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Thomas Watson was the sort of guy every business person dreams of emulating. He was a nobody at the turn of the 20th century, but found a mentor and learned…

| April 12, 2018

Thomas Watson was the sort of guy every business person dreams of emulating. He was a nobody at the turn of the 20th century, but found a mentor and learned the ins and outs of his markets, mastering them. In 1914, Watson was hired to lead a company called the Computing-Tabulating-Recording Company (CTR). He ran with CTR—renaming it International Business Machines in 1924—and by his retirement in 1956 he had grown revenues from $9 million in 1914 to $892 million.

But as journalist Edwin Black extensively chronicles, there was a problematic side to Watson. Watson and IBM built machines for Hitler that helped the Nazi state identify Jewish citizens and were ultimately used for the death camps during the war. Watson himself received a medal from Hitler in 1937 for IBM's services to the Reich. (He returned it under popular pressure in 1940.)

Now, some have pointed out that many Western companies did business with the Nazi regime in the 1930s, including Ford and GMC, and IBM also contributed significantly to the American war effort. The point here is not to condemn IBM, but to ask aloud whether morality has a role to play in the business world. Do business leaders have moral obligations? (To the public? To their customers? To their shareholders?) Morality is distinct from ethics; ethics is a mutually-derived code of conduct (sometimes reinforced by regulations); morality is an internal system of values and principles about (admittedly subjective) notions of right and wrong.

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