The Digital Hand How Computers Changed the Work

of American Manufacturing Transportation and

Retail Industries 1st Ed. Edition James W.
Cortada pdf download
https://ebookgate.com/product/the-digital-hand-how-computers-
changed-the-work-of-american-manufacturing-transportation-and-
retail-industries-1st-ed-edition-james-w-cortada/

Get the full ebook with Bonus Features for a Better Reading Experience on ebookgate.com
Instant digital products (PDF, ePub, MOBI) available
Download now and explore formats that suit you...

The Digital Hand Vol 3 How Computers Changed the Work of

American Public Sector Industries 1st Edition James W.
Cortada
https://ebookgate.com/product/the-digital-hand-vol-3-how-computers-
changed-the-work-of-american-public-sector-industries-1st-edition-
james-w-cortada/
ebookgate.com

Digital Games Computers at Play The Digital World 1st

Edition Ananda Mitra

https://ebookgate.com/product/digital-games-computers-at-play-the-
digital-world-1st-edition-ananda-mitra/

ebookgate.com

The Art of Digital Photography 1st American ed Edition

John Hedgecoe

https://ebookgate.com/product/the-art-of-digital-photography-1st-
american-ed-edition-john-hedgecoe/

ebookgate.com

Encyclopedia of Products Industries Manufacturing 1st

Edition Patricia J. Bungert

https://ebookgate.com/product/encyclopedia-of-products-industries-
manufacturing-1st-edition-patricia-j-bungert/

ebookgate.com
King James Bible 400th Anniversary edition of the book
that changed the world

https://ebookgate.com/product/king-james-bible-400th-anniversary-
edition-of-the-book-that-changed-the-world/

ebookgate.com

The Supply Chain in Manufacturing Distribution and

Transportation Modeling Optimization and Applications 1st
Edition Kenneth D. Lawrence
https://ebookgate.com/product/the-supply-chain-in-manufacturing-
distribution-and-transportation-modeling-optimization-and-
applications-1st-edition-kenneth-d-lawrence/
ebookgate.com

Architecture in the Digital Age Design and Manufacturing

1st Edition Branko Kolarevic

https://ebookgate.com/product/architecture-in-the-digital-age-design-
and-manufacturing-1st-edition-branko-kolarevic/

ebookgate.com

How the Brain Works 1st American ed Edition John Mccrone

https://ebookgate.com/product/how-the-brain-works-1st-american-ed-
edition-john-mccrone/

ebookgate.com

Handbook of manufacturing processes how products

components and materials are made 1st ed Edition Bralla

https://ebookgate.com/product/handbook-of-manufacturing-processes-how-
products-components-and-materials-are-made-1st-ed-edition-bralla/

ebookgate.com
The DIGITAL HAND
This page intentionally left blank
J A M E S W . C O R T A D A

The
DIGITAL HAND
How Computers

Changed the Work

of American

Manufacturing,

Transportation,

and Retail Industries

1
2004
1
Oxford New York
Auckland Bangkok Buenos Aires Cape Town Chennai
Dar es Salaam Delhi Hong Kong Istanbul Karachi Kolkata
Kuala Lumpur Madrid Melbourne Mexico City Mumbai Nairobi
São Paulo Shanghai Taipei Tokyo Toronto

Copyright
2004 by Oxford University Press, Inc.

Published by Oxford University Press, Inc.
198 Madison Avenue, New York, New York 10016
www.oup.com
Oxford is a registered trademark of Oxford University Press
All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted, in any form or by any means,
electronic, mechanical, photocopying, recording, or otherwise,
without the prior permission of Oxford University Press.

Library of Congress Cataloging-in-Publication Data

Cortada, James W.
The digital hand : how computers changed the work of American
manufacturing, transportation, and retail industries / by James W.
Cortada.
p. cm.
Includes bibliographical references and index.
ISBN 0-19-516588-8
1. Automation—Economic aspects—United States. 2. Manufacturing
industries—United States—Automation. 3. Transporation—United
States—Automation. 4. Retail trade—United States—Automation. I.
Title.
HC110.A9C655 2003
338.0973—dc21 2003012107

9 8 7 6 5 4 3 2 1
Printed in the United States of America
on acid-free paper
To my three mentors, who taught me everything I know that is important about history:

George B. Oliver
Earl R. Beck
Alfred D. Chandler, Jr.
This page intentionally left blank
Preface

I learnt to see that utility was the test and measure of all virtues.
—Jeremy Bentham, 1776

any observers have called the slow growth of the American economy in 2002
M and 2003 a “jobless recovery.” In other words, as the economy began ex-
panding again, it did so without adding new jobs. Indeed, companies kept laying
off people, or simply did not feel a need to hire in order to handle increased volumes
of business. The single most frequently cited reason by reporters, economists, and
government officials for why new jobs were not added was due to the investments
made by companies in computing in the 1990s. These investments in automation
reduced the amount of labor content of work, thereby increasing the capacity of
existing people, factories, and firms to handle more business. Those remarking on
the “jobless recovery” got it all wrong, however. Recovery was due not to invest-
ments made in computers in the 1990s but to investments made in computing and
telecommunications over a much longer period of time—in fact, over more than a
half century. This pattern of investment shows no end in sight, and thus remains
one of the most important issues that we need to understand if we are to appreciate
how both the U.S. and world economies are transforming, on the one hand and,
on the other hand, how businesses and industries are doing so as well. This book
begins to tell the story of how computing so profoundly influenced the economy
of the United States.
Computers profoundly influenced the structure, activities, success, and failures
of most industries. The historical record of the past half century illustrates clearly
that this technology affected how industries emerged, operated, and changed. Case
studies of the effects of computing on individual processes and companies have
long offered dramatic evidence of the profound influence of this technology. But
the same can be said of industries and also of the economies in which they resided.
The purpose of this book is to describe how that influence occurred over time and
still affects industries today. I will do so primarily by documenting how industries
came to use computer technology over time.
viii Preface

The title of this book is intended to call attention to its basic theme, the role
of computers in the American economy. The metaphor of a hand that is influencing
or directing the economic affairs of nations has long been with us, introduced by
Adam Smith in The Wealth of Nations, published in 1776. One of the points he
made greatly affected how generations of economists and historians looked at busi-
ness, namely, that there is an invisible hand of market forces. That invisible hand
generated demand for goods and services from which sprang the whole field of
economics and a large body of knowledge about economic behavior. Two hundred
years later, the father of business history, Alfred D. Chandler, Jr., extended the
metaphor by arguing that modern business enterprises took over the functions of
coordinating flows of goods and services in an economy by managing the various
processes of production and distribution. He argues that managers and modern
corporations were of sufficient strength and quantity to control many of the tasks
Adam Smith had assigned to an invisible hand. His perspective led him to call their
influence on economic affairs pervasive enough to be The Visible Hand (1977) of
the economy. Chandler could do that because corporations, organized into indus-
tries, profoundly rationalized economic behavior by the early decades of the twen-
tieth century.
On the heels of this development came the arrival of the computer, its
rapid deployment across the economy so great that within a half century of its
introduction, information technology (IT) was exercising a profound level of in-
fluence on management’s decisions in ways analogous to Chandler’s visible hand
and, before him, Adams’s invisible hand. As I demonstrate in this book, The
Digital Hand helps us to realize the extent of the effects of this one class of
technology on economic activities. The story of how companies and whole in-
dustries came to use computers is by itself a dull tale but when seen in their
role as an economic power equal to those described by either Adams or Chan-
dler, they make the subject very important, one that we need to understand be-
cause the full effect of that influence has yet to be felt. As most studies of tech-
nological trends continue to report, the full development of the technology and
the extent to which it can be deployed have yet to reach their apex. In short,
we are not yet at the end of the story of the digital hand, rather somewhere,
perhaps, in the middle of the experience. Therefore, this book, although clearly
intended to be a formal narrative history of the use and deployment of com-
puting, takes the story to modern times.
I recognize that the title may be overstating the influence of computers since
they did not replace preexisting mechanisms in the economy, such as management.
Indeed, we should acknowledge that in general computing made new means pos-
sible for regulating the activities of the economy, much as had the steam engine in
the eighteenth century or, to a lesser degree, the telegraph in the late 1800s. None-
theless, until industry-level studies are done by various historians and the full de-
ployment of computing can be declared completed, we will not fully understand
the influence of computing on the economy. To start the process, I am willing to
run the risk that the title overstates the role of the digital, although I think the risk
quite low.
 Preface ix

My contention is that the digital influence and its effects on economic activity
are both as pervasive as management’s is on the economy and are a natural extension
of their role. In other words, without the managerial revolution that Chandler spoke
about, we could not have the digital “revolution” that so many speak about today.
So that there is no misunderstanding about how I use the word digital, I refer not
to portions of fingers on a hand but to the type of computer chips in wide use
across the world, that is, digital technology. The Digital Hand is all about computing
and other related technologies and how they, too, became the source of great in-
fluences on economic and business behavior.
Business history in the last three decades of the twentieth century has provided
both historians and business managers with useful insights into the patterns of
managerial practices and appreciation for the functioning of commercial enterprises
and economies at large. This is a history book, describing in narrative form what
uses of the computer took place selectively in bellwether industries that either were
just so large that whatever they did proved enormously influential or were just so
innovative that they introduced novel applications to the rest of the economy. A
quick example of the former is General Motors and its industry (the Automotive)
and of the latter, the Grocery Industry, which developed the ubiquitous bar code.
But this is not history just for the sake of history. Understanding historic patterns
of adoption of digital technology gives us insight into how specific industries did,
and continue to, operate because they are prisoners of existing applications and
processes and, in most instances, of long-standing practices and attitudes. In short,
modern business history can describe what otherwise would be called contempo-
rary events. Given the contention of so many experts on computing that this is still
an emerging technology, we have here, in the use of computers in business, a useful
opportunity to study its history to understand the present circumstances of com-
panies and industries.
But why look at the adoption of information technology by industry? Why not
by application? Computers do not have lives of their own. They are the tools of
companies, organizations, and people. Simply put, managers organized the func-
tions of computers into firms and industries. Computers do not decide to deploy;
rather, managers make that call. As Michael E. Porter taught us so many years ago,
industries have been a convenient way to cluster companies.1 Industries acquired
distinct personalities, ways of operating, and often novel uses of technologies. They
also learned from each other, either by looking over the fence at what another
industry did or through industry associations that formalized the transfer of prac-
tices and knowledge. One of my contentions in this and in my earlier books has
been that investing in infrastructure counts. Often this is done on an industry basis
as did the Banking Industry, for example, when it developed with the U.S. govern-
ment ways of electronically moving money around the economy (before World War
II) or later standardized the look and feel of the modern check (1950s). Today’s
electronic trading networks, already evident in the automotive, utility, pharmaceu-
tical, and defense manufacturing industries, show that this process is still at work.
We can conclude that the adoption of digital technology by industries provides
relevant insight into how the current U.S. economy came about.
x Preface

Managers long ago concluded that work practices varied from one industry to
another, and therefore it was not enough to keep up with developments in their
own. A newly deregulated industry looked for managerial talent in an industry
deregulated a decade ago. We saw this pattern at work with the migration of man-
agers of telephone call centers into the Utility Industry in the 1990s. Executives
experienced in mergers in one industry moved to another when consolidations
began anew. The need for understanding what has happened across the fence has
never been greater than today. The Internet is rumbling through industries at a
high rate of speed, causing fundamental structural changes for all, although the
reasons for existing remain the same, such as manufacturing and selling cars. But
new roles were becoming possible too. Bankers became stockbrokers, and insurance
firms began to think about becoming bankers. Digital supply chains linked retailers
to manufacturers. Digital rivals constantly challenged bricks-and-mortar firms.
Everyone, it seemed, was also forming alliances. Most of these recent patterns of
change have been directly made possible by the digital.
The historical record has much to say about these trends. It also offers evidence
on a far larger set of issues than just the Internet. For example, I demonstrate that
those industries that exploited IT in the fullest enjoyed in exchange the greatest
economic returns, evidence I routinely apply at the firm level. The historical record
also demonstrates that industries profoundly influenced the nature of the digital
technology, how it was put together in the form of products and functions, and the
pace and rate of technical and economic change. Describing how digital technol-
ogies and their uses entered industries also reinforces the notion of some business
historians and economists that industries have their own persona, operating almost
as living economic entities in which companies are its body parts. By examining
what occurred within specific industries, we see that process of operation and
change at work.
Most of the literature on the role of a particular technology, such as large
computers or the Internet, was contemporary; that is, it described situations as they
appeared at the time it was written. Authors often provided very little explanation
about how situations surfaced or evolved because they lacked historical perspective.
Economic and industry-specific descriptions also had the look and feel of a Polaroid
picture of a moment in time. To use a statistical process control phrase, such a
perspective was one data point on a chart. What manager wants to exploit a trend
line that only has one data point? When American managers embraced quality
management practices and process control procedures in the 1970s and 1980s,
they continued the long-standing tradition of adopting analysis and fact-based de-
cision making, yet much of the literature on managerial practices failed to provide
long-term trends and perspectives. This book—and its intended sequels—begins
by addressing that problem by looking at the role of managers and firms in adopting
and using one of the most important technologies to come along in the last century.
This strategy allows us to move from generalities about today’s circumstance to a
more substantive view of what is actually occurring.
For historians, however, the value of such a study may really be greater because
as they shift their focus to modern business history they will increasingly bump
 Preface xi

into the digital. Most histories of computing have, so far, focused on the develop-
ment of the technologies themselves. Historians have yet to level their sights fully
on the consequences of this technology on businesses. The closest some have come,
and I include myself in this group, is to describe the emergence of the information-
processing or computer industry; but even in looking at this supply side of the
story, we have barely scratched the surface. Ultimately, however, the demand side
of the equation becomes the most important to the historian because it is the use
of a technology that gives it significance. No technology is of much value until it is
used. So an early step in opening up the vast area of both the history of business
and how people worked in the late twentieth century requires us to begin by un-
derstanding how firms and industries used computing technology; we do so by
deploying the normal tools and techniques of the historian, ranging from solid
archival research to posing and answering questions about intent and consequences.
In short, this book’s primary mission is to suggest future paths of historical research
that must be taken if we are to appreciate what happened in the second half of the
twentieth century and to point the way, almost as if a hand stretches out to a
historian, to our future.
Although not an economist or an economic historian, I believe that the story
told in this book has messages for these communities as well. The work of the U.S.
economy has evolved over time because of, among other things, the use of com-
puters and all things digital. Therefore, I frequently use the word digital as a noun
instead of as a descriptor. Whereas observers of the economy have long debated
whether or not we have arrived at the Information Age, industries quietly, almost
stealthlike and incrementally, have evolved their practices by adopting the digital
to improve efficiencies, to strengthen competitive positions, and to support business
strategies. At one time I thought to use the word stealth in the title to emphasize
the fact that most of these changes were hardly recognized by the public, journalists,
or public officials, who instead used sweeping generalizations to describe the trans-
formation of the economy; yet it was the total collection of millions of small incre-
mental changes that give us a more accurate view of exactly what happened. When
we add up all these incremental adoptions of the digital, their effect over time is
nothing less than stunning.
What I have attempted to do in this book is not so much to demonstrate that
we have had a computer revolution or that we have entered into the Information
Age but rather that industries have gradually evolved into forms characterized by
a heightened state of computerization, a condition in which the digital is both
ubiquitous and a part of almost all work. In other words, if one did not know the
history of what happened, it would be easy to conclude that a revolution had
occurred in a short period of time. The historical record demonstrates that nothing
could be farther from the truth. Things did not change overnight; rather they
evolved and, in the process and over time, built momentum, creating unintended
consequences and accumulating mountains of new practices and organizational
forms profoundly different from those in previous decades. That realization, when
looked at within the context and objectives of industries, led me to conclude that
the mission of a company (or industry) has not fundamentally changed over time
xii Preface

nor has its function. The real “revolution”—and I believe we are experiencing an
evolution that in time historians might conclude was a revolution—is the more
exciting story, provocative because it comes closer to describing what happened in
the lives of so many people.

How This Book Is Organized

My approach is straightforward. I look at the history of how information technology

was used in major industries. I focus on applications of computers, but I recognize
that it is the use of computer chips, not just computers per se, that counts. I consider
selected groups of industries from roughly 1950, when commercial applications of
digital technology began to appear, and carry their stories to the present. To be
more precise, I carry the story to September 2001 because at that time there was
such a shocking change in American business; moreover, we are still so close to
the events of that date that the consequences to my story are yet unclear. That is,
there were enough changes in and shocks to the economy so that historians many
years from now will have to determine if the story told in this book continued
smoothly into what is our future.
There are literally hundreds of industries in the American economy, so selecting
which ones to study was an important decision. I chose to look at industries that
met several criteria. First, I wanted industries that existed in 1950 or that emerged
as a direct result of the creation of digital technologies, such as the Software In-
dustry. Second, I sought out industries that played large roles in the American
economy, such as the Automotive Industry. Third, I wanted industries that were
innovative users of technology (such as the Grocery Industry), that were early
adopters (e.g., the Petroleum Industry), or whose influence on the rest of the econ-
omy was significant (such as the Retail Industry). The last criterion—the influen-
tial—was tricky because defining what is influential is difficult to do. I chose to be
practical and cold-blooded about the issue by choosing industries in which member
firms had used their economic muscle to force smaller firms and suppliers to use
computers in the way the larger firms wanted. General Motors forced thousands of
suppliers, kicking and screaming, into the Information Age, as did Wal-Mart. The
historical record is very clear on this point. Thus the 16 industries chosen for this
book are emblematic of what occurred across the economy at large. The industries
selected are also big enough in their sectors of the economy so that I can generalize
with confidence about the historical patterns of behavior of the nation at large. They
also illustrate the range of responses to the use of computers across the economy.
I acknowledge that I leave myself open to the charge of being arbitrary in my
selection, but so be it; we must begin somewhere. Writing a book that is twice the
size of this one, to include many other industries, is not practical either.
But a further word on sectors is essential at this point. Economists define
sectors as made up of clusters of various industries. For example, there is a man-
ufacturing sector, which is made up of all the manufacturing industries. For this
project I chose to focus on those sectors that dominated the manufacture, distri-
 Preface xiii

bution, and sale of goods, that is, the buying and selling of things. This choice led
to manufacturing, portions of the transportation sector, wholesaling, and retailing.
Cumulatively, these sectors accounted for slightly less than half of the economic
activity of the nation. I chose not to discuss the rest of the economy in this book,
such as insurance, banking, passenger travel, and entertainment, which will be dealt
with in a separate book. In other words, the sectors and industries chosen for this
study were big enough to allow identification of basic patterns of business and
economic behavior with some reasonable level of confidence. However, let me be
the first to admit that the scope of this book ensures that no one will consider it
definitive; I believe it is suggestive and hope that it shows the way to further research
on the general topic.
This book is the first of a series of three on the theme of The Digital Hand. I
intend to describe enough industries to account for roughly 80 percent of the U.S.
economy at the second half of the twentieth century so that my observations and
conclusions are based on a sufficient level of detail to be creditable. The second
book will focus on such sectors as telecommunications, finance, media, and enter-
tainment. A subsequent publication will focus on how computers were used in the
public sector by local, state, and federal government agencies; the military; and
educational bodies at all levels. Only by reviewing the experiences of over 40 in-
dustries can we truly begin to understand the scope of the computer’s role in and
influence on the American economy. I have attempted to do enough research on
the sequel to feel confident that the general conclusions described in this initial
study hold true for the industries to be discussed in later volumes. But this book
is also intended to stand on its own for the industries described in it.
To get the job done, I have chosen to mix analysis (e.g., the first three chapters
and the conclusion) with narrative history. To begin the long process of under-
standing the effects of computing in American business we need to know how
computers were used, by whom, and why. In short, we need an inventory, and
that is what I have provided. I briefly introduce each industry, with the assumption
that the reader might not be familiar with it; describe how it adopted the digital
over time; and then summarize what we know about the economic and business
impact of this technology. Although the chapters may seem long, they are brief to
me. Each of the industries is so rich in experience and detail that book-length
studies could be done on all of them, as well as on others I did not study. Indeed,
the next step after this project is completed should be to look at these industries
in more detail and on a global basis because, increasingly, as we look at both the
late twentieth century and the early years of the new one, it is very clear that national
boundaries do not isolate industries from one another.
I focused, however, on the United States for three reasons. First, the United
States was the initial user of information technology on the broadest scale and, in
time, proved to be the most extensive adopter. So, this nation has been influenced
the most and the longest by this new class of technology. Second, the American
experience profoundly affected the activities of other industries around the world
and the economies of both the United States and other economically advanced
nations. Third, there is a huge body of material that we can rely on for the comments
xiv Preface

made in this book. In fact, I looked at over 10,000 published items and could just
as easily have examined 100,000 had time permitted.
The Digital Hand is made up of roughly three sections. The first, chapters 1–3,
particularly chapters 1 and 2, are intended to introduce this and my subsequent
books on American industries. I recognize that the first three chapters are long;
they originally were five, but it is essential to appreciate the rich context in which
the reader can understand the experiences of specific industries. The second group
of chapters—4 through 11—are the heart of the book. The third is an analytical
concluding chapter, as well as some appendices and other material to help those
who wish to study further the themes explored in this book.
The book builds on work I began several volumes ago. Starting in the late
1970s, I published a series of books on the role of information technology in a
historical context. By the late 1980s, I was deeply immersed in the study of how
information technology was permeating the American economy at the firm level,
but it was a supply side approach. In the late 1990s, I began looking at the demand
side of the story and realized that we knew less about how and why people adopted
digital technologies than we did about the invention of the computer. Most of the
discussion about the effects of technology on the success or failure of American
industries took place above the application level, either on a strategic level or the-
oretical plane. I agree with most observers of technology that a variety of issues
always played important roles in the work of industry: economics, corporate cul-
ture, innovation, competition, and government policies. I also recognize that Amer-
ican managers were quick to reach out to technology for the quick fix, although
many observers of the technological scene are correct when they argue that more
technology is not always the best answer. But it is an answer, and many looked to
it, often achieving success in conjunction with other factors that affect the perfor-
mance of a firm. Hence the need for this book and for focusing more on technology
than in engaging in debates about other factors affecting the performance of an
industry or the U.S. economy at large.
Most of the accounts of the history of information processing and the com-
puter, for example, concerned the invention of the computer chip and the machines
that used them and were written by historians or engineers. Economists engaged
in debates about productivity paradoxes, whereas government agencies celebrated
the positive economic impact of computers. But quietly the nation went from having
several hundred computers in the mid-1950s to spending over 5 percent of its gross
domestic product (GDP) annually on information technology by the mid-1990s
and to 7.5 percent in 2000. The big story, therefore, lay on the demand side.
To begin to understand that story, I worked on three projects in the late 1990s.
The first, in collaboration with the distinguished business historian Alfred D. Chan-
dler, Jr., and a team of highly experienced experts on the history and use of infor-
mation, led to the publication of a history of information and its technologies from
the 1700s to the present: A Nation Transformed by Information: How Information Has
Shaped the United States from Colonial Times to the Present. Its conclusions are that
this nation builds technology-based infrastructures that work, businesses and gov-
ernment agencies adopt information technology effectively and sooner than others,
 Preface xv

and Americans do not hesitate to invent new uses of computer chips to make a
profit. I then conducted my first examination of the effects of the Internet on
management and working practices, primarily focusing on the U.S. experience,
where this new information infrastructure had affected the economy the most and
the earliest. That book, 21st Century Business: Managing and Working in the New
Digital Economy, documented how Americans were experiencing a new round of
profound changes brought about by computing and other forms of digital tech-
nologies of a magnitude that had not seen since the late 1960s. In that book I began
to draw specific lessons from history while also keeping an eye on the evolving
nature of digital technologies. Then, I examined the role of all kinds of information
across major features of American society, looking at everything from newspapers
to the Internet, from radio and books to television and magazines as used in work,
leisure, vacations, religion, government practices, and politics. The insights gained
there led me to understand the historic appetite this nation has for all kinds of
information, not just for what resides in one medium, such as personal computers
(PCs). In Making of the Information Society: Experience, Consequences and Possibilities,
I explained the rationale for this simple lesson: do not limit your view of information
only to computer applications. However, since vast quantities of information were
being digitized, it was essential to understand the digital features of what occurred
in industries. In all three exercises I uncovered new insights and lessons by relying
on a combination of historical perspective and an understanding of contemporary
events. The book you are holding is another application of the same technique.
Over many years, I have been very sensitive to the fact that when I am writing
on business and historical issues about computing my views would be colored by
the experiences I had as an IBM employee. Never has that issue been such a difficult
one for me to deal with as in this book because the ideas discussed here are central
to what I, as an IBM employee, and my company did for decades. That fact that
IBM played such a commanding role in the diffusion of information technology
over the last half century cannot be denied nor, on balance, can the relatively
positive feature of that story. I make no apologies for the fact that I played a small
part in that flow of events, beginning in the early 1970s. So, I admit that this book
has an IBM-centric view, to what degree I leave it to the reader and future historians
to judge.
I have never before ended a preface with an apology to my readers, but I feel
compelled to do so in this case because I chose to write on a very broad issue,
which means I have had to seem arbitrary, to write chapters that I wish were half
their length, and to have to discuss some issues too briefly. I have had to generalize
without fully developing explanations. For these sins I ask for understanding. The
views I express in this book and the weaknesses exposed are not necessarily those
of the people who helped me, of my employer (IBM), or my publisher.
I dedicate this book to three wonderful gentlemen, saints in their profession.
George B. Oliver taught me history when I was an undergraduate student at
Randolph-Macon College and then handed me off to the late Earl R. Beck at Florida
State University, who had to continue the job until I completed my Ph.D. in history.
Then in the years following, Alfred D. Chandler, Jr. mentored me as I learned about
xvi Preface

business history. All three showed great faith in me and devoted many hours to
help me to grow intellectually. This book would have been impossible without their
investments in me over the past 40 years.
No author writes a book without help from many people. At the IBM Archives,
archivists over the past 20 years found thousands of pages of material for me. The
current archivist, Paul C. Lasewicz, provided support and supplied many illustra-
tions in this book. No historian of computing can function today without the help
of the staff at the Charles Babbage Institute at the University of Minnesota, and I
am no exception. The archivist, Beth Kaplan, found illustrations and material for
me; the associate director, Jeffrey Yost, hunted down material; and the director,
Arthur Norberg, himself a distinguished historian, taught me a great deal, critiqued
this book in an earlier version, and gave me both advice and support as I soldiered
on. Bill Aspray, at Indiana University, critiqued portions of the book, gave me good
advice, and encouraged me at every step. Edward Wakin, of Fordham University,
also sought to encourage my lines of research. David Boardwell, at the University
of Wisconsin, stimulated my thinking about the nexus of technology and action,
and his influence will be most felt in the sequel.
A number of colleagues at IBM have given particular assistance. Philip Swan,
IBM’s economist, provided data and kept me honest about my economic statements.
Larry Prusak played the role of the classic cheerleader, urging me to complete what
was clearly a very large project for a person who had a day job. Michael Albrecht
did the same and, in the mid-1990s, made it possible for me to do research and
writing on contemporary IT issues that were essential in influencing my views.
Several dozen experts on specific industries also provided data, insight, and cri-
tiques. Everywhere I turned within the company, I found help, year in and year
out.
This is my third project with Oxford University Press, home to a wonderful
team of people. My editor, Martha Cooley, demonstrated extraordinary patience
and faith in the project. Even a retired Oxford editor, Herbert J. Addison, an icon
in business publications, helped me with some of the original notions behind this
book. The Production Department at Oxford again did their usual magic. I want
to thank Ian Tucker for preparing the index. Once again I want to thank my wife
Dora for her constant support as I spent so many days and years working on this
book.
James W. Cortada
Madison, Wisconsin
CONTENTS

1. Arrival of Digital Technologies and Their Applications 3

2. Digitizing the American Economy 28
3. Presence and Role of Manufacturing Industries in the American Economy 66
4. Business Patterns and Digital Applications in the Transformation of
Manufacturing Industries 89
5. Patterns and Practices in Three Traditional Manufacturing Industries:
Automotive, Steel, and Aerospace 128
6. Patterns and Practices in Three Process Industries: Petroleum, Chemical, and
Pharmaceuticals 161
7. Manufacturing Practices in Information Technology Industries:
Semiconductors, Hard Disk Drives, and Software 193
8. Business Practices and Digital Applications in the Transformation of
Transportation Industries: Trains and Trucks 227
9. Presence of Wholesale and Retail Industries in the American Economy 258
10. Business Patterns and Digital Applications in the Transformation of the
Wholesale and Retail Industries 283
11. Patterns and Practices in Three Retail Industries: Grocery, Apparel,
and E-tailing 317
12. Conclusion: How Computers Changed the American Economy 355
Appendix A: How to Study the Role of Computing by Industry 389
Appendix B: The Universal Product Code (UPC), Optical Character
Recognition (OCR), and Point-of-Sale (POS) 395
Notes 397
Bibliographic Essay 465
Index 473
This page intentionally left blank
The DIGITAL HAND
This page intentionally left blank
1
Arrival of Digital Technologies and
Their Applications

When used with insight and ingenuity, computers will permit relief from the
most repetitive form of human work. They will make possible more rapid and
less wasteful methods of increasing our material well-being.
—John Diebold, 1952

mericans injected digital technology into their national economy in massive

A quantities during the second half of the twentieth century. The computer be-
came its most widely recognized form. This technology supported and stimulated
economic growth and increases in labor productivity. It made possible new prod-
ucts and services and, most important, facilitated fundamental changes in the way
work was done in both the private and public sectors, sometimes by design but
often as consequences. Put another way, computer chips and the information tech-
nologies and products built with them, along with software, contributed profoundly
to the changed look and feel of how the economy worked by the start of the twenty-
first century. Largely because of the convergence of various technologies and the
redesign of work patterns, primarily to take advantage of computers and telecom-
munications, Americans enjoyed waves of improvements in economic productivity.
This series of improvements translated into profits. In turn, these often contributed
to sustaining the historic expansion of the American economy, a process that had
been underway during the last half of the twentieth century. Many reasons account
for the extraordinary prosperity enjoyed by the United States in this period, but
one was the successful application of various types of computer-based technologies.
The nature of the deployment of technology is also a feature of the modern economy

3
4 The DIGITAL HAND

not yet studied extensively by experts on computing; more often they are quick to
turn to its consequences.1 This book illustrates how computer technology (includ-
ing programs, especially application software) contributed to the overall functioning
of the American economy.
This is not a story about digital determinism in which the so-called march of
progress is carried along by inevitable improvements in computer technology. Im-
provements occurred, but they were not inevitable. They came constantly, often in
forms that made sense to firms and government agencies to apply in their work.
The key point to keep in mind is that in general nobody was forced to use this
technology; people chose to embrace it. When companies and agencies found a
new way to use a technology, they tried it, learned from their mistakes and expe-
rience, reapplied it, and more often than not benefited from the effort. Frequently,
users worked with computer suppliers to develop or improve existing technologies
as well. Yet, they were also cautious, not always eager to be the first to try something
new. The rates of adoption of a technology or of a specific new device, software,
or application (including strategies that depended on a specific technology) by users
varied across industries over time. This cycle of meeting new innovations, experi-
menting, applying, and finally relying on them to function was constant, as well as
positive. But this cycle was chosen; that is, the story told in this book is about
millions of small decisions to use computer-based technologies, choices made be-
cause they seemed to hold out the promise of economic advantage.
Managers made these decisions across the entire U.S. economy, in every in-
dustry and within most firms. In some industries, that choice was made more
frequently than in others. As a result, some enjoyed more or less economic advan-
tages. But every industry participated. Farmers used personal computers; manufac-
turing firms installed programmable robots; home-based businesses relied on the
Internet to go global. The examples are everywhere and endless: computer-based
training of first-graders; computer-driven rockets and smart bombs; computerized
data collection on factory floors and at supermarket registers; software-based sim-
ulation models for economists, astronomers, consultants, political pundits, and all
our weather forecasters. For purposes of this book, I illustrate these thousands of
decisions, and where possible their results, by looking at a number of sectors and
industries within the U.S. economy from 1950 to 2000. I describe the patterns of
successful implementation that can be used by managers who are pondering what
to do about future rounds of technological innovation or by government officials
to guide public policy. They point the way for the historian to conduct further
research.
The first two chapters set the table for the rest of the book. Chapter 1 looks at
the emergence and the long-term evolution of the core information technologies
that made effective use of computers. In chapter 2, I present a brief overview of the
U.S. economy as essential context for the discussions about what happened within
various industries. This is a crucial exercise because digital technologies were not
deployed outside the context of the nation’s economic activities. Industries are not
isolated elements within any society; they are part of a more complex economic
and social ecosystem. That is why I include an extensive discussion about globali-
 Arrival of Digital Technologies and Their Applications 5

zation of the economy; it is also part of the story of how technology diffused across
industries. When engineers invented new gadgets, and made profound improve-
ments in the capabilities of computers and software, industries adopted them when
it made economic sense. To fully appreciate the arrival of the Information Age,
therefore, we need to understand the interactions among technologies, industry-
specific behaviors, and economic circumstances.
The industries I chose to look at are listed in the table of contents. These are
grouped into chapters to reinforce our understanding of shared and contrasting
patterns of adoption. These industries account cumulatively for the vast majority
of activities within three large sectors of the American economy during the past
half century. The three large sectors chosen for study are manufacturing, transpor-
tation of goods, and retailing. To know what occurred within these industries is to
appreciate the effect of digital technology on large bodies of American work.
I want to answer only a few questions in this book because I recognize that to
understand thoroughly the effect of the digital on the American economy as a whole
would require more detailed studies of many industries. However, that said, there
are some initial questions we should ask. The first, and ultimately the most basic,
is how did these industries use digital technology? Second, what were their expec-
tations for them? Third, how did this technology cause the work of businesses and
government agencies to change? Fourth, on an industry-by-industry basis, what
were the implications for future uses of digital technology? We will ultimately need
many specific company case studies to answer that last question at a more detailed
level in order to validate or correct the findings in this book. Finally, what were
the business and economic results? To a large extent this last question will be
answered by looking at the U.S. economy as a whole.

Those Remarkable Little Digital Chips

It is first essential to clarify one very important concept that profoundly influenced
both the actions and language of work activities. This concerns the role of the
digital. Notice that so far in this chapter the word computer has been sparingly used,
and the reason is simple. A computer is only one form of digital technology at work.
There are many others, such as robots, cell phones, pagers, palm pilots, program-
mable microwave ovens, smart bombs, carburetors in automobiles, bedroom alarm
clocks, digital watches, traffic lights, and electronic toys. All of these are important
items in use across the American economy, which have generated revenue and
profits for thousands of firms for a very long time. All of these are made possible
by the computer chip, what I simply call digital technology. Historians of computers
prefer to use such phrases as computerization or embedded processors to describe the
technology in the heart of computers. They also use such terms as integrated circuits
and transistors. But for brevity, I use the slang term chips frequently to mean all of
the above. I do so because I want our focus to be on the capabilities of the integrated
circuit, which does look like a chip or a famous American breakfast cereal, because
without it we would not have a fascinating story to tell. The ability to program a
6 The DIGITAL HAND

computer chip (embedded processor) to do a number of different things, from

launching a rocket to making sure that the mixture of air and gas in automobiles
is efficient, remains profoundly important. It is that flexibility that made possible
the use of so much technology in the American economy.
The second point to keep in mind as we think about the digital chip as the
basic building block of many new innovations and tools is the fact that various
lines of technological developments merged together as time passed, creating new
levels of capabilities, functions, and additional requirements. Some of the major
lines of parallel developments include telephony and telecommunications, radio
and television, and finally computers. Over time digital technology became the base
for all of these other information technologies and devices. Once that occurred, it
became possible to merge them together. The most recent example, and certainly
stunning by any measure, is the Internet, which blends telephony, telecommuni-
cations, television, voice, video, and graphics. Another is the cell phone, which uses
computer chips, radio signals, and telephonic technologies. But this is a process
that has long been underway. Combining telephone lines and TV-like screens to
make possible online computing at work began in the late 1950s and became
widespread by the end of the 1960s. Still later, personal computers became the
next wave of change. All are illustrations of the process at work. Economists and
technologists are currently looking at the convergence of technologies with great
interest because the process of blending and mixing together various information
and picture- and voice-handling tools and technologies is actually intensifying to-
day.2 That is made directly and immediately possible by the fact that computer
chips and their digital features can be plugged into many devices in different ways.
We think of these as intelligent; in fact they are simply able to take instructions on
what we want them to do. Those instructions sit inside the integrated circuits
(chips), which are little devices with no moving parts other than electrons flowing
through them in predefined patterns (the digital I speak of), using software to
instruct them.3
The analog is another class of computer technology that has long played an
important role, too. Unlike a digital computer, which processes discrete pieces of
data (such as 2 ⫻ 2 to yield the answer 4), analog devices provide a continuous
flow of electrical impulses or answers, such as the constant change in temperature,
quantity, or time. Analog computers are rarely used for business applications, the
bulk of the work done by computers in the twentieth century; instead, they are
employed in continuous flow operations, such as monitoring and controlling op-
erations in a liquid chemical plant or in a petroleum refinery. In these environments,
analog computers constantly adjust the flow of activities, such as how much fuel
runs through a pipe, based on a variety of variables. Analog computational devices
were actually some of the earliest to be applied in a commercial setting. By the end
of the 1970s, most had been displaced by the more precise, faster, and ultimately
cheaper digital computer.4 These devices were often used in the 1940s and 1950s
in technical, engineering, and scientific applications. They were used, for example,
in the design of automobiles and airplanes and in solving nuclear reactor problems.5
 Arrival of Digital Technologies and Their Applications 7

However, despite the role of the analog, users overwhelmingly relied on the
digital computer. So the key notions on technology to watch for in subsequent
chapters are the roles of the digital chip and the various permutations (convergence)
of that technology. Occasionally we encounter the analog, but not often.

Long-Term Evolution of Digital Technology

Birth of the Integrated Circuit

Understanding the broad outlines of the historic evolution of computer integrated

circuits (chips) helps us appreciate their influence on American business practices
and economic activity. Chips can be highly specialized, designed to do one thing,
such as control the temperature in a building, or they can be used for more gen-
eralized purposes, such as serving as the memory in a computer where information
is stored and moved around at a user’s request. Because of their flexibility, they
appear in many products, from airplanes to wristwatches; hence they are also called
embedded processors. To a large extent, the business and social history of the
computer chip is a tale of deployment in ever smaller forms and in even more
machines and devices, as suggested earlier in this chapter. These features endow
many devices with a crude form of intelligence and function that they otherwise
would not have. Computers replaced mechanical functions, thereby reducing the
cost and size of devices that no longer required moving parts, for example, digital
variants of mechanical alarm clocks. Over time, the cost of integrated circuits de-
clined while the amount of information they could hold and the speed with which
they could perform functions increased. It is why, for example, one could say that
if automobiles had increased their productivity at the same rate as computers, a
luxury car would cost $5.
We do not need to go through a detailed history of the computer chip, but
there are several historic features of these devices important to understand. The
granddaddy of computer integrated circuits was the vacuum tube, essentially a
device that looked like a large, long light bulb, used to hold information in the
earliest computers in the 1940s. Engineers used similar devices to operate radios,
TV sets, and many TV-like computer terminals (called cathode ray tubes, or simply
CRTs). In 1947, engineers and scientists at Bell Labs invented the father of the
computer chip, which they named the transistor. Following years of research on
how to reinvigorate an electronic impulse—necessary for long-distance phone
calls—engineers had been experimenting with various elements, such as germa-
nium, which possessed the capability of augmenting an electrical impulse. The new
technology was licensed by AT&T in the 1950s and 1960s to over 250 companies
around the world. The transistor emerged very quickly as the basic building block
for computers, while the public was introduced to the new technology in small,
portable radios.6 Throughout the 1950s, additional work to miniaturize transistors
yielded more functions and made them more reliable. Then in 1959, engineers at
8 The DIGITAL HAND

Figure 1.1
Multiple generations of transistors. Courtesy IBM Archives.

Texas Instruments (TI) and at Fairchild simultaneously developed what we now

call the computer chip.7
Figure 1.1 is a photograph of multiple generations of chips, beginning with
the transistor. However, note the obvious: the technology evolved, becoming
smaller and more lightweight. Not so obvious is the fact that it became more reliable
and could handle larger volumes of data and more complex instructions. In the
1960s, a variety of suppliers emerged in the United States and, later, around the
world. As the devices became more sophisticated, additional uses for them became
possible. This is the central point about the evolution of chip technology. The
earliest transistors were used in telephone networks and radios. The last of the
transistors, before being fully displaced by chips in the 1960s, were used in military
and civilian computers and in spacecraft. By the mid-1960s, computer chips began
appearing in hearing aids, digital watches, military and space applications, and in
general-purpose computers. By the early 1970s, they were also extensively used in
automobiles and other forms of transportation and in the earliest microwave ovens.
In 1971, Intel introduced the Intel 4004 microprocessor. This chip had multiple
transistor-like components and were programmable, a computer on a chip. This
chip changed many things, not the least of which was the computer. Computers
experienced huge jumps in capacity, horsepower, speed, and complexity of jobs.
 Arrival of Digital Technologies and Their Applications 9

The technical history of the chip from then to the present is a story about more
capacity, horsepower, reliability, and function.8
In the 1970s, American, Japanese, and European manufacturers of small ap-
pliances and industrial devices began to use embedded processors in their products.
One of the most dramatic uses around the world was found in the personal com-
puter. In fact, without the powerful integrated circuit on chips, the thought of
having light, portable computers seems odd. To suggest the extent of their deploy-
ment, we can look at their value as products in themselves. In 1971, approximately
$2 billion in chips were manufactured in the United States. That volume doubled
in 1973 and doubled again to roughly $8 billion in 1979.9 Demand for these items
increased in the 1980s and 1990s. In 1995, for instance, global sales of integrated
circuits reached $140 billion, and they nearly doubled again by the turn of the
century. About two-thirds of all these chips were used within the American econ-
omy. The biggest demand for chips in the 1980s and 1990s, accounting for roughly
40 percent, were personal computers. So one can see how already the computer
chip, which originally went into large mainframe computers and still did at the
turn of the century, appeared in other devices. By the time the Internet had become
widely popular, in the period 1995–1998, all types of computers used only 47.9
percent of all digital chips; the rest went into industrial instruments (10.3 percent),
communications (14 percent), consumer electronics (21.9 percent), and automotive
processes (4.9 percent); the military and government used the rest. The fastest-
growing demand for chips in the 1990s came from consumer electronics, such as
televisions, stereos, and home appliances.10
At first, improvements in the capacity and power of chips in computers came
every several years with the introduction of a new generation of microprocessors
or computer systems. By the early 1990s, new products were coming out on a fairly
regular schedule each year. The fact that by then roughly 20 firms dominated the
global business of manufacturing chips ensured that competitive pressures would
lead to new enhancements on a regular basis. By the 1990s, manufacturers had
branded some of their chips with names the public came to recognize through
advertising, like Intel’s Pentium II and, later, Pentium III. Machines with these
components, such as laptops, often had little logos on them: “Intel Inside, Pentium
III.” Over 10,000 different types of chips existed by the start of the new century,
most developed for industrial customers, such as automotive or consumer elec-
tronics manufacturers. In short, these little workhorses of the Information Age had
become highly specialized, making it easier to apply them in an ever-increasing
variety of applications.

Birth of the Computer

What about computers, the workhorses for business uses and the focus of much
of the rest of this book? The history of the computer has been told many times and
is increasingly becoming a familiar story that need not detain us here. However, as
with the chip, several trends are important to understand.
10 The DIGITAL HAND

A few milestones in the history of computers are linked to waves of expanded

use of digital applications. We can think of the 1930s and 1940s as a period of
gestation in which prechip technologies were developed or optimized while the
experts refined concepts of what a computer should do. They developed early
peripheral equipment and built the first computers. Government agencies in West-
ern Europe and in the United States funded them, with the largest number of
projects in the United States, the majority at American universities.11 In the late
1940s and early 1950s, work began on what would become the first U.S. com-
mercial computer, the UNIVAC I. It became the first machine adopted by American
business, and 46 were built. This machine received much publicity, both in print
and on television, with the result that many managers became aware of the existence
of the new technology. In the late 1940s and early 1950s, managers saw computers
primarily as government, military, or scientific devices, but the UNIVAC I changed
that, suggesting a greater versatility. Those possibilities were not yet clear to most
people, particularly to managers, but enough potential interest existed to encourage
some firms to start becoming familiar with these new devices. It also led office
appliance- and electronic equipment-manufacturing firms to consider moving into
the computer business. One of the firms that did was IBM, and after several years
of developing computers for the military and later for commercial users, it intro-
duced the 650 in 1953. Designed for commercial customers, it was small and
packaged with software and peripherals. It became quite popular, with over 1,800
units ultimately installed in the second half of the 1950s, of which 800 were in use
by late 1958.12
The IBM 650 system demonstrated to many corporations that commercial uses
of computers were possible and made economic sense. Those two realizations oc-
curred during the 1950s. Whereas many historians think of the 1960s as the great
decade of acceptance of computers, we now know that the installation of so many
650s across all major industries demonstrated that acceptance came earlier. We also
know that nearly a half dozen years had passed before the great surge in installations
occurred in the 1960s. Management recognized the potential value of computers
earlier than we might otherwise have thought but waited for the massive adoptions
of thousands of systems until these were more mature, as ultimately occurred in
the mid-1960s. In short, business and government managers knew by the mid-to
late 1950s what to look for in a computer, and they put pressure on the computer
industry to respond. Vendors did so with incremental improvements for a number
of years but did not introduce dramatically more effective products until after
1964.13
Incremental improvements in computers, software, peripheral equipment, and
programming techniques continued as the normal pattern during the late 1950s
and early 1960s. Incremental is the correct adjective to use because improvements
were built on previous ones; nonetheless, these innovations were dramatic in scope.
During this period, for example, modern computer languages came into their own,
along with online processing, two events considered revolutionary and profound
by historians of computers.14 Then in April 1964, IBM introduced 150 products,
which included 5 computers, new operating systems, printers, tape drives, disk
 Arrival of Digital Technologies and Their Applications 11

drives, and various punch-card equipment that fundamentally changed the rate of
adoption of computers in the United States. America’s most respected business
historian, Alfred D. Chandler, Jr., described the effects of this product line in un-
restrained language: it made “possible an explosion in the use of computers
throughout the world. Few other modern industries ever grew so fast or became
such a powerful agent of transformation,” a process he argues was jump-started by
the System 360.15 Users in the United States agreed, spending vast sums on this
and other products, most often designed to compete against IBM’s System 360. In
1963—before the S/360—American organizations spent $1.5 billion on computer
hardware. In 1968, at the height of the shipments of S/360s, they spent $4.5 bil-
lion.16
What made this product line so attractive? For the first time, a company offered
a series of products that were compatible; that is, if a company had one computer
and needed to get a larger one, programs that operated on the smaller machine
could run on a bigger model without rewriting them. This saved users millions of
dollars in the costs of converting older software to newer programs, a fundamental
problem in the 1950s and an inhibitor to expanded deployment.17 Compatible
systems meant that users could upgrade their systems with minimal interruptions
to the computing work of their firms, such as manufacturing products. Customers
and all of IBM’s competitors embraced this new approach. The computer industry
spent the rest of the 1960s growing at nearly 20 percent each year.18
Information storage devices called disk drives proved integral to these systems.
They looked like very large compact disks (CDs) in stacks in hatboxes. Unlike data
on tape, which could only be reached by reading all the data before the piece of
information one wanted, with a disk drive one could reach out and grab just the
piece of information needed. That ability made access to information very fast. In
time it also became very cheap. Disk drives made online systems technically and
economically attractive, leading to whole new generations of applications in the
1960s and 1970s.19
Standardization across all forms of technology, therefore, became a silent en-
ergizer, encouraging adoption of computing. Often overlooked but very important
was the role of peripheral equipment during this and later decades. If one had to
change the way one fed information into a computer, costs could be high enough
to make the justification of a new use impossible. Therefore, all computers could
normally handle the array of existing formats and data-input devices in existence.
At the same time, new ones appeared that lowered data-input costs as well. Table
1.1 lists many of the basic types of input equipment that appeared over the half
century. The number of products offered by vendors in each of these categories
proved staggering, as thousands of devices and various models appeared.20
The pattern of incremental improvements in computers and their peripheral
equipment (most of which was for input and output) already evident in the 1950s
continued through the 1960s and 1970s. Online systems and packaged software
appeared (e.g., for accounting and manufacturing applications). Companies and
government agencies began linking computers to telephone lines to conduct work
across the nation.21 The number of computer systems installed went from about
12 The DIGITAL HAND

Table 1.1
Data Entry and Output Devices
Type Medium Common Applications

1950s–Mid-1960s
Punched cards 80-Column Card Storage, sorting
Tape drives Magnetic tape Batch processing
Long-term storage
Disk drives Disk packs Online, query
Printers Paper Reports
Sensors Components built into Process control
machinery
Image scanners Machine-printed text Conversion of data to
digital format

1960s–Mid-1980s
Cathode ray tubes (CRTs) Terminals Online, realtime
Key-to-disk Diskettes Data entry
PCs Diskettes, paper Portable, small file
storage, file backup

Mid-1980s–Present
CD-ROM CDs Cheap storage
Laserdisc DVDs Entertainment

6,000 in 1960 to tens of thousands by 1980. It was in this period that large com-
puter systems, often called mainframes, became ubiquitous in most medium and
in all large U.S. organizations.
The use of these components in different classes of computers proved to be
one of the most important developments in the evolution of digital technology.
None played a more important role for some early users than the minicomputer.
As the name suggests, these were small computers that were used in specialized
applications unlike large systems housed in data centers that were primarily used
for business applications (e.g., accounting). Initially most popular with engineers,
these smaller systems were used for such jobs as online computer-aided design
(CAD) of new products, solving engineering and scientific problems, or providing
specialized data collection and control on the shop floor of a factory. These were
bought directly by engineers and other users, usually not by the data-processing
departments, and were operated by users themselves. Also, they were frequently
less expensive to acquire and operate: Minicomputers came into their own in the
late 1960s and remained an important segment of the computer industry until the
1980s (when personal computers had become powerful enough to displace them),
 Arrival of Digital Technologies and Their Applications 13

Data centers were sterile

environments in which
companies housed their
largest computer systems.
This one, in New York in
1960, shows an IBM 7000
series system. These systems,
expensive and large, were
major investments by a
company in people, software,
and hardware. Courtesy IBM
Corporate Archives.

made attractive by their relative smallness, substantial power, and cost advantages.
Some of the most widely used minicomputers of the 1970s—the heyday of such
systems—included products from the Digital Equipment Corporation (DEC), called
the PDP series; Hewlett-Packard (very popular with engineers in manufacturing);
and Texas Instruments. Over 100 niche providers of such machines emerged just
between 1968 and 1972.22
Paul Ceruzzi, a leading historian of modern computing, has made the vital
point that the minicomputer “opened up entirely new areas of application. Its
growth was a cultural, economic, and technological phenomenon.” Specifically, and
just as the personal computer in the late 1970s and all through the 1980s did for
yet additional groups of people, the “mini” (as it was normally called) “introduced
large groups of people—engineers and scientists, later others—to direct interaction
with computing machines.” For many, it was the first time they directly and per-
sonally interacted with a computer by way of a keyboard, the way they would later
interact with PCs.23 By the time high-performance workstations came along in the
1980s and 1990s, displacing minis, a whole generation of users had emerged. When
Sun, IBM, and others used digital technology to create powerful desktop machines
that did the work of what by the late 1980s looked like large, slow machines (the
minis), users were already familiar with the applications that were ported over to
the smaller desktop units. Just as minis remained a specialized class of machines,
although widely used, so, too, did many high-performance workstations.
14 The DIGITAL HAND

Birth of the Personal Computer

In the mid-1970s, the development of the personal computer and its software
began, conducted not by the large suppliers of computers but by small entrepre-
neurs and individuals like Steve Jobs, Steve Wozniak, and Gary Kidall. In the late
1970s, a raft of new machines appeared, sometimes also called microprocessors,
initially put together with off-the-shelf components such as the chip. In this period
the Apple line of computers came into existence, along with such other early sup-
pliers as Commodore, Altair, and Osborne.24 In August 1981, IBM, recognizing the
emerging market for these small machines, introduced the Personal Computer 1,
or simply the PC. That announcement signaled to many managers in corporate and
government America that the use of PCs in their organizations made sense. By the
end of 1983, Americans were buying over a million machines per year, many within
corporations.25 The rest of the story of the 1980s is largely one of both additional
mainframe and online systems implemented in existing and in new enterprises, as
well as the penetration of PCs into organizations and into the private lives of hob-
byists and workers.26
The PC came to play the kind of role with end users that the large main-
frame had served for large organizations. It coexisted with large mainframes and
was used in business applications throughout the 1980s and 1990s, while at the
same time Americans adopted the PC for home entertainment (e.g., playing
games, listening to music, and watching videos and movies) and for e-mail and,
later, access to the Internet. Minis and high-performance workstations remained
the purview of technical communities. Because of the increasing versatility of
computers, a user could move an application from one platform to another. For
example, by the end of the 1990s, PCs were powerful enough to handle some
computer-aided design/computer-aided manufacturing (CAD/CAM) applications,
which historically had only been done by using minis, mainframes, and high-
performance workstations.
All through the period of the 1950s–1980s, computers grew in capacity to
handle larger applications, do more complex work, and handle additional volumes
of transactions. The technical history of these systems is one of more capacity,
greater reliability, lower cost per transaction, greater variety of software and oper-
ating systems, and new online tools. Innovations came constantly, with product
announcements literally made on a daily basis by the late 1960s. Only one of many
companies, IBM normally had over 3,000 different products and made new product
announcements at the rate of several per week. Most of its major competitors did
the same. Improvements in an organization’s ability to conduct online processing
and its linking of telephone lines to computers also occurred, all creating a sense
of unrelenting change upon change.27

Birth of the Internet

In 1969, the U.S. government launched a network that made it possible for sci-
entists, engineers, military personnel, and weapons vendors to communicate with
 Arrival of Digital Technologies and Their Applications 15

one another. Thus was born what in time we came to call the Internet. In the 1970s,
the number of users expanded. In the 1980s, it became the major network used by
academics to communicate with one another—hence the birth of e-mail. By the
end of the 1980s, private individuals had gained access to the network by using
personal computers. In the early 1990s, a variety of software tools appeared, making
it possible for individuals to communicate and use the Internet in a comfortable,
nontechnical manner. No development proved more important at that time than
the creation of the World Wide Web. After it came on stream in 1993–1994,
American use of the Internet expanded rapidly. In 1994, developers of the original
web browser, called Mosaic, formed Netscape, announcing its version of the prod-
uct that September. With an easy-to-use tool now available, interest in the Internet
expanded sharply across the American economy first and later around the world.
During the second half of the 1990s, it seemed that most corporations had to get
a web page up on the “Net.” Millions of individual users also began using the
Internet.28
Companies and government agencies added content (information), as well
as applications done over the Internet. Businesses and government agencies be-
gan selling and performing work over the Internet, fundamentally changing how
work was done within their enterprises.29 Work done previously on mainframes
or only on PCs was now enmeshed into more comprehensive networks of
applications, software, and hardware, thereby creating complex infrastructures
in which organizations invested collectively several trillion dollars. These be-
came integral parts of how organizations were structured and how they func-
tioned.30
As companies and agencies gained experience with IT over the decades, they
added new applications onto old ones. They expanded existing uses to new parts
of their enterprises and then added capacity to do more. They continuously up-
graded old equipment and software to newer models or versions. Whole IT organ-
izations grew up in response to the need to provide this technology and to support
it. The IBM Room of the 1940s and 1950s became the EDP (Electronic Data Pro-
cessing) Department by the end of the 1960s, the DP (Data Processing) Department
or Center in the 1970s, and the MIS (Management of Information Systems) Orga-
nization in the 1980s. The EDP managers were often engineers and only first-level
managers in the 1950s. By the end of the 1970s, some had become vice presidents
or senior vice presidents. By the early 1990s, most were being called chief infor-
mation officers (CIOs) and, in large enterprises, were in command of thousands of
employees. These organizations had a vested interest in promoting the use of com-
puters, and they did not hesitate to do so. To a large extent, they all had one mission:
to use computers. In the words of IBM president Thomas J. Watson, Jr.: “It became
the conventional wisdom that management ran a bigger risk by waiting to com-
puterize than by taking the plunge.”31 All during the past half century, they sug-
gested new uses of IT and worked closely with vendors to design them, influencing
the form and functionality of new computer equipment.32
16 The DIGITAL HAND

Applications, the Reason for Computers

People acquire computers because they want to use them to do something, from
playing games to paying bills. As fancy and complicated as they are, computers are
simply tools. The same is true of any other device that has computer chips embed-
ded in it. The heart of this book is about the uses of computers and other digitally
based devices.
I began this chapter with a quote from John Diebold, one of America’s earliest
commentators on how advanced technology, and most specifically the computer,
could be applied to the operation of any large organization. He wrote this passage
at a time (1952) when businesses were just beginning to use computers in com-
mercial operations. Diebold recognized at once the potential benefits of this new
technology, as well as the profound change it would bring. At the time, he focused
on automation in general. He has been credited with being the first person to use
automation in a book, although others have argued that engineers at Ford Motor
Company invented the term and applied it to manufacturing applications.33 Re-
gardless of who came up with the word in the first place, in time, users, observers
of the computer scene, and technical staffs moved to another term, applications. As
the number of computers installed in U.S. enterprises and public agencies grew in
the 1950s and early 1960s, the notion of applying computers to business processes
did too. It is a term that today is used across all kinds of technologies and products,
making it one of the most visible business terms of modern times.
Throughout this book and as is the custom in the field of computing, I use
the word applications to refer to the uses to which computers and related devices
are put. Let’s begin: applications of computers are the least understood part of the
whole story of digital technology and computers themselves.
Businesses came to use computers not because they increasingly became less
expensive but because they performed functions (applications) deemed beneficial
or necessary to the enterprise. Declines in unit costs did not mean that overall
expenditures for computers dipped; in fact, the exact opposite occurred because as
more systems came online, more programmers and other technical staff were
needed to maintain and operate them, and more end users had to be trained and
supported as well. Yet, overall, economies of scale always counted as work shifted
to computers and thus away from other sources of expense, or created new capa-
bilities that had economic value. In short, computers made it possible for manage-
ment to perform tasks less expensively than with either earlier information tech-
nologies (e.g., adding machines) or manual operations and to do things not
practically possible with previous methods (e.g., guiding missiles on their course
or analyzing millions of customer records for trends). Machines were now used to
improve efficiency, to lower operating costs, to be seen as “modern,” and to be
competitive in an economy that increasingly relied on more, faster, and ever more
precise technologies. The use of computers, particularly in the Western world,
followed a long-standing tradition of injecting technology into important processes
of life and economic affairs. In summary, machine-based applications proved im-
portant, more than a thing of fashion or novelty. To a large extent, technology
 Arrival of Digital Technologies and Their Applications 17

afforded many applications of sustainable competitive activity in all advanced econ-

omies. As with earlier technologies, computers in general enhanced people’s ability
to expand control and to speed the flow of information and work, materials, and
finished goods, while improving the quality and nature of goods and services. Seen
within that broader context, computers became the next round of the application
of technology.
Since we are discussing computers and their applications, we should also rec-
ognize that these machines differed from earlier technologies. First, more than office
machines, such as adding and calculating devices or typewriters, computers made
it possible to alter the flow of work and the nature of the relationship of employees
with one another. Second, they changed the culture and tasks performed in the
workplace. The types of workers needed in a workplace with computers were trans-
formed: new levels of education and different skills (analytical and technical) were
prized, resulting in the creation of new positions and careers based on knowledge
of this new technology and its applications. As with other technologies, changes in
skills stimulated fears of job losses and created opportunities for new forms of
employment. As historian Amy Sue Bix concluded in her study of the debate on
job displacement, “The United States had enshrined the gospel of workplace mech-
anization as progress, automation as destiny.”34
No business or government manager normally acquires any technology just
because it is cheaper, faster, or better than something else. The hunt for value begins
first by looking for a good use for such a system, followed by determination of cost,
function, reliability, and practical benefit.35 Managers’ perception of the risk of a
faulty decision, and its effects on their careers, was a hidden, additional consider-
ation too.36 Therefore, to appreciate the history and role of the computer, we have
to move from merely understanding how it works to how it is used. When one
shifts to that perspective—to users of computers—the focus changes from the nuts
and bolts of technology to business issues. Since that is the approach I am taking,
this book is more about business history and current management practices than
it is a history of computers.
By making that shift, we also arrive at the central issue related to computers—
applications. How these machines were used in various industries leads to the
inevitable discussion of accounting and decision making, to data collection and
analysis, to a variety of command-and-control applications. I use the word appli-
cation frequently in this book because it is the term employed by users of this
technology. The word is so widely in use that it hardly requires definition for
practitioners. But, so that there is no misunderstanding, I define the term as the
use to which computers, telecommunications, and digital (computer) chips are
put. I think of such concepts as a payroll application, an accounting application, a
data collection application, an airline reservation system application, and so forth.
E-mail is also an application. Applications are collections of tasks performed by
computers, normally with some human involvement. They lead to predefined, ex-
pected outcomes, such as printed payroll checks, information on what a manufac-
turing plant is making, an airline travel reservation, or an e-mail message. My
definition of the word conforms to all prior ones, dating back to the 1940s.37
18 The DIGITAL HAND

Systems is a second term that is widely used and which appears from time to
time in this book, being closely related to applications. A system is normally thought
of as the software resident in a computer that does a specific application, for in-
stance, as in a payroll system that collects data on work and then calculates salaries
and prints out checks. Often it is also the hardware such software runs on. Some
people use the term to mean the human tasks involved in the operation of a piece
of software, but normally it refers to specific pieces of software and hardware that
work together. Business and scientific communities increasingly came to use the
term systems as the twentieth century progressed, to the point where the notion of
including technology, tasks, and measurements of performance has become routine.
The concept of standardizing repeatable activities and technologies became a by-
product of this approach.38 I will have more to say about standards later in this
chapter. What is important to realize now is that the development and use of
computers and their applications constituted a major example of that process at
work. For our purposes, application is a broader term that is used to include all the
activities involved in, for example, payroll management.39
Since the late 1970s in the United States, a third term, process, has made its
way into business language, primarily as a byproduct of the adoption of quality
management practices. This word is used to describe a set of managerial principles
governing the operation and control of a collection of tasks that may or may not
include the use of computers or other high-tech devices. The process by which one
cooks a turkey dinner is a repeatable routine in which certain technologies, like a
stove or a digital microwave oven, are used at various stages of the process. One
would say that the cook applied (used) the oven to perform the process. Since there
was no software involved in the preparation of this meal, computer systems were
not used.

How Applications Affected Business Behavior

The three concepts associated with computers—applications, systems, and pro-

cesses—are important to keep in mind because over time managerial and nonman-
agerial employees learned a great deal about how the three interacted and affected
the course of business activities. In the 1940s and 1950s, one would have thought
about applications. Between the 1960s to the early 1980s, people spoke about
installing systems to do specific applications. Subsequently, management looked at
groups of activities as processes in which applications of technology were embed-
ded. That combination led to the writing (programming) or buying of software and
hardware (systems) by technical staff and managers. Over time, the most effective
managers increasingly saw applications as part of the larger functions of an enter-
prise and thus approached them as components of an environment that needed to
be managed holistically. At the dawn of the twenty-first century, this approach, the
first behavioral byproduct of applications, had become part of the mantra of modern
management practice.40
The second byproduct, evident by the late 1980s, was management’s realiza-
tion that the effective use of computers often required work flows to be designed
 Arrival of Digital Technologies and Their Applications 19

differently to accommodate the capabilities of computers and software in order to

increase their economic benefits. This approach is profoundly important because
up to then, that is, from the 1940s to the late 1980s, the more conventional ap-
proach was to apply computers to streamline or enhance existing work flows with-
out changing in any fundamental fashion how work was done. Although economists
are now documenting the effects of this change in thinking,41 many managers and
consultants believe that it is the shift toward making work more computer-friendly
that led to the enormous increases in productivity achieved by the American econ-
omy in the 1990s.42
This book is an initial attempt to document the historic use of computers,
primarily in business but also to a certain extent in government, and so by design
is long on narrative. Until we know such basic facts as what applications were used,
and how, when, and why they were used, any broad-based conceptual interpreta-
tion of applications or computers becomes difficult to create. The elementary task
of discerning what applications were in use can be compared to the work of an
explorer standing at the edge of a very large jungle with few or no preexisting paths.
Like the metaphorical explorer, we have to cut paths through this jungle of appli-
cations and industries and, as a result, create some sense and structure (i.e., a path)
that makes it possible for others to pass through and understand it. At the end of
this exercise we are not left with a full and accurate map of the application jungle,
but at least we know more about it than before. Future students of the jungle can
straighten out our paths and build four-lane highways through it.
To hack away at this jungle, four basic techniques are required. In combination
they cause us to link applications and technology together and to tie the two to the
purposes and functions of both an enterprise and an industry to the economy in
which they operate. The key is to develop an integrated view of the activities and
influences on each of five components—economy, technology, applications, firms,
and industries—because nothing operates in isolation. All five also involve inter-
actions among inventions and innovations, especially technology. An improvement
in technology causes a firm to alter an application. A new application makes it
possible for a company to do something innovative and productive, which had not
been economically attractive before. The idea of the holistic is far from new. How-
ever, managers and nations constantly relearn the lesson. In looking at the success
of the U.S. economy in the 1980s and 1990s, economist Richard K. Lester con-
cluded that a variation of strategies, investments, and capabilities made possible the
resurgence: “There has been no standard template for America’s industrial renewal.”
He argues that “the most successful firms understand ‘best practice’ not as a collec-
tion of independent techniques, but rather as a coherent system of mutually rein-
forcing processes, practices, and strategies.”43 Embedded within them are applica-
tions and systems.
Changes in technology affect the mission of a firm or the functioning, even the
borders, of an industry. The arrival of disk drives made the direct pinpointing of
information possible, leading immediately to online applications in the late 1950s
and early 1960s. One leading historian of computing, Paul E. Ceruzzi, argued that
development of disk drives “spelled the end of the batch method of processing.”44
20 The DIGITAL HAND

In fact, batch processing has continued to the present day, although Ceruzzi is
correct to the extent that batch applications as a percentage of the total amount of
processing declined sharply over time.45 The new technology made all kinds of
applications possible. For example, providing online customer service meant that
companies could expand mail order businesses or handle queries, as did so many
telephone and utility companies. They could also consolidate offices into larger,
more efficient customer call centers. In some cases, the Internet is fundamentally
redefining the borders of work, industries, and economies. In others, it is melding
together pieces of industries to form entirely new ones.46 Public policies create
economic incentives for its citizens to use the Internet more in one country than
in another, or they facilitate desired economic behavior, as is evident when one
compares practices in the United States with those in Western Europe (for example,
Europeans are charged by the minute to use the Internet, whereas Americans pay
a flat low fee for unlimited use).47 In summary, we need to use a holistic approach
to understand applications and their history.

Role of Technical Standards and Industry Organizations

“The proliferation of digital devices—each with its own way of representing and
communicating information—has heightened the importance of getting these de-
vices to talk to one another, to their applications, and to their users in mutually
comprehensible tongues.” That is how Martin C. Libicki, a senior fellow at the
Institute for National Strategic Studies at the National Defense University in the
1980s and 1990s, summed up the issue of standards and the role they play.48 Of
course, one good quote deserves another, this also by Libicki on what standards
do: “Without them, the trillions of bytes on the Net would make little sense, intel-
ligent machines would lose much of their brainpower, one type of equipment could
not work with another, and all the data being so busily created would be accessible
only to the creators.”49 Technical standards—a little-studied feature of technology
and business practices as history—played an important role because in the world
of computers they emerged across a wide variety of technologies and functions,
enhancing their capabilities. Standards were set for every class of technology in each
decade and in every industry. The process continues today with wireless commu-
nications, computer integrated manufacturing (CIM), and a broad array of Internet-
related technologies and practices.
How machines (and their software) communicated and worked with each other
is a standards story, like the IBM System 360 in the 1960s or adoption of Microsoft’s
operating systems in the 1980s and 1990s. The development of computer languages
by technical committees, which then obtained the approval of technical or industry
associations and vendors, also played prominently in the computer industry and
continued to be a recurring strategy adopted by inventors, vendors, and users each
time a major new technology surfaced. They linked together hardware, software,
applications, and management practices, and they observed legal requirements. In
 Arrival of Digital Technologies and Their Applications 21

subsequent chapters, the role of various technical communities within industries

demonstrates how crucial they were in the role of computers in changing the way
companies did their work.
The fundamental reason that standards are so essential lies in the fact that they
long played an important role in facilitating adoption of particular technologies.
Examples abound: electricity in the nineteenth century, long-distance phone calls
in the early 1900s, low-tech stationery and envelopes in the 1920s, or the very
high-tech nuclear reactors in France and the United States in the 1960s and 1970s.
In information processing, standards emerged to discipline all types of technology:
computers, peripheral equipment, operating systems, programming languages, ap-
plications, telecommunications, and even the design and manufacturing practices
of computer chips and telephone cables.50
Standards also appeared in applications. Standards made it possible for firms
to communicate among themselves and to coordinate activities. The Banking In-
dustry is the best example of this process at work. Banks transfer funds through
the United States Federal Reserve System, using standards for performing these
transactions and electronic transfers first laid down over a half century ago. In the
1950s, today’s look and feel of a check—with its numbering system, for example—
came into being because the industry agreed on a standard. Automatic teller ma-
chines (ATMs) in the late 1980s began communicating with each other as customers
began withdrawing cash from an account in one bank by using an ATM of another
bank. The ability to do that called for standards. In manufacturing, today’s elec-
tronic supply chain management processes and protocols are collections of stan-
dards set up over many years, beginning with electronic data interchange (EDI)
specifications in the early 1970s. The CAD/CAM software from various suppliers
has many standard, common features. A reason that some industries adopted en-
terprise resource planning (ERP) software from Systems Applications Products
(SAP) in the 1990s was to have standards. Also, SAP’s code is an excellent example
of de facto standards set when a particular supplier’s product (hardware or software)
is so widely adopted that it becomes the standard for a particular application or
industry—the idea that everyone is using it.51 So, too, is Oracle’s telecommunica-
tions products late in the twentieth century.
Standards are set in essentially five ways. First, technical bodies create them,
as in the case of many of the early high-level programming languages that first
appeared in the 1950s and 1960s. COBOL, the most widely used programming
language by businesses for over 30 years, began in that way.52 Second, standards
are imposed to facilitate sharing of information or functions, a role frequently played
by the United States Department of Defense with the information-processing com-
munity over the past six decades.53 Standards came into existence a third way when
industry leaders set them, as frequently occurred in the Banking Industry.54
The fourth approach, and the one most frequently seen in manufacturing, is
the de facto adoption of an application, such as shop floor data collection or
computer-based master production scheduling of work in a factory. A variation of
that fourth approach is the adoption of a process by which certain activities have
22 The DIGITAL HAND

occurred, such as accounting practices as set forth by the Federal Accounting Stan-
dards Board (FASB), the U.S. ruling body for accounting, or in the use of point-of-
sale (POS) terminals by retail firms to capture sales and inventory data.
The fifth occurs when one vendor succeeds in selling so many of its products
that the product itself becomes the de facto standard—the majority of the market
wants it. Word processors on PCs in the 1980s and 1990s from Microsoft exem-
plified this process. Another example is IBM’s operating system software for large
mainframes over the past half century and, most recent, the “open standards” move-
ment within the IT community.
As demonstrated in subsequent chapters, standards facilitated adoption of spe-
cific applications, processes, or information technologies. The rate of implementa-
tion and the extent of adoption were directly related to the use of standards. The
extreme obvious case is that of American checks because they all have the same
design for the placement of data (e.g., where one fills in the amounts) and the
protocols governing microcoding of numbers. Debit cards share common standards
in the data’s placement, format, and movement in the banking system.
The use of standards in accounting, manufacturing, and business practices in
general has a long history, exercised over the course of at least the past 20 decades
in business and even longer in some government agencies (e.g., the postal system).55
Such a lengthy use of standards conditioned managers to adopt information tech-
nologies that facilitated the use of existing practices in more optimized ways. As
technologies led to new insights on how best to perform a task, new standards
emerged—as they continue to do today. Standards normally were influenced by
managerial practices and beliefs, such as the desire evident today to make business
processes more computer-friendly. Another effect on the adoption of standards was
the perception managers had about the capabilities of a technology, about which I
say more in the next chapter. Historians recognized the growing importance of
standards in the twentieth century. No less of a distinguished historian of technol-
ogy than Thomas P. Hughes recently brought together a team of scholars to look
at the history of standards around the world, to see what their applications were
and, in the process, to partially document the wide extent of the notion of stan-
dards.56
The account of the arrival of the computer presented in this and the next
chapter is admittedly a rosy view of what happened because it glosses over failures
and difficulties not always overcome. Nonetheless, the fact remains that the digital
arrived and was deployed for rosy reasons—it worked, made economic sense, and
eventually became the way in which things were done. We cannot ignore that
reality. What also occurred, however, was a complex process of invention and
deployment, one filled with controversies, failed initiatives, impaired or destroyed
firms, failed vendors of hardware and software (dot.coms are only the latest cases),
and often difficult and dynamic economic climates. But to dwell too much on the
negative issues would obfuscate the real story, which is positive. The ultimate reality
is that a new technology emerged that nearly every government agency and business
enterprise in the United States embraced in less than a half century.
 Arrival of Digital Technologies and Their Applications 23

Approach to the Study of Applications

The first step in the study of applications is to briefly survey circumstances in the
American economy that made the use of computers possible, beginning in the
1950s (chapter 2). A similar, yet smaller, more narrowly based discussion about
the economic realities that existed over time has to be included when surveying
individual industries. Economic influence always functioned as an important lever.
For example, the role of tax policy and depreciation profoundly influenced the
timing of when companies acquired large computers, which were capital-intensive
investments. The roles of innovation and global competition are also important
considerations; today, investments in information technology absorb the lion’s share
of U.S. capital investments, a share that continues to increase at the dawn of the
new millennium.57 In short, economic and business practices in combination are
important to understand if we are to appreciate the use of digitally based applica-
tions.
Second, it is important to understand the features and attractions of any ap-
plication. Why, for instance, is computer-based payroll used? Why does one in-
dustry use computers more than another? How is the Internet being used to increase
competition or expand market reach? How were applications acquired and justified?
In our discussion, it is possible to begin collecting early experiences, simultaneously
documenting some of the effects applications have had and continue to impose on
organizations and the economy at large. Some applications cut across industries
and appear frequently in this book. Accounting applications are ubiquitous; every-
one uses them. E-mail now fits into this category as well, primarily because of the
Internet, but it, too, existed within enterprises decades ago.
Third, taking an industry view gets one past applications used in all industries,
such as accounting and e-mail, to industry-specific uses that often fundamentally
changed the nature of the work there and which are not yet appreciated by histo-
rians or the public at large. For example, the use of ATMs to conduct banking led
in the late 1980s and 1990s to a very sharp decrease in the number of human bank
tellers needed to transact business. Moreover, ATMs and computers with telecom-
munications, it can be argued, facilitated the enormous number of mergers that
occurred in that industry in the late 1990s. The banking world looked fundamen-
tally different in the early years of the new century than it did 15 years earlier, and
one of the primary reasons is the set of computer-based applications that bankers
implemented. So, industry views are essential to any appreciation of the use and
effect of applications on management and the economy as a whole. Lester’s earlier
comment on how industries revived in different ways is in line with the value of
an industry-centric view. What little historical research done on computer use re-
inforces the value of this perspective. For instance, James L. McKenney looked at
a small group of applications from different industries and drew the same conclu-
sions reached by Lester. The Bank of America used information technology differ-
ently than did American Airlines or United Services Automobile Association (in
insurance), for example. Although McKenney found common themes, primarily in
24 The DIGITAL HAND

management practices, the applications that fundamentally helped a firm were

unique to each one and to its industry.58 The same process is underway in our
Internet era, with applications evolving that are also industry-specific and even
activity-specific.59
Fourth, as the first three steps are taken, it is also important to cross-link
patterns from one firm to another and from one industry to another because users
learned from each other, regardless of where they worked. Some common patterns
emerge, shedding light on how computers were used, why, and for what. These
data also makes it possible to begin understanding the extent of deployment in the
economy at large. Deployment is an important issue for all concerned. For the
historian it leads to answers about how many people used a technology and who
they were; the more usage, the more important the technology is and the greater
the effect on a nation’s history. For the economist, it defines the activities, costs
and benefits, and relative value of actions and investments. For the manager, de-
ployment reveals whether the company was ahead, behind, in trouble, had a com-
petitive advantage, or could make more or less profit. What were the costs and
benefits to the organization, to an industry, and to the nation, culturally, econom-
ically, and from a business perspective? These are all good questions, and all are
rooted in deployment. So, everyone has a stake in the issue. Because this kind of
study is rooted in an industry-centric approach, appendix A expands on the dis-
cussion of the methodology used to develop several critical findings.

Key Findings

Deployment as a point of emphasis departs from the more traditional view of com-
puters and chips in which historians and economists, consultants and managers,
focused on how machines and widgets emerged and what they did.60 One of the
findings in this book is that the rate of deployment of computing technologies
varied across all industries and within firms in an industry. Some embraced com-
puters sooner rather than later. Understanding why helps to document the pro-
found changes that occurred in the U.S. economy in the second half of the twentieth
century and which continue to affect this economy in such a rapid, one might even
say, jolting manner.
A related finding is that the rationale for adopting digital technologies varied
over time and also differed from one industry to another. Equally important, every
industry studied for this book and for the intended two sequels (a total of 46), found
economic and operational benefits in using computers. To be sure, there were many
common elements in this rationale, such as cost savings, but even that motivation
translated into different levels of performance from one firm to another. In other
words, all banks and factories were not the same. Social and political policies dic-
tated some of these differences. For example, the U.S. government was one of the
earliest users of accounting applications, and soon after, so were commercial sup-
pliers to the government. Aircraft manufacturers were required by the U.S. Air Force
in the 1950s to design wings by using mathematically based design applications
called computer-aided-design, or simply, CAD software tools.61 It was only years
 Arrival of Digital Technologies and Their Applications 25

later that automotive and then other industries did the same thing. I argue that the
transfer of experience from one application to another and from one firm or industry
to another played an important role in the proliferation of digital technologies
throughout the American economy, also accounting in large part for the speed of
diffusion.62 That ability for information and people to move about openly in the
American economy was a feature of U.S. society that continuosly made it possible
for innovations to find practical homes, a process long recognized by historians.63
Closely tied to the notion of openness is my finding that acceptance of an
application’s viability was a function of who else was seen to adopt it. A dramatic
example of this practice involved the personal computer. Until IBM introduced its
own PC in August 1981, many companies did not take this new technology very
seriously, although it had been available for over a half dozen years and individual
employees had used them. But after that, senior and middle management, partic-
ularly in computer data centers, could no longer ignore this technology and the
applications that so quickly became available to exploit it.64 Acceptance and grow-
ing understanding of a technology or use, in turn, led suppliers of such applications
to determine what to develop, build, sell, and support, such that, in turn, accep-
tance accelerated within business and government circles.

Approach and Sources

Looking at the subject from 1950 to the present makes sense because it was in the
early 1950s that computers began moving out of university laboratories and gov-
ernment agencies into commercial enterprises. Computer information technology-
based applications had, in general, stabilized after a half century of deployment
into widely accepted similar practices. These were overwhelmingly in accounting,
distribution (including inventory control and logistics), and shop floor scheduling
and tracking. Although that collection of applications provided a base of knowledge
that informed early users of computers, the arrival of the newer technology ushered
in so many technological changes that once again uses of information technology
underwent dramatic changes. As of this writing (2003), it appears that the process
of dramatic change is still underway, with no end in sight. It was in roughly 1950–
52 that the current round of changes began, providing the reason for selecting that
decade as a useful watershed.65 By the early 1960s, large firms had become the
largest number of users of computers and their base digital technologies, such as
the integrated circuit (IC), better known as the chip.
Also in the early 1950s, we have the first documented use in the United States
of a digital computer in a commercial setting: General Electric installed a UNIVAC
I computer system in Lexington, Kentucky, at its appliance-manufacturing plant.
It was highly publicized and watched by many companies.66 Soon after, other firms
moved into the fray and began using computers to help manage their operations.
From the 1950s to the early 1980s, much of what was applied took the form of
highly centralized computer operations in which work was increasingly added to
large computers. Not until after the arrival of the microcomputer (the PC) in the
business world during the early to mid-1980s did changes occur in the fundamental
26 The DIGITAL HAND

nature of business applications, where they were used, and by whom. From the
1950s to the present, we have experienced a rush to install and use computer-based
technologies at an unrelenting pace that far exceeds the initial round of implemen-
tation of information technologies in the period 1875–1930.67
The use of computers and their applications is as visible a process as anyone
can find in the U.S. economy. The computer industry (as it was known for at least
four decades) had always been very public. Early users of computers were so proud
of their accomplishments that they frequently rushed into print, bragging about
their achievements in thousands of articles and hundreds of books, although most
of these appeared in publications of small circulation, read only by members of
one’s industry. Many other thousands spoke at business conferences about their
applications. Computer vendors were equally effusive, publishing application briefs
and user guides. The methodical promotion of applications by vendors often dic-
tated what received publicity and what did not. For example, in 1956 the general
sales manager at Burroughs, N. L. Mudd, wrote a letter to the entire sales force in
the United States and Canada in which he reported that “as part of the Company
sales promotion program, the Advertising Division has for some time been prepar-
ing and placing installation stories in trade magazines, then reprinting most of the
published stories for distribution with material for the monthly sales meetings.” He
went on to describe how this program was administered for the purpose of pro-
ducing “free nation-wide publicity of favorable information about our products.”
He sought stories in all industries so that they could be shared across industries.68
In each decade, industry publications from all sectors of the economy also
documented the issues dealt with in this book. We can thus study specific cases,
trends, quantified measures of deployment, and public policy, including transcripts
and reports of very public, noisy law suits—in fact, hundreds of them. Like John
Diebold, most people who were observing the business scene sensed almost from
the beginning that use of computers would represent a major theme in late
twentieth-century America.69 To be sure, most were also cautious, particularly se-
nior management, who routinely commissioned studies on the potential of com-
puters. Their cautious behavior was more an act of sound prudence than a
reluctance to embrace a potentially viable technology.70
Despite the existence of a vast body of usable material for the study of appli-
cations, historians, economists, and business management experts have only nib-
bled at the topic in piecemeal fashion. Yet, the large volume of activity alone would
guarantee that the issue would be a major one in the field of business management.
It is also a subject that nobody has yet integrated fully into the fabric of business
historiography or into the lexicon of contemporary management practices.
What few studies we have of European and Asian uses of computers lead me
to conclude that applications vary from one country to the next, less because of
technological considerations than of either public policy or the way in which firms
are run.71 For that reason, my focus is on the United States, without generalizing
on a global basis, although occasionally I make comparisons with other countries.
Furthermore, the use of computers in the United States proved far more pervasive
Another Random Scribd Document
with Unrelated Content
hinaus und sprang in den Wagen, ohne sich noch einmal
umzusehen.
Lange sah Pipin dem davonfahrenden Wagen nach, der rasch in
der Dunkelheit verschwand. Nachdenklich sagte er dann:
»Eines hätte ich ihm nicht sagen dürfen! Daß ich ihm nicht gefolgt
habe, das wird er begreiflich finden, wenn er sich nicht mehr
darüber ärgert, aber daß ich einen Augenblick an ihm irre geworden
bin, das wird er mir nie verzeihen!«
* * *
(Aus einem Briefe.)
26. September 1893.
... Ich werde ihn erst auf seinem alten Platz in unserem
Wohnzimmer wiedersehen. Aber nicht mehr den alten Elmenreich –
sondern einen neuen für mich, zu dem ich mich in ein neues
Verhältnis setzen muß. Er ist als Sieger aus dem Erlebnis dieses
Sommers hervorgegangen; er hat sich nicht täuschen lassen, er hat
Recht behalten durch die Ueberlegenheit seines Verstandes. Ich
sollte ihn bewundern. Und der arme Pipin ist in die Schlinge gefallen;
er geht unabsehbaren Enttäuschungen entgegen, grausamen
Schmerzen; sein Glaube wird ihn betrügen, sein Vertrauen wird ihn
irreführen, seine Güte wird ihn vernichten. Ich sollte ihn bemitleiden.
Nach meinem innersten Empfinden aber ist alles umgekehrt. Da
erscheint mir Elmenreich arm und kahl, ein dürrer Boden, aus dem
nimmermehr ein Halm sprießen wird – und Pipin unendlich reich, ein
Auserwählter, auf den das Leben seine ganze Fülle häufen will ...
* * *
(Aus einem Briefe.)
28. September 1893.
... Daß Pipin diese letzten Tage meiner Verbannung mit mir teilt,
mußt du der Wundergeschichte zuschreiben, die ihn zu guterletzt
noch um das Vergnügen gebracht hat, mit seiner Braut zu reisen. An
seiner Stelle machte Dr. Kranich den Reisemarschall. Eugenie hatte
ihren Verlobten zwar gefragt, ob er diese Begleitung gestatte; er
antwortete, daß er sich weder jetzt noch jemals ihr gegenüber auf
den Standpunkt des Gestattens oder Verbietens stellen wolle. Da ließ
sich die Stiefmutter nicht einen Tag länger halten; denn sie war sehr
böse darüber, daß Pipin unerschütterlich darauf beharrte, vor seiner
Abreise die Angelegenheiten der Tressenbäuerin zu ordnen.
Der neue Wallfahrtsort hatte plötzlich das Augenmerk der
geistlichen Autoritäten auf sich gezogen. Bis dahin hatten sie der
Sache ihren Lauf gelassen, ohne sich irgendwie einzumischen. Als es
aber ruchbar wurde, daß ein unbefugter Amateur seine Hände dabei
im Spiel gehabt und durch die Experimente einer ȟbersinnlichen
Wissenschaft« den Zustand der Bäuerin herbeigeführt hat, ließ sich
der Pfarrer den Brunnhofer-Seppl kommen; dann stattete er Pipin
einen Besuch ab. Pipin bekam sehr unangenehme Dinge zu hören,
Dinge, die allerdings an die Adresse der beiden Abwesenden
gerichtet waren, die er aber doch selber einstecken mußte.
Das Ergebnis dieser Unterredung war, daß er sich verpflichtete, die
Sache in aller Stille und ohne Aufsehen ungesäumt in Ordnung zu
bringen.
Vor allen Dingen sollte die Kranke ehestens aus dem Umkreis der
Gläubigen entfernt werden. Mit Hilfe des Arztes und reichlicher
Geldopfer nach allen Seiten gelang es ihm auch in den nächsten
Tagen, ihr einen Platz im Spital der Kreishauptstadt zu verschaffen.
Gestern bei Tagesanbruch wurde sie von zwei Wärterinnen in einem
Wagen abgeholt und auf die Bahn gebracht.
Und so ist es wieder nichts mit dem Wunderbaren! Oben vor dem
leeren Hause am Abhang des Tressensteines stehen die
Zuspätgekommenen und murren. Sie, die mühselig und beladen
sind, auf die das Leben seine eiserne Faust gelegt hat, die es blutig
schindet mit seinem unbarmherzigen Druck, sie sollen bloß zum
Narren gehalten worden sein von einem dieser Spaziergänger und
Nichtsthuer? Die Heilige aus ihrem Fleisch und Blut, sie wäre nur
durch die falschen und unnützen Künste behext gewesen, mit denen
sich die Nichtsthuer die Zeit vertreiben –? Und man kann es ihnen
nicht einmal heimzahlen! Sie sitzen in sicherer Ferne in den warmen
Städten, wo sie sich's gut geschehen lassen, während der grimmige
Winter von den beschneiten Gipfeln heruntersteigt in das Land und
alles Lebendige zertritt ...
Unten im Orte ist es wie ausgestorben; in den Villen und
Wirtshäusern werden die Läden geschlossen, Vorhänge und
Teppiche abgenommen, die offenen Veranden mit Brettern
verschlagen. Es giebt keine eleganten Gestalten mehr, keine
Equipagen, keine geräuschvollen Vergnügungen. Das Fieber dreier
Monate ist vorbei; die Gegend kehrt aus dem künstlichen Leben des
Sommers zu ihrer natürlichen Bestimmung zurück. Auf den Pflug
gebückt, bearbeitet der Bauer schweigend seinen Acker; und in der
Furche schreitet der Säemann mit seiner großen, unsterblichen
Geberde – ein Symbol des primitiven Lebens, das sich in den
Jahrtausenden behauptet, Wurzel und Stamm jenes ewigen Baumes,
dessen Wipfel in ruheloser Bewegung von allen Winden zerzaust
werden ...
 Die schönsten Bücher und Geschenkwerke
für junge Frauen und Kinderfreunde!
Manuel Schnitzer, I. Semester
Ein Kinderbuch für Mütter. 3. Auflage. Brosch. M. 3.–,
geb. M. 4.–.
»Möchten viele Mütter das köstliche Büchlein lesen, das übrigens auch für jeden
feiner erzogenen Leser eine wertvolle, anmutende Gabe ist!«
» B a s e l e r N a c h r i c h t e n «.
»Ein Kinderbuch für Mütter! Darin liegt eigentlich eine Bescheidenheit, denn das
Buch ist nicht nur Müttern und solchen, die es werden wollen, zu empfehlen,
sondern jedem kinderliebenden Menschen. Das Buch ist eine liebevolle
Kleinmalerei, reich an Humor und Gemüt, ja ich möchte fast behaupten, mit so
recht mütterlichem Verständnis geschrieben.«
» Vo s s i s c h e Ze i t u n g «, Berlin.

Ottokar Tann-Bergler, Seine Majestät das Kind

Kleine Geschichten von unseren Kleinen. Brosch. M. 3.,–,
geb. M. 4.–.
»Eine Sammlung echter Wiener Skizzen, Kindergeschichten, die und zu Thränen
lachen machen, aber auch zu Thränen rühren ..... Wer Freude an Kindern hat,
dem wird das Buch lieb werden.«
» Z ü r i c h e r Po s t «.
»Die Sammlung enthält so viel Herzerfreuendes, daß sie zweifellos alle
Kinderfreunde willkommen heißen werden.«
» L i n z e r Ta g e s p o s t «.

Elsa d'Esterre-Keeling, Der Philosoph im Steckkissen

Autorisierte deutsche Ausgabe übersetzt von Wa l t e r
H e i c h e n . Brosch. M. 3.–, geb. M. 4–.
 »Dieses reizend schalkhafte Buch wird sicher jedes junge Elternpaar ganz
außerordentlich erfreuen. Es ist eine außerordentlich geistvolle Ironisierung der
mancherlei Schwächen und Thorheiten, welche mehr oder weniger von allen
Eltern teils gegen das Kind, teils unter sich in Gegenwart des Kindes begangen
werden ....«
I n t e r n a t i o n a l e L i t t e r a t u r b e r i c h t e , Leipzig.

Frances Hogdson Burnett, Der kleine Lord

Aus dem Englischen von Pa u l S e l i g e r . Illustriert von
S . v. S a l l w ü r k . Preis M. 3.–.

Paul Herman Hartwig, Schnockelchen

Kindergeschichten. Brosch. M. 1.–, geb. M. 2.–.

Einer gesunden Reform des E h e - u n d G e s c h l e c h t s l e b e n s

der Gegenwart sind folgende Werke gewidmet:

Wenn die Menschen reif zur Liebe werden.

Von E d w a r d C a r p e n t e r . Einzig autorisierte deutsche
Ausgabe. Aus dem Englischen übersetzt und eingeleitet von
Ka r l Fe d e r n . Brosch. M. 3.–, geb. M. 4.–.
Während unsere moderne Erziehung meist mit einer scheuen Verschwiegenheit
über die Fragen sexueller Natur und ihre heimlichen Abgründe hinwegzuleiten
sucht, erörtert der Verfasser, frei von aller Ängstlichkeit und Prüderie, dieses für
das Lebensglück jedes Einzelnen und für unsere gesamte Kultur so hochwichtige
Problem. Mit dem ruhigen und vorurteilslosen Blick des Naturforschers vereinigt er
den idealen Schwung des Propheten und sozialen Reformators. Die unhaltbaren
und unreifen Zustände der Gegenwart unterzieht er einer tiefeindringenden Kritik
und gewinnt aus ihnen die Fundamente einer neuen, höheren Weltanschauung,
welche die Sinne nicht durch Askese und unsinnliches Idealisieren verkrüppeln
läßt, sondern der Persönlichkeit ein freies Ausleben aller ihrer Kräfte und
Fähigkeiten ermöglicht. »Nicht nur fort sollst Du Dich pflanzen, sondern hinauf«.
Dieses Wort Nietzsches könnte man der Schrift als Motto voransetzen. Es ist eins
von jenen Büchern, durch das der warme Hauch des Lebens weht, ein Grund- und
Eckstein von jenem großen Bau der Zukunft, an welchem wir mitzuarbeiten alle
berufen sind.

Das Geschlechtsleben in der deutschen

Vergangenheit
Von M a x B a u e r . Brosch. M. 4.–, geb. M. 5.50.
Auf ein reiches und gewissenhaft geprüftes Quellenmaterial gestützt, entwirft
der Verfasser ein anschauliches Bild von den sexuellen Lebensgewohnheiten und
Sitten unserer Vorfahren. Die naive Derbheit und Sinnlichkeit des mittelalterlichen
Menschen mit ihren oft grotesken Äußerungen der Lebensbejahung ist hier ebenso
anziehend wie historisch treu wiedergegeben. Keine Seite des geschlechtlichen
Lebens, des legitimen, wie des illegitimen, bleibt unaufgehellt. Die Schrift bietet
nicht nur dem Kulturhistoriker von Fach viel Interessantes, sondern ist, trotz ihres
wissenschaftlichen Charakters, auch für jeden Laien lesenswert.

Schriften und Gegenschriften zur »Vera«-Frage.

Vera, Eine für Viele! Aus dem Tagebuche eines Mädchens.
15. Auflage. M. 2.–.
Christine Thaler, Eine Mutter für viele. Ein Brief an die
Verfasserin von »Vera, Eine für Viele«. 3. Auflage. M. 1.–.
Auch jemand: Eine für sich selbst. Brief an die Verfasserin von
»Eine Mutter für viele«. M. 1.–. 3. Auflage.
Verus, Einer für Viele. Aus dem Tagebuche eines Mannes. M. 2.–.
E... E..., Einer für Viele. M. 1.–.
Felix Ebner, Meine Bekehrung zur Reinheit. Aus dem Leben
eines Junggesellen. M. 2.–.
Gerda Schmidt-Hansen, Eine für Vera. Aus dem Tagebuche
einer jungen Frau. M. 2.–.
Zu beziehen durch alle Buchhandlungen des In- und Auslandes.

Nicht nur denen, die Wert auf außerordentlich spannende Lektüre

legen, sondern auch insbesondere für alle diejenigen, welche für die
gerade in unseren Tagen soviel besprochenen Themata des
S p i r i t i s m u s , der S u g g e s t i o n , der G e b e t s h e i l u n g , der
S e e l e n w a n d e r u n g etc. Interesse haben, seien die folgenden
belletristischen Novitäten auf das Angelegentlichste empfohlen:
Victor Blüthgen, Die Spiritisten. Roman. Preis brosch. M. 3,–,
geb. M. 4,–.
»In seinem neuen Roman »Die Spiritisten« zeichnet Victor Blüthgen mit jener
Mischung von köstlichem Humor und herzwarmem Ernst, der ihm eigen ist, einen
Kreis von interessanten Personen, die sich in den Spiritismus vertiefen und
schildert sie in den verschiedensten Stellungnahmen zum spiritistischen Problem.
Besonders sind die Abschnitte, in denen Blüthgen den Wahn einer Befruchtung aus
der vierten Dimension darstellt, von aktuellstem Reiz. Dem Dichter standen die
weitgehendsten praktischen Studien auf dem problematischen Gebiet zur
Verfügung. In den Tagen des Prozesses einer Anna Rothe, unter den Sensationen
der Gebetsheilung dürfte sich ein solches Werk des allgemeinen Interesses
erfreuen.«
Berliner Börsenzeitung.

C. Eysell-Kilburger (Frau Victor Blüthgen), Klänge aus einem

Jenseits. Ein Mysterium. Preis brosch. M. 3,–, geb. 4,–.
Dilettanten des Lasters. Roman. Preis brosch. M. 3,–,
geb. M. 4,–.
Der Roman, ein Beitrag zur Frauenfrage, spielt in einem kleinen Kreise jener auf
geistigem Gebiete erwerbenden Mädchen, die Berlin an sich zieht: Musikerinnen,
Malerinnen, Kunstgewerblerinnen, Schriftstellerinnen, die statt auf den Mann zu
warten, ihr Schicksal in Ringen und Entbehren selbst in die Hand nehmen. Stolz
auf ihre Selbständigkeit, geben sie vor, den Mann entbehren zu können, während
sie innerlich mit allen Fibern nach ihm verlangen, weniger aus Temperament, als
aus der großen Mädchenneugierde heraus. Sie kokettieren mit der Bohême,
machen sich deren Allüren zu eigen, aber sie sind zu anständig, um über heimliche
Wünsche, allenfalls Naschen und Nippen hinauszukommen, sind nichts weiter als
D i l e t t a n t e n d e s L a s t e r s . Und eine und die andere wagt doch einmal zu viel,
man beneidet sie und ergreift mit Feuer ihre Partei. Gerade die Heldin, die
Vornehmste, innerlich Keuscheste unter allen wagt den letzten, gefährlichen
Schritt, wird zum Opfer und bringt es doch nicht fertig, konsequent zu bleiben. Der
ganze Roman bietet auch in der Handlung ein aufgegriffenes Stück Leben von
ergreifendem Ausklang.
Brünner Morgenpost.

Bertha Saturny, Sein Wille. Eine Erzählung im Zeitalter der

Suggestion. Preis brosch. M. 2,50, geb. M. 3,50.
Henry Wenden, Die Tote. Eine Artistengeschichte. Preis brosch.
M. 2,50, geb. M. 3,50.
Dr. med. Fritz Köhler, Die Gebetsheilung. Eine psychologisch-
naturwissenschaftliche Studie. Preis M. 1,–.
Herman Frank, Das Abendland und das Morgenland. Eine
Zwischenreich-Betrachtung. Preis M. 2,50.
A. N. Apuchtin, Vom Tod zum Leben. Geschichte einer
Seelenwanderung. Preis M. 2.–.

Die Vaclavbude
Ein Prager Studentenroman von Karl Hans Strobl.
2. Auflage. Brosch. M. 3.–, geb. M. 4.–. 2. Tausend.
»Nach der süßlichen Romantik »Alt-Heidelbergs« wirkt ein so gesundes Buch
wie das vorliegende doppelt wohltuend. Strobl schildert in seinem Studentenroman
die letzten Tage der sturmbewegten Zeit unter dem Ministerpräsidenten Badeni.
Plötzlich fühlt man sich in jene Zeit zurückversetzt und lebt den Prager Rummel bis
zur Verhängung des Ausnahmezustandes mit ... Die Schrecken dieser wenigen
Wochen sind von dem Autor mit einer solchen Anschaulichkeit geschildert, daß es
einem an mancher Stelle den Atem verschlägt.«
» D e u t s c h e Ze i t u n g «, Wien.
»Ein prächtiger Haß, eine lobenswerte Wut gegen die konventionellen
Ausdrucksformeln ist hier in einer Weise zu Tage getreten, die in ihrer ganzen
Bedeutung freilich nur der Selbstschaffende wird entsprechend würdigen können,
der am besten weiß, wie viel fertige Phrasen an einen herandrängen, setzt man
nur die Feder ans Papier.«
» M ä h r i s c h - s c h l e s . Ko r r e s p o n d e n t «.
»Strobls Erzählung, deren schlichte Helden ein paar Prager Burschenschafter
sind, schildert mit großer dichterischer Kraft und Anschaulichkeit, die stellenweise
an das Packendste, was Zola geschrieben hat, erinnert, Stimmungen und
Vorgänge in den blutigen Prager Dezembertagen nach dem Sturz des Ministeriums
Badeni, ohne dabei viel von Politik zu reden.«
» Vo s s i s c h e Ze i t u n g «, Berlin.

Die Blauen
Eine humoristische Geschichte aus dem modernen Kunstleben
Von
Paul von Schönthan.
2. Auflage. Brosch. M. 2.50, geb. M. 3.50. 2. Auflage.
»Die bekannte glückliche Feder des beliebten Wiener Autors muß man auch an
diesem Kabinetstücke der humoristischen Litteratur bewundern. Er schildert die
Tragikomödie eines Mannes, der mit seinen Talenten zwischen der Sezession und
der konservativen Kunstgenossenschaft schwankt, in den Strudel des mondänen
Kunstkultus gezogen wird und in die Gefahr kommt, allerlei violetten
Beeinflussungen stilisierter Damen und Snobs zu unterliegen. Zum Glück reißt ihn
sein gesundes und im Grunde tüchtiges Naturell aus diesem verworrenen Treiben.
Er malt statt blauer Symphonien wieder solide Bilder und heiratet eine brave
Beamtentochter, statt sich von hysterischen Kommerzienratstöchtern als
Kunstpriester verhimmeln zu lassen. Die Figuren stehen über dem Wiener
Künstlerleben wie auf goldenem Grunde. Als besonders interessant dürfte es noch
empfunden werden, daß zu der Zeichnung von einzelnen jener Figuren litterarische
Persönlichkeiten, deren sensationelle Publikationen besonders den Wiener Boden
stark aufregten, ihre Züge geliehen haben. Ganz abgesehen von seinem
sensationellen Charakter dürfte dieser Roman schon darum das Interesse
weitester Kreise erregen, weil Paul von Schönthan nicht nur spannend zu erzählen,
sondern auch amüsant zu plaudern und humoristisch zu schildern versteht, wie
nur wenige seiner schriftstellernden Kollegen.«
»Hamburgischer Correspondent«
 Hinweise zur Transkription
Das Originalbuch ist in Frakturschrift gedruckt.
Darstellung abweichender Schriftarten: g e s p e r r t , Antiqua, fett.
Der Titel "Dr." ist im Original in Antiqua gesetzt; auf eine
Kennzeichnung wurde hier ausnahmsweise verzichtet, um den
Lesefluss nicht zu hemmen.
Der Text des Originalbuches wurde grundsätzlich beibehalten,
einschließlich uneinheitlicher Schreibweisen wie beispielsweise
"Brunnhofer Seppl" – "Brunnhofer-Seppl", "nicht wahr" –
"nichtwahr", "todmüde" – "totmüde", "verleumdet" – "verläumdet",
mit folgenden Ausnahmen,
Seite 13:
".." geändert in "..."
(am Orinoko oder Maranon Pflanzer geworden ...)
Seite 126:
".." geändert in "..."
(im Ernst behauptete sie, Elmenreich sei ein Weiberfeind ...)
Seite 184:
":" eingefügt
(Elmenreich: »Mna!«)
Seite 220:
".." geändert in "..."
(göttlich überlegen über Tod und Leben ...)
 *** END OF THE PROJECT GUTENBERG EBOOK PIPIN: EIN
SOMMERERLEBNIS ***

Updated editions will replace the previous one—the old editions will
be renamed.

Creating the works from print editions not protected by U.S.

copyright law means that no one owns a United States copyright in
these works, so the Foundation (and you!) can copy and distribute it
in the United States without permission and without paying
copyright royalties. Special rules, set forth in the General Terms of
Use part of this license, apply to copying and distributing Project
Gutenberg™ electronic works to protect the PROJECT GUTENBERG™
concept and trademark. Project Gutenberg is a registered trademark,
and may not be used if you charge for an eBook, except by following
the terms of the trademark license, including paying royalties for use
of the Project Gutenberg trademark. If you do not charge anything
for copies of this eBook, complying with the trademark license is
very easy. You may use this eBook for nearly any purpose such as
creation of derivative works, reports, performances and research.
Project Gutenberg eBooks may be modified and printed and given
away—you may do practically ANYTHING in the United States with
eBooks not protected by U.S. copyright law. Redistribution is subject
to the trademark license, especially commercial redistribution.

START: FULL LICENSE

THE FULL PROJECT GUTENBERG LICENSE
 PLEASE READ THIS BEFORE YOU DISTRIBUTE OR USE THIS WORK

To protect the Project Gutenberg™ mission of promoting the free

distribution of electronic works, by using or distributing this work (or
any other work associated in any way with the phrase “Project
Gutenberg”), you agree to comply with all the terms of the Full
Project Gutenberg™ License available with this file or online at
www.gutenberg.org/license.

Section 1. General Terms of Use and

Redistributing Project Gutenberg™
electronic works
1.A. By reading or using any part of this Project Gutenberg™
electronic work, you indicate that you have read, understand, agree
to and accept all the terms of this license and intellectual property
(trademark/copyright) agreement. If you do not agree to abide by all
the terms of this agreement, you must cease using and return or
destroy all copies of Project Gutenberg™ electronic works in your
possession. If you paid a fee for obtaining a copy of or access to a
Project Gutenberg™ electronic work and you do not agree to be
bound by the terms of this agreement, you may obtain a refund
from the person or entity to whom you paid the fee as set forth in
paragraph 1.E.8.

1.B. “Project Gutenberg” is a registered trademark. It may only be

used on or associated in any way with an electronic work by people
who agree to be bound by the terms of this agreement. There are a
few things that you can do with most Project Gutenberg™ electronic
works even without complying with the full terms of this agreement.
See paragraph 1.C below. There are a lot of things you can do with
Project Gutenberg™ electronic works if you follow the terms of this
agreement and help preserve free future access to Project
Gutenberg™ electronic works. See paragraph 1.E below.
1.C. The Project Gutenberg Literary Archive Foundation (“the
Foundation” or PGLAF), owns a compilation copyright in the
collection of Project Gutenberg™ electronic works. Nearly all the
individual works in the collection are in the public domain in the
United States. If an individual work is unprotected by copyright law
in the United States and you are located in the United States, we do
not claim a right to prevent you from copying, distributing,
performing, displaying or creating derivative works based on the
work as long as all references to Project Gutenberg are removed. Of
course, we hope that you will support the Project Gutenberg™
mission of promoting free access to electronic works by freely
sharing Project Gutenberg™ works in compliance with the terms of
this agreement for keeping the Project Gutenberg™ name associated
with the work. You can easily comply with the terms of this
agreement by keeping this work in the same format with its attached
full Project Gutenberg™ License when you share it without charge
with others.

1.D. The copyright laws of the place where you are located also
govern what you can do with this work. Copyright laws in most
countries are in a constant state of change. If you are outside the
United States, check the laws of your country in addition to the
terms of this agreement before downloading, copying, displaying,
performing, distributing or creating derivative works based on this
work or any other Project Gutenberg™ work. The Foundation makes
no representations concerning the copyright status of any work in
any country other than the United States.

1.E. Unless you have removed all references to Project Gutenberg:

1.E.1. The following sentence, with active links to, or other

immediate access to, the full Project Gutenberg™ License must
appear prominently whenever any copy of a Project Gutenberg™
work (any work on which the phrase “Project Gutenberg” appears,
or with which the phrase “Project Gutenberg” is associated) is
accessed, displayed, performed, viewed, copied or distributed:
 This eBook is for the use of anyone anywhere in the United
States and most other parts of the world at no cost and with
almost no restrictions whatsoever. You may copy it, give it away
or re-use it under the terms of the Project Gutenberg License
included with this eBook or online at www.gutenberg.org. If you
are not located in the United States, you will have to check the
laws of the country where you are located before using this
eBook.

1.E.2. If an individual Project Gutenberg™ electronic work is derived

from texts not protected by U.S. copyright law (does not contain a
notice indicating that it is posted with permission of the copyright
holder), the work can be copied and distributed to anyone in the
United States without paying any fees or charges. If you are
redistributing or providing access to a work with the phrase “Project
Gutenberg” associated with or appearing on the work, you must
comply either with the requirements of paragraphs 1.E.1 through
1.E.7 or obtain permission for the use of the work and the Project
Gutenberg™ trademark as set forth in paragraphs 1.E.8 or 1.E.9.

1.E.3. If an individual Project Gutenberg™ electronic work is posted

with the permission of the copyright holder, your use and distribution
must comply with both paragraphs 1.E.1 through 1.E.7 and any
additional terms imposed by the copyright holder. Additional terms
will be linked to the Project Gutenberg™ License for all works posted
with the permission of the copyright holder found at the beginning
of this work.

1.E.4. Do not unlink or detach or remove the full Project

Gutenberg™ License terms from this work, or any files containing a
part of this work or any other work associated with Project
Gutenberg™.

1.E.5. Do not copy, display, perform, distribute or redistribute this

electronic work, or any part of this electronic work, without
prominently displaying the sentence set forth in paragraph 1.E.1
with active links or immediate access to the full terms of the Project
Gutenberg™ License.

1.E.6. You may convert to and distribute this work in any binary,
compressed, marked up, nonproprietary or proprietary form,
including any word processing or hypertext form. However, if you
provide access to or distribute copies of a Project Gutenberg™ work
in a format other than “Plain Vanilla ASCII” or other format used in
the official version posted on the official Project Gutenberg™ website
(www.gutenberg.org), you must, at no additional cost, fee or
expense to the user, provide a copy, a means of exporting a copy, or
a means of obtaining a copy upon request, of the work in its original
“Plain Vanilla ASCII” or other form. Any alternate format must
include the full Project Gutenberg™ License as specified in
paragraph 1.E.1.

1.E.7. Do not charge a fee for access to, viewing, displaying,

performing, copying or distributing any Project Gutenberg™ works
unless you comply with paragraph 1.E.8 or 1.E.9.

1.E.8. You may charge a reasonable fee for copies of or providing

access to or distributing Project Gutenberg™ electronic works
provided that:

• You pay a royalty fee of 20% of the gross profits you derive
from the use of Project Gutenberg™ works calculated using the
method you already use to calculate your applicable taxes. The
fee is owed to the owner of the Project Gutenberg™ trademark,
but he has agreed to donate royalties under this paragraph to
the Project Gutenberg Literary Archive Foundation. Royalty
payments must be paid within 60 days following each date on
which you prepare (or are legally required to prepare) your
periodic tax returns. Royalty payments should be clearly marked
as such and sent to the Project Gutenberg Literary Archive
Foundation at the address specified in Section 4, “Information
 about donations to the Project Gutenberg Literary Archive
Foundation.”

• You provide a full refund of any money paid by a user who

notifies you in writing (or by e-mail) within 30 days of receipt
that s/he does not agree to the terms of the full Project
Gutenberg™ License. You must require such a user to return or
destroy all copies of the works possessed in a physical medium
and discontinue all use of and all access to other copies of
Project Gutenberg™ works.

• You provide, in accordance with paragraph 1.F.3, a full refund of

any money paid for a work or a replacement copy, if a defect in
the electronic work is discovered and reported to you within 90
days of receipt of the work.

• You comply with all other terms of this agreement for free
distribution of Project Gutenberg™ works.

1.E.9. If you wish to charge a fee or distribute a Project Gutenberg™

electronic work or group of works on different terms than are set
forth in this agreement, you must obtain permission in writing from
the Project Gutenberg Literary Archive Foundation, the manager of
the Project Gutenberg™ trademark. Contact the Foundation as set
forth in Section 3 below.

1.F.

1.F.1. Project Gutenberg volunteers and employees expend

considerable effort to identify, do copyright research on, transcribe
and proofread works not protected by U.S. copyright law in creating
the Project Gutenberg™ collection. Despite these efforts, Project
Gutenberg™ electronic works, and the medium on which they may
be stored, may contain “Defects,” such as, but not limited to,
incomplete, inaccurate or corrupt data, transcription errors, a
copyright or other intellectual property infringement, a defective or
damaged disk or other medium, a computer virus, or computer
codes that damage or cannot be read by your equipment.

1.F.2. LIMITED WARRANTY, DISCLAIMER OF DAMAGES - Except for

the “Right of Replacement or Refund” described in paragraph 1.F.3,
the Project Gutenberg Literary Archive Foundation, the owner of the
Project Gutenberg™ trademark, and any other party distributing a
Project Gutenberg™ electronic work under this agreement, disclaim
all liability to you for damages, costs and expenses, including legal
fees. YOU AGREE THAT YOU HAVE NO REMEDIES FOR
NEGLIGENCE, STRICT LIABILITY, BREACH OF WARRANTY OR
BREACH OF CONTRACT EXCEPT THOSE PROVIDED IN PARAGRAPH
1.F.3. YOU AGREE THAT THE FOUNDATION, THE TRADEMARK
OWNER, AND ANY DISTRIBUTOR UNDER THIS AGREEMENT WILL
NOT BE LIABLE TO YOU FOR ACTUAL, DIRECT, INDIRECT,
CONSEQUENTIAL, PUNITIVE OR INCIDENTAL DAMAGES EVEN IF
YOU GIVE NOTICE OF THE POSSIBILITY OF SUCH DAMAGE.

1.F.3. LIMITED RIGHT OF REPLACEMENT OR REFUND - If you

discover a defect in this electronic work within 90 days of receiving
it, you can receive a refund of the money (if any) you paid for it by
sending a written explanation to the person you received the work
from. If you received the work on a physical medium, you must
return the medium with your written explanation. The person or
entity that provided you with the defective work may elect to provide
a replacement copy in lieu of a refund. If you received the work
electronically, the person or entity providing it to you may choose to
give you a second opportunity to receive the work electronically in
lieu of a refund. If the second copy is also defective, you may
demand a refund in writing without further opportunities to fix the
problem.

1.F.4. Except for the limited right of replacement or refund set forth
in paragraph 1.F.3, this work is provided to you ‘AS-IS’, WITH NO
OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR ANY PURPOSE.

1.F.5. Some states do not allow disclaimers of certain implied

warranties or the exclusion or limitation of certain types of damages.
If any disclaimer or limitation set forth in this agreement violates the
law of the state applicable to this agreement, the agreement shall be
interpreted to make the maximum disclaimer or limitation permitted
by the applicable state law. The invalidity or unenforceability of any
provision of this agreement shall not void the remaining provisions.

1.F.6. INDEMNITY - You agree to indemnify and hold the Foundation,

the trademark owner, any agent or employee of the Foundation,
anyone providing copies of Project Gutenberg™ electronic works in
accordance with this agreement, and any volunteers associated with
the production, promotion and distribution of Project Gutenberg™
electronic works, harmless from all liability, costs and expenses,
including legal fees, that arise directly or indirectly from any of the
following which you do or cause to occur: (a) distribution of this or
any Project Gutenberg™ work, (b) alteration, modification, or
additions or deletions to any Project Gutenberg™ work, and (c) any
Defect you cause.

Section 2. Information about the Mission

of Project Gutenberg™
Project Gutenberg™ is synonymous with the free distribution of
electronic works in formats readable by the widest variety of
computers including obsolete, old, middle-aged and new computers.
It exists because of the efforts of hundreds of volunteers and
donations from people in all walks of life.

Volunteers and financial support to provide volunteers with the

assistance they need are critical to reaching Project Gutenberg™’s
goals and ensuring that the Project Gutenberg™ collection will
remain freely available for generations to come. In 2001, the Project
Gutenberg Literary Archive Foundation was created to provide a
secure and permanent future for Project Gutenberg™ and future
generations. To learn more about the Project Gutenberg Literary
Archive Foundation and how your efforts and donations can help,
see Sections 3 and 4 and the Foundation information page at
www.gutenberg.org.

Section 3. Information about the Project

Gutenberg Literary Archive Foundation
The Project Gutenberg Literary Archive Foundation is a non-profit
501(c)(3) educational corporation organized under the laws of the
state of Mississippi and granted tax exempt status by the Internal
Revenue Service. The Foundation’s EIN or federal tax identification
number is 64-6221541. Contributions to the Project Gutenberg
Literary Archive Foundation are tax deductible to the full extent
permitted by U.S. federal laws and your state’s laws.

The Foundation’s business office is located at 809 North 1500 West,

Salt Lake City, UT 84116, (801) 596-1887. Email contact links and up
to date contact information can be found at the Foundation’s website
and official page at www.gutenberg.org/contact

Section 4. Information about Donations to

the Project Gutenberg Literary Archive
Foundation
Project Gutenberg™ depends upon and cannot survive without
widespread public support and donations to carry out its mission of
increasing the number of public domain and licensed works that can
be freely distributed in machine-readable form accessible by the
widest array of equipment including outdated equipment. Many
small donations ($1 to $5,000) are particularly important to
maintaining tax exempt status with the IRS.

The Foundation is committed to complying with the laws regulating

charities and charitable donations in all 50 states of the United
States. Compliance requirements are not uniform and it takes a
considerable effort, much paperwork and many fees to meet and
keep up with these requirements. We do not solicit donations in
locations where we have not received written confirmation of
compliance. To SEND DONATIONS or determine the status of
compliance for any particular state visit www.gutenberg.org/donate.

While we cannot and do not solicit contributions from states where

we have not met the solicitation requirements, we know of no
prohibition against accepting unsolicited donations from donors in
such states who approach us with offers to donate.

International donations are gratefully accepted, but we cannot make

any statements concerning tax treatment of donations received from
outside the United States. U.S. laws alone swamp our small staff.

Please check the Project Gutenberg web pages for current donation
methods and addresses. Donations are accepted in a number of
other ways including checks, online payments and credit card
donations. To donate, please visit: www.gutenberg.org/donate.

Section 5. General Information About

Project Gutenberg™ electronic works
Professor Michael S. Hart was the originator of the Project
Gutenberg™ concept of a library of electronic works that could be
freely shared with anyone. For forty years, he produced and
distributed Project Gutenberg™ eBooks with only a loose network of
volunteer support.
Welcome to Our Bookstore - The Ultimate Destination for Book Lovers
Are you passionate about books and eager to explore new worlds of
knowledge? At our website, we offer a vast collection of books that
cater to every interest and age group. From classic literature to
specialized publications, self-help books, and children’s stories, we
have it all! Each book is a gateway to new adventures, helping you
expand your knowledge and nourish your soul
Experience Convenient and Enjoyable Book Shopping Our website is more
than just an online bookstore—it’s a bridge connecting readers to the
timeless values of culture and wisdom. With a sleek and user-friendly
interface and a smart search system, you can find your favorite books
quickly and easily. Enjoy special promotions, fast home delivery, and
a seamless shopping experience that saves you time and enhances your
love for reading.
Let us accompany you on the journey of exploring knowledge and
personal growth!

ebookgate.com