From: lessgovt@gmail.com   
      
   ‘The Greatest Capitalist Who Ever Lived’ Review: Mr. IBM   
   By Stephen Budiansky, Oct. 20, 2023, WSJ   
   Growing up the son of the highest-paid executive in America, who by the 1930s   
   had made IBM a household name with its near-monopoly on punch-card tabulating   
   equipment, Thomas Watson Jr. felt nothing but dread about his apparently   
   inescapable destiny—   
   taking over the family business.   
      
   Alternately indulged and harshly disciplined by his domineering father, he was   
   paraded in jacket and tie at age 9 before dutifully applauding employees. In   
   his teens, supplied with his own car, sailboat and a monthly allowance of   
   $7,000 in today’s    
   money, he predictably rebelled, getting into scraps at school, flunking out of   
   a series of private academies and finally squeaking through Brown University,   
   where he concentrated on girls, drinking and flying airplanes.   
      
   Suddenly, an opportunity presented itself to make his way “absolutely on my   
   own,” Watson recalled. A business friend of his father’s was looking for a   
   secretary to accompany him around the world, selling pavilion space at the   
   upcoming 1939 New York    
   World’s Fair. Leaping at the chance to escape from his father’s   
   shadow—“my personal Independence Day,” he called it—Watson was halfway   
   around the world when his boss confessed that his father had secretly managed   
   the whole thing, paying his    
   son’s salary and expenses. A “terrible blow to my pride,” the son said.   
   A few months later he joined IBM as a sales trainee, remaining there the rest   
   of his working life.   
      
   “The Greatest Capitalist Who Ever Lived,” a biography of Thomas Watson Jr.   
   (1914-1993) by Ralph Watson McElvenny and Marc Wortman, is the story of that   
   reluctant son’s successful transformation of IBM into the world’s foremost   
   manufacturer of    
   computers. It begins with his accession to the presidency in 1952, at age 38,   
   and culminates in the 1960s with the launch of the System/360 series, which   
   vaulted IBM into the position of most valuable publicly traded corporation in   
   America. There is lots    
   of boardroom drama, family feuding and high-stakes technological gambles.   
   Although the lead author is Watson’s grandson, the authors do not shy away   
   from unflattering details about their subject’s personality and private   
   life. But neither do they    
   offer much insight into his character, or go beyond psychology and   
   business-management clichés in describing the lessons he learned from his   
   personal struggles (e.g., teamwork is important).   
      
   Despite trumpeting the authors’ access to the IBM archives and personal   
   family papers, lengthy sections of the book draw entirely on Watson’s 1990   
   memoir, “Father, Son & Co.,” and do not dig deeper. His estrangement from   
   a sister is briefly    
   mentioned but never explained, and there is a cursory nod to his and his   
   father’s devotion, unusual for corporate leaders of that day, to social   
   justice and to support for the Democratic Party. But the reader is not left   
   with much of an impression of    
   personal growth or self-knowledge.   
      
   Perhaps Watson fails to emerge as a full-fledged character because he did not   
   have much of a character. Like his father, Watson was given to terrifying   
   rages that left employees shaken or in tears. He deliberately pitted   
   individuals and divisions of the    
   company against one another, and at home expected his wife and children to   
   jump to his orders. Although once he buckled down to his responsibilities   
   Watson undeniably worked hard to learn the business, he never shed his   
   spoiled-rich-kid persona, dropping    
   $50,000 on impulse on a painting or antique car, commissioning custom sailing   
   yachts, buying a Learjet and a helicopter for his personal use, along with a   
   secret hideaway with a private airstrip on an island in Maine where he could   
   conveniently drop in    
   for one of his (many) extramarital affairs.   
      
   The idea that Thomas Watson Jr. was “the greatest capitalist who ever   
   lived” is both a bit fatuous and more than a little ironic, given the   
   company’s longstanding dependence on government largess; IBM owed much of   
   its early success in the 1920s, ’   
   30s and ’40s to contracts with the Census Bureau and the Social Security   
   Administration, major users of IBM tabulating equipment and its (very   
   profitable) punch cards, of which the company sold billions a year to its   
   equipment lessees.   
      
   As it moved into computers, the company lagged technologically behind its far   
   more innovative early competitors, and nearly every one of IBM’s subsequent   
   technological advances was directly funded by hefty government R&D and   
   production contracts. The    
   authors mention the pivotal role that the company’s work on the Air   
   Force’s SAGE radar system played in its initial foray into electronic   
   computing and its adoption of the new technology of magnetic-core memory.   
   Costing more than the Manhattan    
   Project, the SAGE system of networked ground stations, designed to detect   
   enemy aircraft and direct fighters to intercept them, provided 80% of the   
   company’s computer revenues in the 1950s. But IBM had to be practically   
   forced by the Air Force’s own    
   engineers to employ the new memory, which would subsequently prove key to   
   IBM’s success in the commercial computer business. (Core memory would be   
   used in nearly all computers until superseded by semiconductor chips in the   
   1970s.)   
      
   A huge gap in the book is any mention of the even greater helping hand IBM   
   received through its extensive work for the codebreakers of the National   
   Security Agency. NSA contracts provided the company with millions of dollars   
   in revenue starting in the    
   mid-1950s, plus direct support for major breakthroughs in data processing and   
   storage hardware, notably the semiconductor processors that delivered a   
   100-fold increase in speed over their vacuum-tube predecessors. NSA’s   
   leaders often expressed    
   frustration at the way their contracts with IBM would inevitably morph into a   
   product IBM could sell to its commercial customers. “As usual the agency has   
   a firm hold on the IBM leash and is being dragged down the street,” an NSA   
   engineer assigned to    
   keep tabs on the company’s work for them reported. “If you want to control   
   an R/D contract you should pick a company other than IBM.”   
      
      
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