There will still be an immense amount of capital in place.

No matter what happens because of y2k (barring nuclear war), one thing to remember - there will be a lot of things which will still work. Consider all the roads, bridges, train tracks, etc. An oil refinery might sit idle (because a faulty embedded chip caused an explosion) but if the product (oil derivatives) is still valuable, there will be a very high economic incentive to get it working again. It may take a month, or a year or five years to do it but the "costs" in human labor will be less than building it all new.

There may be a lot of discussions about who owns and deserves whatbut in the long haul, there will be a lot of opportunities for people who are able to pull together the small pieces and get something working again.

The capital which could vanish and never return (to the same owners) is "human capital". The delicate web of relationships, employees, customers, suppliers, and technologies. Just like the rise of the internet in the 90's, great new pools of human capital will be rebuilt, but in many ways different than today.

-- Thom Gilligan (thomgill@eznet.net), August 14, 1999

Answers

There will be a considerable amount of physical capital (machines, factories, tools, in place I agree but vast amounts, perhaps most of our current electronic capital may be lost completely, not just shufled around to different owners as I think you are suggesting. We can and will rebuild but it's going to be a very long, hard process with a lot of human suffering.

-- cody varian (cody@y2ksurvive.com), August 15, 1999.

You mentioned derivitives. I have read up on derivitives and they are beyond anyones scope to get a handle on. I heard a figure in the trillions from Barrons magazine about the amount of derivitives. They are one of the great uncertainties of the comeing days. Although concentrated in just a few banks, the overlapping disruptions in many areas of business and government are going to test the derivitive market in ways that no one I have read can imagine. Capital flight out of countries as a result of y2k worries is another topic hardly mentioned but looming with huge impact. The financial market alone has the ability to take us down. People like to say that the great depression could have been avoided if there was great capital input by the government. Historians say that there was huge intervention by those who were rich and also by the governments. Things can get very wrong very fast despite our best efforts. The level of complication and cross-dependencies now is so vast, it is breathtaking and impressive, but also, that much more hard to manage in a out of ordinary situation like we face.

-- bill burke (bill52@rocketmail.com), August 15, 1999.

(1) There is a lot of capital infrastructure out there. It will, to a great extent, still be there 6 months or a year after December 31.

(2) Some of that infrastructure will deteriorate after the first of the year if unused. Metal rusts (or corrodes) in damp climates, cement crumbles in cold climates, etc. Here, I estimate that it the island would be mostly jungle if left alone for 5-10 years.

Therefore, we can count on only some infrastructure being available... The longer the outages, the less will be available.

-- Mad Monk (madmonk@hawaiian.net), August 15, 1999.

Thom ..... I think your taking a lot for granted with these assumptions, not the least of which is that there is continuous electricl power to move all the ELECTRONIC money worldwide. IMOH, we are going back to the 1800's , but only where a rural population has a strong , LOCAL leader, who can organize the people to defend themselves and their food/property from roving families/gangs that have survived city living by riot, looting and murder. Have you spent at least 2000+ hours reading on Y2K WORLDWIDE , and the domino effect of lack of food, parts, oil, chemicals, NON HYBRID SEEDS and trains to deliver coal the utilities that use it to gain electric power ? Wake up ! There is only 4 months left ! I pray you don't have a family to feed/defend . Eagle

-- Hal Walker (e999eagle@freewwweb.com), August 15, 1999.

As originator of the question, I would like to reply to Hal.

I am personally very well aware of the potential domino effects and I have made an awful lot of changes to the way my family lives and the "things" I own in anticipation of some troubled times.

I would like to point out that the comments made by Hal are basically accusing me of not buying into a number 10 scenario. Actually, the purpose of this forum is to help Ed Yourdan gather opinions about the way people think the world might recover from scenarios in the range of 4 to 9. Hal, one of the things that you should take into consideration is that humans are psychologically incapable of sustained violence over long periods. People living in cities will face more serious problems but to the extent that they cooperate and find ways to survive through them by trusting eachother, they may learn more than people who are out in the rural areas afraid of all strangers.

But back to the topic of this string. My comment about capital is meant here to describe physical capital, not digital money. In the early days of capitalism, the capitalist was not the richest man, and he may not have had a lot of money, but he owned the local factory, the means of production, the means by which new economic value could be created, and he could attract a lot of money if the factory made on interesting product.

The comment I am trying to make here is to realize that a lot of the time and money a business spends is in expensive physical assets. Let's take the example of an oil tanker. Let's take a middle of the road one which costs about 50 million dollars. Now let's say that there are half a dozen y2k problems in embedded chips which must be fixed before it is safe to use that ship, and let's also say that the company who owned this ship went bankrupt. Let's also say that as many as 20% of the companies in the business of shipping oil went bankrupt and that those who did survive are not really in the mood to buy a lot of new ships. In times like those, it is not uncommon that a small company can come to the owner of the ship and make a deal to take over ownership or management of the ship, at a very low cost, whereby they then hire specialists to tell them what chips are needed to get the vessel operational again. They then arrange for purchase or even special fabrication of the chips. Let's say this takes 8 months and costs the company 2 million dollars to fix the chips. That is still a lot less than the 2-3 years and 50 million dollars to make a new ship.

A scenario which should be considered is that most of 2000 is a time when more and more things are falling into problems, and that the entire world readjusts its expectations and spending to a "survival mode". And then in the last months of 2000 and throughout most of 2001 and 2002 and immense amount of the things that were broken get repaired and suddenly there are massive quantities of things available. Hal should consider that when things are scarce people often are willing to share, but when there is again plenty, then envy shows its face again.

It should not be underestimated that a period of rapid recovery is almost as traumatic as a sudden fall.

-- Thom Gilligan (thomgill@eznet.net), August 16, 1999.

Thom ... Your NOT addressing the whole picture; just playing in a dream world YOU WISH to be there in 2000. But , to your statements. You say ... humans are psychologically incapable of violence over long periods of time." Long periods are what ? People in Serjevo put up with shelling and sniping for three years. Ask senator John McCain how long he stood the beatings and torure ? Then you slide over the cities problems by blithly saying ..." but to the extent that they (the people) cooperate and find ways to survive through them by trusting each other, they MAY learn more than people who are in the rural areas, afraid of all strangers. " What's to 'cooperate" ; when someone puts a gun in your face when you answer the door/attempt to leave (whatever), and demands your food/money ? People who live for decades in apartments DON'T know who lives two doors down from them. How do you intend to "cooperate" and "find ways to survive" ?Giving them everything, will NOT lead to survival ! Or, kill them, and then think about disposing of the bodies ? Either your NOT a city dweller, or you have NO PLAN OF ACTION . Also, I don't understand how these people vying for control of these physical capital assets will do so with the banks closed . Gas pumps don't work; no food deliveries; police calling in "sick" , in order to stay home and protect their families/and/or they can't cash checks with the banks closed. THIS will be the real world ; in a develutionary sprial; each new failure adding to the total collapse of the world , which you dream is somehow insulated from from the rest, BECAUSE you can't or won't admit to the domino effect so often discussed on past threads. When the Titanic started sinking, people repeated what they"knew" MUST be fact; it's unsinkable ! Then, not to worry; there are lifeboats ( sub - government ); those are full ?(i.e. not available) . So we HAVE life jackets ( sub - food ). ALL'S WELL ! When they run out, or your in the water, HOW LONG CAN YOU LAST ??? You don't have seeds (non hybrid), tools, land to cultivate; a means to protect the harvest (from 2-4 legged creatures) and the weather ? How sad ! You only delayed your death by a few months. For the want of a nail .... etc. ASSUME THE WORST ! hope for the best; NOT PLAN ON IT ! Eagle

-- Hal Walker (e9994eagle@freewwweb.com), August 17, 1999.

Listen Hal

It is really regretable that you need to use this forum to make personal attacks on people like me.

Once again, I remind you that the spirit of this forum is to consider the ways that people will rebuild. It is also a forum where people who want to consider milder scenarios are able to discuss.

You and I can certainly both agree on the fact that y2k will cause an immense amount of hardship.

Maybe where we disagree would be that I believe that there is something in human nature which drives us towards cooperation and trust, and that even in infrastructurally devastated cities, people will work together to get through.

The personal level of preparations I make with my family are not the topic of this forum.

The discussion of rebuilding (which is why Ed invited us here) is inherantly an optimistic discussion because it is saying that no matter how bad it is, and how long it takes, we have the power to rebuild.

I would graciously ask you to spend your time on this forum helping to share your vision of rebuilding and not be so tempted to attack people and what they have to say.

-- Thom Gilligan (thomgill@eznet.net), August 18, 1999.

Thom, I didn't see Hal's comments as a personal attack. I can learn from a point and counter-point discussion.

Herb

-- Herb (HERB87@JUNO.COM), August 18, 1999.

Herb .... THANKS ! Thom ..... Sorry if it sounds personal ( and some points were ); I have lived 71 years and watched this once great country slide toward the rim of the " bottomless pit ". The greed of those governing knows NO limits ! You must admit your making many suppositions to arrive at this 'rosy new (OLD) world' . I believe your education has probably landed you a great job. BUT, trying on these " it will be over in a year " scenarios doesn't cut it with me. I lived the Great Depression; walked a mile and back to buy a farm worker a pack of Luckies; HOPED he would give me a niclkle. Knew exactly how many .22 I had for my rife to hunt for food; never shot anything we didn't eat; saw the CCC guys and the WPA trucks go by to build the bridges and roads; heard my parents say , "Waste not ; want not" , when there was any food left on my plate. What are your experiences ? A dip in the market? The drop in '87? Look at the bubble we are in today, and ask yourself, with a CRASH to 3000 on the DJA, the terrorist groups just itching to get even, corruption at most levels of politics AND Clinton in the White House, how can it be less than a 9-10 ? I have presented my "solutions" to the area where I live on many posts, past and present (partial). I see NO immediate recovery; I see anarcy for 1-2 years and massive death tolls, especially if we become involved in nuclear war (accidently or via "leadership" from the White House, in a last desperate attempt to shift blame/wag the dog, for the collapse). You are certainly NOT a polly. I think your topics are on line, BUT NOT THOUGH THROUGH , with all the info presently available, IMHO . I tried to inform the area where I live with articles from the net in February/March . Number of minds changed ...0. Number of people asking ANY questions ...0. Number of people who called , even to say I have it all wrong .... 0. Total apathy! Solution ? Buy more food, seeds to plant acres of crops, find all the working tractors (with plows!) and SIT BACK and wait till hunger/freezing cold sharpens their minds and unplugs their ears. At least I have the plan . DO YOU ? Eagle

-- Hal Walker (e999eagle@freewwweb.com), August 18, 1999.

This is an interesting thread that started innocently enough. I was intrigued with Thom's notion of human capital disappearing only to be rebuilt. That assumes that part of human capital is not the human if you believe Hal. The amount of human biomass meandering the planet is incredibly high and much of it is not capital in a productive sense of the word. Even with the sophistication of today's transportation, logistical, and overproduction of food and other products, we are unable to evenly distribute wealth in any kind of meaningful way. Thom seems to argue that depriving the world of functional sophisticated systems will have no impact on the actual numbers of people who will survive; I would suggest that significant percentages of people will pass on for a variety of medical and nutritional reasons. Then there will be those who may perish at their neighbor's hand.

Concentrating human capital in sufficient quantities with the right skill mix could be a daunting challenge although it will no doubt occur again and again. Taking advantage of deteriorating infrastructure will be a race against time. Thom would have to assume that there is enough food and other products to continue some variation of the current division of labor. That, in fact some large part of the human capital group will labor diligently at menial labor to provide the more educated and enlightened the respite needed to restore that which was destroyed. What Hal seems to be saying is that this a fine goal but unlikely given his 71 years of experience. I agree with Hal for the most part. I have over 20 years experience with the US Army and another 12 in aerospace for the most part. Nowhere have I seen the sustained selfless behavior required to achieve Thom's outcome. Much that I have seen would support Hal.

I even have problems with Ed's categories. I don't know what the cutoff is, but it seems that once you pass a certain number on the descending scale that momentum carries you the rest of the way. How do you stop the slide? What if you stop short of that number which gives you all that momentum and you get wild cards thrown in, such as nuclear meltdowns at 200 of the 400+ nuclear power plants? If remaining people in the world turn their back on technology of any advanced nature, how does that affect the outcome. It is possible that there is a society of Techies and Prims. Science fiction was seldom this good. The stakes are much higher when you have to live it and not experience it only in your mind.

Good day and good luck. --Curt

-- Curt Shoffner (cshoffner@orbital.com), August 18, 1999.

Thom..

You are to be commended for the time taken to post your thoughts. However, this is not a bulletin board where information is digested without debate or opposing responses. You have entered into an area that will guarantee heated retorts so try not to be so thin-skinned. Hang in there and give us some additional supporting facts..Thanks.

-- For (your@info.com), August 18, 1999.

Curt S. ..... Thanks for the cross summation . You have put the opposing views in order, from my prospective. I too, have seen too much of human nature and what happens to people when things get "tight" ( i.e. yours and everyone closes life depends on your conclusion{s} ) . Fresh out of radar school ( USN Boston), my destroyer , on the port bow of a carrier ( for torpedo protection; i.e. we take the hit; not the carrier) which was about to launch planes at midnight, with only bow and stern lights on , and we recieve an order from the skipper to plot a new course, so that we would end up on the starbord bow of the carrier, five hundred yards to their stern ( to pick up pilots , if the ditch) , after it turned into the wind. Just two problems to add. DON'T hit the OTHER destroyer that will cris-cross our course AND, you have five minutes to solve the problem. Of course I had not done this, except as an exercise in class. Worried ? Why ? Only 156 mens lives depended on the answer being right; and that ONLY counted the men abourd our ship (INCLUDING ME!). Four minutes and two frantic questions from the captin .. "What's the course and speed, CIC (Combat Information Center) ?" At this time, the executive officer, who was with us in CIC , wispered to me " What did you get ?" NOW, I WAS SCARED ! I was depending on HIM ! After I told him my answers, he mumbled, "That's what I got too." The boswains mate on the bow of our ship later related to me privately that he could have reached out and shook hands with the man on the starn of the CARRIER ! What's the point ? Y2K and what follows will leave YOU making quick decisions that may cost you/those dear to you , their lives IF you haven't planed/considered what you MUST do in that particular case , because YOU have the helm . God forgives fools and little children; others WILL BE JUDGED . Time is short. Think it out. Eagle

-- Hal Walker (e999eagle@freewwweb.com), August 18, 1999.

Hello everyone...the entertainment value (an educational) of this string would dwindle if I backed out now.

Your@info.com has encouraged me not to feel bruised by Hal's eagerness. Hal, I suppose it is your tendency to capitalize a lot of words that felt like having an index finger drummed on my chest. Since Hal is so concerned that I may not be prepared for this, I can let y'all know that in the last year I have completely restructured my net worth towards y2k transition and survival. I gave up a well-paying job, sold an urban home, moved to the coutry, busted my butt digging in a large number of new garden beds in clay soil in a drought year, grew and collected non-hybrid seeds, learned a lot about solar panels and battery banks from the new owne's manuals, chopped a bunch of wood, installed two wood stoves with all the tedious masonry work, refurbished an old cistern in the new house, completely repainted an entire 3 bedroom appartment, manually transported 35 tons of pebbles to help make our basement floor drain better, etc.

I may not have personal war stories and I did not live through the depression (Hal, all power to you for making it through both) but I am clever enough to read the writing on the wall about y2k. I agree with Hal that many of us may be forced to make decisions on a dime that may affect our very lives and the lives of others as well....I certainly made one of them already when I woke up one day and said the "the only way I can do all I need is to quit my job".

I appreciate that Curt picked up on my reference to "human capital". Even the US military has come to understand a modern army does not so much count on its hardware (I mean battle weapons, not computer) as it does on its software...said differently, without good intellegence, team spirit, tight responses, and communications the best of weapons are meaningless. The whole world knows that the USA is sitting on some of the best military assets in the world. But if they knew we were unable to deploy them what would they think?

It is a bit odd that I was peceived as arguing that all would be fine and there would be no body count. If you go back to my original entry you will note that I stated that "human capital" will be lost. Dead bodies are the penultimate form of lost human capital. Dead cities are the ultimate form. I also stated that the web of today's relationships which forms the basis of our modern division of labor is delicate. Break the spider's web and she must get out and spin it again. Even from the ashes of the deadest of cities, the Phoenix may rise.

There may be a period of very low tech life. There may be places and times where people decide that killing is the only option. There may be people who choose not to kill but who live terribly desparate lives, filled with hunger, cold and disease. But there will also be places where people work together and find a small way to improve their lot. I moved to the country because I think it is easier out here to keep ahead of more of the problems. But one thing we must remember is that even if 80% of the urban population dies, that still leaves a lot of city folk who made it. They will have stories of their own to tell. We might learn a lot about human nature (good and bad) to listen to those stories.

I completely agree that the combination of petroleum based agriculture, just in time manufacturing, highly linked electrical grids, massively leveraged derivatives markets, DJIA mania, fractional reserve banking, oblivious politicians, overly litigative lawyers (and to agree with Hal, nuclear armaments, terrorist interests, biological weapons) along with y2k create a recipe for disaster.

Hal forsees no recovery in the first 2 years. Russians thought that freedom and democracy and free trade would make things better. If you don't live in Moscow then 10 years later it is mostly worse. Rich Russians took their money and left or they bought monopolies at pennies on the dollar. Y2k leaves nowhere to go. Oddly enough, I think y2k will help Russia because the rich will go down again to the level of the poor. The little guys in Russia are afraid to start businesses because the crime bosses just suck them out.

Call me naive to say that America is a land which was built on trust and freedom to be an entrepreneur. A large number of would-be Americans died halfway across the Atlantic, others froze to death trying to reach California gold. Did this discourage the survivors?

There will obviously be no free lunch. Work or die will be the new motive for a while. But somewhere down the line, some guy is going to get a generator, find some fuel, and decide to show movies down at the Cinema. For the first week, free seats, then the next week a nickle each (second movie for free). His first 100 nickles were spent to buy another gallon of gas for the generator. As the months/years go by, the price he charges will be a good measure of the rate of recovery. By the time the city government has its act back together and they find out the real owner of the Cinema is dead and the Bank that held the mortgage went out of business, they will gladly transfer ownership of the building to the guy who started it up with his generator (that way they can collect taxes again). This is what I mean by capital still being in place. This great big Cinema with 8 separate Theatres today would be worth at least $1 million. In 2000, it might not be worth a buck but taking the risk to take charge of it could make the new owner rich down the road.

I read somewhere that there were 1 million members of Latin gangs in American cities (quite well organized and networked). But who changed the world more in the last 10 years, Bill Gates and his 5,000 programmers or the million members of the Latin Lords? Violence can hurt/kill. Violence can slow things down. Violence can destroy. But work done for the good of self and others builds. And the building grows again. Humans have a virtuous side. Country folk are god fearing and honest, but they do not have a monopoly on good citizenship. 99% of Americans are good honest folk out there trying to make an honest living, trying to give their kids a life, relying on eachother. Many of them will continue to be honest through the worst of situations.

In my opinion, one of the best ways to get shot in troubled times is to walk around with a gun. If an armed man arrives at my door and sees a gun in my hand, how much faster will he shoot.

I have lived long enough to say I have lived well. I have thought myself on deaths door once and said I was ready. I will not bow down to become violent, the angels will help me or they will have me. And I in these beliefs am not alone.

There will be a rebuilding time. We will return the dead buildings and roads back to life. We will light the cities again. We will invent. Much too much has been created to say it could ever all be destroyed. It will be a time of great joy as we all see the wonders of our society and our art returning.

Thom

-- Thom Gilligan (thomgill@eznet.net), August 19, 1999.

Thom .... I had No idea you had come this far. Thanks for setting ME straight. I had a whole different prospective of your rebuilding/using these 'physical assets' (i.e. like in a year) and I really thought one of your wires was crossed. With all that prep and work done, I wish you were one of my neighbors ! Keep writing. I may not agree with everything you write in the future, but as a great man once said , " I'll defend your right to say it to the death." Just one bit of advice ... Don't get old; It hurts ! Eagle

-- Hal Walker (e999eagle@freewwweb.com), August 19, 1999.

Hal,

I'm 70+ myself and getting older isn't as bad as the alternative.

Herb

-- Herb (Herb01@prodigy.net), August 20, 1999.

Sickness, Old Age, and Death are the three aspects of humanity which no culture has ever found a way past.

Hal, don't you think getting old would be easier if the young folk didn't seem so foolish?

-- Thom Gilligan (thomgill@eznet.net), August 20, 1999.

Thom,

Keep writing and thinking. What did you do before you retreated to the country?

Sincerely, Stan Faryna

-- Stan Faryna (info@giglobal.com), August 27, 1999.