Y2K Crisis - Analysis of a Failed Prediction

The predicted catastrophic 'end-of-the-world' consequences of Y2K did not happen. Did the predictions prevent the disaster? This is analogous to asking whether a prediction enables itself to become true (e.g. self-fulfilling prophecy).

There are many examples of companies that made significant investments in patching their software to avoid the predicted problems from the date-change transition. In fact, the US spent $100 billion on the Y2k problem ($8.5 Billion on Federal government alone)!

Was the $100 billion justified? I was not surprised to read that the Govt folks who fueled this level of spending determined that it was justified (self-fulfilling justification). The fact is, there was not enough time or money to re-write all the software in the world, and yet the end-of-the-world did not occur.

Finkelstein describes some factors that fueled the panic that led to the gross exaggerations (the end of the world as we know it):

1. Public ignorance led to panic. Many religious organizations exploited the situation to predict the end of the world. http://www.youtube.com/watch?v=FKv563gbJbE
2. Business managers created more panic when they suddenly realized their businesses depended on computer technologies, none of which they really understood.
3. IT managers exploited the panic to justify increased budgets for new equipment and various software projects.
4. Consultants exploited the panic, "hoping to charge companies thousands of dollars a day to fix the problem."