PART 2: THE DEVOLUTIONARY SPIRAL

by

Y2000@Infomagic.com

In the first article of this series I predicted that the failure of even a small number of our computer systems, combined with fundamental problems already existing in the global economy, will lead to the total collapse of civilization as we know it. I would now like to expand on that and show you that collapse is probable even in an unreasonably optimistic best case scenario in which all of the systems are fixed before 2000. In any of the more realistic scenarios this collapse is absolutely certain. I would also like to explain just how devastating that collapse will be and to show that recovery in our lifetimes is an extremely unlikely outcome. We must prepare for a dark period of several generations during which much of our technology and knowledge will be lost and after which there may be a slow recovery by our descendants. Such preparations are the subject matter of this series of articles. However, we must also prepare ourselves for the very real possibility that the outcome of this situation might well be the total extinction of the entire human race. It really could be worse than I am predicting and I really am being optimistic.

First, I would like to assure you that I am not some kind of nut anxiously waiting for the end of the world. I am a professional computer consultant with 30 years of extensive, hard won experience in many different areas of information technology. I have programmed at the lowest machine code level on everything from small embedded systems all the way up to the largest mainframes. I have co-invented computer hardware and developed novel solutions to very complex problems. I have designed and implemented very large scale business computer systems and I have planned and managed the creation and growth of entire mainframe data centers. I have also worked at a senior level in some of the best consulting organizations in the world. In short, I am a super geek, with an extensive real world and management background beyond the art of computing itself.

I have been aware of the Y2K problem for at least 20 years, and actively working on it for about three. Until the beginnning of 1998 I believed that the problem could still be mostly fixed and I have always been skeptical of the wilder claims of potential Y2K failures. For example, as an airline and instructor rated pilot (my secondary career), I don't believe that airplanes will fall out of the sky. However, I am quite certain that many, if not most, large commercial aircraft will indeed be grounded -- by shortages (and higher prices) of fuel, by crippled Air Traffic Control systems and by the lack of sufficient general economic activity to justify their continued operation. Unlike the bulls and pollyannas, I am not fixated on the success or failure of individual systems. I have the capacity to see the larger picture and I am far more concerned with the total failure of Charlotte's Web itself -- that system-of-systems which forms the backbone of modern civilization.

I freely admit that many of my colleagues disagree with my conclusions and believe that Y2K will be nothing more than a "bump in the road". The problem is that, speaking as an expert, I have never seen any credible evidence to support their general position. Yes, they can point to individual successes, but this does not materially support their overall hypothesis of "no problem" and we (the bears or "doombrood") can point to far more failures, far more known problems, and the abysmal record of our own industry in meeting deadlines and required functional capability. In addition, I must point out that the disaster scenario requires the failure of only a relatively small percentage of our systems (let's say 20%) while the "bump in the road" scenario requires virtually perfect correction of almost all affected systems, all on time and all on budget. For the bulls to be right, we must somehow magically move from a historical on-time project success rate of less than 15% to a success rate for Y2K projects of at least 90 - 95%.

Such a position is clearly irrational. However, for the sake of argument, let us go even further and assume that all affected systems will indeed be fixed before they start to fail. Unfortunately, this would not solve the problem or prevent the disaster. You see, after any major maintenence change to a system (which Y2K most certainly is) there is always a residual rate of failure as a result of the changes themselves, even when the changes are properly "tested". The failures manifest themselves when the system is placed back into the real world of "production", as opposed to the artificial world of "testing". They happen because maintenence programmers customarily test only the immediate effects of their changes. There is neither the time nor the money nor often even the ability to test the entire consequences of a particular change to a system. The residual failures typically arise elsewhere in the system, at some point unrelated to the change itself and completely unanticipated by the programmer.

This last is why residual failures are so hard to identify and correct. Often, we can't even tell for certain whether a particular failure really is the result of a recent system change or not. In turn, this is why a good system administrator would never return two or more systems to "production" at the same time. Not only is the risk of failure almost doubled, but there is also a small chance of both systems failing simultaneously. For Y2K, the problem is greatly compounded by the fact that, essentially, we will be placing all of our corrected systems back into "production" at roughly the same time. We can even calculate the magnitude of the residual failures, to a first approximation.

The actual rate of residual failure depends on a number of factors, but mostly on the size of the system and the scope of the changes. Under average conditions, modest changes to a moderately sized system, the rate would be about 7%. The scope of Y2K changes is, of course, much more extensive than this and many of the systems are extremely large, so the residual failure rate is also likely to be higher. Nevertheless, for the sake of argument, let us again assume an overly optimistic residual failure rate of only 5% for Y2K related changes. But this is only for one system. For a business with multiple systems (which they all have) the chance of a system failure can be computed as:1-(1-f)**n, where "f" is the failure rate and "n" is the number of systems.

An average small business would have perhaps 5 systems so, assuming a residual rate of 5%, they have about a 23% chance of at least one system failure (1-(1-.05)**5 = 0.226). A medium size business would typically have about 25 systems and, therefore, a 72% chance of a failure (1-(1-.05)**25 = 0.723). A large business with 100 or more systems would have a 99% chance of a failure (1-(1-.05)**100 = 0.994). This is EVEN IF ALL OF THE SYSTEMS ARE FIXED! Of course, many of these failures will be relatively easy to fix, but others will require an effort beyond the capabilities of the business and they will not be fixed before the business itself fails (this is particularly true for small and medium businesses using packaged software). In addition, the great majority of these failures will have at least some domino effect on related customers and vendors. To make it even worse, virtually everybody will be facing these problems at about the same time, leading to a chaos in which actually fixing the problems becomes almost impossible. At the very minimum this will lead to an economic disaster, JUST FROM THE ACT OF FIXING THE SYSTEMS THEMSELVES, without even taking into account the effect of the unfixed systems, of embedded systems or of an already declining global economy.

In reality, of course, the situation is much worse than this, and the residual failure rate will be much, much higher. Just how much worse is anybody's guess since we have, as yet, insufficient historical data of actual Y2K failures. One thing I can state, categorically, is that a "bump in the road" is not even on the scale of possibility. As we have seen above, the best case end of the scale really begins with a global economic disaster and even then assumes that all systems are fixed on time and that there are no outside factors such as a global recession. Clearly this, too, is an untenable position.

So, in a realistic best case, how much worse than an "economic disaster" is it going to get? Let's use the same formula but this time with a guesstimate of the rate of critical failures (those likely to lead to a failure of the business itself). As an expert, I personally think that the overall, critical failure rate will be between 10 and 20% but, again, let's be overly optimistic and say that only 1% will fail critically and terminally for the business. Even this means that 5% of small, 22% of medium and 63% of big businesses will, inevitably, cease to exist as a direct result of Y2K system failures. Interestingly, these numbers accurately reflect our intuitive grasp of the increasing dependance on information technology as businesses grow larger. But the exact numbers don't really matter because this is only the first level of failure.

The second stage of failure is the "domino effect", the interrelationships between vendors and their customers. Roughly speaking, each of the big three auto manufacturers has about 50,000 vendors of whom about 10,000 are "critical" to production. On the basis of the above, at only a 1% critical failure rate, at least 500 of the critical vendors (5%) will go out of business, forcing the production line to a halt. If that happens for any extended period of time then most of the other 49,500 vendors are basically out of business. Not that it matters. On the basis of the above, two of the big three (63%) will themselves go out of business because of their own Y2K failures, taking most of their vendors with them. Not that it really matters. 50% of the big three's customers are employed by small businesses, of which 5% will immediately go out of business. Unfortunately, the other 50% of their customers are employed by medium and large businesses of whom, optimistically, (63-22)/2+22 or 42% will also go out of business, removing their former employees from the auto market. Those who still have jobs will also be much less likely to buy and, with this immediate and increasing drop in sales, all of the big three will effectively go out of business -- together with most of their vendors. The same thing will happen in every other segment of the economy as well.

Even with unrealistically optimistic numbers, and without taking either embedded systems or the already poor global economy into account, I think this proves beyond any reasonable doubt that Charlotte's Web will indeed completely collapse, just as I predicted in the previous article. Unfortunately, that is still only the second level of failure.

The third level of failure is something I call a devolutionary spiral -- the unwinding of everything we have built over the last 2,000 years of civilization. It is a continuing, self perpetuating, reduction in global population, economic activity and technical capability. It has many of the characteristics of a deflationary spiral in economics; of the entropy of a closed thermodynamic system; and of the sudden jump to a lower energy level which we see in the decay of many nuclear-physical systems. Historically, it is much like the fall of the Roman Empire, which collapsed under it's own weight far more than from outside factors, and from which "recovery" took over 1,000 years. I don't yet know how to measure the spiral, scientifically, but I do know how to describe it.

The key is something called "carrying capacity", a term from the biological sciences. It defines the maximum population of a given species which a particular habitat can support under a specified set of circumstances. If the maximum population is exceeded, or if the capacity itself is reduced, the inevitable result is always a reduction in the population to a level far lower than the simple difference in population numbers would suggest. As an example, consider the plight of the beautiful Mule Deer of the Kaibab Plateau, close to my home in Northern Arizona. Several years ago, the greenie meanies manipulated a ban on the hunting of Mule Deer in this area. Until then, hunting had been used to control the deer population, with the permitted "harvest" designed to reduce the total number of deer, swollen by springtime breeding and summer plenty, to the maximum number which could be supported through harsher winter conditions. As a result, the year round population of deer was normally at it's theoretical maximum for that particular habitat.

Without hunting, the first snows found the herd 25% larger than the winter carrying capacity. At first, the poor deers just lost weight, competing with each other for a food supply far below that needed to support them all through the winter. As the winter progressed, however, the weaker deer (does, fawns and the old) quite naturally died -- by their pitiful thousands. But, worse than this, even the stronger, dominant males were weakened to the point that they, too, succumbed in higher numbers than usual. By the next spring, the Kaibab deer herd was reduced to less than 50% of the normal, springtime population and there were fewer new fawns. In the fall, there were less dominant males and less healthy does, to take care of building the new population. It took decades to recover to normal levels (and then only with the resumption of controlled hunting).

I am personally sickened by the images of this event, by the triumph of "emotion" over "reason", but that is not the point I wish to make. The point I must make is that we, ourselves, are really not that different from the Kaibab deer herd. We live in a complex, computer dependent, world with a carrying capacity of about 6 billion souls. Take away some of the computer capacity, as little as 10%, and we lose a significant portion of the carrying capacity. Because of the domino effect, if we lose just 10% of our businesses (and even the government expects more) this could easily translate into a loss of one third of the carrying capacity and, thus, 2 billion dead.

But that's just the beginning of the devolutionary spiral. Unlike those Kaibab deer, we human beings are to a large extent responsible for creating our own carrying capacity. Without our complex society there is no way this earth could support or carry 6 billion people. But, conversely, without 6 billion people there is no way we could create such a complex society in the first place. When we lose a significant percentage of the population, which we certainly will, we will also lose an important part of our ability to maintain civilization itself. As a result, we will lose even more of the carrying capacity and even more of the population. Once the spiral starts it feeds on itself and it cannot be stopped by anything we do. It will stop, all by itself, but only when a new equilibrium is reached with a much lower carrying capacity and a much smaller population, with far less economic activity and more limited technology.

It doesn't matter whether you believe me. It doesn't even matter if I am right. Because you are not the only one reading this article. Through the magic of the internet there are thousands, perhaps millions, who are also reading and who do believe. There are millions of others who have found similar opinions elsewhere and who also firmly believe it's really coming, really soon, to a town near them. They believe it is serious enough that they have already decided to withdraw their money from their banks and mutual funds. When that happens en masse, some time next year, our entire economy will collapse. In a sense, the end has already begun and the spiral has already started to unwind.

There is nothing wrong with their decision, even though it will indeed trigger the very collapse they are trying to protect themselves against. The point is that Y2K is real, the global recession is real. Roosevelt was wrong. We really do have something more to fear than fear itself. It makes sense to prepare. It is sheer folly to ignore Y2K and those who do so will be numbered among the dead. The sensible question is not whether to prepare but how to prepare and for what. The remaining articles in this series will cover the how, for the moment I am concerned with the what. I have painted a pretty bleak picture of the total collapse of civilisation itself and the death of billions. Using highly optimistic numbers, I think I have shown that this is not just possible but probable. It makes the most sense to prepare for this worst case scenario. If you prepare for anything less, and I am right, you will not be prepared at all and you, too, will be numbered among the dead.

To drive this point home, I would like you to consider the closest historical precedent I can think of. The Roman Empire also collapsed in upon itself, in much the same way that I am predicting. As it collapsed, the carrying capacity of the empire was reduced and the population did indeed spiral downwards, reaching a low point several hundred years later around 1350. Most of their technology was also lost and their roads, aquaducts, cities and monuments soon fell into disrepair because none of the survivors understood the Roman technology. Even if they had, there weren't enough people nor enough economic activity to justify let alone institute the repairs. Consider this also. After a 1,000 years there were indeed survivors. They just weren't Romans.

Five miles from my boyhood home in England are the ruins of a Roman fort, built in the time of Hadrian to protect the estuary of the largest local river, and the center of trade and commerce in the area. Today it is little more than a few piles of rubble, but legend has it that every year, at midnight on Good Friday evening, the old town comes back to life for just one hour. As a boy I would sneak out and ride my bike to the old fort. More than one dark night I spent there, listening for and almost hearing the ancient sounds, looking for and almost seeing two thousand year old ghosts from a long dead civilization. I wonder what little boy will look for us, if we don't prepare.

_______________________________________

Copyright (C) 1998, y2000@infomagic.com

This article is published as part of Cory Hamasaki's "DC Y2K Weather Report" and may be reproduced under the same terms and conditions. All other rights reserved to the author.

Assessment -- Day 400 --

Here's the bad news, another 100 days has gone by, roughly 3 months, a season, the wheel of time has turned another quarter year, 20% of the time since Day 500.

And where are we? How much further along is remediation? What were the big Y2K events?

The harsh reality is we are no further along than we were 100 days ago. Certainly a few organizations have made significant progress, perhaps some have reached major milestones but I have no evidence of that.

For most of the Fortune 5,000, it's business as usual. They're holding their Friday management review meetings; Joe and Joan are sneaking out for a nooner; Caleb, the corporate intranet's web weenie, is late to work after a hard night on Internet-chat; Bill is watching his boss, hoping that the jerk will leave early ... if the boss cuts out at 2:00, Bill's day ends at 2:05.

But no one is minding the Y2K store, it's a joke, a no-win project handed over to the clueless and the indifferent.

There's a clear sense of the Fortune 5,000 sliding from denial, straight to surrender. They've recognized that the job is impossible and they've given up.

We're not going to make it.

Bob Egan's team has tabulated the completion dates and status as reported by the Fortune 500 in their 10Q. While their picture is gloomy, it doesn't tell the entire story.

The status is still the "We're at nn% completion and on schedule barring unforeseen circumstances" status as reported by all projects. They're maintaining their schedules by trading probabilities, risk, and "project managment reserves" for "on schedule".

They are increasing the odds of failure to maintain a pretext that the work is proceeding according to schedule. This is normally fine and standard project management trickery.

In this case, unlike all other projects, you can't suddenly declare, "Oh No! I just discovered a major problem. I need another nine months and ten million dollars to complete the project." You can't slip the schedule into 2Q 2000.

The real story won't be known until next summer when the schedules slip again, descope, defer, declare the system to be non-mission critical.

We're not going to make it.

... but there are things that can be done. I don't mean MRE's, ammo, and cashing in the half million in the 401(k), although there are sound arguments for survivalist-duck measures.

Start work on a big garden, get your friends and family going on at least the minimal preparations, get your company, local government, church, to take that first step.

Here's the trade off. If no one prepares, when the systems break, we'll have a very hard time. The systems will break, this is a certainty. It is uncertain whether the consequence is rioting, looting. "Mad Max" and "Escape from New York" or "Little House on the Prairie".

How much efficiency does computerization bring to civilization? For large organizations that adopted mainframes in the 1960's and 1970's, a great deal. When (not if) ... when those systems fail, civilization will be severely impacted.

If everyone reduces their requirements and dependancy by 20-40%, this may make up for the shortfall. Or maybe not... no guarentees in Y2K.

Transport -- "No Problems with Airplanes."

Thursday, November 19, 1998, United 196 757 from LA to Dulles. About 15-20 minutes in to the flight... -BANG- the plane shakes and rattles.

" -pffft-, uh, this is the pilot, uh, that bump you felt was ..., there's a plane about a half mile ahead of us and we caught a little turbulance from it. Nothing to worry about...."

OK, fine, the FAA and the airlines, "Get It." In this case, clueless himself was on UA196 in seat 28F and was looking out the window. A big orange fireball came out of the right engine.

... nothing to worry about.

Clueless -- CCCC --

CBS news has been running commercials about Y2K. They were supposed to run a piece on Wednesday but apparently it was pre-empted by more important news... Michael J. Fox has some kind of disease, great, that really affects me. Good going CBS.

ABC (Nov 27, 1998) just carried the report on how the DoD systems that were "tested Y2K OK", weren't tested. Ho-Kay. I'm reassured. Everythings fine.

This week's Newsweek has a page about Dr. Olmstead and his Y2K weekend place in the desert and Sunday's 60 minutes will be covering Y2K.

The WSJ covered Y2K on Nov 25, and mentions that Massachusetts entitlement programs are way, way behind schedule. Here's a quote, "'We're running out of time -- seriously running out of time." says John Beveridge, a deputy state auditor who last month reviewed Year 2000 compliance efforts in the state government."

The "Record of Hackensack", a New Jersey newspaper, has done an Egan on the 10Q's, they report that costs are spooling up, "Chase Manhattan now expects to pay 363 Million to fix the bug -- up 21 percent from an estimate it gave just a few months ago."

Telco's? No problems at Telcos? Tell ATT, they just raised their Y2K cost estimate by $75 million to $375 million. ...and that's just for 1998. Total costs $900 million... so far.

Hey, what's this sh*t? No problems in state government, everyone'll be done by December 1998, leaving all of 1999 for testing. And Banks.. banks "Get It". or something. What's a few hundred million dollars more or less.

Mooooo?

Few hundred million, try $800 million to $925 million for Citigroup.

Here's a new resource for you... http://www.bestweek.com, they report that 30 insurance companies are spending $1.79 Billion. It's only money? Well-noooOOOOoo. Here's some quotes from the website, "All warn investors that insurers could be affected by unforseen Year 2000 computer problems..." and referring to contingency plans, "Most admit that even these plans may not be foolproof."

Mooooo... moooooo? Hark! The herd is starting to sniff the air. There is nothing more frightening than a mass of Yuppies and Gen-X'ers when they're afraid. Sure, they'll live in Dee Cee; get liquored up; wake up in some stranger's hotel room (Who are you? and did I enjoy myself?), their clothes in a heap across the room; ride a mountain bike in city traffic, eat a hot dog (tastey bacteria) from a street stand. But when it comes down to it, they'll panic every time.

Don't get caught in the panic. Avoid trouble by avoiding the herd. Can you pull the "disconnect" switch and live independent for a couple weeks? If so, you may have to do that if we see a Yuppie/Gen-X hysteria.

If it happens and, lets say, just hypothetically, food vanishes from the stores. Don't panic. With your two month stash, you can ride this one out. In DeeCee we have grocery store panics before every snow storm.

If it happens, ride it out. You can rebuild your stash when things get back to normal in a week or two.

... nothing to worry about.

cory hamasaki 399 Days, 9,591 Hours.

-- oh, brother, can you believe that? (oh,brother@aol.com), January 21, 2001

Answers

First, I would like to assure you that I am not some kind of nut anxiously waiting for the end of the world.

Yes, you are...

-- Uncle Bob (unclb0b@aol.com), January 21, 2001.

This apocolyptic view was not correct for Y2K. No one tried harder than I to debunk this type of thinking. I gave up a $500K/year career to compulsively post to the debunker forum about this folly.

However in the past year I have come to realize that this view was not incorrect, only premature. We are indeed approaching a cataclysm, brought upon us by a combination of factors---the NWO, climate changes, militant Islam, and ungodliness. I do not know when these forces will converge to bring us to chaos. I can only say---prepare now! Thank you and God bless.

-- (cpr@boy.texas), January 21, 2001.

GAWD, what a moron doom zombie you are, cpr! I have learned this past year that oil production and distribution will not slow down, EVER! Fuel and natural gas costs are stable. Rolling blackouts are the boogeyman under the bed. BOO! Bubble.coms will never fail you, cpr. Buy more stock and get rich! Recession? BAH! What a moron.

BWAHAHAHAHAHAHAHAHA!

-- Paulie Milne (hogfarmer@halifax.com), January 22, 2001.