IBM and the Holocaust: The Strategic Alliance Between Nazi Germany and America's Most Powerfulcorporation
by Edwin Black
A review by Jack Beatty
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
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
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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