American Big Business in Britain and Germany: A Comparative History of Two “Special Relationships” in the 20th Century by Volker R. Berghahn (review)

Did the twentieth century really encompass the “Americanization of the World” as William T. Snead asserted in 1902? Was this period objectively “The American Century” as Henry Luce concluded in February 1941? Volker R. Berghahn challenges these long-held beliefs in his book, American Big Business in Britain and Germany. Berghahn has provided a book of original scholarship that challenges earlier works concentrating on the “special relationship” between the United States and Great Britain. On the one hand, he extends his analysis beyond the English-speaking union of Britain and the United States to include Germany in the period from 1900 to 1957. On the other, he questions the basic fabric of capitalism in the international arena, explaining the interplay between politics, diplomacy, and economics. Employing a wide range of sources, especially newspapers and the private writings of contemporaries, Berghahn provides a riveting economic-diplomatic history, illustrating quite clearly that power follows the money. Sadly, profits dominate the agenda no matter the actions of the nations involved.

In the first two decades of the twentieth century, the United States emerged as a great power both diplomatically and economically. At the same time, Great Britain’s economic hegemony began to decline. Berghahn argues that the United States, as the clearly superior economic force, attempted to coerce Great Britain into conforming to American economic policies, such as the “Open Door” concept of international trade, while the British wanted to reestablish the protectionist practices of the Empire and Commonwealth. Meanwhile, Imperial Germany embraced advances in industrial methods and production, including the application of academic training to management practices. Primarily as a result of its superior educational system, Germany quickly stepped forward as the preferred market for American investment. Germany had the necessary prerequisites for economic stability: a larger population than Great Britain, a superior economy, and a willingness to follow the American lead in business practices.

Unfortunately, Berghahn does not fully explain some of the contradictions in this story: for instance, the fact that some German business practices, like cartels, conflicted with the American model. Similarly, he does not fully integrate into his analysis the “varieties of capitalism” school of historiography that postulates a close relationship between the United States and Great Britain as defenders of market capitalism against the German bank-dominated and closely held business system. Berghahn gives this interpretation rather short shrift (7–8), yet it challenges his analysis.

Germany appears as Berghahn’s hero in the business relationship with the United States, interrupted only by the two demons: Kaiser Wilhelm II and Adolf Hitler. Although both represented substantive threats to stability, some American business leaders fell under their spell and continued business contacts. Only with the outbreak of armed conflict, and to protect investments in England and France, did US big business shift to a defense of allied interests. Although these two extremists temporally interrupted the “special relationship” with Germany, the relationship was quickly rehabilitated after the world wars. Conversely, the end of World War II led to the deterioration of Anglo-American relations yet again. England supported the Morgenthau plan, a proposal designed to limit German reentrance into the world economy. Because the plan was contrary to American visions of postwar commerce, the American administration scrapped it. West Germany emerged as the preferred business partner. Any supposed “special relationship” died quickly with American policy during the Suez crisis, when Great Britain, France, and Israel attempted to seize the canal in 1956 after Gamal Abdel Nasser threatened to nationalize the area. The US President was prepared to attack the British pound in order to force compliance with American demands. Earlier closeness between the English-speaking allies dissipated quickly. Great Britain became America’s “poodle” (8), a faithful friend when needed.

Berghahn’s transnational perspective illuminates the economic, political, and diplomatic authority of...