The Book of the Week is “Father Son & Co., My Life at IBM and Beyond” by Thomas J. Watson Jr. and Peter Petre, published in 1990.
Curiously, the word “mainframe” never appeared in this volume. Not even once.
Born in 1914, Watson Jr. (hereinafter referred to as “Jr.”), who grew up in Short Hills, New Jersey, was the oldest of four siblings. His father (Watson Sr., hereinafter referred to as “Sr.”), who played well with others, executed a financial turnaround of Computing-Tabulating-Recording Company (renamed IBM in 1924).
Sr. instituted a corporate culture of “investiture socialization”– training, educating, and fostering cooperation among employees and rewarding them for performing well. They had air-conditioned offices and factories (rare for the 1930’s) in Endicott, in upstate New York. Their corporate campus afforded them the use of a country club that offered free concerts, a dining room, two golf courses, a shooting range, and library.
Top management encouraged even the lowest-level workers to make suggestions for improving working conditions. On one occasion, an anonymous complaint that reached Sr.’s desk alleged that a heating system in a plant was being renovated too early in spring, making the work environment freezing, and there was one toilet for fifty employees. Jr. was sent to personally investigate. He wrote that he began remedying the situation within one day.
The first half of the twentieth century is obviously a bygone era in employment. The non-union IBM was competing with other employers that provided labor-union: benefits, compensation and job security for their workers.
Sr. was practically the only corporate executive in America in the Depression years who agreed with FDR’s policies. One hard and fast rule under the “cult of personality” which Sr. developed, was that alcohol was prohibited in all IBM offices at all times, including lunchtime off-campus, and even special occasions.
IBM initially sold scales and meat slicers business-to-business, but switched to leasing of, and tech support for, electric typewriters and punch-card machines. That last product automated all accounting functions and processing of sales data.
In 1940, Sr. testified at a Congressional hearing on “technological unemployment”– the unfortunate, economically adverse situation in which people are thrown out of work when processes get automated. Sr. argued that his company was good for the economy, as it stimulated consumerism.
During WWII, IBM contracted with the War Department to manufacture machine guns, and keep tabs on a slew of battle-related statistics: “… bombing results, casualties, prisoners, displaced persons, and supplies.”
IBM found that the most cost-effective way to run its international business through its subsidiary, World Trade, was to assemble machine-parts in various countries so as to force interdependence among them and share the wealth. Immediately after WWII, though, there were disastrous financial losses in Europe especially, until infrastructure could be rebuilt.
By then, the company had about 22,000 employees, most of whom worshipped Sr. His photo hung on the walls of their offices. Nevertheless, at the time, he was smart enough to listen to IBM’s vice president of engineering. The latter was virtually the only manager who had the foresight to raise the alarm early, on the coming obsolescence of the medium of punch-cards, which took up scads of storage space but allowed instantaneous data-viewing. The technologically superior, compact medium of magnetic tape stored data which were invisible until viewed on a monitor. It was unclear how long the transition from punch-card to tape would take, but entrepreneurs were already making inroads on the extremely expensive experimentation required.
In the 1950’s, the U.S. government commissioned IBM and the Massachusetts Institute of Technology to do a joint defense project called SAGE. In 1957, the Soviets’ launch of Sputnik showed SAGE to be “… a costly fantasy, the SDI of its day. Before long, we found ourselves vastly overarmed, faced with the danger of mutual annihilation.”
In 1967, in the wake of racial tensions in America, IBM built a plant in the Bedford-Stuyvesant section of Brooklyn, New York City. It was part of a social program that was modestly successful; suggested by a task force comprised of white business leaders who assisted a black community board with economic development.
The author admitted that IBM had become a monopoly of sorts by the 1970’s. “The [anti-trust case against IBM] dragged on for twelve years, until the Reagan administration finally dropped it in 1981… the natural forces of technology etched away whatever monopoly we may have had.”
Read the book to learn about the role played by IBM with regard to other major negative and positive economic trends driving America over the course of more than half a century, plus more biographical information on the author and his family.
ENDNOTE: Alarmists on both sides of the economic spectrum shouldn’t have nearly as much fodder with which to propagandize, if they heed the lessons from this book, lessons that smack of deju vu all over again :
- Some people might say Moore’s Law has run its course in the United States (See the post, “Moore’s Law / Elon Musk”).
- Microsoft learned the most lucrative lessons from IBM in preparing its own legal defense against the Justice Department’s antitrust accusations.
- The national healthcare system of the United States can only improve in the coming decades– eliminating one major cost for employers that was seriously hampering their bottom line.
- The way IBM began to do business internationally decades ago, is still in existence. And
- supply and demand will compel Americans to find solutions to seemingly overwhelming problems, such as those relating to energy, environmentalism and education.
Of course, there will always be leaders who, grateful for term limits, lacking courage– adopt the attitude of the character Linus in the “Peanuts” comic strip: No problem is ever so big or so complicated that it can’t be run away from.