Siemens im Sowjetgeschäft: Eine Institutionsgeschichte der deutsch-sowjetischen Beziehungen 1917–1933 by Martin Lutz (review)

The first volume in a new series entitled “Perspektiven der Wirtschaftsgeschichte” explores a topic of substantial interest and promise. The extensive literature on early German-Soviet relations has been overwhelmingly conceived in terms of state relations. Martin Lutz, without minimizing the importance of interstate ambitions and agreements, offers a pioneering company-specific study of German-Soviet industrial exchange in the tumultuous period from the Russian revolution to the Nazi assumption of power. His book not only examines Siemens’ policies in response to the Bolshevik revolution and to the loss through nationalization of its substantial Russian assets, but also situates these policies within diplomatic relations and broader questions of continuity in German economic interests in eastern Europe. In both respects the research and argument offer rewarding insights.

The theoretical model which frames the research, and the organizational structure adopted to accommodate it, prove less rewarding. The author borrows concepts from “New Institutional Economics of History,” foremost among them the notion of “truly bounded rationality,” to address the relationship between the profound challenges presented by doing business with the new Russia and the institutional and policy responses of Siemens. The aim of the model is to integrate economic, social, and cultural factors with questions of institutional structures and adaptability. But as deployed here, it tends to complicate the organization of the book and create repetition.

After a lengthy introduction in Part 1, roughly half of which outlines the theoretical and methodological approach, four chapters in Part 2, the core of the book, trace Siemens’ engagement with the new Russia and the Soviet Trade Commission established in Berlin in 1921. The periodization of these chapters is based on the stages of Soviet political and economic development: from war, revolution, and civil war through the New Economic Policy to the first Five Year Plan. Their point of departure is that the war and revolution represented a fundamental crisis in trade which necessitated an equally fundamental relearning process for Siemens. Part 3 focuses on the institutional dimensions of that process, applying the theoretical model to the variety of ways Siemens came to terms with the new circumstances. Its empirical materials are in part duplicated, with elaboration, from the story traced in Part 2. The result is some dispersion of evidence and repetition in the argument.

The uneven integration of the book’s empirical and theoretical components is unfortunate, for the subject and the findings are important. Siemens was Germany’s largest electrical firm and had longstanding and extensive investments in Russia. Prior to 1914 it was the leading electro-technical company there, with its own factories and multiple branch offices. Revolution and civil war effectively suspended its operations, yet loss of its investments without compensation from the Soviets (it did receive partial compensation from the German government) did not mean loss of interest in the Russian market. After internal struggles over strategy and a test of wills with the Soviet Trade Commission, resulting in a temporary boycott of its products in 1923–1924, it again became a major supplier of technology. Although never attaining prewar levels, its exports to the Soviet Union during the intense industrialization and electrification of Stalin’s first Five Year Plan comprised almost 7 percent of the company’s gross revenue.

This study suggests two constants in Siemens’ broad aim to expand profits by regaining lost market share abroad. One was the conviction, for reasons both historical and immediate, that Russia was an essential market for German industry, dependent as it was on export. The second was the assumption that the Soviet state, like Imperial Russia before it, could not supply its own technological and industrial needs. Siemens implicitly subscribed to a theory of modernization that corresponded to the explicit embrace by Soviet rulers, above all Stalin, of progress measured in Western terms. This overlap in central objectives offered a platform for trade, though it by no means...