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The Other Y2K Problem

December 16, 1999

While computer experts have frantically tried to update software to avoid
the dreaded Y2K glitch, and while others who are convinced the apocalypse is
upon us have headed to the hills, we should pause to remember that other Y2K
crisis that was supposed to have been upon us. According to former President
Jimmy Carter, the world was supposed to end in the next few weeks.

Few among us remember the Carter Administration's Global 2000 Report to the
President, prepared by the State Department and the Council on Environmental
Quality in 1980, with help from a gaggle of federal agencies like the
Environmental Protection Agency and the CIA. The report, like the
discredited Club of Rome's Limits to Growth report of 1972 and Robert
Heilbroner's 1974 An Inquiry into the Human Prospect, predicted mass
starvation, massive amounts of pollution, and increasing hunger and poverty
for all by the year 2000 unless "the nations of the world act decisively to
alter current trends."

"Decisive action," of course, was further government control of all
resources. In his farewell speech of January 15, 1981, Carter told the
nation, "If we do not act, the world of the year 2000 will be much less able
to sustain life than it is now." Defeated for re-election, Carter clearly
was miffed about not being able to carry out his statist agenda on energy,
the economy, and the environment.

Carter was not the only one who foresaw disaster without a healthy dose of
statism. Others believed Carter's plans were inadequate. The Washington
Post, in its review of Global 2000, declared "the report's projections
clearly err on the side of optimism.

Although the report's prediction of a global population of approximately six
billion people by 2000 was accurate, its assessment of the quality of life
that people would face clearly was not. For example, it absolutely missed
the boat when it came to predicting the future of oil markets.

Conventional wisdom in 1980 was that the world have suddenly entered into an
"Age of Scarcity," in which so-called cheap energy would have to give way to
current realities. During the 1990s, the report predicted that people would
see "rapidly increasing petroleum prices" that would hamper industrial growth
and lead to famine in the Third World.

The "futurists" could not even grasp the fact that the wide disruption in
oil markets during the 1970s was due more to the U.S. Government's ridiculous
controls on domestic crude oil and its politically charged distribution
system than any depletion of reserves. While economists recognize that any
age is an "age of scarcity," Americans faced shortages that were directly
caused by government interference into oil markets, not a new round of
scarcity.

A month after Carter delivered his "The End is Near" speech, President
Reagan lifted price controls from oil and allowed the free market in
oil to resume control of distribution. Within a couple years, oil prices
fell rapidly and even today they are far below the price levels of 1980.

Global 2000 and its companion publications managed to miss the mark on about
everything else as well. The world is less polluted than it was in 1980, and
the economies of many nations have improved substantially from their levels
of two decades ago. The mass starvation, economic chaos, poverty, and
environmental catastrophes predicted so confidently by the "experts" have
failed to come about in the way they said they would.

North Korea, the one
nation where mass starvation exists today, has actually been following the
Carter prescription of increasing the power of the state over the economy.

Faced with being discredited by their very words, one would think that the
apocalyptics would at least tread very lightly when it comes to making future
predictions, and would at least recognize the efficacy of free markets.
Unfortunately, that is not the case.

The most obvious example is the presidential candidacy of Vice President
Al Gore, who is actually running on a platform that if he is elected, he will
bring better weather to this country. The author of another discredited
apocalyptic book, Earth in the Balance, Gore has managed to convince millions
of Americans that once again the earth is on the verge of destruction unless
the state intervenes into free markets in a mighty way.

While one can argue that the leviathan state has continued to advance during
the last few decades, it is true that in some areas we saw something
resembling a decrease in state power. Thanks to deregulation of energy and
capital markets, we have seen a boom in high technology development.

Consumer choice has increased immensely, and the internet is further changing
the way we live for the better.
However, the persecution of Microsoft proves that politicians still can act
the part of the bull in the china shop without recrimination from voters.

Prosperity is a fragile thing. Despite the best efforts of government, we
are more prosperous today than we were in 1980.

However, politicians can wipe out many of those gains should voters allow
them to do so. It would be tragic if the "expert" predictions of doom were
to come to fruition because of those in government who ostensibly were trying
to prevent it.

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William Anderson teaches economics at North Greenville College.


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