Abstract
This paper places the early history of digital computing in the United States, during the period from 1945 to 1960, in the larger historical context of American business, labor, and policy. It considers issues concerning the business sectors that chose to enter into early digital computing, the robustness of the general economy and the importance of defense as an economic driver, the scientific race with the Russians, and gendered issues of technical labor – and how each of these helped to shape the emerging mainframe computer industry.
The decade and a half from the end of the Second World War to the election of John F Kennedy as president in 1960 was one of prosperity and progress for the American economy and its business sector. Although the developing Cold War with the Soviet Union overshadowed many of the developments of that period, its effect was stimulative for the domestic economy. Pent-up consumer demand from the Second World War years, the availability of cheap energy, the application of government-financed wartime innovations to peacetime commercial uses, and liberal programs of foreign economic and military aid all encouraged private investment and created expanding employment opportunities. Increased productivity and the application of new tools for monetary and fiscal management helped keep the economy growing and minimized the potential for inflation and excessive swings of the business cycle. Despite the increased role of government intervention in the economy, American business enjoyed an era of market-directed growth that created an affluent society without parallel in the world (Johnson, “American Business in the Postwar Era,” pp. 101–113 in Bremner and Reichard, op cit, 1982).
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Notes
- 1.
Not very far into the writing of this paper, the authors discovered Thomas Haigh’s excellent but infrequently cited paper, “Computing the American Way” (2010). His paper has a purpose similar to this one, and we commend our readers to examine his paper carefully. We have intentionally refocused our paper to take a different tack from the one Haigh takes, but nevertheless there are a few places at which the two papers overlap.
- 2.
Some examples of excellent contextualized computer histories include Campbell-Kelly (1990) on ICL and the British computer industry, Lecuyer (2005) on Silicon Valley , Bassett (2007) on semiconductor history, Edwards (1997) and Akera (2008) on Cold War computing, Heide (2009) on punched -card systems, Rubin and Huber (1986) on the knowledge industry in the United States, and Haigh and Paju (2016) on IBM in Europe. There are many more good examples of literature that could be pointed to here. However, the goal of this paper is to present a brief and readable account without trying to do justice to a full bibliographic analysis. This paper can thus be regarded as more of an essay than a traditional research literature review.
- 3.
The focus of this paper is early computer history. Some audiences would be more interested in the history of information rather than the history of computing, and this topic is also shaped by similar exogenous forces. One approach to this broader topic in the United States is taken by Rubin and Huber (1986), who describe the knowledge industry as including education, research and development, the media of communication, information machines, and information services. A more recent approach to the history of information in the United States is given by Cortada (2016), which traces the use of information in government, business, education, and people’s everyday lives since 1870.
- 4.
There are typically some aberrations in these composite profiles, and the prosopographer simply has to live with these aberrations. For example, NCR, which had built codebreaking equipment during the war, had already learned about electronics and computing when the mainframe computing industry was established. IBM handled its lack of electronics expertise in part by stepping out of its role as a business machine manufacturer after the war and also becoming a defense contractor, utilizing government defense contracts to build up its research labs, research personnel, and electronics expertise. So, in this one respect of familiarity with electronics, NCR and IBM were uncharacteristic of the typical business machines company, which generally had little such expertise. But in many other respects, both IBM and NCR were similar to the other business machine manufacturers.
- 5.
There had been excess profit taxes imposed by the federal government during the war. These were revoked in 1945 but reimposed in 1950 because of the Korean War . For an analysis of corporate tax incentives in the 1950s in the United States, see Thorndike (2011). The authors have not been able to find specific cases in which companies entering the computer industry after the Second World War were given tax incentives, but they may exist. IBM , for example, capped its profits at 1.5% on government business during the war and had no postwar revenue slump for which it might have taken advantage of tax credits. In fact, the company grew rapidly in the postwar years. Clearly, defense contracts to certain of these companies were more important than tax incentives in the postwar era.
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Aspray, W., Loughnane, C. (2019). Foregrounding the Background: Business, Economics, Labor, and Government Policy as Shaping Forces in Early Digital Computing History. In: Haigh, T. (eds) Exploring the Early Digital. History of Computing. Springer, Cham. https://doi.org/10.1007/978-3-030-02152-8_9
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