Ibm and the Holocaust : the Strategic Alliance Between Nazi Germany and America's Most Powerful Corporation (01 Edition)

A shocking account of IBM's complicity with the Nazis is a reminder that people bear moral responsibility for the actions of the corporation – a point that critics have failed to grasp.

You are Thomas Watson, the founder of IBM, and you face a choice. Hitler has just come to power in Germany, and you are considering whether to direct your German subsidiary, Dehomag, to bid for the job of tabulating the results of a census the Nazi government wants to conduct. While you are making up your mind in your New York office, the local papers swell with stories of anti-Semitic outrages committed by that government. On March 18, 1933, The New York Times reports that the Nazis have ousted all Jewish professionals – lawyers, doctors, teachers – from their jobs. A front-page story under the headline "German Fugitives Tell of Atrocities at Hands of Nazis" describes Brown Shirts dragging Jews out of a Berlin restaurant and forcing them to run a gauntlet of kicks and blows such that the face of the last man through "resembled a beefsteak." Other stories tell of Jews being forced to clean the streets with toothbrushes, of book burnings, of 10,000 refugees fleeing Germany, and of 30,000 people – Jews, political prisoners, gays, and others – imprisoned in concentration camps. On March 27, virtually outside your window on Broadway, a crowd of more than 50,000 at a Madison Square Garden mass rally demands that American firms boycott Nazi Germany. In these circumstances, with this knowledge, will you, Thomas Watson, bid for the census contract?

You are Thomas Watson, it is 1937, and you must know that the census and other work your German branch has performed for the Nazis has been used not just to count cars and cows but to identify Jews. Perhaps you have even read the comment of a Nazi statistician that "In using statistics the government now has the road map to switch from knowledge to deeds." You have visited Germany; you were in Berlin in July, 1935, when Black Shirts rampaged through the streets smashing the windows of Jewish stores, and forcing your friends, the Wertheims, to sell their department store for "next to nothing" and escape to Sweden. You have seen the broken windows, you have taken tea with a German official at a fine home that he told you was once the property of a Jew who had fled Germany, and now, in recognition of your services to the Third Reich, Hitler wants to give you a medal. Will you accept it?

You are Thomas Watson, it is 1940, and Hitler has invaded France. Now comes another choice: executives of your German subsidiary want you to sell out to German principals. With Hitler moving to occupy all of Europe, this is a chance for a clean break. True, the United States is not yet in the war, but Hitler's bombs are falling on London. Disengagement would be politic. Will you sell out or fight to hold on to Dehomag?

Thomas Watson chose to tabulate the Nazi census, to accept Hitler's medal, and to fight for control of Dehomag. And he made other equally indefensible choices in his years of doing a profitable business counting Jews for Hitler – choices that are described in IBM and the Holocaust by Edwin Black. This is a shocking book, even if its subtitle, "The Strategic Alliance Between Nazi Germany and America's Most Powerful Corporation," is hyperbolic and misleading. (IBM was hardly America's most powerful company in the 1930s and 1940s; General Motors was, and it too did business with the Third Reich, though you could be forgiven for getting the impression from Mr. Black that IBM was alone in this unrighteous commerce.) IBM was a New Deal company that famously strove to avoid laying off its work force during the Depression. Watson was a friend of President and Mrs. Roosevelt's. IBM helped crack the German intelligence code. It had a good war. Yet, with the help of more than a hundred researchers working in archives in the U.S., Britain, Germany, France, and Israel, Edwin Black has documented a sordid relationship between this great American company and the Third Reich, one that extended into the war years.

The Holocaust, Black stipulates, would have occurred with or without the Hollerith tabulating machines and punch cards IBM/Dehomag leased to the Nazis. But he raises the important if ultimately unanswerable question of whether Hitler's destruction of the Jews would have happened as rapidly and claimed as many victims without the harvest of deadly information recorded by the Hollerith machines, on IBM punch cards, by IBM/Dehomag employees working for the Nazi death bureaucracy.

On the efficiency question, he provocatively contrasts Holland and France. The Nazis ordered censuses in both countries soon after they were occupied. In Holland, a country with "a well-entrenched Hollerith infrastructure," out of "an estimated 140,000 Dutch Jews, more than 107,000 were deported, and of those 102,000 were murdered – a death ratio of approximately 73 percent." In France, where the "punch card infrastructure was in complete disarray," of the estimated 300,000 to 350,000 Jews in both German-occupied and Vichy zones, 85,000 were deported, of whom around 3,000 survived. "The death ratio for France was approximately 25 percent."

Black gives evidence to qualify the implied claim that the Hollerith technology made the decisive difference. In Holland the Nazis installed a zealous bureaucrat to take the census. France had a moral hero in charge who frustrated German efforts to find Jews – and paid with his life. Holland had a long and innocent tradition of recording religion on all manner of official documents. France "lacked a tradition of census taking that identified religion." The historian has to provide the material to unmake his case in order to be true to the shagginess of history. In this example, Black passes the test of historical candor. His passion (his parents are Holocaust survivors) overmasters him elsewhere, however, and rhetorical claims – "eventually, every Nazi combat order, bullet and troop movement was tracked on an IBM punch card system" – leave him open to critics like the one writing in The New York Times who complained that Black "often tells his story not in the subtle hues of scholarship but in the Day-Glo paint of the potboiler."

I have read four other negative reviews of this book, and they all share what to me is a surprising feature: they are more critical of Edwin Black (with The Times pointing out that he has written for Redbook magazine and another reviewer that he is not a college graduate) who wrote a book, than of Thomas Watson, who made the damnable choices recorded in that book. And several of the reviews reveal depressingly low expectations of the corporation. In Business Week Peter Hayes, a Holocaust historian, calls the book a "deplorable publication" and musters several arguments against it, of which I will mention only one. "Unless Watson was prepared to write off his assets in Germany," Hayes writes, "in which case his operation would remain there for Hitler to exploit," he had no choice but to do business with the Nazis, and even to accept Hitler's medal, to stay on their good side. But, according to Black, "Holleriths could not function without IBM's unique paper. Watson controlled the paper.... Holleriths could not function without cards. Watson controlled the cards.... Hollerith systems could not function without machines and spare parts. Watson controlled the machines and spare parts." That passage refers to the situation in 1940, when the Nazis had long since become dependent on their single-source supplier. Perhaps Hitler could have taken over Watson's "operation" years earlier. And suppose Hitler had, shouldn't Watson have been willing to write his assets off? He could have justified that step to his stockholders on the strongest moral grounds in all history. And remember: he was not selling widgets to the Nazis but a product that could patently further the proclaimed racialist aims of the regime (The Times ran anti-Semitic selections from Mein Kampf on its front page within months of Hitler's taking control of the government). That information is power was and remains the theory of IBM's business. Black's question "How did they get the names?" indicates the maleficent use to which the power of information was put.

Writing in The Wall Street Journal, my friend Geoffrey Wheatcroft, the author of The Controversy of Zion, advances an exculpatory logic one can readily imagine Watson himself hiding behind. "The capitalist free market is indeed amoral," he writes. "It is an efficient system for investment and production but cannot achieve moral aims itself. In this it resembles its physical technology. A hypodermic syringe can be used to inject cyanide or penicillin. It is not an independent moral agent." But prior to the market is the corporation, led by human beings who cannot escape responsibility for its actions. Prior to technology are the "independent moral agents" who made it – syringes and tabulating machines don't drop from heaven. And prior to the corporation – to continue our movement away from the market to the persons seeking to enter it – are the owners, the stockholders. Black says not a word about IBM's stockholders, who bear a diffuse yet inescapable responsibility for what Thomas Watson did in their name. There is a kind of market determinism in the air, which easily meshes with the techno-determinism of unconsidered speech, a tendency to treat the Market as the Marxists treat History – as a force overriding human choice and responsibility. There is no such thing as "business ethics," Peter Drucker has pertinently observed, only ethics.

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