This was originally published in the October 17, 1973 issue of Computerworld. Computerworld seems still to exist and presumably is the copyright holder. As with the other material here that I am merely the author of, if the copyright holder wishes this taken down, they need only ask.

(NOTE: I wonder how many IT professionals know that their profession actually has a code of ethics. It was published in 1992. It's available at

ARMONK, N.Y. Oct 17, 1973 - In late 1973, the Association for Computing Machinery officially adopted a code of professional ethics. Historians have now shown this code led directly to the market crash of 1975 and to the so-called "Black Decade" from which we are only now beginning to recover.

The code itself seemed innocuous enough. It required integrity, virtue, honesty, etc. from data processing professionals. It had no more real substance than the ethical codes of the medical, legal or automobile repairing professions. Under normal circumstances, it would have been both ineffectual and harmless. But those were not normal times.

The ACM code was caught up in the wave of reaction which swept the country as evidence mounted of malfeasance and corruption both in politics and within the DP industry.

In the reaction, the ACM code was formulated into law -- the worst, in retrospect, of the many laws (many good, a few bad) passed in that era. The first two states to include the ACM ethical code in its laws were Rhode Island and Minnesota. By May of 1974, 27 states had such a law. In the Autumn of 1974, Congress added federal statutes to the list.

The first known conviction under these laws was obtained in Montana on April 26, 1974. Frederick J Abernathy, Mountain States sales representative for Synergenics, Inc of Palo Alto, Calif. was convicted of knowingly and willfully misrepresenting a Synergenics 2796-4 disk as being "plug-to-plug" compatible with the CDC 6200 when in fact only the plugs (Amphenol Type 519-3-31 pin) were compatible. He got five years and $5000.

Other arrests and convictions came thick and fast culminating in November 1974 when the entire sales staff of the IBM Federal Systems Division was arrested by federal agents for conspiracy to violate Public Law 892-54 -- intention to knowingly misrepresent the capabilities of an information system.

Although the trial -- known popularly as the trial of the Gaithersburg 5692 -- was eventually thrown out of the Federal District Court in Baltimore, MD due to a flaw in the the arrest warrant, the message was clear -- lying about hardware or software capabilities could get one in big trouble.

A second message took much longer to become clear. That was that even without lying competition, telling the truth about hardware and software capabilities sold about the same number of computers and programs it always had -- next to none.

Actually, few prospective clients actually needed a computer, and once salesmen were forced to describe their products honestly, the customers were able to figure that out.

Lost Contracts

Many companies which had bought into contracts discovered that they would have to take a far larger loss than anticipated (glossing over defects was good for five to ten years and a substantial fine) and had little or no prospect for recovering their loss.

An observant individual would have noted a suspicious number of vacancies at the presidential and vice presidential levels of EDP firms in the fall and early winter of 1974-75.

As with most such things, the evidence of disaster accumulated slowly. A few astute individuals observed the direction of the wind, cashed in their chips and got out of data processing.

By early 1975, the unemployment percentages began to creep upward fueled by flocks of unemployed programmers and engineers as well as those who had been displaced in other fields by the few data processors who were fortunate enough to have connections outside the EDP business.

Then the corporate reports began to come out showing evidence of disaster which even commonly accepted auditing practices could only partially mask. DP stocks slipped, slid, then, as the steady stream of bad news continued, crashed. IBM. at 419-1/2 in June of 1974, still stood at 411 on Jan 1,1975. On Jan 15 it was 388. On Feb 1, at 358. On Feb 15, at 306. On Feb 19, it dropped 126 points from 297 to 171 before trading was halted. It reopened six days later at 194, gained five, and promptly dropped 52 points. Other DP stocks did worse. IBM, after all, makes office equipment on the side.

Bankruptcies were widespread. Worse yet, prospect for DP firms were nonexistent.

Unfortunately, the DP industry had evolved to be far more extensive than most people had realized. Millions of Americas owed their living directly to computer related jobs, and millions more were supported indirectly by EDP work.

The DP industry was every bit as much of a pillar of late 20th century society as was the automobile industry. When it collapsed, the society it supported collapsed. Despite the monetary shakedown of the early 1970s, the U.S. was still the leading economic force in the world. The stock market crash of 1975 led to a worldwide financial debacle including not only the capitalist world, but, to the surprise and chagrin of the communist world, the socialist and communist societies as well.

Once the nature and cause of the disaster became clear, attempts were made to recover. The ill-conceived ACM ethical code laws were, of course, repealed. But the magic was gone. Society was stuck on a skid into the depression of the later 1970s and the last thing anyone needed was an expensive computer of dubious capability to perform an unnecessary job. Humpty Dumpty was not about to be put together again.

We have now, most of us, survived the 1970s, and the economy appears to be on its way up. Our new society relegates computers to a minor and socially constructive role. Perhaps all this is to the good.

Yet one cannot but wish that the framers of the ACM code of professional ethics had been less concerned with ethics and honesty, and more conscious of their role as clowns and roustabouts in a circus -- an entertainment. which is, by its very nature a deceit, albeit a harmless devisement, and a thing which should never, ever, have been taken seriously.