Silicon Insider: PCs for Tyrants?
March 25, 2004 -- It may be time once again to ask the question: Would you pitch your PCs to Hitler?
There are so few great pieces of journalism in the history of high tech — as opposed to the mountains of bad writing and suspect reporting — that it is a shame when one of them is forgotten.
The article I have in mind appeared in February 1977 as the cover story of a young and struggling minicomputer trade magazine called Computer Decisions. It was bylined by the editor, Hesh Weiner, and a reporter, Laurie Nadel. The cover featured a grainy image of a pair of Nazi SS stormtroopers and the headline: “Would You Sell a Computer to Hitler?”
The story answered its own question: "No, no, of course not," say U.S. computer companies, "We would never do such a thing." And yet, Weiner and Nadel continued, these same computer companies were selling their mainframe and minicomputers to dictatorships and tyrannies, notably in South America, that used them to track dissidents and the soon-to-be “disappeared.”
Business Is Business
The article set off a firestorm. I remember sitting in my cubicle in Hewlett-Packard’s PR department, the junior member of the staff, listening as my elders muttered and fumed about how this was the most irresponsible kind of yellow journalism, that companies could not be expected to track the use of every single computer they sold. And, they added darkly, for a young man trying to build a successful magazine Hesh had made a deadly mistake ticking off his biggest advertisers.
They were right. Before long Computer Decisions was gone, and Hesh was on the street (though I’m pleased to note that a Google search found him still writing for some computer industry e-zines.) The computer industry had dealt with the problem in the way corporations always deal with the unspeakable: they changed the subject and walked away.
But as much as I admired, and still admire, those men I worked with at HP, on this matter they were utterly and completely wrong. Because the answer to Hesh’s uncomfortable question was: Yes, even saintly HP would sell a computer to Hitler, as long as he hadn’t declared war on the United States of America or been placed on the Commerce Dept.’s embargo list.
That’s business, that’s what shareholders demand, and that’s why we have a federal government. But don’t deny it; and don’t take umbrage when that unpleasant fact is pointed out to you.
Computers for Criminals
I’ve thought about that article many times in the quarter century since it first appeared. Since that distant time, computers, processors and the Web have been used for everything from child slavery to mass murder to WMD production to organized crime — with all of us playing our little part through our employers, 401(k)s and stock portfolios.
And I thought about Hesh’s story just again when I read recently about how Intel Corp. was having to halt the sales of its Centrino wireless processor chip in China after a dispute with that country’s government. The Chinese government has ordered all Intel Centrinos for sale in China to carry encryption technology produced only in China. Intel has replied that it cannot make the current June 1 deadline.
It is hard to make out exactly what is going on here. The most straightforward explanation is that China, with the world’s second largest PC market is making a protectionist move, the World Trade Organization agreements be damned.
By forcing its own encryption standards (and eventually video compression, and other protocols) on all foreign components makers, it can partially close off its own market, prop up domestic manufacturers, and force foreign competitors to dance to its tune.
It’s a risky move, not just because it is going to tick off the WTO and the world’s other great manufacturers (i.e., the United States), but if domestic manufacturers can’t stay as innovative as their foreign counterparts, it could actually put China in a technology sidepool.
But you also can’t read about this demand without getting the creeps. After all, encryption? Is this latest example of that Sino-paranoia, like the occasional blackouts of Google, that assumes America is trying to infiltrate China through technological wizardry?
Or, more ominously, is this the way the Chinese government will use to access any computer in the country and track any deviations from official policy? Who knows? All that we can be certain about is that Intel, unconcerned about these larger issues, is doing its level-best to try and keep the customer — in this case, the world’s largest authoritarian regime — satisfied.
According to company spokesman Chuck Molloy, Intel is in heavy talks with Chinese officials to try and figure out a way to meet China’s standards without changing the existing Centrino architecture.
When Profits and Ethics Collide
As near as I can tell, larger ethical issues are not part of the decision-making equation. Should they be? That may prove to be the most important question of the new global economy.
Pure, free market capitalism argues unfettered trade ultimately results in the highest common good. But the world isn’t perfect — and even the most doctrinaire free trader is willing to accept embargos on selling, say, state-of-the-art weaponry to one’s enemies or to dangerous rogue states.
What is problematic is the vast gray area just below the North Koreas and Irans. What if China wants to use the reprogrammed Centrino to suppress free speech? Should Intel then refuse to sell the chip in China, whether or not it’s on the Commerce X list?
How about if China’s only strategy is commercial — that it wants to protect its home industries in preparation for an economic assault on the United States? Should Intel, headquartered in Santa Clara, but operating throughout the world, be patriotic to the United States and refuse to help? Or is its first duty to its shareholders? And what happens when profits and per share earnings collide with security and sovereignty?
There are no easy answers here. CEOs aren’t politicians, and we can’t expect them to be. And yet … I find myself remembering that cover story from a simpler, if no less dangerous, world. Somebody sold all those cell phones to Osama bin Laden.
Perhaps it’s time to revisit that old Computer Decision story, bring it up to date to the world of the Internet and al Qaeda, name the new bad guys and their corporate confederates — and, ultimately, force us to ask ourselves some painful questions.
Any takers?
Michael S. Malone, once called “the Boswell of Silicon Valley,” most recently was editor-at-large of Forbes ASAP magazine. His work as the nation’s first daily high-tech reporter at the San Jose Mercury-News sparked the writing of his critically acclaimed The Big Score: The Billion Dollar Story of Silicon Valley, which went on to become a public TV series. He has written several other highly praised business books and a novel about Silicon Valley, where he was raised.