One of the primary places computer hacking originated was at MIT during the late Fifties and Sixties. A group of students, many of who came from the Tech Model Railroad Club (which had an incredibly complicated switching system for its model railroad) were able to use a couple MIT computers very late at night. So they started to write programs. Showing how hierarchical computer access was, one computer (an IBM 704 worth several millions) was guarded by a group of people who were called "The Priesthood." Students were not even allowed to touch it! They would have to reserve time and then give their program cards to a priest to enter it into the machine. They preferred using a donated TX 0 computer that gave real-time feedback and whose owner was much more permissive in granting access, over the batch processing IBM which was maintained by a bureaucracy. Due to MIT’s computer rules, there was a lot of conflict between the "hackers" and the "Officially Sanctioned Users." The hackers used the computers to innovate and explore, whereas the others used them to speed-up traditional number crunching. The hackers believed that computers could create new paradigms, and wanted to expand the tasks computers could accomplish.

As computer time was so valuable, hackers developed the ethic of not wasting it. Computers ran around the clock and there were always a group of students ready to fill-in in case someone would not show up for their slot. It wasn’t only college students who were interested. One faculty kid turned hacker, Peter Dreutsch, got computer time under a false name and wrote his first program at the age of twelve. As they had to write basic programs to run the computer, they shared their work freely. They enjoyed such feats as fine-tuning a program to be as efficient with scan computing resources as possible. The Tech Model Railroad club defined a hack as, "a project undertaken or a product built not solely to fulfill some constructive goal, but with some wild pleasure taken in mere involvement," and the most proficient members were self-defined "hackers" (Levy). One first example of a "hack" was a computer "game" of Ping-Pong where a computer light would move from left to right (and back) changing direction if you flipped a computer switch at the right time. Other "hacks" included a program to convert Arabic numerals into roman numbers, and a program that attempted to play music.

It was based on early hackers, like at MIT, that Steven Levy developed the "Hacker Ethic" in his landmark 1984 book:

The key word in the first statement is "access." In the early computer-era, the vast majority of college students had no access to computers. Only the most advanced students were able to use the best technology, and the creative desires of the budding hackers were discarded in favor of the institution’s use of the machine for number-crunching or its own research agenda. Likewise, until the early nineties very few people had access to the Internet – large powerful networks were out of reach.

The power behind the second statement is that it calls for "all" information to be free, not just some. This is misleading to some extent, as most hackers do not want to abolish individual privacy (however corporate privacy is highly questioned). A better way to phrase it would be that all information whose release will not harm an individual should be free. Here again this ethic finds its roots in the early hackers who readily shared their programs, operating as a free scientific community. Also it comes from the structure of computers themselves which must freely copy information to operate (Levy). Bits (zeros and ones) are copied from disk into memory which is copied to the CPU where they are manipulated in calculations. Computers are constantly sharing information. The earliest computer networks did not bother to have security. Anyone who had physical access could copy or run any program they wanted to, however this would eventually change.

Hackers did not like large bureaucracies like IBM. This logically flows from the desire for access, as bureaucracies are excellent at creating rules which would ration scarcities (like computer time) according to organizational priorities, which would generally exclude hackers. That explains why hackers would want to "promote decentralization."

The fourth statement shows the meritocratic ideal of hackers. Like the desire for access (that allows illegal hacking to get it), this is also ends-oriented. An early example of this belief was the thirteen-year-old faculty child at MIT who was accepted by the college students because of his ability to program and critique the programs of others.

The final two statements assert the early utopic ideology of computer hackers. They believed that not only could technology be used to perform current jobs more efficiently, but that it could radically transform the world into an idyllic society. Hacker utopians believe that computers, and other advancements such as biotechnology, will lead to a qualitative improvement in life. Non-hackers did not, especially in the early stages of the computer revolution, believe that art and beauty could be created on the computer. The initial hacker utopia was later negated by the cyberpunk culture who recognized the possibility that technology would be used to assist an authoritarian corrupt state (like Orwell’s 1984 or Gibson’s Neuromancer), instead of promoting a radically decentralized democracy (akin to that promoted by the New Left in the 1960s). The last statement in the ethic comes from the belief that hackers became demi-gods through their total control over infallible machines.

Not only did this ethic challenge the mainstream computer community, but also it was intended as a universal critique of society. For as Levy argued:

Levy’s ethic contains some political ideas along the lines of libertarianism or mild anarchism; however, it does not provide a progressive framework that would be needed were hackers to play a significant role in the global resistance against the power elite.

Since the creation of this ethic, many people have claimed to adhere to it, however a controversy has emerged over whether they are true to its spirit. The problem comes from what is left out of the ethic. It is silent about what means hackers should use to get information. It implies that breaking bureaucratic rules is acceptable. Therefore many hackers felt that gaining access into computer or phone networks by hacking was also permitted, even encouraged. Others felt that illegal attempts at access would harm the networks, unintentionally or intentionally, and thus went against the MIT-based hacker ethic.