Bookstore Glossary Library Links News Publications Timeline Virtual Israel Experience
Anti-Semitism Biography History Holocaust Israel Israel Education Myths & Facts Politics Religion Travel US & Israel Vital Stats Women
donate subscribe Contact About Home

The Nazi Party: German Industry and the Third Reich

by S. Jonathan Wiesen

  1. Introduction: The Complicity of German Industry

  2. German Business and the Nazis: The East German View

  3. German Business and the Nazis: The Western Approach

  4. German Businesses Defend Themselves

  5. American Writers Look at the Issue

  6. Conclusion: Addressing a Shameful Record

Introduction: The Complicity of German Industry

Six years ago, Oskar Schindler, a German businessman who protected Jews working in his factory during World War II, became renowned through the medium of the motion picture. For many Americans and Europeans, the film Schindler's List (1993) was their first contact with the subject of the Holocaust. While people of all ages were moved by Schindler's genuine heroism, some found it revealing -- and somewhat frustrating -- that it took, in effect, a "good German" to introduce the Holocaust to the general public. And for those familiar in 1993 with the history of German business during the Third Reich, the singularity of Oskar Schindler's courage was particularly striking. The reality was that the great majority of German businessmen behaved in a decidedly unheroic manner during the Nazi era. Most of them, especially leaders of larger companies, not only refrained from risking their lives to save Jews, but actually profited from the use of forced and slave labor,1 the "Aryanization" of Jewish property, and the plundering of companies in Nazi-occupied Europe.

Much has changed in six years. The point was driven home to me recently when, on the first day of my German history class, two students separately approached me, eager to present their ideas for a required research paper. Both of them proposed the same topic in the same way: "something to do with German companies and Nazism." The two students cited as their motivation the stories about German business that have made their way on to television and into newspapers in recent years: the flurry of class action lawsuits brought by former forced and slave laborers against German companies that exploited them during World War II; the current negotiations between American officials and lawyers and German politicians and industrial representatives over the establishment of a compensation fund for these workers; "Nazi gold" and Swiss complicity; reports of European insurance companies and banks that were involved in denying Jews their legal and civil rights in the 1930s and even after the war. After 50 years of relative ignorance about German industry's relationship to the Third Reich, the subject has now reached a mass public around the world.

This is not to say that such interest is entirely new. What I hope to demonstrate in the following pages is that since 1945 the issue of German industrial complicity with Hitler has, in fact, engaged the attention of academia and segments of the general public (in the U.S., Europe, and especially East and West Germany) more than is currently assumed. However, it is indeed true that the topic is only now receiving the attention it truly deserves. Let us try to understand how we have reached this point.

German Business and the Nazis:
The East German View

After 1945, the Allied occupying forces in Germany not only charged former Nazis with a host of war crimes and crimes against humanity, but also tried to educate Germans and their own publics back home about what they perceived to be the origins and particular characteristics of National Socialism.

In the Soviet zone (later East Germany), overt anticapitalism underpinned the "official" view that Hitler rose to and maintained power primarily through the support of German industry. Communist writers argued (incorrectly) that by bankrolling the Nazi party, powerful companies like Krupp (steel and weaponry), I.G. Farben (chemicals and pharmaceuticals), and Siemens (electronics) had undermined the fragile Weimar Republic. Throughout the entire history of East Germany, the connection between fascism and big business was a fundamental aspect of the country's ideology. Communist writers, however, focused more on the years leading up to Hitler's assumption of power in 1933, in order to reinforce East Germany's dogma about the dangers of "finance" or "monopoly" capitalism. The relationship between German big business and the Nazi regime between 1933 and 1945 and the ugly practices that all too many companies were guilty of during that period -- labor exploitation, the Aryanization of Jewish property -- were of considerably less interest to these writers. As the Cold War escalated, the suffering inflicted on Jews and others by German industry became almost a taboo subject in East Germany (though the ordeals endured by communist "freedom fighters" were much celebrated). Indeed, the Holocaust itself disappeared from most of the literature on National Socialism in East Germany.

German Business and the Nazis:
The Western Approach

After World War II, many people in Germany's Western zones of occupation, and in the United States, also argued that businessmen, even free enterprise as a system, were responsible for Hitler's rise, his wars of aggression, and his crimes against humanity. In 1947 and 1948, the communist countries watched with bemusement as the United States, the preeminent capitalist country, prosecuted dozens of executives of three of wartime Germany's largest companies for war crimes and crimes against humanity. In the dock were directors of the Krupp and Flick (steel and coal) companies, both of which had built weapons of war and had employed forced labor, and board members of I.G. Farben, the chemical and pharmaceutical giant that had run a synthetic rubber factory at Auschwitz. During the trials at Nuremberg, the American prosecutors were careful not to portray the proceedings as attacks on the market economy, but rather as attempts to punish individuals who had committed crimes. Nonetheless, it was clear that they had established a strong link between German industry and all aspects of the Nazi economy and, more specifically, between German business and the crimes of National Socialism. The trials resulted in the conviction and imprisonment of a number of important company owners and directors. Most prominently, Alfried Krupp von Bohlen und Halbach, the sole owner of Krupp, was found guilty of employing slave labor and plundering businesses in France and the Netherlands. Krupp was stripped of all his property and business holdings and sentenced to 12 years in prison.

After these trials, the American government's interest in the prewar and wartime behavior of German industry abated -- until now. The long lull can be explained primarily by Cold War considerations. As the fear of Soviet communism grew, American and Western European leaders (political and otherwise) became uneasy with the continued imprisonment of German businessmen, influential figures who were perceived as integral to the creation of a vigorous capitalist economy in West Germany. In January of 1951, during the Korean War, those businessmen still in prison were released through a declaration of clemency by the U.S. High Commissioner for Germany, John J. McCloy, and almost all of their assets were returned to them.

International tensions and political ideology also inevitably affected how others in the West -- scholars, et al. -- approached the theme of business complicity in the Third Reich. From the late 1940s until the mid-1980s, it was, again, the years before 1933 that were the focal point of debate, for Marxists wanted to prove and anti-Marxists wanted to refute the claims that capitalism and fascism were linked. During the prosperous years of economic growth, many West Germans and Americans, particularly government and industrial leaders, were uncomfortable with this debate, because they felt it dredged up a past that might tarnish the postwar achievements of German companies and might reinforce the communist world's anti-capitalism crusade.


German Businesses Defend Themselves

It is important to note that German companies themselves did not simply ignore the debates over industrial guilt. Quite the contrary; German businessmen took the lead in defending their own and their companies' reputations. For the duration of the Cold War there existed, in West Germany, an ongoing struggle between German industry's critics and the country's largest companies, which strove by a variety of means to defend their reputations. Business leaders used aggressive public relations methods to gain the confidence of the national and international publics and, indeed, workers within their own companies. While some writers produced pamphlets and publications condemning the "return to power" of capitalist criminals, companies hired journalists and historians in Germany and the U.S. to write sympathetic corporate histories and to exonerate the companies from accusations that they were involved in the Nazis' criminal activities. Much of the work produced by these writers was, frankly, a whitewash. These histories usually blamed Nazi leaders and the SS for drawing industry "unwillingly" into reprehensible conduct. Clearly, big business was not owning up to its compromised past.

Two examples will serve to illustrate how sensitive German companies have been to reminders of their complicity with the Nazis. The first concerns an autobiography written by Richard Willstätter, a Jewish Nobel Prize-winning chemist (1915) who had been forced to flee Germany in 1939.2 Willstätter, who wrote his book while in exile in Switzerland, died in 1942. In 1949 his memoirs were posthumously published, and executives of the Bayer corporation, the chemical and pharmaceutical giant, read with dismay a short passage in which the scientist criticized Carl Duisberg, the company's late director (and the founder of the chemical conglomerate I.G. Farben, of which Bayer had been the cornerstone), for making anti-Semitic comments when Willstätter resigned from the University of Munich in 1924. No one appears to have paid any attention to Willstätter's criticism of Duisberg until Bayer began to lobby the book's publisher to withdraw the work. One particular Bayer director, retired executive and company scientist Heinrich Hörlein, launched an all-out campaign to besmirch the reputation of Willstätter and promote the reputations of Carl Duisberg and Bayer. Hörlein himself had been tried and acquitted at the I.G. Farben trial in 1947, and bitterness probably prompted him to take vigilant action on behalf of his firm. For a short while in 1949, a debate broke out within the West German chemical industry about anti-Semitism and the Nazi past. In much of the discussion, people ignored the sad events of Willstätter's life, particularly the anti-Semitism he had endured in the 1920s and 1930s, and instead focused on whether he had done some great wrong by criticizing Carl Duisberg. In the end, Bayer and Hörlein prevailed. In future editions and in an English translation of the memoirs, publishers removed the disputed passages. Since 1949, the short-lived but vitriolic campaign against Willstätter has been almost entirely forgotten.

Twenty-three years later, another controversy erupted over the publication of a book critical of German industry. In 1972, a German satirist, F. C. Delius, published (in Germany) a mock history of Siemens to coincide with the one hundred and twenty-fifth anniversary of the company's founding.3 The book, Unsere Siemenswelt (Our Siemens World), was a fake official company publication that proudly listed some of the famous electrical company's numerous "accomplishments": the mistreatment of slave laborers in its factories during World War II, the installation of the crematoria at Auschwitz, etc. It was not immediately obvious that this book was an unauthorized satire, and less than a month after its publication, Siemens took legal action against Delius in an attempt to suppress his mocking commentary on corporate guilt. Ironically, a series of depositions, trials, and appeals drew attention to the conduct of Siemens during the Nazi years (and initiated a debate within the literary community about the role of satire in a democratic society). After three years of legal wrangling, a district court and a provincial appeals court in Stuttgart determined that several of the book's claims, including the Auschwitz assertion, were false, and ruled that Delius's ideas, despite being presented as satire, were damaging to Siemens. (The district court also thought it was suspicious that Delius's evidence had been derived from "communist" publications.) Eventually both parties reached a settlement, part of which stipulated that future editions of the book could only be published with the controversial lines -- including the crematoria claim -- literally blacked out. The most recent edition (1995) of this book still bears the legacy of this settlement: many pages contain black bars concealing lines of text.

Delius has been vindicated in some ways. Contemporary scholars are continuing to learn about the extent to which Siemens, and every major German business in the Thirties and Forties, was implicated in the brutality of Nazi economic policies, most egregiously through the abuse of forced and slave laborers. Siemens ran factories at Ravensbrück and in the Auschwitz subcamp of Bobrek, among others, and the company supplied electrical parts to other concentration and death camps. In the camp factories, abysmal living and working conditions were ubiquitous: malnutrition and death were not uncommon. Recent scholarship has established how, despite German industry's repeated denials, these camp factories were created, run, and supplied by the SS in conjunction with company officials -- sometimes high-level employees.

American Writers Look at the Issue

Until recently, most of the controversies about German industry and the Nazis surfaced in West Germany, not in the United States. To be sure, for many decades some Americans refused to buy German products, particularly automobiles made by Volkswagen, BMW, and Daimler-Benz. But American writers, from the mid-1950s to 1968, did not publish much about German corporate complicity. This changed somewhat with the publication in 1968 of William Manchester's The Arms of Krupp,4 a 950-page book about Germany's "royal family" of armaments manufacturers, a family whose company produced weapons during many conflicts, including the First and Second World Wars. Though Manchester had gotten some of his facts wrong, he did reveal how the suffering of many individuals during the Second World War was the result of the conduct of Germany's major industries. His damning revelations, combined with his hyperbolic style, rankled the German business world (particularly, of course, Krupp) to such an extent that after 1968 companies were more reluctant than ever to allow outside scholars into their archives to research the Nazi period. (How reluctant were these businesses to cooperate with independent historians before the publication of The Arms of Krupp? Here is a telling anecdote. After the book was published, Manchester recalled how the company and the residents of Essen -- the site of Krupp's headquarters -- kept close watch on him as he carried out his research in that city. He even claims to have caught a Krupp employee rifling through his papers as he entered his hotel room one day.5)

Despite German industry's lack of cooperation, academics and others continued in the 1970s and early 1980s to scrutinize and debate German business guilt. The debates became volatile at times. In 1981 the Princeton historian David Abraham published The Collapse of the Weimar Republic.6 The book, which was initially well received in academia, sought to demonstrate a connection between "organized capitalism" and the rise of the Nazi party during the Great Depression. While Abraham avoided the simplistic equation of capitalism and fascism, his structuralist-Marxist approach could not accommodate the findings of the Yale historian Henry Turner, whose prior articles (and his later book7) successfully disproved the suggestion that German industry, before 1933, supported Hitler to any great extent, either financially or ideologically. When researchers checked the accuracy of Abraham's evidence, they found a number of serious errors in his footnotes. Abraham cited documents that did not exist and turned paraphrases into quotes. The controversy eventually became less concerned with the role of industry in the downfall of Germany's first democracy than with a scholar's use and misuse of sources, and with how historians' politics and ideological leanings affect their research and their response to others' works. However, what also emerged from the angry exchanges, in my opinion, was a more nuanced picture than had existed before of pre-1933 industrial behavior in Germany. It became clear that despite some financial links between individual industrialists and the Nazi party, big business did not, to use the German phrase, "in den Sattle heben" ("lift Hitler into the saddle"). On the other hand, German industralists did little to help salvage the crumbling Weimar democracy during the Nazis' ascendancy in the early 1930s.

The "Abraham Affair," for all intents and purposes, marked the end of scholarly debates about German business and National Socialism before 1933. Researchers, with the cooperation of some corporations, now turned their attention to German industry's behavior after 1933. They examined the relationship between businesses and mass murder and attempted to understand the motivations of individuals like the executives of I.G. Farben, whose company worked people to death in Auschwitz.8 The research that emerged from these scholarly inquiries indicated that German industrialists in the Thirties and Forties weren't, by and large, ideologues as much as opportunists; it was their eagerness for profits that led them to participate in a number of heinous endeavors: securing control of Jewish-owned companies, producing war matériel for the Wehrmacht, exploiting forced and slave laborers.


Conclusion: Addressing a Shameful Record

Some businessmen, it is true, resisted the demands of the Nazi regime; some, like Oskar Schindler, protected Jews; some even allied themselves with the anti-Nazi underground. But there were relatively few such people. Greed drove all too many "apolitical businessmen" to engage in odious conduct. This behavior, however, was not an exclusive function of capitalism. Rather, it was the result of the social and political realities that existed in the Third Reich. Most industrialists were opportunists who saw the occupation of Europe and the Nazis' persecution of the Jews as a chance to enrich themselves and their companies. Undoubtedly, latent and overt anti-Semitism, anti-Slavic sentiments, and German nationalism also allowed some industrialists to work with the regime out of a sense of patriotism, and without ever reflecting upon the moral boundaries they were crossing. Fear and the desire for self-protection were also important factors motivating businessmen. (Indeed, few Germans demonstrated the courage to speak out against the Nazi regime. Finally, as the war escalated, the desire to merely survive into the postwar period prompted many companies to take advantage of concentration camp labor.9 The point is that industrial behavior under Nazism cannot be reduced to simple structural explanations. Even within the context of a dictatorship that demanded high levels of production for war, industrialists made choices as individuals. They approached the SS for cheap labor; they decided whether to buy a Jewish company at a fraction of its value; they determined how forced and slave laborers would be treated in their factories.

Today, companies are finally addressing this shameful record. Since the unification of Germany in 1990, increasing numbers of German businesses -- Volkswagen, Krupp, DaimlerChrysler, to name a few -- are allowing scholars to study their archives. Why the change? The end of the Cold War has greatly reduced the fear in many companies that the dissemination of information about German industry's relationship with the Nazi regime will somehow undermine the contemporary German economy. And no doubt a fair amount of political calculation -- even desperation ­ motivates most of the businesses assisting scholars. "Candor" is seen as a good public relations ploy when a company is sued by former forced and slave laborers. With few exceptions, I personally have been treated quite magnanimously by the large German companies -- Krupp, Siemens and Bayer -- whose assistance I have sought for my own research. Some businesses have been quite open in their discussions with me about their use of slave labor and about National Socialism, even though they would rather not have their names splashed across the headlines.

The decision by certain businesses to actually pay historians to research their past, has, however, sparked some recent controversies. Since late 1998, there has been a running debate between the British historian Michael Pinto-Duschinsky and several scholars who have written or are in the process of writing company-sponsored histories. Pinto-Duschinsky has suggested that these scholars have compromised themselves by accepting money from organizations they are writing about.10 In my opinion, Pinto-Duschinsky's accusation is unjustified. The many historians who are now looking not only into German corporate behavior, but that of American companies like Ford and General Motors -- both of which had subsidiaries in Nazi Germany -- have established their credentials as rigorous scholars who are not afraid to expose the ugly facts about forced and slave labor, and corporate opportunism during the Nazi era. I believe it is unfair to accuse these historians of somehow "selling out."

Undoubtedly, as noted, German business's new openness has been influenced by the lawsuits initiated in the past few years by former forced and slave laborers. Moreover, the German and American publics are following the negotiations over the establishment of a joint German government and industry fund to compensate slave and forced laborers who are still alive. This, too, is a factor in the decision of many German businesses to be more forthcoming about their past. (German companies have been sued before by individuals who were forced and slave laborers during the Second World War. In the late 1950s and early 1960s, the Conference on Material Claims Against Germany, an organization representing Jewish Holocaust survivors, approached Germany's major companies -- Siemens, Krupp, Rheinmetall, and others -- and requested compensation for people they had abused during the war. Several years of acrimonious negotiations and corporate stubbornness eventually yielded meager payments for some Jewish victims. The companies involved disingenuously portrayed their grudging recompense as a generous gesture of good will.11 Today, hundreds of thousands of Jewish and non-Jewish survivors of forced and slave labor -- many of them from former communist countries -- who were not covered by these earlier settlements, are seeking compensation.)

The current fund negotiations and lawsuits have, unfortunately, brought about some disturbing developments. Some Germans have made anti-Semitic remarks about the plaintiffs in the lawsuits. They have also intimated that the plaintiffs' attorneys are greedy opportunists, who are seeking to make money off of the suffering of old and dying Holocaust survivors. This kind of reprehensible rhetoric must, of course, be monitored, and condemned whenever encountered.

Moreover, some German politicians and industrialists are intent on portraying themselves and German companies as the victims of unfair legal demands. (This view is not new in Germany. During the Cold War, West German industrialists often felt they were being persecuted by critics who pressed them to account for their companies' past misdeeds.) Earlier this year, the German Chancellor, Gerhard Schröder, referred to the lawsuits by former coerced workers as "a campaign being led against German industry and our country."12 There is still a long way to go before the great majority of German business leaders and politicians acknowledge the full extent of German industrial complicity in the Holocaust. But there has been progress.

A German commentator recently bemoaned the fact that the more positive developments pertaining to these issues have not received enough media attention in Europe or the United States. Certainly, businesses must be credited for their new openness. Individual companies, like Volkswagen, have been quietly establishing their own foundations to pay former forced and slave laborers. But corporations currently being sued are probably hoping that positive news stories, financial settlements and company biographies will swiftly consign the subject of German industry's complicity with Hitler to a kind of limbo. This, however, is wishful thinking. The theme of corporate complicity will remain in the news for many years to come. It is not so easy to bury the past; companies cannot do so simply by acknowledging their behavior during the Nazi era. Moreover, it is inevitable now that damning new facts will emerge. It remains to be seen what companies and the publics of various countries do with this information. 


1  Historians, politicians, industrialists, and attorneys are now struggling with the distinction between "slave labor" and "forced labor." There is by no means a consensus on how the terms should be differentiated, but in recent discussions, the category of "slave laborers" has come to include all Jews who worked in death camps, concentration camps, and other work camps in Nazi-occupied Europe. In most cases, industry's use of slave laborers was in keeping with the SS's intention to eventually work these particular Jews to death. "Forced laborers," on the other hand, included anyone who was compelled to leave his or her home in order to work for Nazi Germany. These are hardly precise distinctions.

2  Richard Willstätter, Aus Mein Leben: Von Arbeit, Musse und Freunden (Munich: Verlag Chemie, 1949); the English edition is Willstätter, From My Life (New York: W.A. Benjamin, 1965).

3  F. C. Delius, Unsere Siemenswelt: Eine Festschrift zum 125jährigen Bestehen des Hauses S. (Berlin: Rotbuch Verlag, 1972).

4  William Manchester, The Arms of Krupp (Boston: Little, Brown, 1968).

5  William Manchester, William Manchester Discusses The Arms of Krupp with Columnist Robert Cromie (Tucson: Motivational Programming Corporation, 1969).

6  David Abraham, The Collapse of the Weimar Republic: Political Economy and Crisis (Princeton, N.J.: Princeton University Press, 1981).

7  Henry A. Turner, German Big Business and the Rise of Hitler (Oxford: University Press, 1985).

8  See Peter Hayes, Industry and Ideology: IG Farben in the Nazi Era (Cambridge: Cambridge University Press, 1987).

9  On the use of forced and slave labor by business to keep factories running, see Neil Gregor, Daimler-Benz in the Third Reich (New Haven: Yale University Press, 1998).

10  Michael Pinto-Duschinsky, "Selling the Past," Times Literary Supplement (October 23, 1998): 16-17.

11  See Benjamin Ferencz, Less Than Slaves: Jewish Forced Labor and the Quest for Compensation (Cambridge: Cambridge University Press, 1979).

12   "German Companies Set Up Fund for Slave Laborers under Nazis," New York Times (February 17, 1999)

Sources: Dimensions: A Journal of Holocaust Studies, Volume 13, Number 2. Copyright Anti-Defamation League (ADL). All rights reserved. Reprinted with permission.

S. Jonathan Wiesen, an assistant professor of modern European history at Southern Illinois University, Carbondale, teaches courses on modern German history and the Holocaust. He is the author of the book, Reconstruction and Recollection: West German Industry and the Challenge of the Nazi Past (University of North Carolina Press)