EH.net is owned and operated by the Economic History Association
with the support of other sponsoring organizations.

Krupp: A History of the Legendary German Firm

Author(s):James, Harold
Reviewer(s):Guinnane, Timothy W.

Published by EH.Net (January 2013)

Harold James, Krupp: A History of the Legendary German Firm. Princeton: Princeton University Press, 2012. vii + 360 pp. $35 (hardcover), ISBN: 978-0-691-15340-7.

Reviewed by for EH.Net by Timothy W. Guinnane, Department of Economics, Yale University.

?
Harold James? subtitle places this work in the genre of business history, but it is also the story of one of the most important families in modern German history. Any good history of the Krupp family has to be a history of the Krupp firm and vice versa. One can argue that the firm?s success depended on the personalities of individual family members, as well as successful dynastic politics. At the same time, control of the Krupp firm meant the Krupp family could never be just another wealthy family.

The first three generations of Krupps created a huge firm responsible for several technical innovations in steel and related industries. The firm helped establish German industry?s reputation for technical prowess and low costs, and Krupp exports were part of the export success that shaped the German economy in the late nineteenth century. The firm also pioneered innovations in labor management. Krupp built housing, subsidized education, and supported consumer cooperatives for his workers, among other ?progressive? measures. These policies reflected an appreciation that the core of the firm?s success was a cadre of workers and managers whose skills would be rewarded by other firms, and who might take production secrets with them.
?
The Krupp name also evokes some of the darkest chapters in German history. Even in the nineteenth century, success always depended in large measure on arms sales. Krupp produced some of the most notorious (if not always effective) weapons used in the 1870-71 Franco-Prussian war and in both World Wars. The Krupp firm?s conduct during the Weimar Republic and the Nazi “Thousand Year Reich” exemplifies the tortured history of German industry in that period. Gustav Krupp von Bohlen und Halbach, who headed the firm during the 1920s, harbored serious reservations about the Nazis. His son did not share those reservations; Alfried joined the SS in 1931, and after the 1933 Nazi takeover the firm reversed its earlier policy of holding the Nazis at arm?s length. Krupp became a central player in the war economy, producing a wide range of weapons and other war materiel. To do so the firm employed slave labor on a considerable scale. Krupp was not alone among industrial firms in reliance on slave labor, but, some bright spots aside, the firm did little to shield those workers from the worst aspects of their fate. The Allied occupation government initially viewed the entire Krupp firm as a criminal enterprise. The Nurnberg War Crimes tribunal indicted Gustav for trial alongside leading Nazis such as Hermann G?ring. Gustav was found medically unfit for trial and let go, but his son Alfried (who in fact had run the firm during the war) was found guilty in a separate trial of virtually the firm?s entire management. Alfried served little time in prison, and was soon once again playing a major role in German industry.

The Allied occupation tried to break up the firm, not entirely successfully, and some firms in Germany today trace their roots to Krupp origins without bearing the name. After the war several firms were spun off from the main Krupp holdings, and either lost their Krupp name or never had it in the first place (the Krupp shipyard, for example, was named Germaniawerft). The most public face of the Krupp tradition today is Thyssen/Krupp, a giant steel firm bearing two of the leading names of Germany’s nineteenth-century steel industry. The much newer Thyssen firm had been the leader of the consolidated Vereinigte Stahlwerk (United Steelworks), formed in the inter-war period to combat excess capacity and falling steel prices. Thyssen/Krupp appears in the news today mostly in connection with astounding financial losses, a pattern that threatens the Krupp name with something approaching extinction from German economic life.

The Krupp family had a long history in the Essen area that dates to the sixteenth century. James dates the industrial dynasty to Friedrich Carl (1787-1826), whose Krupp Gussstahlfabrik (cast steel works) marks the firm?s conventional beginning. Friedrich was more successful at the technical than business side of the firm. The firm?s survival after his early death reflects both Friedrich?s widow?s considerable business skill and his fourteen year-old son?s early experience managing the factory. Alfred (born Alfried; 1812-87) created the massive firm known to history. Alfred?s son Friedrich Alfred (1854-1902) built on this success. Friedrich Alfred?s will stipulated that at his death, the firm be transformed to a corporation (Aktiengesellschaft). As he left no sons, all but four shares in the new firm passed to daughter Bertha (1886-1957). In 1906, Bertha married Gustav von Bohlen und Halbach (soon ?Krupp von Bohlen und Halbach?), a Prussian diplomat. The Krupp success to that point had depended considerably on their women?s connections and business acumen, but Kaiser Wilhelm II did not trust such an important firm in a woman?s hands, and he personally intervened to arrange the marriage. Bertha and Gustav?s son Alfried (1907-1967) exercised increasing influence over the firm in the 1930s, as his father?s health declined, and Alfried effectively controlled the firm even before his father?s death. Alfried was ?the last Krupp.? Upon his death, most family assets, including the firm, transferred to the Alfried Krupp von Bohlen und Halbach-Stiftung (foundation). Today the largest shareholder in Thyssen/Krupp, the foundation was intended in large part to prevent a hostile takeover.

James?s approach throughout is primarily narrative, but he stresses three themes. First, the Krupp family played for so long such a central role in the German imagination that individual Krupps figure as thinly-disguised characters in German fiction of several periods, and in other cases, a Krupp might well serve as an exemplar for an historical theme. James begins several chapters by noting these literary appearances, in an appealing reminder of the centrality of economic power to German notions of identity. Second, the Krupps realized early on that in their business, the State (including, but not limited to, the military) was an important customer. The Krupps cultivated close relationships with military and political leaders not just of their native Prussia, but of other countries whose railroads or military might want steel products. Sometimes the State was the main customer (as for coin-stamping machinery); other times military products (such as cannon) were a way of demonstrating technical proficiency. James?s stress on this effort reminds us of the long tradition of (especially European) firms conducting what amounts to a foreign policy in their search for markets. He does not draw the connection from Friedrich Alfred?s hob-knobbing with the Kaiser to his grandson joining the SS, but, without excusing Alfried, a family whose success depends so heavily on the favor of those in power might find it hard to see moral lines more obvious to others. Finally, James notes an important tension in the firm?s objectives until its transformation into a corporation in 1903. Until then the Krupps had always pursued complicated objectives that did not resemble profit-maximization in any simple sense. They wanted technical advance, they thought themselves responsible for the workers? welfare (as they construed their welfare), and they thought it their duty to work. Alfred especially was what we today would call a workaholic, stressing the duty to work and to the firm above every other aspect of his life. But perhaps above all, the early Krupps prized the firm?s independence. Alfred in particular hated financiers and resisted organizational forms and credit relationships that would comprise his authority over the firm. In taking this view the Krupps were not alone among industrial pioneers, of course, but the sheer size and success of an enterprise built in this way should give pause to those like Alfred Chandler who see corporations with a particular managerial structure as responsible for every successful enterprise.

Krupp: A History of the Legendary German Firm reminds us of a puzzling gap in the historiography. Business history enjoys lively support in Germany, and any topic even vaguely related to the Nazis risks excessive scholarly attention. Yet there is no satisfactory English-language history of the family or even good English-language biographies of individual members. The most serious research to date, Lothar Gall?s two studies, unfortunately has not been translated into English. Many English-speakers will know William Manchester’s The Arms of Krupp (1968), a best-seller that remains in print decades later. Initial reviews of Manchester?s work stressed its numerous mistakes and his obvious loathing of the Krupps in particular and Germans in general. Yet Manchester in some ways anticipated a more recent and more scholarly inquiry into the role of German industry in the rise of the Nazis and especially the behavior of German firms during World War II.

Krupp: A History of the Legendary German Firm provides a readable and engaging overview of the family and the firm, and will be useful to those wanting a (relatively) compact account. Harold James? broad perspective should appeal especially to those left cold by a narrow firm history; more than most business histories, James tries consistently to connect the Krupp firm and family to the cultural and other developments of the period. This book does not, however, rate among this distinguished historian?s best work. Although sometimes brilliant, much of the book is impressionistic, and it sometimes ill-serves the reader by not signaling clearly what is ?Krupp? and what is ?social and historical context.? To take one example, James notes that Gustav held himself aloof from the Nazis until after their 1933 takeover, while his son Alfried joined the SS in 1931. This difference (and Alfried?s later war-crimes trial) neatly encapsulates a vibrant debate among German historians today: how much did business contribute to the rise of the Nazis, and how much autonomy did business enjoy during the Nazi regime? James provides all the right footnote references, but does only a little to integrate this literature?s insights into his discussion of father and son Krupp.

This English-language work derives from a German-language Festschrift edition (subtitled ?German legend and global enterprise?). The Krupp foundation provided research support for James?s efforts, allowed him access to archives, and holds the book?s copyright. These circumstances have led to accusations that James white-washed Krupp?s history.[1]? The charge is unfair. Many German firms have paid historians to write their official histories. Given the thorough unearthing of the Nazis? various crimes, German firms understand there is little to be gained by trying to restrict what is written about their history. Lothar Gall?s and more recent discussions do not spare the Krupps or their admirers, and even if much of that literature has not appeared in English, it hardly qualifies as secret. James might not be as tough on Alfried as some would like, but his discussion of the firm?s actions in World War II is as frank and detailed as one could ask for a 360-page book dealing with nearly two centuries of history.

A different criticism more accurately accounts for what James?s critics view as excessive sympathy for the Krupps: this work is uneven, lacking the rigor and attention to detail that Harold James?s admirers have come to expect. He may not do justice to the firm?s behavior during World War II, as critics note, but neither does he really do justice to (for example) Alfred?s business strategy. The former weakness, of course, bears much more moral and political weight in our world, but both weaknesses stem from the same source, the effort to condense this much story into so few pages. But the real lesson here is that a story as long, fascinating, and sometimes horrifying as the Krupps? requires something more than a single monograph.

Note:
1. See, for example, the reviews by Richard J. Evans (London Review of Books 34 (2), June 21, 2012) and Frank B. Tipton (Australian Review of Public Affairs, June 2012, http://www.australianreview.net/digest/2012/06/tipton.html)

References:

Lothar Gall, Krupp: Der Aufstieg eines Industrieimperiums. 2. Aufl. Berlin (2001).

Lothar Gall, Krupp im 20. Jahrhundert: die Geschichte des Unternehmens vom Ersten Weltkrieg bis zur Gru?ndung der Stiftung. Berlin: Siedler (2002).

William Manchester, The Arms of Krupp: 1587-1968. Boston: Little, Brown (1968).

Timothy W. Guinnane is the Philip Golden Bartlett Professor of Economic History in the Department of Economics at Yale University. Most of his current research deals with the financial and demographic history of Germany. For more information, see https://sites.google.com/site/timothywguinnane/
??????????
Copyright (c) 2013 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (January 2013). All EH.Net reviews are archived at http://www.eh.net/BookReview

Subject(s):Business History
Geographic Area(s):Europe
Time Period(s):19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII