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In the modern Geo-political world, the thin grey line between corporations and
government, is rapidly dissolving. With the Citizens United decision, corporations have been
granted an awesome power, and the line has grown even smaller. Today citizens have grown
accustomed to companies like ATT and Apple working hand in hand with government agencies,
like the NSA, despite the horrific possibilities. But even before the court ruling, the world’s
largest corporations still had a finger on the pulse of the world’s Geo-political landscape.
Corporations like IBM, which have become so prolific that they can effectively alter the political
situation in a region, have inserted themselves in emerging markets across the globe. However,
accompanied with increased globalization and immense financial growth, are even more
complex and terrible externalities that these corporations must face. This paper will describe how
IBM, one of the world’s largest and most universal companies, was born out of conflict and
continuously took advantage of profitable opportunities despite the unspeakable ethical issues,
ethical issues that would make the NSA look like Boy Scouts.
At the end of the 19th century the national census conducted by the Census Bureau
was little more than a standard head count. This was a time of rapid technological advance, and
massive population growth, particularly in the form of immigrant laborers. The industrial age and
its capitalist success attracted many poor immigrants, hungry for the American dream. The
ability to quantitate and characterize these citizens became a necessity. The Census Bureau was
overwhelmed and incapable of completing this task, and in 1896 they held a public invention
contest in the efforts to find a machine that would increase productivity. A son of a German
immigrant named Herman Hollerith presented his Punch Card Tabulating Machine to the Census
Bureau, and won.
Hollerith was a harsh salesman with a loving connection to his invention, and took any
criticisms personally. He strongly identified as German, and visited his homeland frequently. It’s
important to note that during this period Germany was a center for math and science. Many of
the world’s smartest people lived in this region, and some were Jewish. A recruiting battle would
ensue between Russia and US to recruit these people, and use them to develop technology that
would grant them the ability to split atoms and fly to space.
The potential of this machine was obvious. It wasn’t just a counting machine, it could
analyze and solve. The cards were extensive questionnaires that used a hole punch system to
answer questions pertaining to ethnicity, religion, medical conditions, personality, religion and
more. Each hole coordinated with a certain answer, and when the card was ran through the
machine, the machine analyzed and sorted the cards based on these answers. A nation now had
the ability to profile its population. Even as a prototype, this IBM precursor showed the early
signs of a possible monopoly. The cards essentially could only be used once per person, and were
only printed by Hollerith’s company, and only compatible with his machines. Billions of cards
would be needed, and countries across the globe began to line up. Although the power of these
machines, and more importantly the power of the corporation that owned them, was immediately
evident, no one predicted how powerful they would become. This infant company had incredible
power, and also had foreign loyalties. The Census Bureau was disturbed to find out that they
were being charged a higher rate for their punch cards than many other countries. Soon the US
realized this couldn’t continue, and had their own machine developed, but not before Hollerith
licensed all his patents over to a German company, a company that would later be called
Dehomag, or IBM Germany.
IBM was a merger of 3 companies and their patented technologies, founded by war
profiteer Charles Ranlett Flint. The greatest of these technologies was Hollerith’s Card Punching
Machine, which Flint bought from Hollerith for 1.2 million dollars. After Hollerith sold the
remainder of his company to Charles Flint in 1911, Flint renamed the company the Computing-
Tabulating-Recording Company or C-T-R. Flint made a name for himself as an international
arms dealer. He was one the first Americans to own a car and to fly a plane. The monotony of
running a global corporation was too much for him, and he began to search for a successor.
Thomas J. Watson grew up on a modest farm in upstate New York. His early professional
career was erratic. He held a number of low paying jobs, quickly growing dissatisfied with his
wages. One of his business ventures was owning a butcher shop, which quickly failed. Watson
had invested in a new NCR cash register in his butcher shop, and while visiting NCR
headquarters to arrange the transfer of ownership, Watson asked an employee for a job. After
many attempts and denials, he was finally hired in 1896. Watson had a good career with NCR,
being promoted multiple times and regularly rewarded for eliminating competition in the market.
Watson was experienced in deceitful and aggressive sales tactics. While working for NCR, he
was instructed to create a secret company, The Company would be a second hand store that
would sell NCR products at a discount price, a much larger discount then the other local second
hand stores could afford. The company didn’t need to produce profits, so it was able to
