Y2K

Warning of a surfeit in knowledge, Nostradamus, a master of double-talk, saw the 20th Century as an evil and mechanized time in which everything and everyone would be ruled by numbers, ciphers and symbols. His visions of ensuing centuries take on greater flamboyance and apocalyptic resonance the farther he peers into his crystal ball.

Four hundred and fifty years later, aided by hindsight and witness to the marvels and pitfalls of the industrial revolution, Jules Verne, the quintessential futurist and scientific visionary, hinted at a world crushed and dehumanized by technology. Both men understood the vagaries of the human soul. But they were dazzled by the larger picture and neither would anticipate the devil lurking in the detail where all potential catastrophes are known to hide. To their chagrin and immense embarrassment, nor would the very shepherds of our computer-dependent society.

Take the Year 2000 -- or Y2K -- bug, the digital time bomb ready to set off a tumbling-dominoes scenario of millennium madness at midnight on December 31, 1999. Paying for their aversion to long-range planning, computer users are scrambling to avert a Hollywood-sized disaster extravaganza far more believable than a Martian invasion, a stomping 60-story tall Tyrannosaurus Rex, or a wayward Earthbound meteorite.

The plot is equally more prosaic and infinitely more sinister: Power plants fail, plunging millions of households, factories, hospitals into total darkness. Traffic lights go blind. There is no heat, no running water. Sewers and waste management systems crank to a halt. Satellites go mute. Air, sea and land communications are crippled. National security is compromised as military command, control and intelligence networks are stilled, while mutual-assured-destruction launching codes are jolted into red-alert status. Banks close. Assets are frozen. Salary, welfare and social security payments cease. International transactions are suspended. Despite safeguards, stock markets crash, triggering trillion-dollar lawsuits. Food riots erupt. Civil disorder follows. Interconnected by a vast and now dormant electronic matrix, the world is in disarray.

All this, you ask, because, intent on saving space, early computer programmers used a two-digit shortcut to record year dates, as in "99" instead of "1999"? Yes. Computers are basically stupid. They follow instructions that humans program them to do. If the instructions make no sense to the computer, strange things can happen. Maybe the program will run erroneously. Maybe it will cease to run altogether.

Emulated industry-wide, the shortcut is apt to "befuddle" computers and send embedded microchips into catatonic shock in millions of devices that will read "00" as the year 1900 instead of 2000. The date problem is crucial because dates are fundamental to the calculation of algorithms for virtually every type of electronic operation. As computer systems affect virtually every aspect of modern life, it is apparent that the electronic universe that we take for granted could be severely crippled if the dates are not swiftly adjusted.

The Y2K problem is all the more urgent because it has a hard, non-negotiable deadline. As a result, a massive hunt is underway for millions of computerized machines, tools, measuring instruments, and myriad other types of equipment whose software is tainted with the now infamous "00."

The bill for eradicating the Millennium Bug from the global economy has been estimated at between $300 billion and $600 billion. According to the Gartner Group, a computer-industry research company in Stamford, Connecticut, even the lower figure would dwarf the U.S. government's huge bailout during the savings and loan debacle of the early 1990s.

Complete success, they say, is by no means assured, and the final cost could exceed one trillion dollars once hardware is replaced and other expenses -- including current lawsuits -- have been tabulated. Failure to deal with the problem will cause telephones and lights to go dead and essential industries to grind to a halt, conceivably tipping the world into a near-fatal recession.

Experts say the manufacturing sector has the most to worry about, for its year 2000 problems are more complex, widespread and hard to fix than those in conventional computers applications such as accounting and finance. Unfounded concern? Hardly, according to Ralph J. Szygenda, chief information officer are General Motors, whose staff is now feverishly troubleshooting was he calls "catastrophic problems" in every GM plant. The automaker recently disclosed than it expects to spend between $400 million and $550 million to slay the Y2K dragon.

The corrective tasks facing computer-dependent businesses are but one in a series of colossal undertakings. By diverting resources to "non-productive endeavors," Federal Reserve Chairman Alan Greenspan warns, the effort could hurt the U.S. economy and have a cascade effect on trading partner nations.

According to the Gartner Group, 180 billion lines of software code will have to be screened worldwide at nearly $2 a line. The top 100 FORTUNE companies, Gartner estimates, will spend $50 million, on average, to fix the Y2K problem, vs. about $7.5 million for smaller companies.

Another headache is that many of the programs in need of repair are written in Cobol, once the dominant computer language. Cobol had no standard for writing year dates, which makes wrong entries devilishly hard to find. Adding insult to injury, the labor-intensive process could in turn contaminate other programs. Experts predict that new errors will be introduced in nearly 10 percent of routine repairs.

As the fateful date nears, a Gargantuan amount of work remains to be done. Released early this year by Forrester Research, of Cambridge, Massachusetts, a report says that large corporations are barely 34 percent into the year 2000 bug disinfecting process. Making matters worse, many embedded programs are beyond repair because they are inscribed on silicon chips, thus necessitating expensive computer numerically controlled systems to be scrapped and replaced. The U.S. Department of Defense, which has a high percentage of embedded systems is not happy.

Troubleshooters cannot relax. FORTUNE Magazine recently offered chilling previews of what laggard companies can expect as the year 2000 rolls in:

* Leap-year snafus damaged production lines when programmers failed to account for the extra day in February 1996.

* Computers misinterpreting 00 year dates are already issuing demented instructions.

* Dry runs reveal a threat of massive cutoffs in vital services.

* The first year 2000 lawsuits are ringing up billable hours. G.M.'s Szygenda believes that "the year 2000 could easily spark the greatest litigation frenzy we have ever seen." Boston-based software-research company predicts $300 billion in damage awards from lawsuits worldwide.

Meanwhile, the magnitude and implications of the problem continue to elicit attitudes ranging from oracular to negligent unconcern. The United Nations has adopted a resolution urging all nations to attach a high priority to solving the Y2K problems. Government and business inaction has convinced some observers to raise the odds of a recession to 70 percent and rate its severity as being far worse than the one sparked by the Arab oil embargo in 1973-74. A recession could start as early as 1999 if investors start to pull out of the stock market.

President Clinton's Year 2000 czar, John Koskinen, said in late June that doomsday scenarios are overblown. "There's not enough real hard data yet (sic) to make estimates," he said. This is hardly reassuring.

Erring in favor of caution, it is certain that failure to address the problem could have severe consequences, particularly in emerging nations with archaic computer systems, deficient troubleshooting expertise and tight budgets. The century could end in a blaze of technology, with pencils doing the job of computers, candles replacing light bulbs. The IOU could become legal tender. Or maybe not. We'll just have to sweat out the bug and see.

Oh, well, Happy New Yeaschxrzkpffft...