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Hitler And IBM
DID A COMPANY AND A MACHINE SPAWN EVIL?
July/August 2001 | Volume 52, Issue 5
Did International Business Machines, a giant of information technology long before there were computers, have a “conscious involvement —directly and through its subsidiaries—in the Holocaust, as well as... in the Nazi war machine that murdered millions of others throughout Europe"? That’s the message of the bestselling book IBM and the Holocaust , by a journalist and son of Holocaust survivors named Edwin Black. The volume’s subtitle, The Strategic Alliance Between Nazi Germany and America’s Most Powerful Corporation , signals both the enormity of the crime the author alleges (that’s a strategic alliance with Nazis) and, unfortunately, the hyperbolic overreaching with which he sometimes prosecutes his case (“America’s most powerful corporation”? Its sales in 1940 were roughly 1/150 of General Motors’).
The book was published in February —within days, as it happened, of the launching of a Holocaust survivors’ lawsuit against IBM that has since been dropped—and ignited instant controversy. In the book, Black takes on not just IBM itself but also its legendary founder and longtime chairman, Thomas J. Watson, Sr., who Black says “admired the whole concept of Fascism” and engaged in “micromanagement from afar” as “IBM placed its technology at the disposal of Hitler’s program of Jewish destruction and territorial domination.” How true is this? Despite the book’s 520 pages and eight years in the making, the evidence never quite adds up.
Black tells the story beginning with Herman Hollerith’s invention of a punchcard tabulating machine for use in the 1890 census; Hollerith’s technology would later found the business that under Watson would grow into IBM. Hollerith was born in Buffalo, New York, but Black sets an insinuating tone early by writing, “IBM was born German.” The evidence: Hollerith was “the son of intellectual German parents"; he borrowed money from a German friend; he showed his tabulator to “European governments, including Germany and Italy”; he “was said to cherish three things: his German heritage, his privacy, and his cat Bismarck”; and he “went out of his way to sail... on German vessels.”
Watson comes into the story in 1914, as “one of America’s up-and-coming business scoundrels” whose technique was to “vanquish all in his way, and then demand the spoils.” In Black’s telling, Watson built an IBM whose corporate culture “swirled around the irresistible magnetism, the intoxicating command, the charismatic cultic control of one man, Thomas J. Watson, the Leader .”
In 1910 Hollerith licensed his patents in Germany to an adding-machine salesman named Willy Heidinger, who founded Deutsche Hollerith Maschinen Gesellschaft, or Dehomag for short, to use those patents. After World War I, Dehomag was going bankrupt, so Watson, now in charge of what was becoming IBM, bought it out, leaving Heidinger with just 10 percent ownership. Heidinger deeply resented this outcome, and his relations with Watson were stormy from then on. Dehomag, like IBM, owned and leased all its machines, customizing them for specific tasks, so its employees always knew what they were being used for. In Germany as elsewhere that mainly meant business tabulations for companies and censuses for the government.
Not long after Hitler came to power, Dehomag provided technology for the 1933 census. Black makes much of the fact that the census identified citizens as Protestant, Catholic, or Jewish—while acknowledging that censuses in Germany had long asked questions of religious affiliation. Of course, no one could know then the horrific use to which Hitler would ultimately put his knowledge of who was a Jew, but the Nazis’ persecutions and the evidence of worse to come grew steadily more plain.
So did IBM’s difficulties with its subsidiary. Heidinger battled New York constantly, and as Nazi control and restriction of businesses grew, he insisted that his company was pure German and free from foreign influence. By 1935 it was virtually impossible to remove profits from Germany, and by 1936 Dehomag was wholly German-owned—on paper. Black spends many pages showing the contortions IBM went through to hold onto its subsidiary, mainly by working out royalty and loan arrangements to substitute for straightforward ownership and by maintaining financial ties through its Geneva office. And the parent firm certainly did nothing to circumscribe Dehomag’s operations. In fact, Watson held far too long to a belief that a prosperous Germany would avoid war, and that thus trade should be kept flowing openly. In 1937 he said, “As soon as we can have the proper flow of trade both ways across the border, there will not be any need for soldiers crossing those boundaries.”
Later that year, he actually accepted a medal from Hitler—the highest decoration given to a non-German, the Merit Cross of the German Eagle With Star. Black portrays the award as bestowed for, among other things, Watson’s “Promethean gift of punch-card technology that enabled the Reich to achieve undreamed-of efficiencies both in its rearmament program and its war against the Jews.” But by then, Watson’s open involvement in Dehomag had been cut off by the Nazis, who were increasingly suspicious of any American presence in the firm, and he was visiting Berlin solely as the head of an International Chamber of Commerce convention.