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Computing the American Way: Contextualizing the Early US Computer Industry
April-June 2010 (vol. 32 no. 2)
pp. 8-20
Thomas Haigh, University of Wisconsin, Milwaukee

Drawing on work from business, social, and labor history, this article reinterprets the early domestic US computer industry in its broader economic and political context. Contrary to popular imagination, the early computer industry emerges as one devoted primarily to government business, liberal in its political leanings, and with a paternalist corporate culture profoundly shaped by the threat of unionization.

1. , Two firms founded in 1957 did achieve real success in the computer industry by the end of the 1960s: DEC and CDC. Rather than compete head to head with the strengths of IBM and other entrenched firms, they targeted the opposite extremes of computer power, creating the minicomputer and supercomputer markets, respectively.
2. J. Cortada, Before the Computer: IBM, Burroughs and Remington Rand and the Industry they Created, 1865–1956, Princeton Univ. Press, 1993. The IBM story has been told in shelves of books, although these tend to recycle the same anecdotes and to focus on the outsized personalities at the top of the firm. We know much less about the experiences of mid- and low-level employees. The first few years of Univac have been addressed by several historians, but we know little of its development after the mid-1950s. NCR has received some analysis as a pioneer of welfare capitalism, and the managerial and technical woes of General Electric's computer division are chronicled in a number of memoirs. Material on the others is still patchy.
3. A firsthand account of NCR during this era, from its future chairman, is given in S.C. Allyn, My Half Century at NCR, McGraw-Hill, 1967.
4. The best history of the early human resources movement and the bureaucratization of personnel management is S.M. Jacoby, Employing Bureaucracy: Managers, Unions and the Transformation of Work in American Industry, 1900–45, Columbia Univ. Press, 1985. An overview of welfare capitalism is presented in S.D. Brandes, American Welfare Capitalism, 1880–1940, Univ. of Chicago Press, 1976.
5. E.H. Brown, "Welfare Capitalism and Documentary Photography: N.C.R. and the Visual Production of a Global Model Factory," History of Photography, vol. 32, no. 2, 2008, pp. 137–151.
6. Watson was also inspired by a local shoe company. Endicott-Johnson was a famously progressive firm, building municipal buildings, a gold course, and sports facilities for the town and providing health and other benefits to workers. G. Zahavi, "Negotiated Loyalty: Welfare Capitalism and the Shoeworkers of Endicott Johnson, 1920–1940," J. American History, vol. 70, no. 3, 1983, pp. 602–620. According to Watson Jr., its founder, George F. Johnson was a major influence on his father. T. Watson Jr., and P. Petre, Father, Son & Co: My Life at IBM and Beyond, Bantam, 1990, p. 67. An account of their relationship is given in W. Rodgers, Think: A Biography of the Watsons and IBM, Stein and Day, 1969, 71–73.
7. T. Watson Jr., A Business and Its Beliefs: The Ideas that Helped Build IBM, McGraw-Hill, 1962.
8. T.G. Bedlen and M.R. Bedlen, The Lengthening Shadow: The Life of Thomas J. Watson, Little, Brown and Company, 1962, p. 151.
9. A. El-Sawad and M. Korczynski, "Management and Music: The Exceptional Case of the IBM Songbook," Group and Organization Management, vol. 32, no. 1, 2007, pp. 79–108.
10. Rodgers, Think, p. 106.
11. Watson and Petre, Father, Son & Co, p. 147.
12. Bedlen and Bedlen, The Lengthening Shadow, pp. 185–189.
13. Watson and Petre, Father, Son & Co, pp. 44–45.
14. Bedlen and Bedlen, The Lengthening Shadow, pp. 150–154.
15. D.L. Stebenne, "IBM's 'New Deal': Employment Policies of the International Business Machines Corporation, 1933–1956," J. Historical Soc., vol. 5, no. 1, 2005, pp. 47–77.
16. R. Sobel, IBM: Colossus in Transition, Times Books, 1981, 85.
17. Sobel, IBM, p. 86.
18. See L. Heide, Punched-Card Systems and the Early Information Explosion, 1880–1945, Johns Hopkins Univ. Press, 2009, pp. 211–221.
19. Watson and Petre, Father, Son & Co, p. 46. Watson was already the highest-paid man in America in 1934 when figures were first gathered, but this was not disclosed until 1936. Rodgers, Think, p. 127.
20. Annual figures on IBM income, net profit, and sales revenues are from Cortada, Before the Computer, p. 152. Cortada identifies "select sale revenues" but does not explain what this means.
21. A detailed discussion of the role of the War Production Board in coordinating wartime production of office machines is given in Cortada, Before the Computer, pp. 193–199.
22. E.W. Pugh, Building IBM: Shaping an Industry and Its Technologies, MIT Press, 1994, pp. 90–107, is by far the most complete published summary of IBM's work during the war.
23. Rodgers, Think, p. 150.
24. A complete annual summary of IBM's revenues is compiled in Pugh, Building IBM, pp. 323–324.
25. S. Jacoby, Modern Manors: Welfare Capitalism Since the New Deal, Princeton Univ. Press, 1997, p. 6.
26. E. Fones-Wolf, "Industrial Recreation, the Second World War, and the Revival of Welfare Capitalism, 1934–60," Business History Rev., vol. 10, no. 2, 1986, pp. 234–258.
27. Watson and Petre Father, Son & Co, p. 82.
28. Rodgers, Think, p. 226.
29. Watson, , A Business and its Beliefs, p. 20.
30. Rodgers, Think, p. 9.
31. N. Foy, The IBM World, Eyre Methuen, 1974, p. 84.
32. Watson accepted a decoration from Hitler in 1937, returning the medal only after the outbreak of war in Europe. Rodgers, Think, pp. 121–127. IBM's trade with Germany in the Nazi era has been the topic of considerable controversy, most notably with the publication of the popular polemic E. Black, IBM and the Holocaust, Crown, 2001. Watson's 1937 call for closer ties with the USSR accompanied the restoration of diplomatic relations between the two nations. Rodgers, Think, p. 109.
33. Sobel, IBM, pp. 184–185. The figure on total revenue is from Pugh, Building IBM, p. 323.
34. Watson and Petre, Father, Son & Co, p. 162.
35. R.S. Tedlow, The Watson Dynasty: The Fiery Reign and Troubled Legacy of IBM's Founding Father and Son, Harper Business, 2003, p. 187.
36. Cortada, Before the Computer, p. 229.
37. Foy, The IBM World, p. 55.
38. Allyn, My Half Century at NCR, p. 109.
39. S. Fraser and G. Gerstle, The Rise and Fall of the New Deal Order, Princeton Univ. Press, 1989.
40. T.P. Hughes, Rescuing Prometheus, Pantheon Books, 1998.
41. D.D. Eisenhower Eisenhower's Farewell Address, January 17 Eisenhower Nat'l Memorial, 1961; at 19610117%20farewell%20address.htm.
42. Bedlen and Bedlen, The Lengthening Shadow, front matter.
43. R. Griffith, "Dwight D. Eisenhower and the Corporate Commonwealth," American Historical Rev., vol. 87, no. 1, 1982, pp. 87–122, 100.
44. Griffith, "Dwight D. Eisenhower and the Corporate Commonwealth," p. 88.
45. Watson and Petre, Father, Son & Co, p. 163.
46. Rodgers, Think, pp. 204–208.
47. L. Galambos and J. Pratt, The Rise of the Corporate Commonwealth: United States Business and Public Policy in the 20th Century, Basic Books, 1987.
48. L. Galambos, "The Emerging Organizational Synthesis in Modern American History," Business History Rev., vol. 44, no. 3, 1970, pp. 279–290.
49. Watson and Petre, Father, Son & Co, pp. 234–238. Watson mentions having early, private outrage over McCarthy, expressed initially in small groups and later in a public address. Internal chronology suggests that this took place after McCarthy was humiliated during televised hearings with the famous question "Have you no sense of decency?" and after journalist Edward R. Murrow denounced McCarthy on television. Watson himself suggests that, while "many prominent people" had already criticized McCarthy, his remarks retained the power to shock the conservative business audience in Indiana to which he delivered them.
50. According to Pugh, IBM's official decision to proceed with the IBM 701 stemmed from Watson Sr.'s suggestion that IBM create a new division to provide specialized defense products on the outbreak of the Korean war. Pugh, Building IBM, pp. 167–172.
51. H.R. Keith, "Letter to R E Clement, October 27, 1952," Cuthbert C. Hurd Papers, CBI 95, Charles Babbage Inst.
52. This topic is explored with some thoroughness in K. Flamm, Creating the Computer: Government, Industry, and High Technology, Brookings Institution, 1988.
53. Pugh, Building IBM, p. 161.
54. The story of SAGE is told from a technical perspective in K. Redmond and T. Smith, From WHIRLWIND to MITRE: The R&D Story of the SAGE Air Defense Computer, MIT Press, 2000, and from a cultural and political one in P. Edwards, The Closed World: Computers and the Politics of Discourse in Cold War America, MIT Press, 1996, chapt. 3.
55. Pugh, Building IBM, p. 219. The figure should be read carefully, as IBM was paid up front for the AN/FSQ-7s whereas investment in developing and manufacturing machines for its regular product line was recouped via lease payments spread over a number of years. Still, the military revenues were certainly invaluable in underwriting its entry into the computer business, especially given Watson Sr.'s deep aversion to incurring corporate debt.
56. Pugh, Building IBM, p. 326.
57. The story appears prominently in most company histories and is well told by Watson himself in Watson and Petre, Father, Son & Co.
58. Watson, A Business and Its Beliefs, p. 67.
59. D.M. Hart, "Red, White, and 'Big Blue': IBM and the Business-Government Interface in the United States, 1956–2000," Enterprise and Soc., vol. 8, no. 1, 2007, pp. 1–34.
60. In fact, GE ultimately failed in the computer business, and accounts by former members of its computer division invariably single out the firm's repeated installation of managers with no understanding of the computer industry as the primary reason.
61. A.D. Chandler, Jr., Strategy and Structure: Chapters in the History of the American Industrial Enterprise, MIT Press, 1962.
62. Allyn, My Half Century at NCR, p. 138.
63. A.K. Watson, "Major World Issues," Ideas for Management: 14th Int'l Systems Meeting, anonymous, ed., Systems and Procedures Assoc., 1961, pp. 1–3.
64. On the end of Dick Watson's career, see Tedlow, The Watson Dynasty, pp. 230-258.
65. Foy, The IBM World, pp. 166–167.
66. Foy, The IBM World, p. 4.
67. Foy, The IBM World, p. 117.
68. Foy, The IBM World, p. 187.
69. Norris is profiled in P. Eckstein, "Biographies: William Charles ('Bill') Norris," IEEE Annals of the History of Computing, vol. 29, no. 2, 2007, pp. 80–86.

Index Terms:
History of computing, IBM, Cold War, Americanization, welfare capitalism, New Deal Order, Thomas J. Watson
Thomas Haigh, "Computing the American Way: Contextualizing the Early US Computer Industry," IEEE Annals of the History of Computing, vol. 32, no. 2, pp. 8-20, April-June 2010, doi:10.1109/MAHC.2010.33
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