the marketplace. The solution in those cases is to
     redesign and remanufacture that part of the system -- which often 
makes starting over with new equipment the best option.
     That is why some companies are junking their computer systems and 
spending millions, even hundreds of millions, to replace
     everything. It at least ensures that their internal systems work. 

     At issue is time, people, money, and the nature of systems. These 
technical problems are exacerbated by government and
     business leaders who haven't yet fully understood the potential 
significance of this issue for their own companies, to say
     nothing of the greater economic implications. The U.S. leads all 
other developed nations in addressing this issue, minimally
     by six to nine months. Yet in a recent survey of American corporate 
chief information officers, 70% of them expressed the
     belief that even their companies would not be completely prepared 
for Y2K. Additionally, 50% of them acknowledged that they
     would not fly during January 2000. If America is the global leader 
in Y2K efforts, these CIO comments are indeed sobering. 

     The economic impacts for the global economy are enormous and 
unknown. The Gartner Group projects that the total cost of
     dealing with Y2K worldwide will be somewhere between $300 billion to 
$600 billion -- and these are only direct costs
     associated with trying to remedy the problem. (These estimates keep 
rising every quarter now.) The Office of Management
     and Budget (OMB), in a recently released Quarterly Report, estimated 
total government Y2K expense at $3.9 billion. This
     figure was based only on federal agency estimates; the OMB warned 
that this estimate might be as much as 90% too low
     considering the increasing labor shortage and expected growing 
remediation costs as January 1, 2000 looms nearer. And in
     June of this year, it was announced that federal agencies had 
already spent five billion dollars. Of twenty-four agencies,
     fifteen reported being behind schedule. 

     These numbers don't consider the loss of output caused by diverting 
resources to forestall this crisis. In more and more
     businesses, expenditures for R&D and modernization are being 
diverted to Y2K budgets. Business Week in March of 1998
     estimated that the Year 2000 economic damage alone would be $119 
billion. When potential lawsuits and secondary effects
     are added to this -- people suing over everything from stalled 
elevators to malfunctioning nuclear power plants -- the cost
     easily could be over $1 trillion. 

     But these problems and estimates don't begin to account for the 
potential impact of Y2K. The larger significance of this bomb
     becomes apparent when we consider the next circle of the global 
network-- the organizational relationships that technology
     makes possible. 

Who works with whom? 

     The global economy is dependent upon computers both directly and 
indirectly. Whether it's your PC at home, the workstation
     on a local area network, or the GPS or mobile telephone that you 
carry, all are integral parts of larger networks where
     computers are directly connected together. As we've learned, failure 
in a single component can crash the whole system; that
     system could be an automobile, a train, an aircraft, an electric 
power plant, a bank, a government agency, a stock exchange, an
     international telephone system, the air traffic control system. If 
every possible date-sensitive hardware and software bug
     hasn't been fixed in a larger system, just one programming glitch or 
one isolated chip potentially can bring down the whole
     thing. 

     While there isn't enough time or technical people to solve the Y2K 
problem before the end of next year, we might hope that
     critical aspects of our infrastructure are tackling this problem 
with extreme diligence. But this isn't true. America's electric
     power industry is in danger of massive failures, as described in 
Business Week's February '98 cover story on Y2K. They
     report that "electric utilities are only now becoming aware that 
programmable controllers -- which have replaced mechanical
     relays in virtually all electricity-generating plants and control 
rooms -- may behave badly or even freeze up when 2000
     arrives. Many utilities are just getting a handle on the problem." 
It's not only nuclear power plants that are the source of
     concern, although problems there are scary enough. In one Year 2000 
test, notes Jared S.Wermiel, leader of the Y2K effort
     at the Nuclear Regulatory Commission, the security computer at a 
nuclear power plant failed by opening vital areas that are
     normally locked. Given the complexity and the need to test, "it 
wouldn't surprise me if certain plants find that they are not
     Year 2000-ready and have to shut down."8 

     Other electric utility analysts paint a bleaker picture. Rick 
Cowles, who reports on the electric utility industry, said at the
     end of February: "Not one electric company [that he had talked to] 
has started a serious remediation effort on its embedded
     controls. Not one. Yes, there's been some testing going on, and a 
few pilot projects here and there, but for the most part it is
     still business-as-usual, as if there were 97 months to go, not 97 
weeks.9 After attending one industry trade show, Cowle
     stated that, "Based on what I learned at DistribuTECH '98, I am 
convinced there is a 100% chance that a major portion of the
     domestic electrical infrastructure will be lost as a result of the 
Year 2000 computer and embedded systems problem. The
     industry is fiddling whilst the infrastructure burns." 10

     The Federal Aviation Administration is also very vulnerable but 
quite optimistic. "We're on one hand working to get those
     computers Year 2000 compliant, but at the same time we're working on 
replacing those computers," said Paul Takemoto, a
     spokesman for the FAA in early '98. At the twenty Air Route Traffic 
Control Centers, there is a host computer and a backup
     system. All forty of these machines --mid-'80s vintage IBM 3083 
mainframes--are affected. And then there are the satellites
     with embedded chips, individual systems in each airplane, and air 
traffic control systems around the globe. Lufthansa already
     has announced it will not fly its aircraft during the first days of 
2000. 

Who else is affected? 

     But the interdependency problem extends far beyond single 
businesses, or even entire industries. Indirect relationships
     extend like tentacles into many other networks, creating the 
potential for massive disruptions of service. 

     Let's hope that your work organization spends a great deal of money 
and time to get its entire information system compliant.
     You know yours is going to function. But on the second of January 
2000 the phone calls start. It's your banker. "There's
     been a problem," he says. They've lost access to your account 
information and until they solve the problem and get the backup
     loaded on the new system, they are unable to process your payroll. 
"We don't have any idea how long it will take," the
     president says. 

     Then someone tells you that on the news there's a story that that 
the whole IRS is down and that they can neither accept nor
     process tax information. Social Security, Federal Housing, 
Welfare-none of these agencies are capable of issuing checks
     for the foreseeable future. Major airlines aren't flying, waiting to 
see if there is still integrity in the air traffic control
     system. And manufacturing across the country is screeching to a halt 
because of failures in their supply chain. (After years
     of developing just in time (JIT) systems, there is no inventory on 
hand-suppliers have been required to deliver parts as
     needed. There is no slack in these systems to tolerate even minor 
delivery problems.) Ground and rail transport have been
     disrupted, and food shortages appear within three to six days in 
major metropolises. Hospitals, dealing with the failure of
     medical equipment, and the loss of shipments of medicine, are forced 
to deny non-essential treatment, and in some cases are
     providing essential care in pre-technical ways. 

     It's a rolling wave of interdependent failures. And it reaches 
across the country and the world to touch people who, in most
     cases, didn't know they were linked to others. Depending on what 
systems fail, very few but strategically placed failures would
     initiate a major economic cascade. Just problems with power 
companies and phone systems alone would cause real havoc.
     (This spring, a problem in ATT rendered all credit card machines 
useless for a day. How much revenue was lost by
     businesses?) If only twenty percent of businesses and government 
agencies crash at the same time, major failures would
     ensue. 

     In an interdependent system, solving most of the problem is no 
solution. As Y2K reporter Ed Meagher describes: 

          It is not enough to solve simply "most of these problems." The 
integration of these systems requires that we
          solve virtually all of them. Our ability as an economy and as a 
society to deal with disruptions and breakdowns
          in our critical systems is minuscule. Our worst case scenarios 
have never envisioned multiple, parallel
          systemic failures. Just in time inventory has led to just in 
time provisioning. Costs have been squeezed out of
          all of our critical infrastructure systems repeatedly over time 
based on the ubiquity and reliability of these
          integrated systems. The human factor, found costly, slow, and 
less reliable has been purged over time from our
          systems. Single, simple failures can be dealt with; complex, 
multiple failures have been considered too remote
          a possibility and therefore too expensive to plan for. 11 

     The city of New York began to understand this last September. The 
governor of New York State banned all nonessential IT
     projects to minimize the disruption caused by the year 2000 bomb 
after reading a detailed report that forecasts the
     millennium will throw New York City into chaos, with power supplies, 
schools, hospitals, transport, and the finance sector
     likely to suffer severe disruption. Compounding the city's Y2K risks 
is the recent departure of the head of its year 2000
     project to a job in the private sector.12 

     But of course the anticipated problems extend far beyond U.S. 
shores. In February, the Bangkok Post reported that Phillip
     Dodd, a Unysis Y2K expert, expects that upward of 70% of the 
businesses in Asia will fail outright or experience severe
     hardship because of Y2K. The Central Intelligence Agency supports 
this with their own analysis: "We're concerned about
     the potential disruption of power grids, telecommunications and 
banking services, among other possible fallout, especially in
     countries already torn by political tensions."13 

     A growing number of assessments of this kind have led Dr. Edward 
Yardeni, the chief economist of Deutsche Morgan
     Grenfell, to keep raising the probability of a deep global recession 
in 2000-2001 as the result of Y2K. His present estimate of
     the potential for such a recession now hovers at about 70%, up from 
40% at the end of 1997.14 

How might we respond? 

(To be continued...)

<http://www.wfs.org/year2k.htm>