THE DEMISE OF ENLIGHTENMENT HUMANISM, by Gary North

Fallen man wants to worship man by celebrating the works of man. Even covenant-keeping men have a tendency to fall back into forms of man-worship. In our day, humanism is the main rival to Christianity in the West. It comes in two forms: left-wing Enlightenment humanism and right-wing Enlightenment humanism. The adherents of the former have worshipped at the shrine of the State. The adherents of the latter have worshipped at the shrine of the free market and, every few years, take communion at the voting booth.

The USSR was the spiritual heir of the French Revolution. The grand experiment in left-wing Enlightenment humanism died abruptly on August 19–21, 1991, when the Soviet coup against Boris Yeltsin failed. Today, nobody with any influence calls himself a socialist. Marxism is today confined mainly to English departments in American universities, where is has been debauched by feminism and gay rights. The worship of the all-powerful centralized State has just about ended. Tree-hugging environmentalism and family-undermining State education are just about all that remains of the French Revolution – Rousseau’s legacy come to senility. The guillotine of economic reality has not yet chopped off this legacy’s head, but another crucial appendage is surely missing.

The other grand social experiment is right-wing Enlightenment humanism. It had no formal theology until the late eighteenth century. The worship of the free market and political democracy have been substituted for the worship of the State. But the free market is no more God than the State is.

What we learned in August of 1991 is just how fast a social system can collapse. We will learn this lesson again between 1999 and 2001. What free market humanism has promoted for four decades – computer programs with a destructive error built in – is about to receive its just reward.

All over the world, the computers on which modern civilization almost completely rests will soon begin shutting down or spewing out incorrect data. This may begin as early as April 1, 1998, when New York State’s budget rolls over into fiscal 1999. For decades, the entry 99 has been used by mainframe computer programmers to mean a host of things, including "end of run." When the computer reads 99 in the year slot, it follows the command that has been programmed into the software. On July 1, 1998, most of the other states will move into fiscal 99. It is possible that a state’s computer will shut down. If it does, there will be no way to get it going again. Checks will stop being written. The years of data inside it will no longer be available. If this does not happen in 1998, then it will happen in 1999, when fiscal year 2000 appears. Before January 1, 2000, the crisis will be upon us.

When states stop sending out checks, who will trust any public relations agent, in any organization, who tells the press, "This organization is on schedule for its year 2000 repair"? At present, there is no organization that is dependent on any mainframe computer using software written before 1996 that is year 2000-compliant. Nevertheless, every letter being sent out to those few people who have inquired about the year 2000 receives a standard form letter: "While we are not yet compliant, we fully expect to be compliant by December, 1998." My subscribers have been mailing out my recommended form letter asking the question, and they send me photocopies of the replies.

Why December, 1998? Because the corporate managers have been told that there must be a full year for testing. So, the managers simply instruct their computer department to finish by December, 1998. This is dutifully written down somewhere. The managers seriously believe that writing down a deadline date on a form will actually result in a completed project. They do not know that over 85% of all large-scale computer software design projects come in late. This is the largest software project in the history of computing.

They will not meet the deadline: not the 1998 deadline, the 1999 deadline, or the 2000 deadline. With each failure, the panic will spread: into management, where they will become liable to massive lawsuits; into the general public, whose jobs, retirement programs, and very lives are on the line; and most of all, into the ranks of the programmers, who alone have been invested with the authority to save this society from a massive breakdown.

When mainframe computer code writers are getting $200 per hour, and they decide that it is suicide to stay on the job in a city, where most of the large institutions are headquartered, they will begin seeking jobs in small towns with local public utilities. When they begin moving out of the city, the word will get out to the public. The crew is abandoning ship. That will be the signal to make a run for the lifeboats.

There are very few lifeboats, and they all cost money. They will cost far more money in 1999. The raises a key question: Where will people get the money?

Modern society relies almost completely on the means of payment. Remove it, and a high division of labor society turns into a low division of labor society. It is the division of labor that has made us the wealthiest society in history. The division of labor sustains life in the cities.

There are choke points in modern society: the banks. The banking system is a fractional reserve system. The banks have promised depositors that they can get their money out at any time. The bankers believe that, statistically, there will be offsetting deposits for the money withdrawn. Normally, there is. What we are going to see between now and the year 2000 will the most abnormal period in the history of the West since the bubonic plague of 1348–50. And, unlike that plague, this one is easily predictable. Yet I appear to be one of only a handful of people publicly predicting. The programmers are not historians and social commentators, and the commentators do not spend time monitoring the programmers’ mutual assistance forums on the World Wide Web. Managers exude optimism; programmers do not.

When money withdrawn exceeds money deposited, the banks are trapped. They have to stop lending out money. Worse; they have to start calling in loans. Companies that had operated in terms of readily available capital find that not only is fresh capital not being extended, the old bills are coming due. Where do they get the money to repay loans? From cash flow. They have to increase cash flow. So, they start cancelling uncompleted projects and firing people connected to these projects. These people stop depositing money in their banks. The domino effect begins.

But this domino effect will dwarf all others in history. Every depositor is threatened because the banking system as a whole is threatened. Citicorp, America’s largest bank, has 400 million lines of code; Chase Manhattan has 200 million lines. It took the Social Security Administration’s 400 programmers five years to go through and correct six million of its 30 million lines, as of June, 1996. Citicorp and Chase Manhattan began their code revision plans in 1995.

As for the Japanese banks – the world’s monster banks – nothing is public. But their programmers do not speak English that well, let alone COBOL, the primary mainframe computer language. There are comparatively few programmers in Japan, yet they use IBM computers. The world of high finance is heavily dependent on the deposits of capital by small Japanese investors, mostly housewives. When panic hits the average Japanese housewife, the fractional reserve banking game will at long last be over. When housewives begin demanding cash, the Japanese banks will collapse. Their collapse will bring down the international banking system, even without the Millennium Bug. The mere fear of the Bug will do the job.

Panic will spread to most bank depositors, no later than 1999. What rational person in 1999 will leave his money in a bank that he thinks could lose all of its data in 2000? Is it worth 3% or 4% to leave your savings in an institution that may shut its doors forever in 2000? No. That’s why the mother of all bank runs will begin in 1999, if not 1998. The fractional reserve banking system will topple. The 300-year-old experiment with central banking will at long last be brought to the moment of truth: a worldwide bank run.

Central banks will print up bales of paper money to help calm the depositors. Thus, two things will be happening at the same time: (1) a massive deflation in the capital markets – stocks, bonds, mutual funds, pension funds, and mortgages; (2) massive inflation in the consumer goods markets. As people begin to shift their portfolios from long-term credit to cash, all over the world and all at once, we will see the breakdown of the capital markets. When men become present-oriented, all markets that depend on future-orientation will collapse. This means virtually all organized markets. Any capital market that relies on banks or mainframe computers, you can kiss goodbye. Better to say goodbye soon, before the rush.

This is why geographical mobility will end for anyone who does not have gold and silver coins to exchange. The government-guaranteed 30-year home mortgage will soon be a thing of the past, as will those investment vehicles known as mortgage pools. Savings and loans will be long gone. The S&L crisis of the 1980’s will pale in comparison. Mortgages will then have to be issued by the seller. If there is no "owner financing," there will be no financing at all. This means that sellers will not be able to get cash. They will get only promises to pay. In a world of collapsing banks, what will a promise to pay be worth?

Why would a home owner in a rural area sell his property? That will be the kind of property everyone wants. For someone who owns in nice, clean, middle-class home in the country, he will find himself confronted with very rich people begging to buy. Yet he will not be in the mood to sell. For a safe home in a rural area, there will not be enough gold in most people’s possession to buy a property. No one will want to buy an urban property; no one will want to sell a rural property.

Geographical mobility in the modern world is funded by huge pools of low-interest, long-term credit. That environment will cease to exist in 1999.

Similar corporate sins bring on similar corporate negative sanctions from God. Modern man does not believe this. Neither did ancient man. "For as in the days that were before the flood they were eating and drinking, marrying and giving in marriage, until the day that Noe entered into the ark, And knew not until the flood came, and took them all away; so shall also the coming of the Son of man be" (Matt. 24:38–39).

I suppose that the local skeptics had a field day at Noah’s expense. "Hey, Noah, that’s a pretty big building you’ve got there. Too bad nobody ever comes to visit!" Noah must have looked foolish. But he kept building. He knew that the environment would change dramatically. He also knew when: 120 years after God’s first call (Gen. 6:3). We do not have 120 years to prepare. But we have been given a deadline: January 1, 2000. Between now and late 1998, we will see who believes in it enough to take effective action.

Will churches and Christians be ready to extend hope and aid to the fearful in the looming day of corporate judgment? How local churches perform over the next five years will establish the Church’s reputation for the next two or three centuries.

Copyright 1997, Institute for Christian Economics

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