The U.S., in my own estimation, spent more than $300 billion to secure a smooth computer transition into 2000. My numbers are based on comparisons between Y2K fix-it costs that public corporations filed with the Securities and Exchange Commission and each firm's administrative and sales expenses. With financial data about such expenses available for 7,600 public corporations, you can come up with a more reliable approximation of Y2K costs than what you'll read or hear from consultants and government officials.

The question is whether that $300 billion-plus was a successful investment. Or, rather, was it money thrown at a problem under the hysterical conditions that one usually finds when paying ransom to rescue a kidnap victim?

The answer is important. Executives are now concerned with rationalizing their Y2K programs as prudent decisions. Shareholders will also soon ask what other large payments are looming ahead to obtain catastrophe-free computer services that their enterprises will need in order to function.

And the potential credibility of all computer executives could be at risk.

I consider the Y2K tab a monumental failure. It demonstrates how the leadership of our information-based society couldn't cope economically with computer-based risks. There's no such thing as a perfectly functioning, completely reliable computer system, and there never will be, especially as the complexity and interconnectivity of networked systems permeate everything. Of all the inherent risks that I can list, I rank the omission of two calendar digits among the least deadly. The issue is, what have we learned so that we can deal with the dangers that are yet to emerge, such as the perils from cyberterrorism and information warfare?

Our society knows how to cope with inherent risks that arise from technological progress. Steam boilers explode, trains derail, oil tankers spill their cargo, cars collide, buildings collapse and airplanes crash. Since hardly anyone can absorb what may appear to be a rare but huge loss, commerce has insurance.

The payment of an insurance premium allows businesses to share risks and submit to the judgment of expert risk assessors to come up with rational gambles about plausible hazards. In turn, the risk underwriters do their best to impose on society public standards, codes and tests that would minimize their own monetary losses.

In terms of dollar exposure, Y2K was initially believed to be riskier and more expensive than earthquakes or tornadoes. What, then, was the response from our executives?

Instead of following the proven pattern of reliance on codes, standards, tests, competitively priced premiums and cost/benefit analyses, management abandoned sound decision-making and chose to protect each firm as if it were a stand-alone fortress that had to depend on its own error-prone crews to achieve unprecedented levels of reliability.

Whipped into a spending frenzy by doomsday consultants, self-serving vendors and blame-dodging politicians, each organization went ahead with a program of trying to attain a zero-risk status against unpredictable "bugs." As any actuary would tell you, the price of achieving risk-free perfection against every conceivable and unknown danger is a huge multiple of what it would cost to insure against specific perils. It's the difference between the pooled costs of the risks from Y2K compared with each organization's payment of "protection money" for its own safety that is my measure of Y2K's excess costs.

If one assumes that Y2K was something like an insurable earthquake you could come up with the calculation that the U.S. recklessly overspent by about $150 billion by not pooling risks. Instead, every firm ended up self-insuring against every conceivable failure that may arise from a faulty calendar calculation. This proves to me that corporate executives didn't place any trust on the spreading of the risks by means of insurance premiums. I estimate that the penalty for pursuing such an approach was equal to at least one-third of the 1998 profits for public U.S. corporations.

I predict that this loss will come to haunt the credibility of all computer executives whenever they try to make a new case for spending that won't yield more profits.