German Yearbook on Business History 1982

The economic situation in the world is not in order. The inhabitants of the Western countries, used to prosperity, as well as the people in the East, have good reason for dissatisfaction. National products, and with them mass incomes, are stagnating or actually in decline, high inflation rates are causing concern to small savers and even more to people in higher income groups. We see the reaction in a “flight into fixed assets” or purchases of grotesquely over-valued works of art. Many countries are experiencing deficits on their current account and — a symptom of growing distress — unemployment rates are high and rising further. There are reports of shortages of food and other consumer goods in the Soviet sphere of influence, while years ago the situation in Poland erupted in public protests against the shortage of better quality foodstuffs. There are also reports of difficulties in oil — producing countries. Take Algeria, Nigeria and Mexico, for instance, which embarked on very ambitious development projects and now find that they have to cut back as oil consumption and concomitant revenues drop. While the European Community complains of growing mountains of butter and milk powder and its members quarrel over fishing rights and the annual budget contributions, hundreds of millions of people are starving in the Third World.

The two men who created the cooperative movement in Germany, Hermann Schulze-Delitzsch (1808–1883), who worked in the towns, and Friedrich Wilhelm Raiffeisen (1818–1888) who worked in the rural areas, were directing their efforts to helping different groups in the population, but both were groups suffering from the economic and social developments in the first half of the last century. The two men never met, although there was some contact between them at times, mostly from Raiffeisen to Schulze-Delitzsch, and the cooperative banks which they founded differed in many details. Nevertheless, we can distinguish in both men three lines of development which are related to the establishment of the cooperatives and are virtually identical:

The following essay is not original. The question it examines and the method used necessarily and inevitably closely follow those in the excellent study by Patrick O’Brien and Caglar Keyder on economic growth and prosperity in Britain and France up to the First World War¹ — excellent because it is full of ideas, immensely stimulating and admirably brief and concise.

Research into the organisation and management of indudstrial enterprises still lags very far behind in Germany, although a number of more recent case studies consider the organisational and management structures of enterprises as well as their business development. Among them we should mention the work of Jürgen Kocka on the Siemens family firm, Hartmut Pogge von Strandmann on Mannesmann and Wilhelm Treue on the Thyssen concern¹.

Any examination of the relations between Krupp and the Reiehswehr entails a careful assessment of the facts as well as the motives of the persons involved. A brief account of the Treaty of Versailles and its effect on the hopes and expectations of the defeated powers is a major prerequisite.

The German thrift and home-ownership system came into being in the wake of World War I as a self-help movement designed to assist in overcoming a twofold distress situation: a dire need of housing and a dearth of house-building funds. Owing to the complete interruption of house-building and house-preservation works during the war and the immediate post-war period, and further owing to the influx of people from the ceded territories, the uncovered demand for housing in Germany had accumulated to an estimated 800000 units by the end of 1923¹. Commercial private-sector house-building was unable to meet this demand because the interest rates on the required mortgage loans, once war and inflation had made havoc of the capital market, were so high that the resultant rents would have been well out of the financial reach of broad strata of the population.

The tradition of marking an anniversary by issuing a special publication with a more or less detailed history of the enterprise is still strong. The welcome tendency of recent years to greater factuality and a more academic approach has continued — with a few exceptions — in 1981 as well.