Krupp: A History of the Legendary German Firm by Harold James (review)

The Friedrich Krupp firm of Essen became so intimately related with the German state during its history that it became symbolic of it. Its story is unique and important. Harold James’s comprehensive business history of the steel concern fills an important gap in the literature. Supported by the Krupp Foundation, which paid for the book’s research, James uses his knowledge of German history to good effect to tell the story of the firm from its foundation as a family business in 1810 to the end of the twentieth century, when it (then a foundation) finally merged with Thyssen. Particularly interesting is James’s expert analysis of how being a family concern influenced its business and marketing strategies over time. He is particularly interested in the role of banks in controlling and shaping German business—the book is chock-full of references to debts and sales.

There are several key questions that any study of a leading German firm has to tackle: the role of political upheaval in the company’s structure and strategy; the role of the firm in the Third Reich; and, is there a particularly German type of capitalism (part of the Sonderweg thesis made newly important by current financial crises)? James admirably addresses all three, but their treatment is somewhat uneven. He is best at showing how German politics influenced Krupp’s business decisions, and he also spends some time reflecting on the uniqueness of German business. Unfortunately, his book doesn’t contribute much to the debate about German industrialists and the Nazis, except to say that Alfried Krupp van Bohlen und Halbach (then in charge) doesn’t seem to fit the typical models. He treats the firm’s connection with the National Socialist regime delicately, but ultimately, it seems, ingenuously; the Krupps were never vocally pro-Nazi, but they gained immense profits during the Third Reich (p. 205).

Innovation is mentioned frequently as a key aspect of the firm’s identity, but James doesn’t dwell on it in any great detail. Certain members of the Krupp family are flagged as innovators, but little is said about how central this was to the company, though James argues at several points that innovation was more important to Krupp than profits (p. 289). Keeping a firm afloat in order to fund costly and non-lucrative innovation was not unheard of in Germany, but James gives little detail to support his assertion that Krupp did so. Examples of less altruistic or visionary rationales for innovation are clearer, as Krupp innovated in order to stay competitive with other firms in the steel industry in Europe. The account does not really bear on a crucial question that has concerned economists and business historians, namely, what is the connection between business structure and innovation?

Three further themes in the history of technology are mentioned here, but they deserve to be explored in more depth with respect to Krupp: labor relations, military technology, and mass production. James notes, for example, that Alfried Krupp embraced photography as a way to enforce labor discipline through surveillance (p. 42), but he doesn’t explain what effect this had on labor relations at a paternalistic company that sought to cultivate loyalty among its workers, the so-called “Kruppianer” (p. 87). The book’s archival source material makes a focus on the firm’s leaders natural, but adopting a view of the labor force as impressionable and troublesome is not. With regard to military production, James argues only that Krupp (notorious for arms sales) used military production primarily as a way to get the German state to support the firm; he tells us nothing further about the difference between military and civil production—practically or otherwise. Of particular interest to historians of technology will be Krupp’s supposed resistance to mass-production methods, which James claims set it apart from its competitors. The influence of the firm’s craft-production methods on innovation and on its...