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Business as Usual: Journalistic, Academic, and Synthetic Responses to Allied Corporate Collaboration with the Third Reich

December 25, 2010

Review Essay

Business as Usual: Journalistic, Academic, and Synthetic Responses to Allied Corporate Collaboration with the Third Reich.

Reinhold Billstein, et al., Working for the Enemy: Ford, General Motors and Forced

Labor in Germany During the Second World War (New York: Berghahn, 2000).

Edwin Black, IBM and the Holocaust: The Strategic Alliance between Nazi Germany and America’s Most Powerful Corporation (New York: Crown Publishing, 2001).

Neil Forbes, Doing Business with the Nazis: Britain’s Economic and Financial Relations with Germany 1931-1939 (London: Frank Cass Publishers, 2000).

J.R. Pauwels, The Myth of the Good War: America in the Second World War (London: Merlin Press, 2003).

The underlying story of transnational corporate collaboration with Germany under the Nazi regime has been the object of historical fascination (and contention) since the conclusion of World War II. Due to the emergence of several Holocaust restitution lawsuits at the end of the last decade, a renewed interest in the topic of collusion with the Third Reich has expanded in both the public and academic spheres.[1] At the same time, this field of inquiry has found affinity with the growing chorus of critiques of U.S. foreign policy after its triumph in the Cold War, which have materialized not only because of the availability of new archival sources from ex-Soviet bloc countries, but also in the context of accelerating globalization and the unpopular unilateral U.S. invasion of Iraq. Informed by a variety of different methodological and ideological orientations, new works in this field have yet to find an organizational coherence; however, one can discern some common features and influences. The purpose of this paper is to identify some of those features, evaluate a collection of the most prominent works, and chart a possible direction for future analysis of this topic.

Four books can be broken down into three categories. First, Working for the Enemy and Doing Business with the Nazis represent a handful of books that attempt to put forth their evidence in an empirical academic format. Working for the Enemy is a collection of essays that characterize the linkage between the subject of collaboration and the literature on Holocaust restitution, which includes the oral histories of several former forced laborers. Also in this category, Neil Forbes’ exercise in bilateral financial and economic diplomacy in Doing Business with the Nazis reopens the debate surrounding British appeasement of Nazi Germany leading up to World War II. In the second category, Edwin Black’s IBM and the Holocaust is written from a journalistic vantage point and meant for a broad audience. Black himself is a touchstone in this group and has written several books on the various interactions between American and German political and economic actors during World War II, with the IBM book being the most well known. Finally, The Myth of the Good War by Jacques Pauwels is exemplary of a large-scale, synthetic methodology that is based mainly on a comparison of secondary sources. Like other authors who use broad strokes to describe transnational historical dynamics, such as Immanuel Wallerstein or Eric Hobsbawm, Pauwels’ work is a big-picture analysis of American corporate and foreign policy during the war.

Before diving into these categories, a brief look at the historical context of the period is in order. Corporate penetration into Germany was not a special or unique feature to the Nazi era. By virtue of Germany’s loss of World War I and the ensuing reparations treaties at Versailles, Germany’s markets and industrial sector were opened up to the international community. To be fair, what is meant by the “international community” was mainly the U.S., which fashioned the reparations agreements into a circular system that started with loans to Britain and France, in order to finance their wartime production, and ended with German reparations payments to the European victors in the form of goods and services, which could then take the form of loan repayments back to the U.S. This system ensured a vested American interest in the German economy, and along with the need to expand all of its European markets to stave off a postwar recession, started the process of an accelerated corporate colonization of German industries.

This process began with financial and industrial institutions, which laid the groundwork for later Transatlantic business. The first of these organizations was the Bank for International Settlements (BIS), which was set up in Basle, Switzerland. The BIS was founded in 1930 to facilitate large scale transnational financial activity and to encourage nonpolitical interactions between the central bankers of various nations much like the International Monetary Fund and the World Bank today. Originally meant to streamline German reparations payments, the BIS became intimately connected to the economies of Europe and the United States. Under primarily American stewardship, the BIS continued to do business with its member countries in the lead up and during World War II, and persists as a meeting place for international bankers into the present. Other large financial corporations would follow, such as Chase Bank and JP Morgan (now combined), forming partnerships with European banks and opening major branches on the continent. Meanwhile, the automotive manufacturers Ford and General Motors (GM) looked to Germany to expand their markets as this industry heated up all around the globe. By the early 1930s, their German subsidiaries, Ford-Werke and Opel, made up major portions of their parent companies’ growing transnational manufacturing empires. Because of their access to raw materials via their corporate partnerships with other global conglomerates, such as DuPont and Standard Oil, these subsidiaries enjoyed a distinct advantage over their domestic German competitors.

The interwar period also saw the growth of American corporate involvement chemical and electronic industries in Germany. IG Farben, a German chemical manufacturing corporation and one of the largest companies in the world, was organized into an international cartel that included directors from the aforementioned corporations, such as DuPont, Ford, GM, and Standard Oil. When American regulators sought to prevent the monopolization of the chemicals industry during the 1920s, the well-connected corporate lawyer, John Foster Dulles at the law firm Sullivan & Cromwell, worked with the chemical industry to develop cleverly disguised holding companies in Switzerland, which then served to further accelerate the cartelization of the chemical industry. Moving forward into the 1930s, International Telephone and Telegraph (ITT) also expanded its global corporate empire by buying the majority of shares in domestic German companies like Siemens and Telefunken. ITT’s aggressive expansion ensured a near monopoly on all German communications manufacturing by the outbreak of World War II. During the same decade, International Business Machines (IBM) also bought up all of Europe’s burgeoning information technology companies. Punch card technology was revolutionizing bureaucratic organizations and increasing efficiency in an enormous range of business and government functions. IBM ensured that its subsidiary, Dehomag, was in the dominant position not only Germany, but on the European continent as a whole.

Once the Hitler regime took power in Germany, American corporations found that despite calls for nationalization of various industries, the Nazis were a willing partner in American corporate expansion. German contracts for military vehicles expanded operations at both Ford and GM subsidiaries. IBM found its business increased substantially as the Nazis obsessed over census data, looking for efficient ways to marginalize Jews and seize their assets. The BIS had its hands full processing plundered gold from the central banks of Austria, Czechoslovakia, and Poland. After France fell to the Nazis in the spring of 1940, Chase and JP Morgan Bank set up new headquarters in Vichy in order to facilitate a growing need for financial services as the Third Reich retooled the European economy to suit its interests.

As Hitler’s war aims continued, the corporate activity in question had grave consequences. Ford and GM ramped up their manufacture of military vehicles. Ford developed the V2 rocket to rain death and destruction over England. Planes fueled with oil from the English Anglo-Persian Oil Company with rubber tires made by the German subsidiaries of the English Dunlop Company bombarded London during the blitz. IBM catalogued and organized Nazi extermination by labor programs. Concentration camp inmates were tattooed with the corporation’s number systems to keep track of them. Chase and JP Morgan seized Jewish accounts of those trying to flee the Holocaust. The BIS handled gold stolen from Jews that failed to escape.

As one might expect, the organizations named here did not readily reveal the extent of their involvement with the Nazis and much of the story of their activities has still yet to be told. Despite nearly eight decades for researchers to examine various related documents and talk to witnesses, no clear historical consensus on this subject has emerged. Additionally, the businesses detailed in this essay are merely the most prominent institutions that were useful to the Nazis; not only did several other corporations in various neutral or Allied countries provide material, ideological and political assistance to Germany throughout the war, but so did individual actors from these places. The three categories of literature examined here will deal primarily with the most well known cases.

In the first category, representing an academic approach to this topic, falls Working for the Enemy and Doing Business with the Nazis. Through the essays in Working for the Enemy authored by Reinhold Billstein, Karola Fings, Anita Kugler, and Nicholas Levis, they collectively argue that American management of Ford and GM subsidiaries was continuous throughout Nazi rule, despite their knowledge of slave labor utilized at their plants, and post-war profit recovery was maximized. This research originates with work done by Bradford Snell, an attorney hired by the U.S. Senate in 1974 to inquire into domestic anti-competitive practices of Ford and GM. Surprisingly, this report contained new evidence that both of these organizations had also been an integral part of Nazi military production, in both before and during the war. Snell demonstrated that Ford and GM built a majority of the Third Reich’s planes, tanks, and trucks. In Working for the Enemy, a team of German historians investigated Snell’s research and discovered much statistical evidence to support his claims: Ford produced 48% of all the 2-3 ton military trucks in Nazi Germany, and an additional 90,000 civilian trucks were used by Nazi troops in occupied Europe, which were crucial to Nazi supply lines (115). As mentioned earlier, Ford-Werke also helped develop the V-2 rocket for the Nazis through a holding company, Arendt GmbH, to obscure its involvement (115-116). GM Opel owned a significantly larger market share than Ford-Werke and built engines for all types of military vehicles. One popular model with the Wehrmacht, or German military, was the “Blitz Truck” which was developed specifically for the Blitzkrieg in 1936 (21-24). GM Opel also took special pride in building armor for the Panzer tank and the engine for the JU-88 medium range bomber (37, 82).

The documentation in Working for the Enemy also has an affinity with other works involving Holocaust memory, which brings it closer in line with evidence presented in recent restitution lawsuits. Although the case of the former forced laborer against Ford, Iwanowa v. Ford, was thrown out by the State Department, Ford found it expedient to compile a report of its actions after the conclusion of the case.[2] In the long compilation of testimonies by Karola Fings, Elsa Iwanowa and others remember their experiences as forced laborers at the Ford and GM plants in Nazi Germany. These stories have familiar themes, not only to the arguments presented in restitution cases, but also to Holocaust memory in general: senseless brutality, small kindnesses done at great risk, and unimaginable hardship. The testimonies also add a human dimension to the sterile statistics found in other parts of the text and are exemplary of the contemporary “memory turn” in history writing.

Doing Business for the Nazis by Neil Forbes, on the other hand, has a more traditional, scholarly approach to exploring issues of collaboration. The author’s main focus are parliamentary debates, the pronouncements of industry leaders, and major media responses. Unlike Working for the Enemy, there is little to no reference to the Holocaust; although to be fair, Forbes is more interested in internal British politics than genocide. Forbes sees Britain’s economic interconnections with Germany during the interwar period as a larger problem involving Britain’s soul searching as a declining imperial power intent on preserving the fidelity of its markets while simultaneously wrestling with the growing concern that these connections were contributing to grave external threats. Disappointingly, Forbes’ chronology ends as Germany and Britain declare war on each other, leaving the reader to wonder how the author’s examined corporations, the BIS, the Anglo-Persian Oil Company, and Dunlop, fare after the war. This omission creates a discontinuity between his book and many of the others in the field. Forbes leaves us with a pre-Blitz Britain, which “failed to devise mechanisms which could reconcile a panoply of political, financial, economic and strategic considerations” (230).

With Forbes’ text, the reader is barraged with statistical data, creating a much more distant account of economic collaboration between financial and industrial concerns. As with much of the literature in this topic, Forbes’ text has a provocative title, Doing Business with the Nazis, which arguably lends itself to an audience that seeks culpability in the horrific acts of Nazism; however, Forbes shrinks from actually assigning blame to any one party: “Anglo-German economic and financial relations self-evidently exhibited a quality lacking elsewhere…they offered a measure, however small, of stability and continuity” (218). Considering the tremendous damage and loss of life Britain faced at the hands of the Nazi assault during and after 1940, Forbes’ fairly terse explanation that British multinational corporations collaborating with German armaments industry were “largely left to decide for themselves whether to exercise self-restraint” is remarkably free of judgment (161). Forbes’ analysis could either be applauded as the triumph of empiricism over post-Holocaust partisanship, or an apologia of transnational corporate activity. In order to determine the historian’s standpoint, some digging is required. For instance, Forbes excuses the actions of Unilever executives, both in Doing Business with the Nazis and elsewhere, for renegotiating lucrative foodstuffs contracts with Nazi officials even when it was clear that this activity posed a strategic risk to Britain. These earlier interactions with the Nazis have added fuel for contemporary critics of the corporation in the light of various lawsuits against Unilever in Brazil, China, and Western Europe for massive pollution and misrepresenting the genetically modified content of their products. In the context Unilever’s interwar activities, Forbes gives his opinion on the present moral orientation of the company: “Many profitable businesses espouse philanthropic causes…Unilever itself has always exemplified this tradition.”[3] As with the other corporations he looks at, Forbes is convinced it was self-interest and political niaveté, rather than capriciousness, which drove British corporations to operate against their home country’s self-interest.

In the journalistic category of the historiography of collaboration between Allied corporations and Nazi Germany, the judgments against these actions are often far more unequivocal, and as a result, have spawned a few contentious debates. Edwin Black’s IBM and the Holocaust exemplifies this type of work; beyond the prodigious empirical data, Black is not shy about delivering withering criticisms of the results of cooperating with the Nazis: “The destruction of the Jewish people became even less important because the invigorating nature of IBM’s technical achievement was only heightened by the fantastical profits to be made…” (8). Edwin Black is no stranger to controversial statements or subject matter. His first book, The Transfer Agreement, was about Zionist groups negotiating with Nazi officials to allow the emigration of Jews to Palestine in exchange for breaking Jewish boycotts against Germany. Black has also exposed other facets of the transnational interactions between actors in the U.S. and the Third Reich in War Against the Weak, which deals with American eugenicists who helped shape Nazi racial policy.

The essential component of Black’s argument in IBM and the Holocaust that is important for other literature in the genre is the way in which Black exposes how transnational corporations dealt with keeping control of their subsidiaries and siphoning off profit, even while the war raged in Europe. Breaching the realm earlier explored in Working for the Enemy, Black demonstrates the importance of obscure holding companies, neutral countries, and sympathetic lawyers, who acted as representatives of their Allied CEOs, in keeping German subsidiaries within larger multinational corporate empires. With the outbreak of war between the U.S. and Germany, Black states that IBM European subsidiaries could be “managed by Nazi-appointed trustees. IBM Europe was saved” (291). As with other big multinationals, this meant that the Nazis had access to a Europe-wide system of production and distribution to assist their aggressive expansion across the continent.

Black’s bombastic style brought many pro-business historians out of the woodwork in exchanges that exposed ugly implications for the subject. For instance, when the historian Peter Hayes came out and criticized IBM and the Holocaust, Hayes own potentially pro-business perspective was called into question. As a point of reference, Hayes critiqued earlier works on the chemical company, IG Farben, arguing that they were conspiratorial in tone and the collaboration with the Nazis was overblown. Hayes took particular aim at The Crime and Punishment of IG Farben by Joseph Borkin, arguing that the organization’s executives had no choice but to go along with controversial measures, such as building the infamous Auschwitz concentration camp.[4] Black drew attention to the acknowledgements section in Hayes’ IG Farben book, Industry and Ideology, in which Hayes said he received “ancillary support” from IG Farben in order to produce the work.[5] Black subsequently made a similar argument regarding the work, Some Measure of Justice, by Holocaust historian Michael Marrus. Marrus, for his part, argued that “monetizing justice” as a form of Holocaust restitution, such as the lawsuits against IBM and Ford, had more negative than positive outcomes.[6] Black accused Marrus of a conflict of interest in making such claims, noting that Marrus had received a grant from the Ford Foundation to produce his book.[7]

As if the swirling controversy surrounding Edwin Black were not already contentious enough, a row also formed between Black and the business historian Henry Ashby Turner. Turner himself made no secret of being pro-business when it came to the study of Nazi Germany, and expressed a dim view of Black’s work.[8] Turner argued in his seminal work, German Big Business and the Rise of Hitler that corporations played a minor part of Hitler’s ascension compared to the sway of right-wing ideology.[9] Black and Turner subsequently both became interested in GM’s involvement with Nazis during this past decade, as the corporation was also being sued by former forced laborers, with Turner getting exclusive access to GM’s archives in order to produce the work General Motors and the Nazis.[10] Turner specifically denied being hired by GM to write book in which he argued that the U.S. lost control of its German subsidiary, but Black’s suspicions immediately arose when he was denied access to Turner’s GM archives at Yale.[11] Turner passed away while Black fought for, and eventually received, access to the GM material to write his own book on the automotive corporation’s involvement in Nazi Germany, at which time it became a known fact that Turner had, in fact, been hired by GM to write a history for them.[12] In sum, Black’s work blurred the line between journalism and history as he responded to critics and investigated their own work. As these conflicts have unfolded, the question emerges: Are contentious debates like this the future of this field, or are other options possible?

In order to answer this question, the final category of this historiography will be examined, specifically in regard to those synthetic works dealing with a large range of secondary sources that look at the field as a much larger picture. In this category, Jacques Pauwels’ The Myth of the Good War looms large. Pauwels argues that despite the view espoused by American popular history, media, and politicians, U.S. involvement in World War II was primarily for materialistic rather than ideological aims. Drawing influences from the revisionist school of U.S foreign policy that grew up around the questioning of the Cold War, Pauwels demonstrates that the major concern of U.S. leadership during the war were markets for its products and political leverage over as much territory as could be gained (10). Pauwels integrates the material from Working for the Enemy and Edwin Black’s books to show how the various corporations acted in concert, rather than separately, in order to support the funneling of profits from neutral Switzerland back to the U.S. (204-5).  Ultimately, argues Pauwels, the Pentagon developed a system during World War II by working with various corporations to continue massive levels of military spending indefinitely (250-1).

One work Pauwels utilized to make the more conspiratorial claim that various U.S corporations actually worked together in a clandestine way to support the Nazis was Trading with the Enemy by Charles Higham.[13] Higham shared a similar methodological orientation to Pauwels, looking at a broad range of corporate interactions. In contrast to the other author, Higham also included declassified American archival sources to support his claims. The resulting effect is an integrated view of corporate involvement, in which the corporations named in this essay both collaborated with the Nazis and each other. The main problem for Higham is that he does not disclose much information about the declassified sources he uses. They exist, but had to be independently verified.[14]

Another work reminiscent of Pauwels overarching synthesis is Anthony Sutton’s Wall Street and the Rise of Hitler.[15] Published in 1978 before both the Pauwels and the Higham book, Sutton builds up a framework for later accusations of JP Morgan, Chase, ITT, and Standard Oil for helping to facilitate Nazi geopolitical goals. Although it lacks the mastery of an interpretive sweep more reminiscent of world systems theorists that Pauwels has achieved, Sutton’s work fills an important gap between immediate Allied postwar reactions to revelations of corporate collaboration with the Third Reich and later historical analysis stemming from renewed interest in the wake of Holocaust settlement cases.

The Myth of the Good War is the most successful of these texts at interpreting the work that has come before without succumbing to deeply to the inflammatory excesses reminiscent of Edwin Black’s work. Pauwels is also adept at bringing the texts into conversation with each other without stretching their limits. This approach makes sense in the context of ongoing restitution lawsuits and the release of new archival data. In endorsing this particular methodology, Pauwels states that interpolating sources is exposing “the tip of the proverbial iceberg” (205).

In surveying the three methodological categories, the tendency to choose one over the others for simplicity’s sake is compelling; however, all three groups have features that both detract and enhance the topic. As far as the less constructive features are concerned, they are varied and not always easily apparent. For instance, the empirical standpoint of the academic group detailed earlier has the tendency to underplay the human cost of Nazi activity. As with the danger of Forbes’ work, very little mention is ever made of the genocide as a resultant effect of the collaborative activities he discusses. Forbes’ choice to avoid this subject leads to a larger question: Is it possible to talk about the Nazis without addressing the Holocaust? The problem of moral relativism in the social sciences becomes quickly apparent in this context.

On the journalistic side of the spectrum, Black’s overwrought arguments have invited a range of critics. As we have seen, not all of his detractors were coming from a purely objective standpoint, with some having questions of their own to answer regarding the veracity of their work. On the other hand, if he had compartmentalized his biases and made them more apparent in his introduction, as well as made an effort to remove overly judgmental language, would his core argument be better received? This question leads to a more fundamental one mirroring the issue above: Is it possible to empirically approach the Nazis and the Holocaust without breaching the realm of moral relativism?

Pauwels synthetic methodology closes the gap between these two categories considerably by virtue of taking in both more and less empirically-based works. The significant deficiency for this model is that contains little in the way of new research. In the academic realm, particularly for specialists, this is more of a problem; for a wider audience, there is still plenty of interest making a closer read of primary sources less important. That being said, integrating sources into a larger framework does allow the reader to access a wider historical scope to consider the overall causes and effects of this controversial transnational economic activity.

An ideal model would incorporate elements of all the works discussed here. The measured, empirical voice of Forbes; the investigative and accessible method of Black; the oral history included in Working for the Enemy; and the sweeping geopolitical standpoint of Pauwels. Future historical analysis of recently compiled archival sources, such as those catalogued by the Nazi War Crimes Interagency Working Group at the National Archives in Washington D.C., The Independent Commission of Experts on Swiss Banks (also known as the Bergier Commission), and the United States Holocaust Memorial Museum Bad Arolsen files, which is in the process of digitizing more than forty-six million documents currently archived in Germany, would be well served to include these methodologies. Allegations of corporate collusion with Nazis are a not to be taken lightly, particularly for businesses that continue to be patronized today. If evidence of war crimes do emerge, they deserve to be scrutinized carefully both in the academic and public spheres. It is imperative that researchers examine past forays into this topic critically and incorporate their most useful elements in future research.

[1] Barry Meier, “Chroniclers of Collaboration; Historians Are in Demand to Study Corporate Ties to Nazis,” The New York Times, Feb 18, 1999, C1. In the late 1990s many corporations ramped up their legal and historical defenses against accusations, creating a market for researchers willing to work with these institutions.

[2] Ford Motor Company, Research Findings About Ford-Werke Under the Nazi Regime (Dearborn, MI: Ford Motor Company, 2001).

[3] Neil Forbes, “Multinational enterprise, ‘Corporate Responsibility’ and the Nazi Dictatorship: The Case of unilever and Germany in the 1930s,” Contemporary European History, Vol. 16, No. 2 (2007), 166-7.

[4] Joseph Borkin, The Crime and Punishment of IG Farben (New York: New York Free Press, 1978); Peter Hayes, Industry and Ideology: IG Farben in the Nazi Era (Cambridge, Cambridge University Press, 1987). Hayes thanks to IG Farben is on the acknowledgments page, xx.

[5] This debate is discussed in Michael Allen’s critical review of IBM and the Holocaust, “Stranger than Science Fiction: Edwin Black, IBM, and the Holocaust,” Technology and Culture, Vol. 43, No.1 (Jan., 2002), 153.

[6] Michael R. Marrus and William A. Schabas, Some Measure of Justice: The Holocaust Era Restitution Campaign of the 1990s (Madison: University of Wisconsin Press, 2009).

[7] Edwin Black, “Michael Marrus falters badly in Some Measure of Justice,” The Cutting Edge News, March 1, 2010. [accessed Dec. 16, 2010].

[8] Henry Ashby Turner, Jr., Review: IBM and the Holocaust by Edwin Black, The Business History Review, Vol. 75, No. 3 (Autumn, 2001) 636-9.

[9] Henry Ashby Turner, Jr., German Big Business and the Rise of Hitler (Oxford: Oxford University Press, 1987).

[10] Henry Ashby Turner, Jr., General Motors and the Nazis: The Struggle for Control of Opel, Europe’s Biggest Carmaker (New Haven: Yale University Press, 2005). In the introduction on page viii, Turner states, “This book was not commissioned by General Motors. It was written after the documentation project was completed and without any financial support from GM.”

[11] Edwin Black, “GM and the Nazis—Part Four: How will history remember General Motor’s collaboration with the Nazis?” The Cutting Edge News, June 30, 2008. [accessed Dec. 16, 2010].

[12] William Grimes, “Henry Turner, 76, Historian and Author, is dead,” New York Times, Jan. 19, 2009. [accessed Dec. 16, 2010].  The article details GM’s employment of Turner.

[13] Charles Higham, Trading with the Enemy: The Nazi American Money Plot (New York: Delacorte Press, 1983, 2007).

[14] Jason Weixelbaum, “Jason Weixelbaum: A Review of the Shocking Revelations of U.S. Corporate Collaboration with Nazi Germany,” History News Network, June 15, 2009. [accessed Dec. 16, 2010]. Additionally, for a more detailed account of Higham’s sources, see Jason Weixelbaum, “Following the Money: An Exploration of the Relationship between American Finance and Nazi Germany” [accessed Dec. 16, 2009].

[15] Anthony Sutton, Wall Street and the Rise of Hitler (California: ’76 Press, 1976).

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