September 17, 2007

Business by Other Means

I'm told the head, at the time, of the Krupp family and therefore the Krupp armaments concern submitted a bill to the Allied armies at the end of WWII. It seems an unexploded German bomb, discovered early in the war, revealed to the Allies the superior fuse the Germans employed and they promptly adopted it for their own use. Well! there was clear appropriation if not violation of copyright and patent here so you can imagine. But how to calculate the number of fuses owed for? As surely as severed umbilical cords entail live births, exploded bombs entail exploded fuses.

As it happens, perhaps not unexpectedly, the Krupps were able to calculate the effects of weapons of mass destruction to a fine statistical point. They knew quite precisely the ratio of civilian death to bombs dropped in a terror raid. They erred on the conservative side by a point or two--after all, where calculation is approximate, it's best to give your customer the benefit of the doubt. They were businessmen after all, not thieves.

Flush from recent victory, the Allies felt comfortable violating a legitimate commercial obligation, and simply refused to pay.

There's a lesson to be learned here. As little as patriotic feelings typically inspire what used to be called cartels and are now usually called multinationals, the side of any conflict they wind up on will affect their bottom line. IBM collected throughout the war on the first widescale practical application of the stippled card technique which would ultimately lead to the earliest computers--numbering for administrative purposes the prisoners in the Nazi death camps. (Tattooed on their arms were skin-imprinted replications of the numbers encoded on these stippled cards.) Nazi Germany having collapsed and surrendered with the last payment still due--bankruptcy with extreme prejudice you might say--the final cheque was delivered to an IBM representative by Allied High Command, within the shadow of Bergen-Belsen. Everything has hidden as well as visible costs--worth bearing in mind when you read a story like this online.

C 2007 Martin Heavisides


Chancelucky said...

do you have a reference for the Krupp story? I'd like to check it out.

I know that American scrap metal dealers essentially supplied steel used in the Japanese war effort during World War 2.

In a more modern vein, I guess there are some interesting details about the "hydrocarbon" agreement in Iraq. It's not just about splitting the revenues between Sunnis and Shiites. It has provisions to keep certain British and American companies in the picture.

Bits like the Krupp story are always fascinating.

Martin Heavisides said...

The Krupp story I was told when I was in University. I might have to research a bit to see if it bears scrutiny. (It's why I begin the story 'I'm told'.)