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The Art of Cloaking Ownership: The Case of Sweden.

Reviewed by Mark Harrison

This book is the outcome of the authors' exhaustive investigation of the wartime activity and interests of the Wallenburg brothers, Jacob and Marcus, prominent in Swedish financial circles of the time. Its main focus is on the Stockholm Enskilda Bank (SEB). Aalders and Wiebes argue that SEB played a significant role as an intermediary for private German companies such as Bosch, IG Farben, and Krupp, helping them to conceal and thereby retain ownership of foreign subsidiaries which otherwise would have been liable to confiscation by the Allied powers, and helping the wartime German government both to retain ownership of its foreign assets and to realize the proceeds from sale of assets looted from Germany's occupied territories, Jewish families, and so on. In addition, the Wallenburg-controlled ball-bearing manufacturer Svenska Kullager Fabriken (SKF) not only played its part in concealing German ownership of foreign subsidiaries across the world, but also supplied the German war economy with large quantities of ball-bearings in the decisive stages of the war.

This is the core of the argument. The authors go on to argue that the Wallenburgs began to retreat from this strategy towards one of accommodation with the Allies as German defeat became increasingly likely. After the war, after years of pressure and counter-pressure, half-hearted postwar investigation, disclosure, and continued concealment, they made a kind of peace. Rather than go for full exposure and a judicial resolution, the Americans chose to protect the Wallenburgs and at the same time use their interests as a covert route for enforcing on neutral Sweden the commercial blockade of the Soviet sphere of influence. In their epilogue, the authors suggest that the Wallenburgs' nephew Raoul, imprisoned and executed after the war by the Russians despite his wartime efforts on behalf of Hungarian Jews, was basically a victim of the sequence of intrigues.

This is a story of considerable interest from many different angles which Aalders and Wiebes appear to have researched with great persistence and ingenuity, in the archives of many different countries and with the cooperation of many different organizations (but not of SEB itself). At the same time one wishes that they had stepped back occasionally from the mass of detail and documentation to consider the broader issues raised in their work. What drives their efforts is perhaps best defined as a politico-legal problematic: to what extent were international law and Swedish neutrality violated by the Wallenburgs' activities? The authors aim to show that the Wallenburgs compromised Swedish neutrality, both in wartime (when they acted in German interests) and after the war (when they were forced to follow a pro-NATO line). The Aalders-Wiebes methodology is definitely a legal one: the step-by-step accumulation of an overwhelming mass of incriminating evidence both direct and circumstantial. Their criterion for condemnation is also implicitly legal, sometimes "on the balance of probabilities," sometimes "beyond reasonable doubt." But a jury of lay readers might wish that the law had been more clearly stated by the authors, and the case more succinctly summarized. The authors do not explain the meaning of neutrality, the rights of neutrals in a conflict, or how the rights and obligations of citizens of a neutral country might differ from those of its government. Nor is there much of a summing up, the opportunity for which is diverted into speculation about the fate of Raoul Wallenburg.

This legalistic approach means that many important questions are not asked. Social scientists (as opposed to jurists) are often professionally more inclined to see behavior as the test of law, rather than law as the test of behavior; on this point the documentary evidence may well not suffice, and other kinds of knowledge should be introduced. At the level of governments and policies one set of questions arises concerning neutrality. How viable was the Swedish concept of neutrality when most other countries were at war? Was neutrality feasible in principle (or, on the other hand, was it the only possible objective)? Was there any way of upholding neutrality other than by doing dirty deals with both sides? If Swedish neutrality was compromised, what criteria are appropriate for us to decide whether it was substantially compromised, on a large scale?

At the level of private interests and individuals we need to know more about the motives which drove behavior and the calculations which directed it. Why did the Wallenburgs act as they did? Was it for the sake of immediate profits, or pro-German or pro-Nazi feeling, or some calculation of the long-run value of their market position in the global economy after a German victory? The relationship to Nazi goals of the German firms' interests with which the Wallenburgs were involved is also unexamined. Were Krupp and Bosch trying to uphold the long-run overseas financial position of Hitler's Reich, or were they pursuing their own private strategy regardless of the outcome of the war? How was it that so many in Swedish and Allied governments colluded with the Wallenburgs - was it because of personal friendship, financial self-interest, or shared objectives for restructuring the postwar global economy?

In summary, this is a most interesting book which tells a complex tale but misses a number of opportunities for the reader's more general information.

Mark Harrison is Reader in Economics at the University of Warwick. He is the author of a number of books and articles about defense industries and about World War II in Russian and international comparative economic history, most recently Accounting for War: Soviet Production, Employment, and the Defence Burden, 1940-1945 (1996).
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Author:Harrison, Mark
Publication:Business History Review
Article Type:Book Review
Date:Dec 22, 1996
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