Structuring the Information Age: Life Insurance and Technology in the Twentieth Century (review)

Historians have long focused more on how goods and services are made and marketed than on how they are used once they enter the marketplace. Scholars of "consumer culture" focus on end users, but they tend to define them as men or women on the street, who individually wield relatively little influence whenever they venture into a restaurant or department store. Structuring the Information Age examines the history of information technology in the United States by shifting focus away from the producers of that technology and toward a kind of end user that has heretofore received little attention—large-scale corporations, which easily rank among the leading information-technology (it) consumers. All but a tiny fraction of it use prior to 1980 was by business and government clients; even today, a quarter of a century into the personal-computing revolution, those sectors account for more than 80 percent of all it sales.

Although Yates focuses only on a single type of business client, the life-insurance industry, this sector supplies her with several interesting contrasts. Some insurers mass-marketed small policies to working-class customers; others comparable in size processed fewer policies; and still others were much smaller regional firms. Since scale and scope have everything to do with a company's data-processing needs, these two variables were key to determining what motivated insurers to purchase it and when to switch from one type to another. What united these companies was that it costs comprised a uniquely large slice of their budgets—20 percent, second only to the securities industry—and that they were usually conservative in their adoption of new systems. This later trait (corresponding as it did to considerable brand loyalty) was ibm's salvation, since it enabled that notoriously conservative organization to survive the rocky transition from card tabulators to electronic computers.

The one variable that Yates denies much weight in her account is managerial strategy. She refuses to apply the orthodox manager-centered approach, pioneered by Chandler, to explain how corporate clients implemented the machines that they bought.¹ Instead, she cleverly shows that widely divergent strategies typically had minimal effects on outcomes. The best example of this situation is her contrast between how the Equitable and the Prudential used the ibm 705 model (which worked with either punched cards or magnetic tape) in moving from tabulators to computers during the 1960s. Equitable executives treated the 705 as a powerful tabulator, only gradually feeding the more efficient tape into the new machine. Prudential executives tried to move to tape immediately but vastly underestimated the time needed to write programming for the new applications and to convert their far-flung branch offices to the new regime. The result was that both firms took roughly the same amount of time to computerize, at roughly the same cost.

Despite its many virtues, this book serves historians of technology and organizational theorists far better than it does historians of insurance. Most of the important company and trade association history that does not directly relate to it is drawn from secondary sources. Also, the primary payoffs that Yates describes relate to operational features like payroll and customer service, which are common to nearly all large-scale it users. Lurking in the background is an interesting twist, which Yates introduces but spends little time unraveling: The industry's actuarial side, which might be assumed to be most in need of "mechanical brains," did not come close to generating the volume of data-processing work that would have justified buying expensive tabulators and computers. Although actuaries led the way in pushing the companies to renovate their it capacity, the machines were nearly always used to keep track of workers or customers...