Anthony J. Pennings, PhD


Lotus Spreadsheets – The Killer App of the Reagan Revolution – Part 1

Posted on | September 23, 2014 | No Comments

The major feature of the “Reagan Revolution,” according to Peter Gowan’s Global Gamble, was to “put money-capital in the policy saddle for the first time in decades.”[1] From the time of his presidential IBM PCinauguration in early 1981 and throughout his eight-year tenure, Reagan’s administration sought to propel the financial sector through widespread policy changes designed to “roll back” the containment of finance instituted during FDR’s reign and the early Cold War. Part of what made this political and economic movement consequential was the development of the electronic spreadsheet and its use on the newly invented personal computers such as the Apple II and IBM PC.

In this post I want to set the context for the success of the spreadsheet, particularly Lotus 1-2-3. In a future post, I will explore the formal aspects of the spreadsheet as a meaning-making application and why they are so effective in social and economic realms. I’m not taking a technological determinist position here, but rather arguing that spreadsheets and related financial technology facilitated the impact of what is sometimes called the “Reagan Revolution.” The major policy characteristics of this economic transformation included:

  1. the deregulation of banking and financial industries;
  2. relaxing the laws on anti-trust and corporate acquisitions;
  3. major tax cuts to privatize surplus wealth;
  4. securitization of student debt and other financial instruments;
  5. removing the caps on interest rates that banks could charge on credit cards and other loans;
  6. increasing US government debt to feed the bond industry and provide an additional hedge for financial risk-taking;
  7. selling off government agencies and assets;
  8. strengthening the dollar to help export production capital to low-cost countries, as well as;
  9. pressuring countries around the world to enhance the flow of US-produced news; and the
  10. liberalization of global capital controls.[2]

Also important was the increased military spending and commercialization of Cold War technology that facilitated globalization of capital with fiber optics, microprocessors and packet-switched data communications. These technologies were the primary drivers of financial innovation and economic activity in the 1980s and their productive legacy continues to shape the global economy.

The ingeniously innovative “microcomputer” spreadsheet, VisiCalc, was created when Dan Bricklin teamed with his friend Bob Franston in 1977 on an homework assignment for his Harvard MBA degree. Not surprising, it was an assignment to do the calculations for one corporation to take over another corporation that sparked Bricklin’s computing solution. Faced with doing the monotonous calculations on standard green ledger sheets, he fantasized about creating a calculating tool that combined the usability of fighter plane “heads-up display” simulation with re-editing capability of a word processor. The two of them went to work with an Apple II and the result was a new “visible calculator” technology that rocked the financial world.[3]

The use of the spreadsheet exploded after IBM introduced its own “Personal Computer” in August of 1981. Soon after, Lotus 1-2-3 became available for the “PC” and all the “IBM-compatible” clones such as Compaq and Dell. Lotus 1-2-3 was named for its spreadsheet, graphing, and database capabilities that combined to produce an extraordinary new facility to both conceptually and textually organize financial information. Although the earliest PCs were weaker than their bigger contemporaries – mainframes, and even the relatively large minicomputer, they had several advantages that increased their usefulness.

The main advantage of the PC-based spreadsheet was its immediacy – it put computing power in the hands of a single user and bypassed the traditional authority structures of the data processing centers organized around mainframes and minicomputers. The microcomputer was characterized in part by its accessibility: it was small, relatively cheap, and available via a number of retail outlets. It used a keyboard for human input, a cathode ray monitor to view data, and a newly invented floppy disk for storage. Together they allowed a user to input their own numbers and play with different combinations. The main benefit being the new flexibility in terms of the speed and amount of information immediately available. Unlike using a spreadsheet on a mainframe, which required trips to the EDP department for each data input change, the PC-based spreadsheet allowed new data to be entered easily via the keyboard and provided immediate results on the screen.

One implication was that frustrated accountants and financial analysts would go out and buy their own computers and software packages, often over the objections or indifference of the EDP department. People could do the calculations themselves, and ignore the bureaucracy.[4] Lotus 1-2-3, with its combination of graphics, spreadsheets, and data management caught the eye of many business entrepreneurs and corporate executives who saw the value of a computer program that simplified the monumental amount of numerical calculations and manipulation needed by the modern corporation. By October 1985, CFO magazine was reporting that “droves of middle managers and most financial executives are crunching numbers with spreadsheet programs such as Lotus 1-2-3.”[5]

Lotus 123

Microcomputer based spreadsheets became ubiquitous in the business world and became a major productivity tool. In an era of incredible economic and financial flux, the electronic spreadsheet became the “killer app” that guaranteed the success of the PC industry and also provided an incredible new utility for individuals in the financial sphere. They were empowered to create dramatic new numerical calculations and construct new financial “what-if” scenarios in unprecedented short timeframes. As the Reagan Revolution took hold, the spreadsheet was there to to itemize and measure value, mobilize dormant resources, and place them into the transactional circuits of the global economy.

For example, spreadsheets were used around the world in a process called “privatization” where national assets were minutely valued to produce collateral for international loans or in the case of state-owned enterprises (SOES), turned into shares that could then be listed on national or international stockmarkets and sold. Margaret Thatcher started this process with the sale of British Telecom and soon after New Zealand became the international model when it “corporatized” and sold off its telecommunications agency to retire one-third of the accumulated national debt.

Within a liberalized regulatory infrastructure and an interlinked chain of financial institutions, financial traders eager to become “masters of the universe” quickly adopted the new technology. “Spreadsheet knowledge” began to have an extraordinary ability to capture and fix value in monetary terms. Spreadsheets are not so much a reflective technology as they are a constitutive and productive technology. They do not reveal the world as much as they create new financial meaning by creating and solidifying relationships between previously disparate resources. They were increasingly used by accountants and other financial magicians to construct value in such a way that it can be entered into the flows and accumulation processes of corporations other organizations enmeshed in the monetary flows of the global economy.

The PC-based spreadsheet created a new visualization process that combined financial calculation with interactive manipulation in such a way as to help create a new financial-based economic dynamism. It is this combination of financial deregulation and technological innovation that created the trajectory of digital money-capital and enshrined the legacy of the Reagan Revolution. That inheritance lives on in the disparities of debt and wealth so prevalent in today’s dystopic global economy.

In Part II, I will discuss some of the historical precedents that led up to the 1980s as a period of intensifying financialization that welcomed the use of the PC-based spreadsheets. The corporate environment was particularly vulnerable to a variety of raids enhanced by financial technologies like Lotus 1-2-3.

In later posts I will examine the more formal aspects of how the spreadsheet works using a combination of cultural and media analysis to explore its internal machinations and external implications. An important question in this inquiry examines the importance of “spreadsheet capitalism,” the role of these calculative devices in organizing and evaluating the financial information central to modern organizations and the modern political economy.


[1] Peter Gowan’s (1999) Global Gamble: Washington’s Faustian Bid for World Dominance.
[2] US debt tripled under Reagan to over $2 trillion. Notable liberalization of global money flows occurred when Reagan addressed eurodollars by allowing onshore facilities. This list is compiled from my work on How IT Came to Rule the World which examined the Reagan legacy in such entries as From Sputnik Moment to Reagan Revolution and How Star Wars and Japan’s Artificial Intelligence Threat Led to the Internet.
[3] Bricklin quote from (2002) Computing Encyclopedia. Volume 5: People. Smart Computing Reference Series. p. 30.
[4] Stephen Levy’s “Spreadhsheet Way of Knowledge” was an early influence. So much so that I asked one of my NYU students to create the linked website. It was originally published as Chapter 10 in Tom Forester’s (ed.) Computers in the Human Context: Information Technology, Productivity and People. Basil Blackwell. 108 Cowley Road, Oxford OX4 1JF, UK.
[5] Quote from CFO on the impact of Lotus 1-2-3 in the corporate world from David M. Katz, “The Taking of Lotus 1-2-3? Blame Microsoft.” December 31, 2002.


AnthonybwAnthony J. Pennings, PhD is Professor and Associate Chair of the Department of Technology and Society, State University of New York, Korea. Before joining SUNY, he taught at Hannam University in South Korea and from 2002-2012 was on the faculty of New York University. Previously, he taught at St. Edwards University in Austin, Texas, Marist College in New York, and Victoria University in New Zealand. He has also spent time as a Fellow at the East-West Center in Honolulu, Hawaii.


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