On April 7, 1964, IBM officially gambled the company on the introduction of the S/360, a new mainframe computer. The first model, roughly the size of an industrial refrigerator, could process more than 32,000 calculations per second. Just four years later, IBM was offering a model capable of 5.5 million. Making any of this computing potential actually work demanded a gray-suited army of highly trained consultants. By 1984, mainframe computing was a $12b business with IBM sweeping up 80% of its revenues.
The weekend after IBM’s big 1964 announcement, Dixiecrats in the US Senate launched the final phase of their filibuster of the Civil Rights Act. For months, Senators from the Confederate states led a defensive campaign worthy of General Lee, using every available means to kill the bill. A Senate vote broke the Dixiecrats’ filibuster on June 10, 1964 and the Civil Rights Act was sent to the President.
Just four miles from the Capitol that summer, Shirley Jackson was graduating as the valedictorian of Theodore Roosevelt High School, the first of the District’s high schools to respond to the Supreme Court’s Brown decision by integrating. She was, along with one other student that year, the first Black woman admitted to MIT.
Interestingly, MIT had begun admitting Black students (male, of course) in the 1890’s, and maintained a stream of Black students up to the revival of national Klan activity during WW1. In the 1920’s, that stream dried up until the 60’s.
Jackson would not only graduate from MIT but become the first Black woman to earn a doctorate there, in Physics. She joined Bell Labs in 1976 while also becoming a Physics professor at Rutgers. In 1995 she was appointed to head the Nuclear Regulatory Commission. In 1999, she was named President of Rensselaer Polytechnic. In 2014 she would join the President’s Intelligence Advisory Board under America’s first Black President.
Illinois Republican Senator Everett Dirksen took the rostrum in the final day of the great 1964 Dixiecrat filibuster and quoted Victor Hugo, “Stronger than all the armies is an idea whose time has come.” He could have put it another way: Mythologies follow power.
Why did white supremacy fail? A tide “stronger than all the armies” was shifting against white nationalism. In the post-war years, the rise of a knowledge economy put the interests of white nationalism at odds with the growing power of a new generation of corporations.
Professor Derrick Bell in 1980 described what he called the “interest-convergence dilemma” in civil rights law: “The interest of blacks in achieving racial equality will be accommodated only when it converges with the interests of whites.” People had fought against the slave trade, bigotry, and white supremacy for as long as these institutions existed. What changed in the 20th century was the acquisition of a new ally. By 1964, white people were earning money in ways that not only didn’t need white supremacy but chafed against it. That money would eventually destroy white supremacy as the unifying force in American life.
While interest-convergence helps explain the failure of our white supremacist mythology, it also foreshadows our challenge in building something better. Limits of affluent white Americans’ appetite for racial justice continue to mark the limits of racial justice overall. Replacing white supremacy with something more just will eventually require us to push the boundaries of liberal white willingness to compromise their personal interests.
In 1953, Tom Watson, Jr. the President (and son of the CEO) of America’s leading data company, IBM, wrote Policy Letter #4 to his management team. It included the following passage:
“Each of the citizens of this country has an equal right to live and work in America. It is the policy of this organization to hire people who have the personality, talent and background necessary to fill a given job, regardless of race, color or creed. If everyone in IBM who hires a new employee will observe this rule, the corporation will obtain the type of people it requires, and at the same time we will be affording an equal opportunity to all in accordance with American tradition.”
His far-sighted memo was published a year before Brown v Board of Education and several years before the Montgomery Bus Boycott. A close examination of Watson’s strategy can go a long way to explaining the death of white supremacy and the pitfalls we face in replacing it.
Watson’s policy directive was aimed less at his own managers than at the segregationist governors of Kentucky and North Carolina. IBM wanted to expand its manufacturing operations into lower wage environments of the South, but it could not allow Jim Crow to undermine the company’s priorities. Those facilities would open in the late 50’s with white and black employees side by side.
In 1958 IBM abolished the hourly wage in an effort to bridge the divide between its white collar and manufacturing workforces. As CEO, Tom Watson Jr. would look for ways to bridge a growing divide in compensation between management and front-line workers with innovations in profit sharing and employee stock ownership. He wrote:
“I thought that the model corporation of the future should be largely owned by the people who work for it, not by banks or mutual funds or shareholders who have inherited the stock from their parents and done nothing to earn it.”
In the 60’s the company would step up its investments in racial equity, working with Robert Kennedy on a project to open IBM facilities in the Bed-Stuy neighborhood of Brooklyn and backing Kennedy’s redevelopment agenda. While Dixiecrat Senators were battling to halt the Civil Rights Act in 1964, its author, Assistant Attorney General and Head of the Civil Rights Division, Burke Marshall, was fighting behind the scenes to win votes. After he won, IBM would make Marshall its general counsel.
We have an instinct to place halos on our heroes and horns on our villains. Do not make this mistake. Neither Thomas Watson, Sr nor Jr. were ideological crusaders, but relentless advocates for their company’s interests. IBM’s interests, and the interests of an entire emerging industry, had converged with the interests of civil rights reformers – up to a point.
Tom Sr. was running IBM when Tom, Jr published his racial equity memo. Two decades earlier, when IBM’s goals required collaboration with the Nazis, Tom Sr. didn’t hesitate. IBM’s punch-card tabulators, developed first for the US Census, then for the Social Security Administration, became crucial to the Nazi effort to round up Jews. IBM’s German subsidiary was its second-most profitable unit during the Depression.
When the Nazis insisted they could only do business with IBM if it removed Jews from senior management, the company complied, at least in Europe. Tom Watson Sr. met Hitler in 1937, where he was presented with The Order of the German Eagle. He returned the medal in 1940. There’s no evidence that CEO Tom Sr. wrung his hands over Nazi anti-Semitism in the 1930’s, or that he resisted Tom Jr.’s move toward desegregation in the 1950’s. Neither move was about ideology. This is a very important factor to understand.
Look closely at the language of Tom Jr’s policy statement. What goal does it identify? “The company will obtain the type of people it requires.” What does that mean?
How many cotton planters ever used the word “talent” to describe their business needs? What about coal barons? Steel companies in the 19th or early 20th century weren’t looking for workers with particular “personality, talent and background,” to borrow Watson’s phrasing.
Mythologies follow power. Wealth derived from land tends to be relatively “extractive.” Gaining possession of the asset is the greatest part of gaining wealth from it, because the money is largely just extracted from the asset. Labor in plantation agriculture was almost entirely “fungible,” meaning any new unit could be plugged in to replace an old unit with little or no loss of output. This fungibility declined slightly in industrial settings, where the ability to read and write, manage a clock, and master craft-like skills made some workers marginally more valuable than others. But still, high levels of creativity, critical thought and education in an industrial laborer added little value for the capital owner.
Cotton planting, like coal mining or timber cutting, was relatively heavy in brute force and light in scientific engineering. That’s not to say that innovation played no role, but that it was relatively less important than in certain modern industries. Compare, say, the force versus innovation mix in cotton farming to the demands of producing photocopiers or writing software. In extractive industries, the most important key to wealth is gaining ownership or control of a productive asset, then holding extraction costs down. Profit in extraction industries comes primarily from rents rather than innovation.
What are the main political interests of a cotton planter in 1870? Clear, secure land title. Access to markets. Inheritance rights. Low taxes. Police power to prevent mass unrest. Perhaps some minor infrastructure investments to speed products to markets. That’s about it. Almost anything else government does in that setting is shaved directly off their profits. Investments in health care, education, mass transportation, science and innovation not only lower their profit margins, but threaten their power.
Mythologies follow power. IBM in 1953 had very different interests from capital owners in agriculture or industry.
The same way a gold miner searches for “the mother lode,” a new brand of company in the 20th century was starting to search for “talent.” Talent is not a finite resource. You don’t capture talent in a war. You can’t make it produce under the lash. Talent requires cultivation. A poverty-striken, war-torn country has just as many smart people as a prosperous, peaceful nation, but it doesn’t have as much talent ready for knowledge work. It is impossible to develop the human potential of a population, making it ready to power a knowledge economy, without significant, long-term investments in that population’s well-being. By the second half of the 20th century, nations were in competition to create the best conditions for developing talent.
By the post-WW2 era, a new generation of entrepreneurs was accumulating wealth, which breeds power, by cultivating human ingenuity. What they wanted from a government was not just different from the needs of planters and industrialists, but starkly at odds with these older power centers. White supremacy was becoming an obstacle to money and power.
Why was Shirley Jackson accepted into MIT in 1964 when her mother wouldn’t have been given such an opening? If IBM’s needs hadn’t moved the culture to develop new talent, Sputnik would. Power was lining up against the preferences once granted to white men, preferences that stunted America’s capacity to develop talent for knowledge industries and national defense.
People had been fighting against slavery, Jim Crow and white supremacy for as long as those institutions existed in North America. What changed in the 20th century is that they found a critical ally. Combining this long egalitarian thread in American life with a new economic power gave the allies of racial equity an unprecedented opening. Why wasn’t Martin Luther King Jr. simply lynched like so many men and women before him? This new generation of activists had access to powerful allies.
IBM and similarly placed companies needed a mass of healthy, comfortably raised, highly educated and creative people prepared to devote their minds to problem-solving. These new knowledge workers were not fungible. This labor pool did not fit into classical Marxist categories. Knowledge workers’ talents and skills were not sold in the marketplace by the hour but could become a platform for capital investment. Those labor-like skills could be improved by investment, usually in the form of education or training, raising their yields, like capital. And these workers were beginning to be compensated directly in the form of capital ownership in their employers’ companies. For knowledge capital investors, development of a population’s health, welfare and talent made everyone richer, even as the workers themselves earned more. Knowledge capitalists needed a government unlike anything humans had ever seen. The government they want still hasn’t fully taken shape anywhere in the world.
What IBM, other knowledge capitalists, and the national defense infrastructure needed from a political system was not what cotton planters and factory-owners needed from a political system. White supremacy, as developed, refined and perfected to harmonize the interests of rural and industrial capitalists would be at war, almost literally, with the needs of knowledge capitalists, for decades. Knowledge capitalists won this war because they have vastly more wealth, and wealth-creation power, at their disposal and because a powerful vein of activist egalitarian politics survived in the US, ready to seize this opening.
Where does that leave us? In the 2020 Election, counties that produce well over 70% of US GDP opposed the white nationalist presidential candidate. Republicans, running on a platform lifted from a 1920’s KKK pamphlet, can only win in the places left behind by the pivot to knowledge capitalism, places that don’t generate enough knowledge capital to compete. White supremacy remains the dominant, though dying mythology of America’s deteriorating backwaters. Power and money have largely abandoned white supremacy as the means of preserving and perpetuating its interests.
That doesn’t mean that white supremacy will be stamped out and forgotten in every corner of the globe. It means that white supremacy has already shrunk to the point that it no longer functions as the unifying mythology for the US.
This is bad news for America’s remaining white supremacists. Whether it becomes good news for humanity is a question that remains unanswered, left largely in our hands. This is where the “dilemma” in the interest-convergence dilemma, begins to bite.
White financial clout behind the destruction of white supremacy won’t necessary help in the construction of something better. At least, not without pressure. Corporations, for example, want to be unshackled from the constraints of Jim Crow, free to reap the dividends of a society that develops talent without the artificial constraints of racism. But when the desire to build a new, post-racial mythology begins to challenge the interests of otherwise anti-racist whites in material ways, as in areas like police and zoning reforms, will whites be willing to relinquish enough of their privilege for a more just order to emerge? California’s experience suggests that the interest-convergence dilemma continues to define the limits of racial progress.