“The Arms of Krupp” | The Dangers of Corporatism
In 1814, as the empire of Napoleon Bonaparte crumbled from the onslaught of the Sixth Coalition powers, the people of Paris felt the ground shudder as cannon shells burst outside the city walls. A year later, the returned emperor's defeat at Waterloo had brought the Germans back to their beloved "City of Lights." In 1870, Paris was besieged by the armies of Kaiser Wilhelm I, and twice during the First World War it seemed as though the jewel of France might fall into the hands of the great enemy across the Rhine. Each time, the guns of the Prussian armies made their way to the front from the great iron works of Essen owned by the Krupps, the most powerful family in the German-speaking world after the royal House of Hohenzollern. The Krupp dynasty wielded its power not through the might of armies but the output of its industry. Joined at the hip with the rulers in Berlin, the arms of Krupp built the modern German state and empowered it to liberate a continent from French hegemony and then plunge the world into not one but two world wars.
In 1968, the American historian William Manchester published The Arms of Krupp, a fascinating history of German industry. The book received mixed reviews, with readers praising its interesting stories and the author's humorous commentary but critiquing its length—my personal copy is over a thousand pages long. The Arms of Krupp is an interesting bit of history not well-known to modern audiences, and it is a warning to us today of the power that big business can wield in society when it works alongside oppressive political regimes.
The Krupp Family
The first record of the name "Krupp" dates to the late 16th century when Arndt Krupp joined a merchant's guild in the town of Essen in the Ruhr valley of northwestern Germany. Arndt bought up a considerable amount of land around Essen, and his son Anton took over the family's arms business. During the devastating Thirty Years' War (1618-48), the Krupps built matchlock and flintlock muskets for the Hapsburg Empire and soon made a name for themselves in the world of weapons. By the late 17th century, the family-owned a majority of the Ruhr's coal mines and several iron forges in Essen. In 1807, shortly after Napoleon Bonaparte had seized control of northwestern Germany, Friedrich Krupp took over his family's business. A savvy salesman, Krupp learned that the French emperor was paying handsomely for any new innovations in how to forge steel, and in 1811 he secured a contract from Napoleon to build a new factory in Essen for his Gusstahlfabrik, or "cast steelworks." The business he built with French money became the most powerful enterprise in Europe because the steel produced by Krupp Aktiengesellschaft was lighter and stronger than any other industrial metal in the world.
Krupp AG soon had contracts with Napoleon's puppet-states across Europe, and his largest customer after France was the Hohenzollern Kingdom of Prussia. The family became close with King Friedrich Wilhelm III and supplied him with armaments for the 1812 invasion of Russia. When the Russians defeated Napoleon's armies outside Moscow, Krupp's weapons soon found new targets; during the German "Wars of Liberation" against the French in 1813, Krupp muskets and cannons were used on both sides. Czar Alexander I of Russia bought thousands of field guns from Krupp for the 1814 invasion of France, and the Prussian army that helped the Duke of Wellington win at Waterloo a year later fired more than a thousand Krupp-made shells into Napoleon's lines.
Friedrich Krupp died in 1826, and his son Alfred took over the company and built it into the largest privately-owned firm in Europe. He funded new developments in weaponry that extended the range of field artillery and made muskets more reliable and easier to repair on the battlefield. Krupp AG held public demonstrations at expositions in several European capitals, and Alfred often gifted the newest and best weapons to the Prussian state. During Otto von Bismarcks' wars to unite Germany under the Hohenzollern kings, Krupp's guns blasted away at Danish, Austrian, and French soldiers and forged the German people into a unified national state. Alfred Krupp became known as the "Cannon King" during yearly demonstrations during the 1870s at his private estate north of Essen to show off his most recent deadly creations. He ran the company with an iron fist, and though he listened to advice from family members and hired managers, his word was law. Krupp was also very generous to his employees, providing them with quality housing near the factories and good wages to ensure their work was always top-notch.
When Alfred died, his son Friedrich Alfred continued to expand Krupp AG. He was less severe than his father and more interested in helping the disadvantaged in society. His philanthropic work endeared the Krupp family to the German people. Friedrich Alfred also started a subsidiary company to build large internal combustion engines, and in 1893 his competitor Rudolf Diesel licensed Krupp's design for Germany's first submarine. The Krupps got involved in building warships as well when they bought Germaniawerk in 1896, and this enormous factory was soon churning out vessels for Kaiser Wilhelm II's High Seas Fleet. Sadly for Friedrich Alfred, his personal life was a mess, and after he was arrested in Italy on charges of deviant sexual behavior, he was found dead in 1902, probably having taken his own life.
Friedrich Alfred's daughter Bertha inherited the company, but Kaiser Wilhelm thought it was not proper for a woman to run Germany's largest and most important business. In 1906, she married Gustav von Bohlen und Halbach, and the couple then took the company public and began to allow investors from outside the family to buy shares. By 1912, the company was selling weapons to over fifty countries under its new name, "Krupp Grusonwerk AG," and also licensed its designs to arms manufacturers in a dozen more. Two years later, when the Great War began in Europe, Krupp had a virtual monopoly on weapons production in Germany but lost its overseas contracts thanks to the British naval blockade. Gustav's workers built millions of artillery shells and hundreds of thousands of guns, including its "Big Bertha" model of howitzer (an unflattering honor for his wife) and the "Paris Gun," the largest artillery piece of the war. Its Germaniawerk factory produced more than eighty U-boats for the navy as well.
Gustav Krupp von Bohlen und Halbach was a passionate believer in German supremacy and shared his Kaiser's dream of a continental empire. His contracts with the German Army kept it fighting even as the Western Front collapsed during the Allied "Hundred Days" offensive. When the war ended and the Treaty of Versailles forced Germany to give up arms production, Krupp AG secretly continued to build weapons for the postwar Weimar Republic; its subsidiaries in Sweden produced artillery shells and a submarine pen in the Netherlands built "submersible fishing boats." In 1930, three years before the coming of Germany's great warmonger, Gustav ordered his Essen factories to start building the Tiger I tank in direct violation of the Treaty of Versailles. International agreements and foreign mandates could not stop the "Cannon King" heir's work.
The Krupps and the Third Reich
As an avowed monarchist, Gustav Krupp hoped that the Hohenzollerns would eventually be restored to the German throne. He viewed the German president, Field Marshal Paul von Hindenburg, as a regent of sorts until a grandson of Kaiser Wilhelm II would return to his rightful place. When the National Socialist German Workers' Party began its campaign for power during the Great Depression, Gustav was horrified at its brutal tactics and the demagogic Adolf Hitler who led it. However, by 1932, he had become what his friend and competitor Fritz Thyssen called a "super-Nazi." The two men funded Hitler's failed presidential campaign in 1932 and later that year urged President von Hindenburg to make the Nazi leader chancellor. Whether or not Gustav Krupp truly believed the racist screeds that spewed from Hitler's every speech is still the subject of debate; he may have become an ardent Nazi, or perhaps he wished to use the party as a vehicle to first revive German greatness and then restore the Hohenzollern monarchy. But his alliance with Hitler proved to be a decisive factor in the Führer's rise to power.
Gustav took a position in the Third Reich's government as president of the German Chamber of Commerce. From this position, he helped the Nazis purge the German economy of its Jewish workers and businessmen. He defended his actions as being necessary to keep his company together, but the results were horrific. Across Germany, Jews were hounded from their jobs and forced into ghettos or deported to concentration camps. When Gustav suffered a stroke in 1941, his son Alfried took over the firm and turned it into the most pro-Nazi organization outside the party itself. When war broke out, Alfried sold weapons to the German military at near-wholesale prices and enabled Hitler to bring death and destruction to millions of innocent people. As a member of the SS, he became a war criminal by using slave labor in his Essen factories until they were destroyed by a British bombing raid in mid-1942. He regularly sent his victims to work in German labor camps and donated Krupp AG's truck fleet to the SS to speed the deportation of Jews to Auschwitz and the other death camps in Poland. His work in the death camps went beyond transportation—Alfried's signature can be found on the work orders to build the six large crematoria that incinerated nearly two million gassed victims of the SS at Auschwitz. For his many services to the Third Reich, Alfried earned the personal favor of the Führer, who allowed him to continue to run his business independent of government control at a time when most companies had been nationalized. His father, Gustav, remained close with the Nazi hierarchy from his sick-bed and kept in regular contact with Hitler concerning the progress of the war and the destruction of European Jewry.
Once the Allies had destroyed the Third Reich and its horrors were made known to the world, the Krupp family was implicated in Germany's crimes. Gustav was indicted at the Trial of Major War Criminals in Nuremberg in October 1945 but was too sick to stand trial—in fact, the judges had meant to put Alfried on trial, but a clerical error had led to a mixup. The court did not convict Gustav on any of the three charges (conspiring to commit acts of aggression, committing war crimes, and committing crimes against humanity), but he remained under indictment until his death in 1950. Alfried and eleven other directors of Krupp AG were later tried and convicted of war crimes in a separate proceeding in 1947, and he was sentenced to twelve years imprisonment and had his company taken from him. Three years later, however, the American High Commissioner in West Germany, John McCloy, pardoned Alfried Krupp and gave him back his controlling interest in Krupp AG. While in prison, he insisted he had not committed any war crimes—despite the overwhelming evidence against him—and said, "We Krupps never cared much about [political] ideas. We only wanted a system that worked well and allowed us to work unhindered. Politics is not our business." The depths of this lie can never fully be understood—the Krupps had been a part of political developments in Germany since the Thirty Years' War, had empowered the German government to wage defensive and aggressive war for over two centuries, and had unleashed horrors upon their countrymen and the world.
Krupp Today
Alfried Krupp turned his company into a foundation that would be run by a board of supervisors without any further influence by its founding family. He and his son Arndt received a yearly stipend from its revenue until their deaths in 1967 and 1986, respectively. Krupp AG became a peaceful enterprise after the Second World War and manufactured trucks and farming equipment. The Germaniawerk naval factories built research submarines, including the bathyscaphe Trieste, the first vessel to explore the ocean's deepest depths. It also helped build the German national rail system during the 1950s and 1960s. In 1991, the company that had made weapons of war and helped exterminate six million Jews was bought by Thyssen AG (which had also been part of Germany's rearmament and wartime industries) and today is the leading European manufacturer of high-end home appliances, trains, and elevators.
Learning from History
Krupp AG was a monopoly like few other companies in world history. The "robber-barons" of the American "Gilded Age" could not have dreamed of having the level of control over their markets that Friedrich Alfred, Gustav, and Alfried Krupp had in their hands. Despite Alfried's protestations that politics was not their business, the Krupps' proximity to power in Germany made them an integral part of that nation's government policies for nearly a century. The products they built, the decisions they made, the wars they helped launch, and the crimes they committed are a warning that shouts from the pages of history about the dangers of corporate power when merged with the government.
Today, there are companies whose reach into our daily lives is even greater than that of Krupp AG. Big tech social media firms determine what we read in the news, who we interact with when we get onto Facebook or Twitter, and shape our reality with each search on Google. Governments around the world have tried to reign in their power—seen most recently when Australia passed a law forcing Facebook and Google to pay news publishers—and these companies have reacted with policy changes that have serious social and political consequences. Social media companies have begun to silence dissenting voices, including some of the most powerful people in the world, and certain factions within major governments have applauded these censorship moves. Alliances are forming between big governments and big businesses that are limiting the ability of men and women around the world to get the truth and understand what is going on in their lives.
Now, this certainly does not mean that Facebook, Twitter, or Google is destined to follow the path that Krupp AG took from Essen to Auschwitz—that was the work of a young and impressionable man who followed an evil tyrant. But the story of the Krupp family, brilliantly recounted in The Arms of Krupp by William Manchester, reminds us all of the old axioms that "power corrupts." Businesses should be free to pursue their commercial interests, but people should also be free to communicate and to live their lives free from tyranny of any sort. The German people had no control over Krupp AG and its directors' push for wars in 1914 and 1939—after all, it was "just a private company." When business and government interests align against those of the customers and citizens they serve, the results range from censorship to crematoria. It is vital that students of history understand what happened with Krupp AG and other large corporate interests during the tragic decades of the 20th century and that they listen to the warnings of the past and protect themselves against would-be digital tyrants of the future.
