Review -- IBM and the Holocaust
Business is its Middle Name
By Dr. Robert Urekew, University of Louisville
IBM and the Holocaust began with a tour of the United States Holocaust Memorial Museum in 1993. The first exhibit was a Hollerith punch-card sorting machine bearing an IBM logo plate. The author, Edwin Black, leading his Holocaust survivor parents on a tour of the Museum, resolved to find out why that machine was there. How, he asks, did the Nazi identify victims like his parents? After an exhaustive study, he concludes that IBM made the process of identifying Jews easier and more efficient by means of the technology it eagerly provided for the Nazi regime. Plus, the same technology was used to trace ancestry, confiscate assets, make ghettoization and deportation efficient, and even run the trains on time.
Black's book is shocking. It's contents go against the grain of all that is dear to naive images of corporate America. Did IBM in New York really know what it was doing? Is this book objective? Is its research accurate? The book was obviously not welcome at IBM. The author testifies that the corporation placed obstacles to his research. Why?
It is common knowledge that the inmates of Auschwitz were tattooed with an identification number on their forearm. What is not so widely known is that these numbers initially for a brief time--corresponded to the IBM punch-card system. In other words, the tattooed numbers were IBM-compatible. According to Black, even though the numbers were issued sequentially in the camp as, for example, 1001, 1002 and 1003, they were probably recorded in the Holleriths of the SS Economics Administration as 001001, 001002, 001003. The SS Economics Administration coded Auschwitz itself was not 1 but 001.
Hollerith systems in the camps employed any or all of three components: codeable paper forms, punch cards and/or machines. The Hollerith Department varied from camp to camp and year to year. The forms used in the camps to identify and track prisoners and forced laborers were co-designed by IBM staffers specifically for that purpose. IBM and the Holocaust reveals for the first time that code 6 was Sonderbehandlung, the Nazi term for extermination.
Black's unflattering history of Thomas J. Watson and IBM clearly traces the corporation's takeover of its German importing agency, Dehomag, during the Weimar's Republic's hyperinflation. Dehomag was an acronym representing Deutsche Hollerith Maschinen Gesellschaft. IBM New York owned all of the stock of Dehomag (except for some profit- sharing for its German managers), and thus clearly controlled the operations in Germany.
Once Hitler rose to power, Nazi Germany would become second only to the United States as IBM's best customer. One of the first challenges of the new Nazi government was the rapid and accurate identification of the Jews. IBM, "the solutions people," stepped forward to provide the means. Black documents how Watson closely supervised this operation, not wanting any mistakes in this prosperous relationship. Watson dispatched census specialists from New York, such as Eugene Hartley. Watson even stood in the Berlin census bureau at a celebration of the statistic feat. He could not have been unaware of the New York Times' substantial and continual reporting of Hitler's intentions regarding the Jews. Watson enjoyed his visits to his most profitable overseas subsidiary Germany, and indeed traveled there several times each year during the 30's. He had an opportunity not only to read what the world was reading, but to examine conditions personally.
IBM also helped make the German war machine most efficient. The armed forces, the railroads and war production departments were automated by IBM punch-cards and sorting machines. The company flourished in Hitler's Germany because of Watson's adherence to the maxim: "Know your customers, anticipate their needs." He went to Germany in 1935 to celebrate the 25th anniversary of Dehomag. In his capacity as president of the International Chamber of Commerce, Watson chose Berlin as the site for the 1937 meeting of the ICC, and constantly encouraged other captains of industry worldwide to trade with Germany. In 1937, in recognition of Watson's value to the Third Reich, Adolf Hitler created a special medal, the Merit Cross of the German Eagle with Star, and bestowed it on Thomas Watson. It was the highest honor that could be given to a non-German. Hitler honored Watson partly in gratitude for his selection of Germany, which had become more and more isolated because of its racial and militaristic policies, as the venue for this prestigious world trade conference. Watson was clearly a friend of Nazi Germany.
In a telegram to Hitler, Watson thanked him for the medal, and promised to do everything in his power to further the best of relationships between America and Germany. It was, after all, in both of their best interests.
With the advent of war, Watson and IBM directed Dehomag though agents in Switzerland, and established additional subsidiaries right along with the Nazi conquest of Europe. The Jews elsewhere in Europe were poised to be identified, counted, and eliminated, thanks to the technology of IBM; where they had already been identified by paper and pencil methods, the Holleriths would quantify and organize their destinies through special program custom designed by IBM.
Black displays and documents the contradictions between Watson's public pronouncements and his private actions. For example, Watson was outwardly a proponent of peace, and constantly chanted his mantra: "World peace through world trade." Yet at the same time, he was revolutionizing warfare for the Third Reich, deploying his cards and machines to promote efficiency in all aspects of the military, from troop dispositions to armaments production. IBM, insists Black, brought modern warfare into the information age.
Black's documentation constructs an undeniable fact: after the outbreak of hostilities, IBM=AFeither in New York or via Geneva--knew where each of its leased (not sold) machines were operating in Germany and the conquered countries, and what kind of revenues it could expect from each machine. Each machine was insured. Each machine was serviced on site, often monthly. War was just another financial opportunity for Watson and IBM. Watson did not publicly condemn Hitler or Germany for its aggression. But when faced with mounting public outrage over the invasion of Western Europe, in 1940 Watson reluctantly returned his medal to Hitler. This was perceived as an insult in Germany, and, in Black's words, "all hell broke loose" in Dehomag.
The German managers of IBM wished to sever ties with IBM-New York. Watson vigorously fought to maintain control, using German corporate law to his advantage. The fight was bitter, precisely because IBM's technology was the centerpiece of the automation of the German war effort and the operations of the Nazi party. Germany had become dependent upon IBM New York's vast knowledge, technology and financial support. It would have taken years for Germany to wean itself away from IBM's systems, and Watson knew this very well. This information appears in a critical chapter in the book.
Most readers will probably approach Black's book with the assumption that IBM's operations in Germany at the outbreak of the War were nationalized by the totalitarian Nazi government. But the book shows that Watson was not about to let this happen. He struggled to maintain control using every means available to him, including his powerful political connections. Watson was acutely aware of the economic value of his investment in the Third Reich. Even if America entered the war against Germany, which he fully expected, Watson so arranged the power structures of his multinational corporation that IBM New York would always remain in control of its German "enterprise."
Although many readers will struggle with Black's panoply of documentation, it becomes clear that IBM was so deeply entrenched in Germany that its biggest fear was not being dislodged from the Axis powers, but rather that its profits might be diminished.
Eventually, American law would prohibit any financial transaction with Nazi Germany, without special permission of the Treasury Department. Watson and IBM New York were faced with a challenge. It was not patriotism or loyalty or concerns about genocide. The challenge was how to get around this restriction on income derived from commerce with the Third Reich. Here Black documents with great detail the intrigues Watson employed to evade these restrictions. More and more, it becomes evident that the main watchword of the IBM was "Profit at any Price." Milton Friedman is famous for saying that the only social responsibility of a corporation is to maximize profits. Friedman however, adds the proviso that this must be accomplished without fraud or deception. IBM apparently did not recognize that restriction.
In spite of Watson's enormous popularity in the United States, the IBM corporation came under the scrutiny of the "Economic Warfare Sector" of the Department of Justice. This organization investigated and exposed American firms which did business with Nazi Germany during the War. By means of Watson's political connections and outright deceptions, Black shows how IBM evaded any of the sanctions that were applied to other American corporations accused of profiting from and abetting the German war effort.
It was common knowledge throughout the world that the Nazi regime was bent on genocide. The Allies declared at the end of 1942 that there would be "war crimes" trials for those who had cooperated with the Nazis and their goals of domination and extermination. IBM ignored this warning. Its activities were never concerned with patriotism or anti-Semitism. "It was always about the money," insists Black.
As soon as WWII ended in Europe, IBM rushed in to recover its leased machines and its bank accounts. These machines and accounts were scattered everywhere, from Belgium to Bulgaria. During the war, Black shows that Watson's prime directive to his IBM subsidiaries in Europe was, in effect, "Don't ask-don't tell." He did not wish to be officially informed about the uses of his machines, nor did he wish to be approached for approval of any use. In this way, he insulated himself and IBM New York from the grim applications of his data processing technology. In spite of this directive, and perhaps because of it, it was business as usual for IBM in Europe during the war.
The occupying forces realized that IBM technology was essential to the Third Reich. They acknowledged that the punch-card machines and their data was of the utmost importance as it was the means by which the Germans controlled and shifted manpower. In turn, the Allies would use these machines and data in order to make their own occupation more efficient. Because Holleriths were so useful, these IBM machines were not seen by the occupying powers as evidence of crimes against humanity, but rather as essential components of an effective occupation and the implementation of the Marshall Plan. In this way, any accusation of complicity in war crimes against the IBM corporation was quietly deflected. IBM evaded any hint of responsibility for wartime reparations.
The evidence for all this is, of course, circumstantial. There is no smoking gun. Nevertheless, Edwin Black has amassed a formidable mountain of coherent evidence that argues convincingly for IBM's complicity in the Holocaust. This book will be a case study in corporate ethics for years to come.
More than 15 million people have visited the Holocaust Museum and seen the IBM machine there. Surely some have raised the question: How could this prestigious corporation possibly be linked to such a heinous stain on human history? With empirical evidence, Edwin Black has supplied the answer. IBM and the Holocaust makes an empirical statement. Edwin Black has made his case. It would seem that the burden of proof, in the form of any attempt at deniability, now lies with IBM.
Copyright © 2001 Midstream