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Divide and Prosper: The Heirs of I.G. Farben under Allied Authority, 1945-1951.

Divide and Prosper: The Heirs of I.G. Farben under Allied Authority, 1945-1951 Although economic growth in West Germany after 1948 was in line with the wider European trend, it was generally met with surprise. This surprise was mainly the result of the stark contrast between the seemingly total devastation and paralysis at the end of the war and the recovery of a leading international position as an industrialized nation by the late 1950s. Economic and historical studies drew this contrast into the scope of their work early on. By the late 1950s it was recognized that the dismantling and destruction of German industrial resources that had been modernized during the war, especially in the area of capital goods, had in fact had only a superficial effect, leaving the substance of industry untouched. The question of the importance of politics to the economic resurgence was debated from the start. Did political decisions such as the currency reform, the Marshall Plan, and the state's tax and financial policies spark the boom, or did they merely reinforce an existing process of reconstruction that was primarily defined by the provision of a large industrial capacity in the Western zones, as well as of a sufficient if not growing number of qualified workers? Aside from the political connotations of this question within the context of the neo-liberal political debate, these issues are still debated by German economic historians today.

Raymond Stokes's study of the formation and rise of I.G. Farben's successor companies opens a new perspective, as he analyzes the process of recovery after the war on the level of three companies within one branch of industry in whose development both economic and political factors can be found. Stokes's central proposition is that the potential for growth existing in the three successor companies in terms of capacity, the tradition of production, and human capital was able to develop under the conditions created by the currency reform, the Marshall Plan aid, and the tax and financial policy of the new federal goverment. This process coincided with a rapidly expanding world market, to which the successor companies had access in the context of an occupation policy that was no longer restrictive and whose dynamic in turn broke the already crumbling autarky tradition of the German chemical industry. In this accomodation within the U.S.-dominated world market, Stokes sees an essential result of occupation policy. In his opinion a second result was the destruction of monopolistic structures in favor of oligopolistic ones that imitated the American tradition. The combination of integration in the world market and the renunciation of monopoly ensured a fundamental change in the direction of the German chemical industry's subsequent development.

In this context the I.G. Farben successor companies' German management is of central importance. Their surprising degree of creativity and flexibility allowed them to grasp the opportunity of 1948-49. The English and French policy of maintaining and continuing production in the I.G. plants in their respective zones contributed to the preservation of the management potential residing in a group of managers with a long experience of the chemical industry and of I.G. Farben in particular. The American occupation policy, however, had a more restrictive influence on the development of what became the Hoechst AG, paralyzing existing structures with a split between the U.S. antitrust tradition and big business interests. The abandonment of this policy and the readiness of the United States to accept a solution of an oligopolistic nature is therefore of central importance for the resurgence of the German chemical industry. Given the U.S. dominance of occupation policy, Stokes concludes that the American change in policy played a decisive part in the resurgence.

The book is well written and clearly structured. The problem is formulated in terms of the significance of Allied policy and the material and political factors involved in reconstruction for the development of the German chemical industry in the context of Western Europe. Correspondingly, Stokes divides the history of I.G. Farben and its successor companies into four parts. The first deals with the development of the concern up to 1945: Stokes presents a balance discussion of I.G. Farben's relations with National Socialism, avoiding both uncritical condemnation and flat apology. The firm's wartime relations, or perhaps the U.S. administration's perception of them, decisively influenced the early postwar policies in the occupation period. In Stokes's opinion I.G. Farben was as prepared to cooperate with the regime as it was to independently and creatively exploit the opportunity for machinations. At the same time Stokes neither denies the primacy of politics nor tries to present I.G. Farben as a monolithic block. The second part of the book examines the development of each of the I.G. successors in the three Western zones of occupation. Stokes believes the division into zones was a formative influence on the later break-up into three major successors. The comparison of the zones also allows a comparison of the different forms of occupation policy, which makes the "destructive" character of U.S. policy clear. The third part of the book deals with the period from 1947 to 1951, in which Stokes develops the above theses. The fourth part summarizes the study and explores conclusions.

Stokes's study of a wide range of German, American, British, and French sources provides the basis for a finely argued discussion. This is exemplified by the greater weight given to the internal conflicts of U.S. occupation policy, which does not conform with the black and white picture of a Morgenthau group on the one hand and the representatives of big business on the other. Another insight won through the critical assimilation of sources is the focus on the dilemma of French occupation policy, which had reluctantly to help support BASF in order to make use of its potential while following the overall aim of making Germany industrially weak. The role of the British is slightly underestimated, although interesting points can be found here too, above all in the increasingly negative attitude of the government in London and the military government to industrialists' wishes concerning the destruction of any chances for German competitiveness.

The study is not a true company-oriented history, even if internal company decision and adaptation processes are sometimes the focus. It is accepted that I.G. Farben agreed to the dismemberment into three major companies insofar as it corresponded to the earlier internal regional structure. To what extent the decisions of 1948 and the subsequent development led to a redefinition of management concepts, product policies, and strategies for the world market is still an open question. To put the question in a more pointed way, to what extent can one speak of an Americanization of not only the world economy but also of the German chemical industry? According to Stokes, the German managers possessed a remarkable degree of flexibility, which made possible both the adaptation to National Socialism and the exploitation of the opportunity for expansion after 1948. In this light they appear to be opportunistic chameleons obliged only to promote the expansion of their company without any commitment to a particular style of management. Whether this indeed was the case remains open to debate, as does the question of the significance of the generational change at the managerial level, which was completed under National Socialism, for the postwar recovery in general.

Further detailed studies of individual industries are necessary before more light can be shed on this complex of questions: What was the essential precondition for the modernization of company policy and thus for the successful return to a dynamic world economy? Was it the orientation of the German industrial elite toward an apolitical flexibility required under National Socialism, or were exogenous factors necessary before the development of German companies could be brought into line with that of Germany's Western competitors?

Werner Plumpe is wissenschaftlicher assistent at the History Faculty of the Ruhr University Bochum. He is the author of a number of contributions on the history of the administration of the economy and employer and trade associations in West Germany in the postwar period, including the book Vom Plan zum Markt: Wirtschaftsverwaltung und Unternehmerverbande im britischen Besatzungsgebiet (1987). At present he is working on a study of industrial labor relations in large German concerns before 1933. (This review was translated for the reviewer by Kirsten Jones.)
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Author:Plumpe, Werner
Publication:Business History Review
Article Type:Book Review
Date:Mar 22, 1990
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