From Craftsmen to Capitalists: German Artisans from the Third Reich to the Federal Republic, 1939-1953 9781785332494

Table of contents :
CONTENTS
TABLES AND FIGURES
ACKNOWLEDGMENTS
PREFACE
NOTE ON THE HANDWERK TRADES
ABBREVIATIONS AND ACRONYMS
Part I Handwerk in Crisis, 1918–1933
Chapter 1 FROM ZÜNFTE TO NAZISM German Handwerk to 1939
Part II Handwerk at War, 1939–1945
Chapter 2 HANDWERK IN THE WAR ECONOMY, 1939–1941
Chapter 3 THE SPEER MINISTRY, 1942–1945 The Coordination of Industry and Handwerk
Part III The Occupation Period, 1945–1949 The Confrontation with the American Free Market
Chapter 4 THE FIRST STAGES OF THE OCCUPATION AND THE REVIVAL OF HANDWERK INSTITUTIONS IN THE WEST
Chapter 5 THE LEGAL CONSOLIDATION OF HANDWERK CORPORATISM IN THE BRITISH ZON
Chapter 6 DEVELOPMENTS IN THE US ZONE LEADING UP TO THE INTRODUCTION OF GEWERBEFREIHEIT
Chapter 7 THE ROLE OF ORGANIZATION AND LEADERSHIP IN THE MODERNIZATION OF HANDWERK
Part IV The Early Federal Republic, 1949–1953 Revolution in the German Mittelstand
Chapter 8 THE EFFECTS OF GEWERBEFREIHEIT ON HANDWERK
Chapter 9 THE INTEGRATION OF HANDWERK ORGANIZATIONS INTO THE POLITICAL FABRIC OF THE FEDERAL REPUBLIC
Chapter 10 CHANGES IN THE STRUCTURE AND OUTLOOK OF HANDWERK
Chapter 11 THE HANDWERK ACT OF 1953
Conclusion REVOLUTION IN HANDWERK?
BIBLIOGRAPHY
INDEX

Citation preview

From Craftsmen to Capitalists

Monographs in German History The complexities and peculiarities of German history present challenges on various levels, not least on that of historiography. This series offers a platform for historians who, in response to the challenges, produce important and stimulating contributions to the various debates that take place within the discipline. For full volume listing, please see pages 287 and 288

From Craftsmen to Capitalists German Artisans from the Third Reich to the Federal Republic, 1939–1953

 Frederick L. McKitrick

berghahn NEW YORK • OXFORD www.berghahnbooks.com

First published in 2016 by Berghahn Books www.berghahnbooks.com © 2016, 2020 Frederick L. McKitrick First paperback edition published in 2020 All rights reserved. Except for the quotation of short passages for the purposes of criticism and review, no part of this book may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval system now known or to be invented, without written permission of the publisher.

Library of Congress Cataloging-in-Publication Data Names: McKitrick, Frederick L. Title: From craftsmen to capitalists : German artisans from the Third Reich to the Federal Republic, 1939–1953 / Frederick L. McKitrick. Description: New York : Berghahn Books, 2016. | Series: Monographs in German history ; volume 37 | Includes bibliographical references and index. Identifiers: LCCN 2015047982 | ISBN 9781785332487 (hardback : alkaline paper) | ISBN 9781785332494 (ebook) Subjects: LCSH: Artisans—Germany—History—20th century. | Artisans— Political activity—Germany—History—20th century. | Handicraft industries— Germany—History—20th century. | Germany—Economic conditions— 1918–1945. | Germany—Economic conditions—1945–1990. | Social change—Germany—History—20th century. | National socialism—History. | Democratization—Germany—History—20th century. | Germany—Politics and government—1933–1945. | Germany—Politics and government—1945–1990. Classification: LCC HD9999.H363 G345 2016 | DDC 331.7/94—dc23 LC record available at http://lccn.loc.gov/2015047982

British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library

ISBN 978-1-78533-248-7 hardback ISBN 978-1-78920-531-2 paperback ISBN 978-1-78533-249-4 ebook

CONTENTS

List of Tables and Figures

vii

Acknowledgments

viii

Preface Note on the Handwerk Trades List of Abbreviations and Acronyms

x xiii xviii

PART I Handwerk in Crisis, 1918–1933 1 From Zünfte to Nazism: German Handwerk to 1939

3

PART II Handwerk at War, 1939–1945 2 Handwerk in the War Economy, 1939–1941

31

3 The Speer Ministry, 1942–1945: The Coordination of Industry and Handwerk

63

PART III The Occupation Period, 1945–1949: The Confrontation with the American Free Market 4 The First Stages of the Occupation and the Revival of Handwerk Institutions in the West 5 The Legal Consolidation of Handwerk Corporatism in the British Zone

83 107

vi | Contents

6 Developments in the US Zone Leading up to the Introduction of Gewerbefreiheit

123

7 The Role of Organization and Leadership in the Modernization of Handwerk

141

PART IV The Early Federal Republic, 1949–1953: Revolution in the German Mittelstand 8 The Effects of Gewerbefreiheit on Handwerk

159

9 The Integration of Handwerk Organizations into the Political Fabric of the Federal Republic

179

10 Changes in the Structure and Outlook of Handwerk

207

11 The Handwerk Act of 1953

226

Conclusion. Revolution in Handwerk?

248

Bibliography

253

Index

276

TABLES AND FIGURES

Tables Table 0.1. Index of Trades That Can Be Practiced as Handwerk as Listed in the Handwerk Ordnung of 1953

xiv

Table 8.1. Rate of Increase in Handwerk Firms in Württemberg-Baden, 1947–1949

163

Table 8.2. Rate of Increase in Handwerk Firms in Unterfranken, 1948–1949

163

Table 8.3. Rate of Increase (Decrease) in Handwerk Firms in the British and U.S. Zones, 1948–1949

164

Table 8.4. Comparative Rate of Firm Closing in the British and U.S. Zones, 1950–1951

165

Table 8.5. New Firm Owners with Master Title, 1950–1951

166

Table 9.1. Handwerk Shops by Firm Size

190

Table 10.1. One-ManShops as a Percentage of Total Handwerk Shops

211

Table 10.2. Handwerk Firms and Employees

212

Table 10.3. Consolidation and Productivity Trends in Handwerk from 1949

214

Table 10.4. Proportion of Economic Value Created by Handwerk and Industry, 1936–1951

214

Figures Figure 8.1. Registered and Dissolved Handwerk Firms in Hesse, 1948–1949

164

Figure 8.2. Registered and Dissolved Handwerk Firms in Oberfranken, 1940–1949

165

ACKNOWLEDGMENTS

This page is the last one to be written. It is also an occasion for heartfelt reflection over a period of writing and research that, even though so much of it has been solitary, in truth has relied upon the generosity and kindness of so many institutions and individuals. It is a pleasure to acknowledge them here. The Friedrich Ebert Foundation, German Academic Exchange Service (DAAD), and Columbia University funded preliminary work in Germany, and a grant from the Fulbright Commission enabled me to carry out the main part of the archival research there. These foundations not only provided generous financial support, but also offered important contacts and advice. Many archivists, librarians, and artisanal officials in Germany and the United States took a great interest in my work and provided me with immeasurable help. In particular I would like to mention Thomas Köster and K. van Wesel of the Düsseldorf Chamber; Joachim Lilla of the Rhineland-Westphalian Handwerk Association (Rheinisch-Westfälischer Handwerkerbund); the wonderful librarians at the Archive for Christian Democratic Politics (Archiv für Christlich-Demokratische Politik); Peter John of the German Federation of Trade Unions (Deutscher Gewerkschaftsbund); Dr. Schleidgen of the North-Rhine Westphalian State Archive (Nordrhein-Westfälisches Hauptstaatsarchiv), Düsseldorf; Dr. Wolff and his staff at the Wiesbaden Handwerk Chamber; as well as the staffs of the Federal Archive (Bundesarchiv) in Koblenz, the Cologne Handwerk Chamber, and the Archive of Social Democracy (Archiv der sozialen Demokratie) in Bonn. I am grateful to Fritz Stern, Robert Paxton, Volker Berghahn, Allan Silver, and Peter Johnson, all of whom took the time to read my work carefully and offer comments that were tremendously helpful. The friendships of John Efron, Ann Ramsey, Pamela Radcliff, and Laura Lee Downs were formative. The late William C. McNeil was a dear friend who never lost sight of the truth that scholarship is at heart a human enterprise. I will always miss him. Maria Mitchell and Guillaume deSyon were wonderfully encouraging archive companions. Frank Domurad shared my fascination with German Handwerk, and it is a happy coincidence that his own work on the subject will soon see the light of day. Alfred Mierzejewski, James Van Hook, Frank Zdatny, Jonathan Morris, and Adelheid von Saldern have been generous with their insight and advice, and I thank the anonymous

Acknowledgments | ix

reviewers for their perceptive readings and suggestions. Thanks to my editors at Berghahn Press, Chris Chappell and Jessica Murphy, for their patience and steadfast support, and to Allison Hope for her razor-sharp eye in proofing the manuscript. My colleagues in the Department of History and Anthropology and the administration of Monmouth University have provided an ideally supportive academic home. In Germany our dear friends Monika Heusgen and Ulrich Hecht-Fischer have so often opened their warm home to us in Freiburg. To my wife, Kerstin McKitrick, I owe more than I can say. She has been with me every step of this long journey. Our daughter Anna: Has she suffered the neglect of a book-writing academic parent? Perhaps, but my hope is that, because this project afforded her the opportunity to spend the third grade in Germany, to put down roots there, and to become fluent in the language, it has helped widen her world as it has mine. Finally, my late parents, Eric L. and Edyth S. McKitrick, surrounded their children with books and the values of learning and art. I can think of no greater inheritance.

PREFACE

This book seeks to address some of the important questions in German history concerning the consequences of Nazism, both intended and unintended, and the stability of the (Western) government that followed it. At its core is a problem of modernization: One of the “peculiarities” of the industrialization of Germany was the coexistence of highly modern, technologically advanced socioeconomic groups side by side with the most traditional, rooted, and conservative ones; the tensions produced by this disjuncture were what helped bring Hitler to power. How was it, then, that these contradictions were resolved to produce the stable, capitalist, parliamentary democracy of the Federal Republic? There is, of course, no one set of answers to this problem. In order to address one aspect of it, I have proceeded from several assumptions. First, because an important part of how individual Germans conceived their self-identities before 1933 tended to be in terms of socioeconomic groups, or Stände (and indeed, given the narrow interest focus of most political parties before that time, this was reflected in the structure of political life), I have chosen one such group to examine from the lower-middle classes: master craftsmen, in German Handwerker. These classes have been problematic in German history. Consigned variously by Marxists and liberals alike to the dustbin of history as outmoded, or condemned as the incorrigible custodians of preindustrial, antimodern, or proto-fascist attitudes, the Mittelstand—to use the more complex and evocative German term— formed one of the core constituencies of the Nazi movement. But just as surely, after World War II it formed one of the key supporting social groups of the Federal Republic. I have chosen handwerk because it seems to bring many of the contradictions at issue into high relief. Handwerk encompasses an enormous number of highly diverse trades, varying in skill and organization of work. Yet, despite this diversity, it is and has been in German cultural and economic life a consistently identifiable entity, a Begriff, and one with tremendous cultural resonance. It connotes a certain traditionalism, but also a continued vitality and adaptability unique to Germany. For this reason, I have decided to employ the German terms—handwerker for the individual masters, and handwerk for the entity—in order to at-

Preface | xi

tempt to leave behind the folksy associations that craftsman, handicraft, or artisan may have for English-speaking readers. My second assumption is that the roots of stability in the West must be sought on both sides of the 1945 divide. If indeed it was the tensions of modernity and the reaction to it that caused Germany’s collapse into Nazism, then the resolution of this tension must be sought in the transition from the period when those reacting conceived of the answers to their problems in “antimodern” terms to the period when they embraced modernity. One of the striking things about handwerker is that many of their answers in both periods were the same. Thus, the third assumption will be that the notion of what is antimodern or preindustrial must be reexamined. This study contains a central paradox: Beginning with the onset of industrialization in Germany, handwerker, out of a growing desperation born from a sense of economic marginality and social isolation that even seventy years of change had not resolved, finally joined or voted for the Nazi Party in disproportionate numbers. Most of them did so expecting a reactionary social protectionism—the preservation of their ancient and honorable way of life from the encroachments of modern capitalism and soulless mass society. This is what the Nazis seemed to promise them. What they got, however, was very different. Especially during the war—precisely the time when the reactionary social intentions essential to Nazism conflicted most sharply with its equally essential aim of territorial expansion by means of highly advanced warfare—Nazism, partly inadvertently, partly intentionally, helped to modernize handwerker. In doing so the Nazis, in effect, eliminated one of the social bases, or preconditions, of their own existence. Furthermore, this process of modernization was continued after the war using one of the legacies of Nazism: the corporate institutions and authority granted to handwerk by the regime as part of its policy of “coordination.” The irony here is that the form and function of this corporatism were originally demanded by handwerker to serve as a mechanism of social protection, and were constructed as such. Indeed, many scholars have assumed such forms to be intrinsically reactionary. In her study of handwerk in the late nineteenth century, Shulamit Volkov writes, “The corporate tradition, as a whole, limited the masters’ ability to adjust to the conditions of an open national market economy, compete with new forms of production, accept the reality of a new social-stratification system, adopt modern values, and learn to act as a part of a different political community.”1 Similarly, Heinrich August Winkler has termed handwerk’s corporate tendencies a refeudalization.2 And it is these same traditions that the American occupiers would attempt to demolish in their efforts to make German society modern and democratic. The final paradox is that in the postwar period it has been precisely this originally reactionary corporatism, combined with a revitalized Catholic social teaching, which has made possible the continued vitality of handwerk as a modern economic sector, formed its self-identity as a Stand with a secure position

xii | Preface

in modern society, and overseen its integration in to the political fabric of the Federal Republic.

Notes 1. Shulamit Volkov, The Rise of Popular Antimodernism in Germany: The Urban Master Artisans, 1873–1896 (Princeton, N.J., 1978), 328. 2. Heinrich August Winkler, Mittelstand, Demokratie und Nationalsozialismus: Die politische Entwicklung von Handwerk und Kleinhandel in der Weimarer Republik (Cologne, 1972), 59–60. See also Arthur Schweitzer, Big Business in the Third Reich (Bloomington, Ind., 1964).

NOTE ON THE HANDWERK TRADES

What is Handwerk? The following is the official list of trades that are legally classified as handwerk according to the Handwerk Law (Handwerksordnung) passed by the Bundestag on September 17, 1953. This list is revised periodically to include new trades and to eliminate others that have become obsolete. The 1934 list, for example, did not yet include neon sign makers or television technicians, while needle and nail makers were still recognized trades. By 1965 wooden shoe makers had fallen away and hearing aid technicians added. The first thing to notice about this list is that it covers an enormous range of trades and skills from traditional crafts like butcher, baker, and candlestick maker to the most modern and highly technical trades such as precision optics and electronics. Besides the seven groups in which the trades are organized on this list, there are other ways in which its variety may be grasped. These chiefly involve the relationship of handwerk to industry and its development over time, which has been enormously problematic and is central to this study. While many trades still involve actual production, a considerable number are involved solely with the repair, service, and installation of industrially manufactured articles. Thus some trades service industry and have grown up around it, while others compete directly (or coexist) with industry, and in still others competition is not an issue. Handwerk during this period (1939–1953) was still strongly segregated by sex with most women confined to clothing and health trades. Given the variety of crafts, it might be asked why they are all legally grouped together and represented by the same interest organizations. What defines handwerk or what is common to all these trades is not easy to answer. The boundaries between handwerk and industry, trade, and even art are hazy, and in practice the organization to which any individual firm belongs (because each commercial enterprise in Germany must be a member of an organization) is a matter of continuous discussion and negotiation. Generally, the method of shop organization and training—master, journeyman, and apprentice as opposed to owner/ manager and wage worker—is decisive. Yet even this is no clear boundary and the categories remain to a certain extent arbitrary—a matter of historical or juridical accident or individual choice. It is not a matter of production technique, for many handwerker use industrial, even assembly line, methods, nor of size—

xiv | Note on the Handwerk Trades

it is not unknown for handwerk shops in Germany to have two hundred or more employees. (The juridical arbitrariness of such classifications may be illuminated looking at the French example. There, any artisanal shop which grows to more than 10 employees is automatically reclassified as industry and moves to their interest organizations. Thus artisan corporations lose their most successful members.) TABLE 0.1. Index of Trades That Can Be Practiced as Handwerk, as Listed in the Handwerk Ordnung of 1953 I. Building and Construction Trades 1. Maurer; Beton- und Stahlbetonbauer; Feuerungs- und Schornsteinbauer; Backofenbauer 2. Zimmerer 3. Dachdecker (Schiefer-, Schindel-, Stroh- (Rohr)- und Ziegeldecker) 4. Straßenbauer (Pflasterer) 5. Wärme- Kälte- und Schallschutzisolierer 6. Mosaik-, Platten- und Fliesenleger 7. Betonstein- und Terrazzohersteller; Steinholzleger 8. Brunnenbauer 9. Steinmetze und Steinbildhauer 10. Stukkateure 11. Maler Anstreicher* (Tüncher Weißbinder*); Lackierer 12. Ofensetzer 13. Schornsteinfeger Kaminkehrer*

1. mason/bricklayer; concrete and reinforced concrete builder; heating system and chimney builder; baking oven builder 2. carpenter 3. roofer (slate, shingle, straw and tile) 4. road builder (surfacer) 5. insulator (heat, cold and sound) 6. paver; mosaic layer and tile layer 7. concrete and agglomerated stone producer; kylolith layer 8. well digger and builder 9. stone mason and sculptor 10. plasterer 11. painter (whitewasher); varnisher 12. stove fitter 13. chimney sweep

II. Metal Trades 14. Schmiede 15. Schlosser (Blitzableiterbauer)

14. (black) smith 15. metal worker; locksmith (lightning conductor builder) 16. Maschinenbauer; Werkzeugmacher; 16. machine builder; tool maker; lathe Dreher operator 17. Mühlenbauer 17. mill builder 18. Mechaniker (Näh-, 18. mechanic (sewing and speech Sprechmaschinen- und machines, bicycle mechanic); office Fahrradmechaniker); machine mechanic Büromaschinenmechaniker

Note on the Handwerk Trades | xv

19. Kraftfahrzeugmechaniker; 19. Kraftfahrzeugelektriker 20. Landmaschinenmechaniker 20. 21. Feinmechaniker und Feinoptiker 21. 22. Büchsenmacher 22. 23. Klempner Spengler*, Flaschner*, 23. (Kühlerhersteller, Kühlerreparateure); Gas- und Wasserinstallateure 24. Zentralheizungs- und 24. Lüftungsbauer 25. Kupferschmiede 25. 26. Elektroinstallateure 26. (Blitzableiterbauer, Elektro- und Fernmeldemechaniker) 27. Elektromaschinenbauer 27. 28. Radio- und Fernsehtechniker 28. 29. Uhrmacher 29. 30. Graveure (Damaszierer, 30. Formstecher), Ziseleure 31. Galvaniseure und Metallschleifer 31. 32. 33. 34. 35. 36. 37. 38.

Gürtler und Metalldrücker Metallformer und Metallgießer Glockengießer Schweißer Messerschmiede Gold- und Silberschmiede Gold- Silber- und Aluminiumschläger

32. 33. 34. 35. 36. 37. 38.

auto mechanic; auto electrician agricultural machinery mechanic precision engineer; precision optician gun smith plumber (cooling unit producer and repairer); gas and water pipe installer central heating and ventilation builder coppersmith electrician (lightning conductor builder, electric and telephone mechanic) electric machine builder radio and television mechanic watch maker engraver (damascener, wood block), engraver galvanizer (electroplater); metal grinder brazier, brass worker; metal spinner metal former and founder bell founder welder cutler (knifesmith) goldsmith and silversmith gold, silver and aluminum forger

III. Woodworking Trades 39. Tischler Schreiner* (Segelflugzeugbauer, Kegelbahnbauer) 40. Rolladen- und Jalousiebauer 41. Bootsbauer; Schiffbauer 42. Modellbauer 43. Stellmacher Wagner*; Karrosseriebauer 44. Drechsler; Schirmmacher 45. Holzbildhauer 46. Böttcher Kübler*, Schäffler*; Weinküfer

39. carpenter/cabinet maker (glider plane builder, bowling alley builder) 40. shutter and venetian blind builder 41. boat builder; ship builder 42. model builder 43. cartwright; carriage builder 44. wood (lathe) turner; umbrella maker 45. wood sculptor 46. cooper; wine barrel maker

xvi | Note on the Handwerk Trades

47. Bürsten- und Pinselmacher (Drahtbürstenmacher) 48. Korbmacher

47. brush and paint brush maker (wire brush maker) 48. wicker worker

IV. Clothing, Textile, and Leather Trades 49. 50. 51. 52. 53. 54. 55. 56. 57.

Herrenschneider Damenschneider Wäscheschneider Sticker Putzmacher Weber Seiler (Netzmacher); Segelmacher Kürschner; Mützenmacher Schuhmacher (Schäftemacher); Orthopädieschuhmacher 58. Gerber 59. Sattler; Feintäschner 60. Polsterer und Dekorateure Tapezierer*

49. 50. 51. 52. 53. 54. 55. 56. 57.

men’s tailor women’s tailor; dressmaker tailor and launderer embroider milliner weaver rope maker (net maker); sail maker furrier; hatter shoe and boot maker; orthopadic shoemaker 58. tanner 59. saddler; wallet/purse maker 60. upholsterer and decorator

V. Food Trades 61. Bäcker (Brezel-, Schwarzbrot- und Lebkuchenbäcker, Feinbackwarenhersteller) 62. Konditoren 63. Fleischer Metzger*, Schlachter* 64. Roßschlachter 65. Müller 66. Brauer und Mälzer

61. baker (pretzel, blackbread, gingerbread, rolls) 62. 63. 64. 65. 66.

cake/pastry cook butcher horse butcher miller brewer and maltser

VI. Health and Body Care as well as Chemical and Cleaning Trades 67. 68. 69. 70. 71. 72. 73. 74. 75. 76.

Augenoptiker Bandagisten Orthopädiemechaniker Chirurgieinstrumentenmacher und Chirugiemechaniker Zahntechniker Friseure (Perückenmacher) Färber und Chemischreiniger Seifensieder (Kerzenzieher) Wäschereibetriebe; Plättereibetriebe Gebäudereiniger

67. 68. 69. 70. 71. 72. 73. 74. 75. 76.

optician bandage maker orthopaedic mechanic surgical instrument maker and surgical mechanic dental technician barber/hairdresser (wig maker) dyer and dry cleaner soap maker (candle maker) laundry; ironing building cleaner

Note on the Handwerk Trades | xvii

VII. Glass, Paper, Ceramic and Other Trades 77. Glaser 78. Glasschleifer und Glasätzer 79. Glasbläser und Glasinstrumentenmacher 80. Glas- und Porzellanmaler 81. Edelsteinschleifer 82. Photographen (Phototechniker) 83. Buchbinder 84. Buchdrucker; Schriftsetzer; Drucker 85. Steindrucker; Lithographen; Xylographen 86. Chemigraphen; Stereotypeure und Galvanoplastiker 87. Töpfer Hafner*, Häfner* 88. Orgelbauer; Klavier- und Harmoniumbauer; Geigenbauer; Metallblasinstrumenten- und Schlagzeugmacher; Holzblasinstrumentenmacher; Zupfinstrumentenmacher 89. Vergolder 90. Schilder- und Lichtreklamehersteller 91. Vulkaniseure

77. glazier 78. glass grinder/cutter and etcher 79. glass blower and glass instrument maker 80. glass and porcelain painter 81. gem cutter 82. photographer (phototechnician) 83. book binder 84. book printer; type setter; printer 85. lithographer; xylographer 86. chemigrapher; stereotyper and electrotyper 87. potter 88. organ builder; piano and harmonium builder; violin builder; metal wind instrument and drum builder; woodwind instrument builder; plucked string instrument builder 89. gold plater 90. sign and neon sign producer 91. vulcanizer

Note: Terms in italics followed by an asterisk (*) are dialect or provincial speech. Source: The list is an appendix to the Handwerk Ordung (law) of 1953 in Deliberations of the German Bundestag (Verhandlungen des deutschen Bundestags; VDBT), 1 Wahlperiode 1949, Stenographische Bericht, 258 Sitzung, vol. 15, 12531–12558 and 12563–12572.

ABBREVIATIONS AND ACRONYMS

ACC

Allied Control Council

ACDP

Archive for Christian Democratic Politics (Archiv für Christlich-Demokratische Politik)

AdsD

Archive of Social Democracy—Friedrich Ebert Foundation (Archiv der sozialen Demokratie--Friedrich-Ebert-Stiftung)

ASU

Association of Independent Entrepreneurs (Arbeitsgemeinschaft selbständiger Unternehmer)

BA

Federal Archive, Coblenz (Bundesarchiv, Koblenz)

BdA

Federation of German Employers’ Associations (Bundesvereinigung deutscher Arbeitgeberverbände)

BDI

Federal Association of German Industry (Bundesverband der Deutschen Industrie)

BfW

Bavarian Ministry of Economics (Bayerisches Staatsministerium für Wirtschaft)

BGB

Laws of the Federal Republic (Bundesgesetzblatt)

BayGVB

Laws and Ordinances of Bavaria (Bayerisches Gesetz- und Verordnungsblatt)

BMWi

Federal Ministry of Economics (Bundesministerium für Wirtschaft)

CDU/CSU

Christian Democratic Union/Christian Social Union (Christlich-Demokratische Union/Christlich-Soziale Union)

CDUHandwerkerbeirat CDU-Handwerk Advisory Council CSU

Christian Social Union (Christlich-Soziale Union)

DAF

German Labor Front (Deutsche Arbeitsfront)

DDP

German Democratic Party (Deutsche Demokratische Partei)

DDR

German Democratic Republic (Deutsche Demokratische Republik)

Abbreviations and Acronyms | xix

DGB

German Federation of Trade Unions (Deutscher Gewerkschaftsbund) DHWI German Handwerk Institute, Munich (Deutsches Handwerksinstitut) DHWB German Handwerk News (Deutsches Handwerksblatt) DINTA German Institute for Technical Education (Deutsche Institut für technische Arbeitsschulung) DNVP German Nationalist People’s Party (Deutschnationale Volkspartei) DUD Press Service of CDU (Deutschland-Union-Dienst) DVP German People’s Party (Deutsche Volkspartei) ECSC European Coal and Steel Community EIPS Economic and Industrial Planning Staff FDP Liberal Party (Freie Demokratische Partei) GBW Plenipotentiary for the Economy (Generalbevollmächtigte für die Wirtschaft) GHG National Artisan, Trade, Commerce Federation in the German Workers’ Front (Gesamtverband des deutschen Handwerks, Handels und Gewerbes in der Deutschen Arbeitsfront) GVB Laws and Ordinances (Gesetz- und Verordnungsblatt) HDE Head Committee of German Retailers (Hauptgemeinschaft des Deutschen Einzelhandels) HICOG (Office of the) High Commissioner for Germany HStAD North Rhine-Westphalian State Archive (NordrheinWestfälisches Hauptstaatsarchiv, Düsseldorf ) HWK Handwerk Chamber (Handwerkskammer) HWK-Düss. Düsseldorf Handwerk Chamber (Handwerkskammer Düsseldorf ) HWK-K Cologne Handwerk Chamber (Handwerkskammer Köln) HWK-Wiesbaden Wiesbaden Handwerk Chamber (Handwerkskammer, Wiesbaden) HWKT Council of Handwerk Chambers (Handwerkskammertag) IAIETC International Association of Independent Enterprises, Trades and Crafts (Union Internationale de l’Artisanat et des Petites et Moyennes Entreprises Industrielles et Commerciales) IHK Industry and Trade Chamber (Industrie- und Handelskammer) JCS Joint Chiefs of Staff KfZ Motor Vehicle Handwerk (Kraftfahrzeug Handwerks)

xx | Abbreviations and Acronyms

NA NATO NS-Hago

NSDAP

OKH OKW OMGUS RAM RG R-HW RIV RS-HW RdErl. RWHB RWM SA SED SPD SS USSBS VDBT VfW VfZ WR ZAW ZDH

National Archives of the United States North Atlantic Treaty Organization National Socialist Artisan, Trade, and Commerce Organization (Nationalsozialistische Handwerks-, Handelsund Gewerbeorganisation) National Socialist German Workers’ Party, also referred to as the Nazi Party (Nationalsozialistische Deutsche Arbeiterpartei) High Command of the Army (Oberkommando des Heeres) High Command of the Armed Services (Oberkommando der Wehrmacht) Office of Military Government, U.S. Reich Labor Ministry (Reichsarbeitsministerium) Record Group Reich Group Handwerk (Reichsgruppe Handwerks) Reich Guild Associations (Reichsinnungsverbänds) Peak Organization of German Handwerk (Reichsstand des Deutschen Handwerks) Memo (Runderlaß) Rhineland Westphalian Handwerker Bund (RheinischWestfälischer Handwerkerbund) Reich Ministry of Economics (Reichswirtschaftsministerium) Storm Troop (Sturmabteilung) Socialist Unity Party (Sozialistische Einheitspartei Deutschlands) Social Democratic Party of Germany (Sozialdemokratische Partei Deutschlands) Protection Squadron (Schutzstaffel) United States Strategic Bombing Survey Deliberations of the German Bundestag (Verhandlungen des deutschen Bundestags) Bizonal Economic Administration (Verwaltung für Wirtschaft) Contemporary History Quarterly (Vierteljahresheft für Zeitgeschichte) Economic Council (Wirtschaftsrat) German Economic Advisory Board (Zentralamt für Wirtschaft) Federal Handwerk Peak Organization (Zentralverband des Deutschen Handwerks)

Part I

Handwerk in Crisis, 1918–1933

Chapter 1

FROM ZÜNFTE TO NAZISM German Handwerk to 1939

 Two central ideas will concern us throughout the course of this study. The first

is the ability of German artisans, Handwerker, to adapt to the process of industrialization. The second is how the organizational structure—its coherency, legal authority, and economic influence—affected that adaptation and how it shaped handwerk as a social group, a Stand, with a distinct identity. The outcome of these developments was to have enormous implications for the political and social stability of Germany—and of Europe—in the twentieth century.

Handwerk in the Kaiserreich and World War I By the start of the nineteenth century the golden age of German handwerk had long faded into memory and myth. Handwerk’s great late medieval flowering, with its powerful guilds (Zünfte),1 was followed, with great variations by region and trade, by a long period of uneven decline so that by 1800 average income was only about one-third of what it had been three hundred years earlier, and many handwerker numbered among the poorest in the population.2 This economic decline was reflected in the state of the guilds. Over the course of the nineteenth century these by then ossified institutions were gradually stripped of their organizational monopoly and regulatory authority, culminating with the passage of general freedom of trade (Gewerbefreiheit) in the North German Confederation in 1869, extended to the full Reich in 1871. This legislation abolished the guilds’ remaining public law regulatory authority, including the right to set standards for Notes for this section begin on page 20.

4 | From Craftsmen to Capitalists

and restrict entrance to the trades.3 Thus the culmination of economic liberalism in Germany represented the low point of handwerk’s institutional power. Accelerating industrialization from the 1860s and the shifting political constellation of the Reich presented handwerk with new challenges. Because industrialization affected the multiplicity of trades so variously, it is useful to divide them into three groups: (1) those trades unaffected by industrialization, (2) those in which industry gradually came to dominate production, and (3) those that coexisted with industry in a state of symbiosis.4 First, trades such as baking and butchering, above all, and service trades like barber and hairdresser remained unaffected by technological innovations and indeed prospered due to the side effects of industrialization like the growth of cities and the shift in household patterns of consumption. In trades of the second group the impact of technology was devastating. In textiles, shoemaking, pottery, and soap-making, production was gradually transferred almost entirely into factories. Those masters who survived at all did so either by concentrating production on a custom, often luxury, market, or by shifting to repair, the latter generally entailing an appreciable loss of income. Trades in the third group developed various modes of adaptation. In the light metal trades, for example, simpler items came to be mass-produced in factories, while masters concentrated on high-quality goods. Many in the construction trades shifted from workshop production to on-site building and the installation of factory-produced equipment, such as heating and plumbing.5 Meanwhile, market expansion and shifting patters of distribution brought wholesalers between shop owners and their customers, and the new department stores confronted retail handwerk with intense competition.6 These developments contributed to a growing sense of redundancy and unease among handwerker that was to have important political repercussions. Indeed, few contemporaries doubted that the artisanal mode of production would eventually be made superfluous by more-efficient industry. The tone for all discussion on this widely debated subject had been established already in 1848 by Marx and Engels who asserted that capitalism had set in motion the historically necessary and inexorable polarization of the social forces of production and that all “small tradespeople” were bound to “sink gradually into the proletariat.”7 This grim forecast for the survival of the small proprietor was echoed in the non-Marxist research by economists throughout the nineteenth century. Gustav Schmoller, Karl Bücher, and Werner Sombart each carried out important and influential studies that were more extensive and differentiated than Marx’s on the subject and were careful to stress that the small producer could never vanish entirely. Nonetheless, each concluded, with varying degrees of pessimism, that handwerk’s chances of adapting to the new conditions created by industrialization were slim.8 Other theorists agreed, arguing further that handwerk had lost its former importance as a means of social mobility and thus the state should not squander resources attempting to prop up this unproductive sector.9

From Zünfte to Nazism | 5

The predominant scholarly and scientific judgment that the artisanal mode of production could not hold its own in a free capitalist marketplace was widely shared in Wilhelmine society, where ambivalence regarding industrialization and nostalgia for lost artisanal traditions evoked a deep resonance. Conservatives and social Catholics shared with the left a moral condemnation of the dislocations brought about by industrialization. Unlike Marxists, however, they celebrated the small proprietor as a necessary locus of social stability and believed that these dislocations could be ameliorated, if not reversed, by the reinforcement of traditional hierarchical social relations and institutions.10 The latter part of the nineteenth century also saw the gradual, if incomplete, reestablishment of a handwerk organizational structure in Germany. In the 1880s a number of Reich laws were passed that granted guilds (Innungen) the legal status of corporations of public law with certain regulatory authority, granted to guild masters the exclusive right to train apprentices and permitted guilds to tax handwerker who were not members for services like vocational schools and hostels for traveling journeymen. Yet because the Reich legislation made the actual conferring of the authority contingent upon the discretion of local authorities, who in practice often refused to grant it, the actual gains were limited.11 In any case, such protectionist legislation was consistent with a turn away from free market liberalism in the Reich generally, emblemized by the tariffs of 1877 (the “marriage of rye and iron”) and the growth of cartels in industry. The more solid, lasting gains came at the turn of the nineteenth century with two long-sought pieces of legislation. The handwerk law of 1897 provided that handwerk could establish its own chambers (regional associations including all trades) and permitted the institution of obligatory membership in local guilds (which represented one trade only) when a majority of masters so chose, which increased their organizational clout. Then the law of 1908 established the socalled kleine Befäigungsnachweis (or minor certificate of competency) that stipulated that only licensed masters could take on or train apprentices.12 As important as these legislative achievements were to prove—indeed, leaders later came to regard the 1897 law as the “basic law” of modern handwerk—organizational structure in the Kaiserreich never attained real coherency and remained limited in its authority and divided in purpose. Two divergent sets of organizations competed for handwerker loyalty, neither with particular success. The regionally organized Handwerker Bund was founded in 1882 with close ties to the Catholic Center Party and had a leadership that represented an ideological mixture of Social Catholicism and Protestant social conservatism. With headquarters in Munich, the Bund was primarily interested in reestablishing guild controls as a means of preserving handwerk’s precarious social status by restricting the number of new masters coming into the trades. Meanwhile, centered in Berlin, another movement developed whose leaders hoped to build up a reinvigorated guild system as organs of self-administration to protect the masters’ economic position and as a mechanism of control over both masters and journeymen. Both, how-

6 | From Craftsmen to Capitalists

ever, remained weak and unable to present a unified position on virtually any issue.13 Moreover, the movement’s political goals remained narrowly protectionist, confined to preserving handwerk’s precarious social status primarily by restricting the number of new masters entering the trades. It is true that many masters developed a more pragmatic, accommodationist view of industrialization and opposed a return to an era of strict guild controls as a hopeless illusion. They argued instead for the establishment of organizations with legal rights of self-administration, guided by principles of interest representation and self-help within a market economy. It is also true that a group of educated, scientifically oriented functionaries and masters of larger shops succeeded in introducing a certain amount of rationalization into handwerk and worked to isolate the more traditional conservative one-man-shops.14 But this view was still in the minority, and effective progressivism lay far in the future.15 Even as many continued individually to adapt to industrialization—the introduction of the electric motor after 1900 was a big step in this direction—protectionism remained the reflex response of most masters who had no clear concept of their role in an industrial economy.16 Nor were matters helped by handwerk’s alienation from the political system of the Kaiserreich. As for the Social Democratic Party (Sozialdemokratische Partei Deutschlands; SPD), which held the inevitable relegation of all small proprietors to the proletariat as a matter of doctrine,17 there was never any expectation of cooperation. But handwerk’s relations with other social-political groups were scarcely more congenial. By the latter part of the nineteenth century, handwerk had moved away from its earlier political liberalism. Conservatives appealed to handwerk’s fuzzy sense of nostalgia for a lost golden age, but given the wide social and cultural gap separating them, handwerker were slow to move into the conservative camp, and the alliance was never a comfortable one.18 The fact is that, although Conservatives and Liberals alike sought handwerk as allies against the perceived growing threat of the socialist working class, they refused to support handwerk demands when the latter conflicted with industrial or agrarian interests.19 In addition, the fact that handwerker at once believed in the necessity of holding back the changes of industrialization and recognized the futility of doing so often gave their politics a desperate, reactionary, and sometimes anti-Semitic character.20 The experience of World War I brought important but partial and incomplete changes to handwerk, which were to contribute to its instability in the 1920s. Yet in the longer term the trends begun or accelerated under the pressure of war were to prove a harbinger of its future integration in the economic system of industrial capitalism. Firms fared variously during the war according to their individual productivity and the demand for their products. Handwerker suffered a number of disadvantages relative to industry. They were drafted into the military in large numbers (about 46 percent of masters and 66 percent of journeymen), as opposed to an average for industry of 25 percent, while shops lost additional workers to higher-paying industry. Handwerk also generally came up short in the allocation

From Zünfte to Nazism | 7

of raw materials relative to industry and was hurt by the restricted availability of cheap credit. Small shops, especially in trades not directly involved in war production, were much more vulnerable to forcible closure.21 Yet at the same time handwerk production proved indispensable to the war economy. Wagon building, metal work, saddle making, and carpentry headed the list of trades on which the armed forces relied. Makers of medical supplies and of orthopedic and prosthetic devices also enjoyed an unprecedented demand.22 The context of this engagement is important. Before the war, handwerk and its organizations had been pulled in two opposite directions. On the one hand, many called for protectionism in the form of state help, obligatory guild membership, and measures to restrict entrance to the trades. But on the other hand, there were voices more accepting of the competitive marketplace that advocated a program of self-help organized by their institutions.23 But during the war the protectionist tendencies appear to have receded in favor of the progressive. The anticapitalist, anti–big business, anti–freedom of trade polemics of the handwerk press before the war were replaced by a new spirit of accommodation.24 Several developments drew industry and handwerk closer together. The necessity for wartime cooperation in production combined with a mutual fear of the growing militancy among the working class caused masters to identify more with industrialists as fellow entrepreneurs.25 Though resentments against the advantages enjoyed by industry in the procurement of war contracts hardly disappeared,26 especially among the smaller more marginal handwerker, and indeed was to reappear after the peace, tendencies in the direction of self-help were reinforced.27 But the more enduring outcome of the war was the strengthening of handwerk institutions and a deepening of the ties to their members. Because it was cumbersome for government officials to deal with many individual small shops in the procurement of war materials, the guilds and chambers gradually assumed the task of negotiating orders for their member firms and then distributing orders and raw materials to them.28 By the summer of 1915 the system was well centralized, and single firms were able to improve their economic efficiency while their organizations assumed certain managerial functions. As a consequence, guild membership shot up (from 36% in 1907 to 51% in 1919) as masters recognized its real economic advantages, and the number of cooperatives (which afforded small shops some of the economies of scale available to larger enterprises) almost doubled.29 Especially effective were credit cooperatives both in supplying capital and in attracting handwerker as members.30

Handwerk in Weimar and the Drift to the Right Handwerk’s path to Nazism was a long and twisted one. The political migration of handwerk voters started with support for the middle class liberal parties in early Weimar; then, with an increasing sense of political uprootedness, they drifted to the splinter parties, and finally to the Nazis. Handwerker, as voters and

8 | From Craftsmen to Capitalists

as joiners, had been overrepresented in the Nazi movement from the very beginning, but their increasing support over the course of the interwar period was the product of a complex mixture of social, economic, and political factors. We have seen how before 1873 handwerker generally supported liberal political goals while favoring economic protectionism that liberals strongly opposed. They then drifted into an uneasy alliance with conservative agrarians and sectors of industry, united by opposition to labor, a desire for protectionism, and a belief in an authoritarian Herr im Haus (master of the house) work and social structure. A wide social gulf and divergent interests prevented this coalition from ever being truly stable, however, and handwerk remained socially isolated, increasingly frustrated in its demands, and retreating into ugly anti-Semitism. Within handwerk a shifting but perpetual split existed between individuals who looked to the state for protection and those who stressed self-help and rationalization, as well as between the trades that had adapted to industry and those whose existence was threatened by it. Then, during World War I a congruence of interests drew handwerk closer to industry; yet this situation proved ephemeral, and handwerk was never able to reestablish even the uneasy alliance with conservative agrarians and sectors of industry it had maintained in the Kaiserreich. After the war’s end the first shock to handwerk was the conclusion of the Stinnes-Legien Pact of November 15, 1918 in which heavy industry, fearful of the workers’ council movement, agreed to accept the unions as an instrument of social order. Thus handwerk quickly lost much of the significance as a social buffer between capital and labor that it had enjoyed before the war. Handwerker were further embittered by the new government’s social policies, especially its antiprofiteering price controls, which they believed fell exclusively on them, and by the anti-handwerk trade tax that aggravated tensions between handwerker and their customers.31 Moreover, masters remained as divided as ever. Many continued to advocate an alliance with industry, pointing out that despite the great contradictions between them, industry and handwerk both believed in an authoritarian work relation and should therefore unite in the face of the greater threat of socialism. But typical of their yearning for a lost golden age, they also persisted in looking backward, with their nostalgia for the more authoritarian and less fluid days of the Kaiserreich when they (supposedly) had a set place in society and their socialist enemies had been kept firmly out of power. Thus many handwerker were alienated from the republic from its very inception.32 Protestant handwerker began their Weimar electoral odyssey with the liberal parties. In the first elections of the new republic in 1919, many voted for the leftwing German Democratic Party (Deutsche Demokratische Partei; DDP), partly for tactical reasons as a balance to the SPD. But the liberal DDP could not for long hold the loyalty of conservative, anxious handwerker. After years of worker revolution and counter-revolution, then, many moved to the more right-wing German People’s Party (Deutsche Volkspartei; DVP) in the 1920 election.33 But since, as Larry E. Jones has pointed out, this period was “characterized by the general instability of the bourgeois middle parties and by the increasing disaffec-

From Zünfte to Nazism | 9

tion of the German middle strata from those parties which had become either directly or indirectly identified with the Weimar Republic,”34 this affiliation would not last. If handwerk’s initial commitment to the Weimar system was shallow at best, it received a heavy blow with the inflation/stabilization crisis of 1922–1924. The hyperinflation hit small proprietors especially hard by wiping out their savings (including those they had set aside for retirement), while costs rose and credit tightened. The conditions of the monetary stabilization in late 1923 only made their situation worse in the short term. With credit tightened, thousands were driven into bankruptcy and downward into the proletariat, a trend that continued through 1924. Whatever the exact degree to which handwerker were actually hurt by the inflation/stabilization crisis,35 they felt embittered and betrayed by the new government. The prosperity of factories and the continued growth of department stores and consumer cooperatives, all of which competed with them and squeezed their profits, only sharpened their alienation.36 Throughout Saxony, for example, at numerous Mittelstand protest rallies speakers bitterly excoriated the government’s tax and credit policies, one crying that the latter were “squeezing the Mittelstand like a lemon.”37 The movement to the right is evidenced in the substantial number of handwerker who turned to the conservative German Nationalist People’s Party (Deutschnationale Volkspartei; DNVP) in the May 1924 elections as a protest against the industry-oriented liberal parties in the coalition government,38 and the many who voted for the Nazis. While handwerker who had been hurt economically by the war had joined the Nazis already in 1920 in disproportionate numbers,39 after the inflation many now saw no other hope. In the words of a master organ maker who bitterly turned away from the government to the Nazi Party, With a great deal of work I succeeded in getting a few contracts, but all my hopes were in vain. The inflation put an abrupt end to all my efforts. I could no longer pay my people and my assets dissolved. Hunger and deprivation moved in with us. I cursed a regime that permitted such misery, for I had the feeling that an inflation of these dimensions was not necessary. … But the objective was attained. The Mittelstand that was still modestly prosperous was wiped out—that middle class that was still the enemy of Marxism, even though [because of government policy] it hadn’t the faintest chance of fighting successfully.40

The disillusionment with Weimar democracy went deeper and broader than might be construed from the small numbers of handwerker (overrepresented though they were) who voted for the Nazi Party in May of 1924. Already in 1923, without apparently having any particular party in mind, an important handwerk newspaper expressed an ominous yearning for authoritarianism: “If we don’t fully come out of these endless government crises, if finally a strong man doesn’t come who takes care of the devil of confidence and no-confidence of the parties and finally cleans things up from the very bottom, then we in Germany might as well just pack it in.”41 Coming to the fore again was the traditional moral antipathy to industry. According to the Flensburg chamber history, industry in this period

10 | From Craftsmen to Capitalists

assumed for handwerk “the same position that Jews did for the Nationalists. From handwerk’s ideological point of view, industry was ‘degenerate,’ alien in its essence, and detrimental to the perfection of quality work.”42 Perceiving this discontent, the Nazis aimed heavy amounts of propaganda at handwerker as well as other elements of the Mittelstand both “old” (small proprietors) and “new” (white collar employees). They directed their attacks not only at the Communists and Social Democrats (which the bourgeois parties did as well), but also at the parties of the right and center—the DDP, DVP, and DNVP—for their ties to big capital and “international Jewry.” In their anticapitalist rhetoric, however, the Nazis were careful to distinguish between small private property, which they supported, and the “parasitic” property of cartels, syndicates, and trusts. Only a true peoples’ community (Volksgemeinschaft), they declared, would be capable of ending the oppression of finance capital and the threat of bolshevism and of overcoming class conflict in a unified German nation.43 These generalizations of handwerker voting patterns are valid for primarily Protestant handwerker, those who moved from the liberal parties to the racialist (völkisch) DNVP and the Nazis in 1924; for now, by and large, Catholic handwerker remained loyal to the Center Party. It should be noted, however, that even as the Center Party denounced Nazism as hate-filled and anti-Christian, its own propaganda echoed much of the latter’s language of opposition to both socialism and liberalism and of overcoming class conflict in an authoritarian “people’s community.” Over the course of the Weimar period, the Center Party, too, drifted steadily to the right.44 The period after the stabilization until the onset of the Depression marked a time of improved economic conditions for handwerk and a participation in this interlude of relative prosperity. This was also a period in which the durability of handwerk received a new recognition in the academic literature. Werner Sombart partially reversed his earlier view that handwerk was fated to be absorbed into industry and acknowledged that many trades had impressively modernized their production, and management, methods and clearly had a place in an advanced capitalist system.45 A multivolume government study confirmed handwerk’s staying power in greater detail.46 At the same time, the Prussian Trade and Reich Labor Ministries, recognizing handwerk’s role in training over two-thirds of all skilled workers, worked to join it and industry in an integrated nationwide system of vocational counseling and training.47 But this 1924–1928 interlude of relief brought no reconciliation with the Weimar government. A constant stream of complaints poured forth from handwerk circles. Masters protested vehemently that the government’s tight credit policy after stabilization made it impossible to rebuild, and that taxes fell especially onerously on them. In addition, they resented the high amount of government expenditure, especially such state welfare programs as the unemployment insurance introduced in 1927 for which they footed the bill yet that brought them no benefits.48 Handwerk reacted politically during these years not by a return to the DNVP, which they associated with big agriculture and high food prices, nor to the two

From Zünfte to Nazism | 11

liberal parties with their connections to big business. Rather, for many this was a period of rootless experimentation with the innumerable splinter parties that littered the Weimar political scene. The Business Party (Wirtschaftspartei), founded in 1919 and after 1925 renamed the Reichspartei des deutschen Mittelstands, attempted to appeal to small proprietors and especially to those who had been hurt in the inflation.49 Many handwerker, attracted by its support of corporatist and protectionist proposals as well as its strong anticapitalist and antisocialist rhetoric, cast their votes for this narrow interest party, especially after the onset of the Depression. But even as the Business Party leaders did succeed in organizing massive Mittelstand protest demonstrations in 1928 under the slogan “Mittelstand im Not” (Mittelstand in need), the party never gained a truly broad appeal.50 Mittelstand protest and alienation were also expressed throughout the 1920s in more roundabout ways. In Lower Saxony, for example, the Guelph Party, whose defining characteristic was loyalty to the Hanoverian dynasty, enjoyed a surprising resurgence, and in areas well outside its traditional bases of support. Its new appeal may be explained not as a sign of nostalgia for the lost royal house, but rather as an expression of resentment against the encroachment of the modern state, epitomized by Prussia, and the commercialization and industrialization that had debased local culture.51 Elsewhere, too, votes for special interest or separatist parties represented more a protest against the dominance of Prussia and against modernity in general than as support of a particular program.52 With the onset of the Depression, the economic situation for handwerker deteriorated rapidly. Using 1928 as a base index (1928 = 100), their income levels fell to 96 in 1929, 86 in 1930, 69 in 1931, and 50 in 1932, only one-half of what they had taken in four years earlier.53 By 1932 handwerk bankruptcies accounted for 17 percent of the total nationwide.54 Even in areas where handwerker themselves were scarcely affected, they reacted with alarm and anxiety. William S. Allen reports in his case study of the rise of Nazism that, while in Nordheim in 1932 only a few marginal shops were driven into bankruptcy, handwerker were quick to see the specter of larger disaster. Guild masters demanded public works projects from the government and issued condemnations of illegal competition and capitalism generally. Even though in this region direct suffering was thus far restricted to the workers, the middle classes lived in perpetual fear of social demotion.55 Only the Nazis, however, were able to articulate the demands and frustrations of handwerk with any real success. While the Brüning government (March 30, 1930 to June 1, 1932) decreed several measures to ameliorate their hardship (chiefly lowering taxes on small shops while raising those on department stores— the latter being resented not just by retailers but also by those handwerk trades with a retail business), masters remained alienated and unimpressed. They merely escalated their demands for still lower taxes, a reduction of social welfare, and economic corporatism.56 Striking, too, is the anticapitalist character of their response. A resolution passed in 1931 by a peak association cried, “There prevails in handwerk a bitterness and desperation [rooted in] the one-sided preference of

12 | From Craftsmen to Capitalists

capitalist and trade union forces [by state policy]. The survival of the commercial Mittelstand is decisively dependent upon the breaking up of the centralized predominance of all collective economic forces, be they capitalist, trade union, or state-economic.”57 Only the Nazis—with their incessant denunciations of consumer cooperatives, department stores, finance capital and greedy banks, liberals, Jews, communists, all contained in a continuous barrage of leaflets, meetings, parades, and speeches—succeeded in gaining the votes of German handwerker in the two elections of 1932.58

Handwerk and Nazism In the massive and contentious historiography of the sociology of Nazism at least one thing has remained constant: virtually all who write on the subject agree that, in the words of Thomas Childers: “The nucleus of the NSDAP’s following was formed by the small farmers, shopkeepers, and independent artisans of the old middle class, who constituted the most stable and consistent components of the National Socialist constituency between 1924 and 1932.”59 What has changed in the literature is the estimation both of the extent of the participation of other social groups, especially the working class and the upper-middle classes, and consequently of how National Socialism as a party and as a movement may be characterized.60 The analysis of National Socialism as, in essence, a reactionary response of the lower-middle class has a long and distinguished pedigree. Already in 1930 Theodor Geiger perceived a reaction of “panic” on the part of Mittelstand voters anxious that their precarious status as small property owners would be further eroded by the economic crisis.61 Then during and after World War II a series of studies by American sociologists and social psychologists (often European refugees) attempted to work out a typology of the petite bourgeois authoritarian personality. The psychologist Erich Fromm, for example, argued that the lower-middle class was gripped by a “feeling of powerlessness, anxiety, and isolation from the whole” that gave it a “sado-masochistic” character, a “craving for submission” together with a “lust for power” to which Nazism appealed.62 The most influential sociological study, by Seymour Martin Lipset, argued in the 1950s that, because small proprietors by virtue of their position relative to big business must live with the perpetual pressure of concentration and centralization, “they are always disaffected” and “reactionary.” The explanation for the appeal of Nazism to the German lower-middle class was to be sought neither in the economic crisis of the 1930s nor even in the longer term “anomie and the general rootlessness of modern industrial society.” Rather, on one level, the lack of education and “isolation from varied experiences” predisposed the small town shop owner “toward an extremist view of politics.” But even more deeply, the productive redundancy of the small proprietor made him fundamentally opposed to big industry, labor unions, and state regulation (all being “necessary for a stable, modernized social

From Zünfte to Nazism | 13

structure”) in a way that was both “unrealistic” and “irrational.”63 Thus their contempt for parliamentary democracy is never far beneath the surface and can “under certain circumstances” manifest itself as fascism.64 The next generation of those studying the German lower-middle classes included historians who moved away from structural explanations of fascism and the view of the necessary alienation of the small proprietor. Writing in the late 1960s and early 1970s, they stressed both historical contingency in tracing the stages of political radicalization of the Mittelstand as well as its heterogeneity, even acknowledging the existence of progressive elements that sought accommodation with industrialization. Peter Wulf, for example, in a regional study emphasized the effect of the Depression in Schleswig-Holstein in shaking the confidence of handwerker in the middle-class parties and in the Weimar system as a whole.65 Martin Schumacher examined the German Mittelstand Party as a locus of deep Mittelstand discontent with the republic.66 The most extensive and still indispensable study of the Mittelstand in the Weimar period is Heinrich August Winkler’s Mittelstand, Demokratie und Nationalsozialismus. Winkler, in this book and in his many articles, also stressed the devastating impact of the inflation/stabilization crisis and the depression but put them in the context of what he argued was the old Mittelstand’s long-term preindustrial outlook. Fearing competition, many masters and their institutions called for economic protectionism and a corporatist political structure. The disappointment of their aspirations aggravated antidemocratic tendencies already widespread among them and undermined their already tenuous support for the Weimar state. The turn to the NSDAP was the result.67 Historical research since the 1970s has deepened our understanding of the old Mittelstand 68 and of support for Nazism in several ways. First, Nazism is no longer regarded exclusively as a movement of the lower-middle class, or “extremism of the center,” in Lipset’s phrase.69 Based on new voter research and more-sophisticated techniques of statistical and electoral analysis, the overwhelming consensus now is that Nazism appealed, in Thomas Childers’s words, to “a significantly wider range of social and demographic groups than previously believed.”70 Members of the upper industrial bourgeoisie, agrarians, white-collar workers, civil servants, even workers, were all drawn to the Nazi movement, especially after 1930, in significant numbers.71 Therefore, what was unique about the Nazi Party was not its Mittelstand character, but rather that it was the first “modern absolutistic integrationist or people’s party in Germany.”72 The second innovation in research on the Mittelstand has been the expansion of inquiry from primarily the political to the economic and social. Coming in the context of a wider reexamination of the European petite bourgeoisie in the nineteenth and twentieth centuries,73 this work takes as its starting point a more intensive examination of the differences among the various trades and individual firms, as well as the relations of handwerker with their organizations and the implications of these for politics. For example, a number of social historians have looked at the daily life of handwerker, their economic practice and attitudes, as well as patterns of socialization, marriage, inheritance, and social mobility in

14 | From Craftsmen to Capitalists

order to assess the influence of preindustrial traditions in the modernization of handwerk.74 Tensions between the owners of one-man shops and the more prosperous shop masters who considered the former to be undertrained bunglers who diminished the prestige of the trades have been the object of some research,75 while others have argued that the social connections between handwerker and the working class were much deeper than have been assumed.76 More-differentiated research into Nazi electoral support and the social origins of Party functionaries has demonstrated that those often came from owners of the more marginal and precarious firms.77 Indeed, more controversially, other scholars have argued that the strength of the “backward” or anti-industrial element has been much exaggerated, and that from the Wilhelmine period on many leaders as well as individual masters were committed to a course of economic modernization and accommodation to industry.78 Yet this research, too, confirms the view that, in von Saldern’s words, “The petty bourgeoisie—and especially the artisans—were over represented in the Nazi party.”79 In sum, the new research has discarded the view of the NSDAP as a Mittelstand party, one that expressed first and foremost the antimodernist frustrations and class antagonisms of the lower-middle classes, and has established the differentiated character of handwerk allowing that its relationship with industry was far more complex than previously assumed. Yet, if the NSDAP was not a party of the old Mittelstand, the most recent research, local and general studies alike, confirm that the old Mittelstand formed the backbone of party voters and members prior to 1933.80 But if handwerk supported the Nazis with the expectation of economic and social protection, what they actually got was another matter.

Handwerk under Hitler, 1933–1939 The task of assessing the experience of handwerker under the Third Reich is made complex by a number of contradictory factors, including the differing expectations within handwerk and the apparently mutually exclusive goals of Nazism. Historical interpretations may also be affected by the chronological perspective one takes. If one’s primary vantage point is the Weimar period, when the expressed demands of masters tended toward social protectionism and when handwerk’s future for a permanent integrated position in a capitalist political economy seemed uncertain, then the Nazi period may be seen as a defeat. The Nazis had no intention of shielding unproductive enterprises, and most historians have assumed that the war represented the final triumph of industrial capitalism over handwerk. If, on the other hand, we look backwards from the Federal Republic, when handwerk emerged vital and fully integrated into a liberal capitalist political economy, the impact of the Third Reich on handwerk may appear in a quite different light. This study will take the latter perspective and argue that Nazism had a strongly modernizing effect on handwerk and thus contributed to its postwar success.

From Zünfte to Nazism | 15

The consolidation of Nazi power brought two types of changes to handwerk, organizational and programmatic. For the former the Third Reich was to represent the fulfillment of handwerk aspirations, but hopes for the latter were to be unequivocally disappointed. In the months following the seizure of power on January 30, 1933, the many pro-Nazi handwerker, led by the Nazi Fighting League of the Commercial Middle Class (Kampfbund des Gewerblichen Mittelstands, or Kampfbund) and the SA storm troopers, participated enthusiastically in boycotts and terrorist attacks against department stores, Jewish-owned businesses, and consumer cooperatives. By that summer, however, a shift in policy took place in conjunction with the regime’s program of Gleichschaltung, the “coordination” of all institutions in the Nazi state. Under pressure from business, from the state bureaucracy, from the Party itself (that wanted to bring such outbursts from below under control), as well as pressure from abroad, spontaneous actions like these were brought to a halt.81 The less-disciplined Kampfbund was dissolved and replaced by two new compulsory organizations: the National Socialist Artisan, Trade, and Commerce Organization (Nationalsozialistische Handwerks-, Handels- und Gewerbeorganisation; NS-Hago) and the National Artisan, Trade, Commerce Federation in the German Workers’ Front (Gesamtverband des deutschen Handwerks, Handels und Gewerbes in der Deutschen Arbeitsfront; GHG), under the control of the German Labor Front (Deutsche Arbeitsfront; DAF) that served as instruments of Party control of all Mittelstand groups.82 The most important and far-reaching of the organizational changes took place at the level of the guilds and chambers. The guilds and chambers continued to exist but membership was made obligatory for all masters and journeymen, and the hodgepodge of local jurisdictions was systematized and centralized at the regional and national levels. In addition, their leadership was no longer democratically elected but subjected to the leadership principle (Führerprinzip)—that is, named from above according to criteria of Party loyalty.83 This process of Gleichschaltung meant several things for handwerk. It removed the possibility of spontaneous actualization of handwerk aims from below and made them the responsibility of Party functionaries. While some of these goals, such as the expropriation of Jewish property owners, were later carried out from above, the economic substance of handwerk wishes was not.84 Neither department stores, which to many epitomized the unfair competitive advantage enjoyed by big business, nor purchasing cooperatives, which squeezed handwerk prices from the consumer side, were discriminated against or banned. Thus from the beginning an important feature of handwerk’s hopes for a protectionist, corporatist (ständisch) society was disappointed.85 As for the mechanism of Gleichschaltung itself, however, since so many handwerker were sympathetic to the Nazis, the takeover of the organizations proceeded quite smoothly and with the positive support of most members.86 In contrast to the trade unions, which were completely destroyed (and many of their leaders imprisoned) and replaced by entirely new organizations, the guilds and chambers required no such drastic measures to be brought under Party control. Their membership was politically

16 | From Craftsmen to Capitalists

reliable, and their structure compatible enough with Nazi rule, so that only the replacement of top individuals was necessary to bring them into line. By far the most important and far-reaching accomplishment of handwerk in the Third Reich was the realization of its legislative ambitions. Its significance, however, is ambiguous because, as we shall see, the uses to which this legislation was put were quite contrary to what those most desperately calling for it had expected. The first years of Nazi rule brought the accomplishment of the legal gains, so long sought after and so long denied that most handwerker had given up hope of ever realizing them. The restructuring of handwerk organizations contained in three laws promulgated in 1934 and 1935 came to be regarded in the postwar period as the foundation of modern handwerk politics, with economic effects that remain controversial down to the present day. The First Decree for the Provisional Reconstruction of German Handwerk of June 15, 1934 contained the following provisions that formalized the process begun by Gleichschaltung of establishing a hierarchical, centralized system of handwerk organizations.87 First, it defined seventy-two trades that could be legally practiced as handwerk. Thus boundary disputes with industry, trade, retail, and even art were either settled or a mechanism for their resolution was set in place. Second, guild (Innung) membership was made obligatory (putting the guilds on a secure financial basis), their tasks were clearly delineated, and they were subordinated to the chambers (Kammern). Third, the Führerprinzip became the selection process for the leadership, and clear lines of authority were established among the local guilds and chambers, and their peak organizations. Finally, a court of honor (Ehrengericht) was established to adjudicate offenses to handwerk “honor,” among them “unfair competition and the cheating of customers.” The Second and Third Handwerk Decrees followed on January 18, 1935.88 The Second Handwerk Decree extended the leadership principle to the chambers (and thus abolished the elected assemblies as the bodies that chose the leaders) and assigned authority to select officials at all levels to the Reich Economics Ministry (Reichswirtschaftsministerium; RWM). Finally, the Third Decree gave handwerk its most sought-after goal since 1848: the so-called major certificate of competency (Großer Befähigungsnachweis). According to this law, only those who had received their master title would be permitted to open up and operate a shop in any one of the trades now legally defined as handwerk. The master title, which the chambers would issue, was received at the end of a course of training, set and supervised by them; it entailed a period of apprenticeship (generally three to three and one-half years, depending on the trade), the completion of a journeyman’s piece, a period of journeymanship (of similar length and including both practical and theoretical training), and finally a masterpiece and a master examination.89 Handwerk supported this long-sought legislation in almost all its aspects. The institution of the certificate of competency was universally regarded as a great victory, as was the creation of a unified institutional structure, although there were later to be some complaints about handwerk being “over-organized.”90 The court of honor was applauded as a mechanism of self-discipline and of rooting out the

From Zünfte to Nazism | 17

dishonest and incompetent. Although the extent of subordination to the state did not meet with wishes of those handwerker fixated on a strict ideal of “selfadministration,” such measures as the leadership principle were accepted under the circumstances, and the laws were generally seen as an epochal achievement.91 A matter of central importance in this study will be whether the certificate of competency, the centerpiece of this legislation—originally demanded by most handwerker for reasons of protection and granted by the Nazi state to appease a loyal constituency but, more importantly, as a mechanism of “coordination”92 and political control93—was used as a progressive instrument or as a reactionary one. It seems clear that at the time of its promulgation both motives could be found among handwerker. Some wanted this corporate authority primarily as a way to exclude competition,94 while others saw it, along with the solid organizational structure, as a means to enforce higher standards of workmanship and to introduce techniques of modernization and rationalization in order to improve handwerk’s competitive position in the marketplace.95 Certainly raising productivity was the high priority of the Nazi regime intent above all on rapid rearmament. Thus the formalization of the handwerk apprenticeship system was introduced as part of a broader reform in vocational training in Germany designed to raise skill levels in all economic sectors.96 In addition, leaders expected to use the integrated organizational structure in order to build up their power as an effective political interest group. But in evaluating the effects of Nazi policy with regard to handwerk we must also consider what it did not get from the regime. We have already seen that certain protectionist demands for limiting competition from big business (closing of, or imposing high taxes on, department stores) were denied. In addition, the guilds were refused the right to control prices.97 Thus, anticapitalist and protectionist promises were subverted from the very beginning. In addition, the wishes of handwerk and other elements of the Mittelstand to establish corporate legislative bodies (Ständesrat), where representation would be according to occupational group (giving handwerk more legislative clout and serving to control the working class) was a hope the Nazis exploited but refused to fulfill.98 There were also other, more-topical reasons for handwerk discontent during the Third Reich. Complaints were widespread about the high guild dues and constant demands for special contributions, as well as the claustrophobic level of control by the organizations. In trades where business continued to lag, there was disillusionment with the Nazi policy and the regime, but where business was good, attitudes were correspondingly more positive. High taxes and difficult credit terms provoked constant grumbling, and violence by Nazi thugs, especially against the Church, caused offense to a sense of order.99 Work creation programs affected the trades differently: the construction and metal trades were generally the beneficiaries of government contracts in the building programs of the 1930s, and were therefore without complaint, while trades like cabinetry and upholstery were left behind and embittered.100 Once preparations for war began with the inauguration of the Four Year Plan in 1936, a new category of complaints arose. As

18 | From Craftsmen to Capitalists

rationing of raw materials began, handwerk firms often received the short end of allocations, a situation that was especially acute in the metal trades;101 wage and price restrictions hurt small shops (putting them in a disadvantageous position relative to industry in attracting and keeping labor); and in 1939 2 to 3 percent of all handwerk shops were closed in a “combing out” action designed to free scarce material resources and labor.102 Two things should be noted about the material hardships and Nazi policy during this period. First, however constant the grumbling against the regime may have been, it never developed into a real opposition. Loyalty to the Führer remained high throughout, even as people blamed his subordinates. A shop owner might be heard cursing the government one minute and enthusiastically saluting a passing parade the next. Criticism may have been a barometer of economic difficulties, but it never shook a basic commitment to the regime. As Ian Kershaw puts it, “Complaint and compliance were related characteristics of middle-class life in the Third Reich.”103 The second notable feature of economic life for handwerk under the first six years of Nazi rule is that, measured both by entire trades and by individual firms, those did well that were the most economically efficient. As von Saldern has shown, by the end of the 1930s a rise of income in handwerk firms was possible if it was accompanied by steps to rationalize.104 This means that, contrary to assertions that handwerk was defeated in the Third Reich by the interests of big business (see chapters 2 and 3 in this volume), the circumstances of Nazi rule enabled shops to thrive according to capitalistic, market principles. During the combing out of 1939, it was not the efficient firms that were taken out of business, but rather the smallest shops, the one-man-firms, that were the least efficient.105 These were the most traditional and conservative masters, those who had feared proletarianization the most and who had probably originally voted for Hitler in the greatest numbers. Those who ended up being rewarded under Nazism were benefited not by protectionist programs but rather by a context of market rationality. By 1939 those trades that prospered were the same ones that had been doing well earlier. No artificial mechanism of protectionism had shielded them from the marketplace during the Third Reich.106 For some historians the failure to implement the more radical handwerk demands, as well as the poor showing of these weaker trades, has been seen as a victory of the interests of big business over handwerk. Arthur Schweitzer, for example, chronicles the attempts of Robert Ley, director of the DAF, to extend the scope of his authority over its organizations, first by establishing a set of parallel DAF institutions to those of handwerk and then by attempting to install his own people as the heads of both.107 Handwerk leaders resisted Ley’s attempts to encroach on their authority (this sort of turf war being typical of power machinations under Nazism), but they had to enlist as allies others who were only slightly less dangerous. According to Schweitzer, the goal of the handwerk movement was a corporatist program that he terms artisan socialism.108 This comprised a set of romantically inspired notions of reestablishing an artisanal economy, with

From Zünfte to Nazism | 19

anticapitalist features including opposition to big banks and large-scale industry. Handwerker believed these should be dissolved and their contracts redistributed to small shops. Parliament was to be replaced by a corporate body where representation was to be apportioned according to occupational group, or Stand. Membership of all citizens in party organizations representing their Stand would be compulsory. Prices would be controlled according to criteria of “fair prices” and “ordered markets,” and entrance to the trades limited in order to protect the livelihoods of those already established.109 In order to defeat Ley in his attempt to usurp part of their control, Schweitzer continues, the proponents of artisanal socialism were forced to ally with Economics Minister Hjalmar Schacht, who represented the interests of big business, and high Party functionaries whose interests coincided with those of big business because their primary goal was preparation for war. Schacht’s goals were twofold. First, he wanted to shield the guilds and chambers from the DAF—not in order to protect the autonomy of handwerk institutions, but rather to prevent the DAF from using them against the interests of big business. Second, he wanted to keep them closer to his own control in order to make sure that the ambitions of the artisan socialists were contained so that the economy would operate according to rules favorable to big business.110 Winkler takes this farther and argues that after 1936–1938 the Nazi Party could politically afford to ignore the aspirations of its handwerk supporters for protective measures. Certain of their support (or at least confident of their quiescence), they could afford to put handwerk demands aside and orient the economy toward war production, which meant big business and placating the more dangerous working class. Handwerk thus became politically “superfluous.”111 The problem with these points of view is that they characterize in a blanket fashion the program of handwerker and the aspirations of their leaders as backward-looking, protectionist, and inimical to the interests of big business. They argue that the Third Reich ended up being a defeat for handwerk. But as von Saldern correctly points out, while the goals of many masters may be accurately characterized as economically reactionary, this was not true of many members of the more competitive trades and much of the leadership that tended to come from those trades. Indeed, she continues, contrary to Schweitzer’s and Winkler’s arguments, there was a real overlap of interests between big business and handwerk, especially given the predominant industrial preference for an “organized” economy. Both opposed classical liberalism, socialism, and the unions, supported strong guarantees for private property, and believed in the necessity of organized markets. Both groups supported principles of efficiency and productivity as criteria for economic viability. Handwerk groups actually supported, for example, the combing out actions—which they helped carry out—not just because they reduced competition, but also because they eliminated the least efficient members of their Stand.112 The next chapter will carry this discussion of how handwerk fared under the Third Reich into the war, which none of the authors discussed above have in-

20 | From Craftsmen to Capitalists

vestigated. It will argue that these same principles of efficiency and productivity worked not, as most have assumed, for the exclusive benefit of big industry.113 Rather, handwerk was already positioned—by virtue of its strong organizational structure and its readiness to adopt standards of rationalization and modernization, albeit to the detriment of their weakest members—to profit from the German war economy. Many masters may not have got what they wanted during the Third Reich, but handwerk as a Stand got what it needed.

Notes 1. German has two words for guild. The Innung is the modern incarnation and denotes mainly a self-help or interest group, coming into being in the mid-nineteenth century. The medieval form was the Zunft, which was, in most places, a much more politically and socially powerful institution than the Innung was to be and had extensive authority to regulate every aspect of handwerk economic life and that encompassed an extensive cultural component as well. The Zünfte in Prussia were finally abolished during the Stein/Hardenberg reforms on November 2, 1810. 2. For the economic decline of handwerk in the late medieval and early modern periods, see primarily the work of Wilhelm Abel: “Zur Ortsbestimmung des Handwerks vor dem Hintergrund seiner Geschichte,” in Das Handwerk in der modernen Wirtschaft und Gesellschaft, Deutsches Handwerksinstitut (Bad Wörrishofen, 1966); and the essays in Abel, ed., Handwerksgeschichte in neuer Sicht (Göttingen, 1972); also Rudolf Stadelmann and Wolfram Fischer, Die Bildungswelt des deutschen Handwerks um 1800: Studien zur Soziologie des Kleinbürgers im Zeitalter Goethes (Berlin, 1955). For social tensions within handwerk in the late eighteenth and early nineteenth centuries, see Mack Walker, German Home Towns: Community, State, and General Estate, 1648–1871 (Ithaca, N.Y., and London, 1971), 73–103, 329–353. 3. Wolfram Fischer, Handwerksrecht und Handwerkswirtschaft um 1800 (Berlin, 1955); Dirk Georges, 1810/11–1993: Handwerk und Interessenpolitik: Von der Zunft zur modernen Verbandsorganisation (Frankfurt, 1993), 91–93; Friedrich-Wilhelm Henning, “Die Einführung der Gewerbefreiheit und ihre Auswirkungen auf des Handwerk in Deutschland,” in Abel, Handwerksgeschichte. For handwerk condemnation of the law, see Peter John, Handwerk im Spannungsfeld zwischen Zunftordnung und Gewerbefreiheit (Cologne, 1987), 284–285. For the contemporary lament that the movement for occupational freedom in the 1850s and 1860s meant the atomization of economic life and the dissolution of community ties, see Walker, German Home Towns, 411–417. 4. See Volkov, Rise of Popular Antimodernism, 53–56. 5. Abel, “Zur Ortsbestimmung des Handwerks”; Wolfram Fischer, “Die Rolle des Kleingewerbes im wirtschaftlichen Wachstumsprozess in Deutschland, 1850–1914,” in Wirtschaftliche und soziale Probleme der gewerblichen Entwicklung im 15.–16. und 19. Jahrhundert, ed. Friedrich Lütge. (Stuttgart, 1968). For a summation of research and an overview, see Friedrich Lenger, Sozialgeschichte der deutschen Handwerker seit 1800 (Frankfurt, 1988), 114–142. For a comparative view, see Geoffrey Crossick and Heinz-Gerhard Haupt, eds., Shopkeepers and Master Artisans in Nineteenth-Century Europe (London and New York, 1984). 6. Lenger, Handwerker seit 1800, 141–142. 7. Karl Marx and Friedrich Engels, The Communist Manifesto (New York, 1992), 27. 8. Gustav Schmoller, Zur Geschichte der deutschen Kleingewerbe im 19. Jahrhundert (Halle: 1870), 661–671. While by the end of the nineteenth century Schmoller had come to believe that cer-

From Zünfte to Nazism | 21

9.

10. 11. 12. 13. 14.

15.

16.

17. 18. 19.

20.

tain sectors of handwerk could survive beside industry, his overall view remained pessimistic. See also his Grundriß der allgemeinen Volkswirtschaftslehre, vol. 1 (Munich and Leipzig, 1919), 479–480. His nine-volume study published by the Verein für Sozialpolitik concluded similarly that, although industry affected the trades differently, their obsolescense seemed inevitable: Untersuchungen über die Lage des Handwerks in Deutschland mit besonderer Rücksicht auf seine Konkurrenzfähigkeit gegenüber der Großindustrie, published in the series Schriften des Vereins für Sozialpolitik, vols. 62–70 (Leipzig, 1895–1897). One problem with this study was that it focused primarily on traditional crafts, which indeed were often being superseded by industry, rather than on newer, dynamic crafts. A summary of these studies may be found in Hans Grandke, “Die vom ‘Verein für Sozialpolitik’ Veranstalteten Untersuchungen über die Lage des Handwerks in Deutschland,” Jahrbuch für Gesetzbebung, Verwaltung und Volkwirtschaft im Deutschen Reich 21 (1897): 1031–1088. The series’ editor, Karl Bücher, foresaw a number of effects on handwerk as the result of industrial competition, among them a squeeze on profit margins as industry took over more and more stages of production, impoverishment through shifts in demand, takeovers by larger firms, and increasing dependency on wholesalers. See “Der Niedergang des Handwerks,” in Die Entstehung der Volkswirtschaft, Vorträge und Versuche, ed. Bücher, 3rd edition (Tübingen, 1901), 215–248. Paul Voigt, “Die Hauptergebmisse der neuesten deutschen Handwerkerstatistik von 1895,” Jahrbuch für Gesetzgebung, Verwaltung und Volkswirtschaft im Deutschen Reich 21 (1897): 997– 1030; also Eugen von Philippovich, Grundriß der politischen Ökonomie, 13th edition, vol. II, part I (Tübingen, 1918), 179–188. Kenneth D. Barkin, The Controversy over German Industrialization 1890–1902 (Chicago and London, 1970), chapter 4; Volkov, Rise of Popular Antimodernism, 203–211. Valentin Chesi, Struktur und Funktionen der Handwerksorganisation in Deutschland seit 1933 (Berlin, 1966), 18–19; Volkov, Rise of Popular Antimodernism, 273–274. For the law of July 26, 1897, see Reichsgesetzblatt (hereafter RGBl), 663; for the law of May 30, 1908, see RGBl, 356. Winkler, Mittelstand, 54. Rather than adopt the more gender-neutral one-person shop, I have chosen to keep the flavor of the original German, customary during this period, and use one-man shop (ein-ManBetrieb) throughout. Adelheid von Saldern, “The Old Mittelstand 1890–1933: How ‘Backward’ Were the Artisans?” in Central European History 25, no. 1 (1992): 35. Hal Hansen stresses the role of the states in southwest Germany in promoting artisanal progressivism; “Rethinking the Role of Artisans in Modern German Development,” Central European History 42, no. 1 (April 2009): 1–32. On the efforts of the German state to encourage this tendency as a means of augmenting the skills of the labor force, including strong support for the 1897 law as a means to that end, see David Meskill, Optimizing the German Workforce: Labor Administration from Bismarck to the Economic Miracle (New York and Oxford, 2010). On the varied, conflicted character of lower-middle-class patterns of social mobility, politics, and values in the Kaiserreich, see David Blackbourn, “Between Resignation and Volatility: The German Petite Bourgeoisie in the Nineteenth Century,” in Crossick and Haupt, Shopkeepers and Master Artisans. See Karl Kautsky, “Der Untergang des Kleinbetriebs,” in Das Erfurter Programm, 12th ed. (Stuttgart, 1919), 3–10. Volkov, Rise of Popular Antimodernism, 163–171, 203–211, 221–223, 252–253, 282–283, 287, 313–319. For example, obligatory guild membership (Pflichtinnung), long a goal of handwerk, was opposed by liberals as an obstacle to technological innovation and to the capacity of industry to recruit journeymen skilled labor. See Winkler, Mittelstand, 50, 54–58. Anti-Semitism was often part of their response. See Shulamit Angel-Volkov, “The Social and Political Function of Late 19th Century Anti-Semitism: The Case of the Small Handicraft

22 | From Craftsmen to Capitalists

21.

22.

23. 24. 25.

26. 27.

28. 29.

30.

31.

32. 33.

34.

Masters,” in Sozialgeschichte Heute; Festschrift für Hans Rosenberg zum 70. Geburtstag, ed. Hans Ulrich Wehler (Göttingen, 1974). Lenger, Handwerker seit 1800, 166–167. Jürgen Kocka, “The First World War and the ‘Mittelstand’: German Artisans and White-Collar Workers,” in Journal of Contemporary History 8 (1973): 100–123. Although in the early years of the fighting the War Office had a policy of spreading war contracts and raw material allocation around, partly for reasons of internal social stability, during the coal shortage of the winter of 1916 General Groener ordered, as he later explained, that “all enterprises without work must be closed down, regardless of the consequences. In the same way, all small enterprises must be removed because they make uneconomic use of coal and manpower.” Kocka estimates that by late 1917 50 percent of all handwerker had been drafted and 33 percent of all shops closed down. But despite the directive of the High Command, as well as the prejudices of the industry-dominated War Committee of German Industry (Kriegsausschuss der Deutschen Industrie), many sympathetic war procurement agencies did not discriminate against handwerk in the allocation of raw materials. See Kocka, Facing Total War: German Society 1914–1918 (Leamington Spa, 1984), 102–104; Handwerkskammer Flensburg 1900 bis 1975: Ein Beitrag zur Geschichte des Handwerks in Schleswig-Holstein (Flensburg, 1975), 111; Beiträge zur Geschichte des Osnabrükker Handwerks: anläßlich des 75jährigen Bestehens (Osnabrück, 1975), 401. Rainer S. Elkar and Werner Mayer, Handwerk—eine Karriere: Handwerk an Rhein und Ruhr im 20. Jahrhundert (Düsseldorf, 2000), 31; Wilhelm Wernet, Handwerkspolitik (Göttingen, 1952), 237. Additional trades which furnished goods directly to the armed forces included cooper, brush maker, glazier, plumber, painter, rope maker, tailor. Gunther Mai, Kriegswirtschaft und Arbeiterbewegung in Württemberg 1914–1918 (Stuttgart, 1983), 80. Jürgen Kocka, Klassengesellschaft im Krieg: deutsche Sozialgeschichte 1914–1918 (Göttingen, 1973), 91. A shared opposition to the expanded powers of the state in directing the economy as well as to the growth of consumer cooperatives only strengthened this bond. See Kocka, “The First World War and the ‘Mittelstand,’” 116–120; Kocka, Facing Total War, 111–112. Mai, Kriegswirtschaft, 89; Kocka, Klassengesellschaft im Krieg, 89. In addition, the state’s recognition of the need for skilled workers after the war, as well as handwerk’s leading role in producing them, were sharpened by the war experience; Meskill, Optimizing the German Workforce, 83. Wernet, Handwerkspolitik, 237. Kocka, Klassengesellschaft im Krieg, 88–89; Handwerkskammer Flensburg 1900 bis 1975, 111; Beiträge zur Geschichte des Osnabrücker Handwerks, 403–404, 406. Moreover, the trend toward stronger membership commitment continued. Whereas in 1914 only 38 percent of handwerker were organized in guilds or other handwerk associations, in 1925 the figure had shot up to 75 percent. Mai, Kriegswirtschaft, 89. By the war’s end more than one-third of all handwerker had joined a credit cooperative. The commitment to other forms of cooperatives, however, was still weak—less than 10 percent by 1918—even though this represented a doubling of the prewar figure. Mai, Kriegswirtschaft, 91. Beiträge zur Geschichte des Osnabrücker Handwerks, 412; Thomas Childers, The Nazi Voter: The Social Foundations of Fascism in Germany, 1919–1933 (Chapel Hill, N.C., and London, 1983), 64; Larry E. Jones, German Liberalism and the Dissolution of the Weimar Party System 1918–1933 (Chapel Hill, N.C., and London, 1988), 113. Winkler, Mittelstand, 66–67, 70, 74. Heinrich August Winkler, “From Social Protectionism to National Socialism: The German Small-Business Movement in Comparative Perspective,” Journal of Modern History 48 (March 1976): 7–8; Jones, German Liberalism, 24–25, 49. Larry E. Jones, “The Dissolution of the Bourgeois Party System of the Weimar Republic,” in

From Zünfte to Nazism | 23

35.

36. 37. 38. 39. 40. 41.

42. 43. 44. 45.

46. 47. 48. 49.

50.

51. 52.

53. 54.

Social Change and Political Development in Weimar Germany, ed. Richard Bessel and Edgar J. Feuchtwanger (London, 1981), 268. The still important study of the social effects of the inflation by Franz Eulenburg, “Die sozial Wirkungen der Währungsverhältnisse,” in Jahrbücher für Nationalökonomie und Statistik 122 (1924): 714–778, showed that government policy during the crisis had made inflation’s impact on handwerk much more devastating than on many other groups. Winkler has modified this to argue that those handwerker with real property and debts that could be discharged with the worthless currency (especially home owners) were somewhat cushioned from the inflation’s full effect. Worse off were pensioners and others on fixed income, among whom he concedes were many handwerker, while big industry suffered the least; Mittelstand, 28, 109. In the opinion of many contemporaries, masters were less sophisticated about turning cash assets into capital goods, which would have shielded them from inflation, and thus more often came out the losers; see Lenger, Handwerker seit 1800, 168. Michael H. Kater, The Nazi Party: A Social Profile of Members and Leaders, 1919–1945 (Cambridge, MA, 1983), 23–24. Quoted in Benjamin Lapp, Revolution from the Right: Politics, Class and the Rise of Nazism in Saxony, 1919–1933 (Atlantic Highlands, NJ, 1997), 160–161. Winkler, Mittelstand, 129. See also Jeremy Noakes, The Nazi Party in Lower Saxony, 1921– 1933 (London, 1971), 117–118. See Kater, Nazi Party, 23–24, 241–243. Quoted in Childers, Nazi Voter, 65. Nordwestdeutsche Handwerks-Zeitung (27:48), November 29, 1923; cited in Winkler, Mittelstand, 78. For a more general study of feelings of this kind in Weimar fiction, see Peter S. Fisher, Fantasy and Politics: Visions of the Future in the Weimar Republic (Madison, Wisc., and London, 1991). Handwerkskammer Flensburg 1900 bis 1975, 135. Childers, Nazi Voter, 68–69. Childers, Nazi Voter, 113–114. Werner Sombart, Der moderne Kapitalismus, vol. 3.2 (Munich and Leipzig, 1927), 957–966. For his earlier view, see Sombart, Die deutsche Volkswirtschaft im Neunzehnten Jahrhundert (Berlin, 1913), 279–281. Ausschuß zur Untersuchung der Erzeugungs- und Absatzbedingungen der deutschen Wirtschaft: Das deutsche Handwerk, vols. 1–4 (Berlin, 1930). Meskill, Optimizing the German Workforce, chapter 4. Kater, Nazi Party, 38; Noakes, Nazi Party in Lower Saxony, 109–110. On the Business Party, see Martin Schumacher, “Hausbesitz, Mittelstand und Wirtschaftspartei in der Weimarer Republik” in Industrielles System und politische Entwicklung in der Weimarer Republik, ed. Hans Mommsen, Dietmar Petzina, and Bernd Weisbrod (Düsseldorf, 1977), 823–835; also Schumacher, Mittelstandsfront und Republik in der Weimarer Republik (Düsseldorf, 1972). Heinrich August Winkler, “Vom Protest zur Panik: Der gewerbliche Mittelstand in der Weimarer Republik” in Mommsen, et al., Industrielles System, 789; Jones, German Liberalism, 257–259, 297–298. Noakes, Nazi Party in Lower Saxony, 113–114. For example, in the neighboring province the Schleswig-Holsteinische Landespartei appealed to the same constituency as the Guelph Party and for similar reasons; Noakes, Nazi Party in Lower Saxony, 113–114. Rembert Unterstell, Mittelstand in der Weimarer Republik: Die soziale Entwicklung und politische Orientierung von Handwerk, Kleinhandel und Hausbesitz 1919–1933 (Frankfurt, 1989), 34. Winkler states unequivocally that handwerk along with retail were very hard hit by the Depression and puts 1932 profits for handwerk at one-third their 1928 levels; Mittelstand, 34. See also Childers, Nazi Voter, 212.

24 | From Craftsmen to Capitalists 55. William Sheridan Allen, The Nazi Seizure of Power: The Experience of a Single German Town, 1922–1945 (Chicago, 1984, rev. ed., first published 1965), 43, 109, 140. Noakes also stresses that more important than their actual economic situation was that people “considered themselves to be in a crisis in which they were particularly affected”; Nazi Party in Lower Saxony, 111 (emphasis in original). 56. Childers, Nazi Voter, 214. 57. Reichsverband [deutschen Handwerks], Resolution of November 25 1931, cited in Chesi, Struktur und Funktionen, 25. 58. Kater, Nazi Party, 56–57; Noakes, Nazi Party in Lower Saxony, 121–138; Allen, Nazi Seizure of Power, 140–143. See also Peter Wulf, Die Politische Haltung des Schleswig-Holsteinischen Handwerks 1928–1932 (Cologne and Opladen, 1969). 59. Childers, Nazi Voter, 264. 60. For useful reviews of the literature, see Brian Ault and William Brustein, “Joining the Nazi Party: Explaining Political Geography of NSDAP Membership, 1925–1933,” American Behavioral Scientist, 41, no. 9 (June/July 1998): 1304–1323; Conan Fischer, “Workers, the Middle Classes, and the Rise of National Socialism,” German History, 9, no. 3 (October 1991): 357–373. 61. Theodor Geiger, “Panik im Mittelstand” in Die Arbeit 7 (1930): 637–654. 62. Erich Fromm, Escape from Freedom (New York and Toronto, 1941), quotes from 218, 163, 212. The lower-middle classes were, in Fromm’s view, particularly susceptible to psychological influences when making political choices, whereas support for Nazism among industrialists and Junkers was rooted in their perception of their economic interests. Hitler “was the typical representative of the lower middle class, a nobody with no choices or future.” Moreover, the failure of Nazism in power to deliver on its promises to them did not diminish its appeal, for they were compensated by the “circuses” of the “sadistic spectacles” of Nazi brutality and “by an ideology which gave them a feeling of superiority aver the rest of mankind.” Quotes from 217, 218–219, 212, 220, respectively. 63. Seymour Martin Lipset, Political Man: The Social Bases of Politics (Garden City, N.Y., 1960), 132, 144, 137, 133. Emphasis in original. 64. See also the work of Talcott Parsons, “Some Sociological Aspects of the Fascist Movement,” in Essays in Sociological Theory (Glencoe, IL, 1954). For critiques of these ideas, see Val Burris, “The Discovery of the New Middle Class,” Theory and Society 15, 3 (1986): 324–343; and Richard F. Hamilton, Who Voted for Hitler? (Princeton, N.J., 1982), 25–32. 65. Wulf, Die politische Haltung des Schleswig-Holsteinischen Handwerks. 66. Schumacher, Mittelstandsfront und Republik, 1919–1933; see also his “Hausbesitz, Mittelstand und Wirtschaftspartei,” 834. 67. Winkler, Mittelstand. 68. The term old Mittelstand customarily refers to small proprietors—artisans, shopkeepers, and farmers—whereas the term new Mittelstand refers to white-collar workers and civil servants. 69. Lipset, Political Man 133. 70. Thomas Childers, introduction, in The Formation of the Nazi Constituency 1919–1933, ed. Childers (London and Sydney, 1986), 7. Childers points out the social breadth of Nazi support but also stresses its volatility and contingency, while artisans and retailers formed the core constituency; see Childers, 1–2. 71. Most importantly, see Childers, Nazi Voter; Hamilton, Who Voted for Hitler?; Jürgen Falter, Hitlers Wähler (Munich, 1991). 72. Unterstell, Mittelstand in der Weimarer Republik, 133. 73. See Heinz-Gerhard Haupt, ed., “Bourgeois und Volk zugleich”? Zur Geschichte des Kleinbürgertums im 19. Und 20. Jahrhundert (Frankfurt and New York, 1978); Frank Bechhofer and Brian Elliott, eds., The Petite Bourgeoisie: Comparative Studies of the Uneasy Stratum (New York, 1981); Crossick and Haupt, Shopkeepers and Master Artisans; Crossick and Haupt, The Petite Bourgeoisie in Europe 1780–1914: Enterprise, Family and Independence (London and New York,

From Zünfte to Nazism | 25

74.

75.

76.

77. 78.

79.

80.

1995); Rudy Koshar, ed., Splintered Classes: Politics and the Lower Middle Classes in Interwar Europe (New York, 1990); Horst Möller, Gérard Raulet, and Andreas Wirsching, eds., Gefärhdete Mitte? Mittelschichten und politische Kultur zwischen den Weltkriegen: Italien, Frankreich und Deutschland (Signaringen, 1993); see also David Blackbourn’s conference report on one of a series of round tables of the European Research Group: “Economic Crisis and the Petite Bourgeoisie in Europe during the Nineteenth and Twentieth Centuries,” in Social History 10, no. 1 (January 1985): 95–104. See also the edited volume that came out of the second colloquium on handwerk history held at Schloß Raesfeld in January 1995: Handwerk, Bürgertum und Staat: Beiträge des zweiten handwerksgeschichtlichen Kolloquiums auf Schloß Raesfeld, 12. Bis 14. Januar 1995, ed. Wilfried Reininghaus and Ralf Stremmel (Dortmund, 1997): 99–117. For example, Josef Ehmer, Soziale Traditionen in Zeiten des Wandels: Arbeiter und Handwerker im 19. Jahrhundrt (Frankfurt and New York, 1994); Klaus-Dieter Krohn and Dirk Stegmann, “Kleingewerbe und Nationalsozialismus in einer agrarisch-mittelständischen Region. Das Beispiel Lüneberg,” in Archiv für Sozialgeschichte 17 (1977): 41-98; Hansjoachim Henning, “Handwerk und Industriegesellschaft. Zur sozialen Verflechtung westfälischer Handwerkermeister 1870–1914,” in Rheinland-Westfalen im Industreizeitalter, ed. Kurt Düwell and Wolfgang Köllmann (Wuppertal, 1984). David Blackbourn, “Mittelstandspolitik im Deutschen Kaiserreich,” in Deutschland und Europa in der Neuzeit, ed. Ralph Melville, Claus Scharf, Martin Vogt, and Ulrich Wegenroth, vol. 2 (Stuttgart, 1988), 556. Heinz-Gerhard Haupt, “Der Bremer Kleinhandel zwischen 1890 und 1914. Binnenstruktur, Einfluss und Politik,” Geschäft. Teil .1 Der Bremer Kleinhandel um 1900 (Beiträge zur Sozialgeschichte Bremens), vol. 4, part 1 (Bremen, 1982), 34. On voters, see Thomas Childers, “The Social Basis of National Socialist Vote,” Journal of Contemporary History, 11 (1976): 17–42; on Nazi Party functionaries, see Kater, Nazi Party, 229. See von Saldern, “The Old Mittelstand 1890–1939,” 27–51. See von Saldern’s exchange with Winkler on this issue in Geschichte und Gesellschaft 12 (1986). Winkler, too, who has offered what is certainly the most elaborated view of handwerker backwardness in Weimar, has recognized the appearance of the progressivism among the organization leadership; Mittelstand. 48. Also see Bernd Holtwick, “Panik im Mittelstand? Handwerker in Lippe und im Regierungsbezirk Minden 1929 bis 1935,” in Reininghaus and Stremmel, Handwerk, Bürgertum und Staat. The issue of handwerk progressivism and when it came to dominate handwerk’s outlook is central to this study and will be explored extensively in subsequent chapters, where I will argue that it did not happen until after World War II. Here it can be said that, while it cannot be denied that a group of reform-minded leaders in the 1920s sought to bring to handwerk the principles of competition and especially of sound management, it is far from clear how deep such convictions went, especially when one considers the still predominately local orientation of most guilds and how far such principles of market competition were accepted, or even understood, by the average master, given that those working alone (typically the most conservative) still made up 63 percent of all shops in this period. Von Saldern, “The Old Mittelstand 1890–1939,” 39. In any case, a focus on economic views in explaining Mittelstand attraction to Nazism may lose sight of the fact that a key factor was probably the persistent anxiety of demotion into the proletariat. The prospect of losing one’s shop, and with it the small piece of property that conferred social respectability, as well as the reality that handwerker earnings were often lower than a factory worker’s wages, all upset a deep-seated sense of social and psychological order. Paul Madden and Detlef Mühlberger, The Nazi Party: The Anatomy of a People’s Party, 1919– 1933 (Frankfurt, 2007), 284; Hellmut K. Anheier and Friedhelm Neidhardt, “The Nazi Party and Its Capital: Analysis of the HSDAP Membership in Munich, 1925–1930,” American Behavioral Scientist, 41, no. 9 (June/July 1998), 1231; Oded Heilbronner, Catholicism, Political Culture, and the Countryside: A Social History of the Nazi Party in South Germany (Ann Arbor, Mich. 1998), 60–61; Detlef Mülberger, “A Social Profile of the Saxon NSDAP Membership

26 | From Craftsmen to Capitalists

81. 82. 83. 84. 85. 86.

87. 88. 89. 90. 91. 92.

93. 94.

95. 96.

before 1933,” in Nazism in Central Germany: The Brownshirts in “Red” Saxony, ed. Claus-Christian W. Szijnmann (New York and Oxford, 1999). 213; Dirk Hänisch, “A Social Profile of the Saxon NSDAP Voters,” in Szjinmann, Nazism in Central Germany, 220, 231; Jürgen Falter, “Economic Debts and Political Gains: Electoral Support for the Nazi Party in Agrarian and Commercial Sectors, 1928–1933,” Historical Social Research, 17, no. 1 (1992): 4; Jürgen Falter, “The Young Membership of the NSDAP Between 1925 and 1933: A Demographic and Social Profile” in The Rise of National Socialism and the Working Classes in Weimar Germany, ed. Conan Fischer (Providence, R.I., and Oxford, 1996), 91. One exception is Peter Manstein, who finds the Mittelstand only slightly overrepresented; see Manstein, Die Mitglieder und Wähler der NSDAP 1919–1933: Untersuchung zu ihrer schichtmäßigen Zusammensetzung (Frankfurt, 1999), 57–58, 200. Lenger, Handwerker seit 1800, 195. Peter John, Handwerkskammern im Zwielicht: 700 Jahre Unternehmerinterressen im Gewande der Zunftidylle (Cologne and Frankfurt, 1979), 136. Schweitzer, Big Business, 137–138; Chesi, Struktur und Funktionen, 25–38. For anti-Semitism in handwerk, see von Saldern, Mittelstand im “Dritten Reich”: HandwerkerEinzelhändler-Bauern (Frankfurt and New York, 1979), 202–207. Some of these discriminatory measures against big business were attempted at the local level by sympathetic officials, however; see Lenger, Handwerker seit 1800, 196. See, for example, the account in Allen, Nazi Seizure of Power, 225. Even given their support, many guild members feared that a corrupt Nazi officialdom would siphon off their funds, so they threw themselves big drinking parties to empty their treasuries before the new leadership assumed control. See also Bernhard Keller, Das Handwerk im faschistischen Deutschland (Cologne, 1980), 64–65. Erste Verordnung über den vorläufigen Aufbau des deutschen Handwerks, June 15, 1934; RGBl. I, 493. Zweite und Dritte Verordnung über den vorläufigen Aufbau des deutschen Handwerks, January 18, 1935, RGBl. I, 4; RGBl. I, 15. See Keller, Handwerk im faschistischen Deutschland, 71–75; Chesi, Struktur und Funktionen, 39–47. See below in this chapter. Keller, Handwerk im faschistischen Deutschland, 73–75. While the Nazis granted handwerk these corporate powers partly to reward a loyal constituency, they represented no real concession to protectionism. Besides facilitating the control of corporate bodies by the state (Gleichschaltung), handwerk corporatism, and especially the certificate of competency, were seen as being consistent with, indeed a means toward, Nazi goals of increasing handwerk productivity and facilitating economic planning. See von Saldern, Mittelstand im “Dritten Reich,” 37. Economics Minister Hjalmar Schacht as well as industry, which had until then always opposed the granting of such powers as a hindrance to labor mobility and technical innovation, considered that the structure (and presumably the attitudes) of handwerker had changed; therefore, they now favored the certificate of competency precisely because they believed it would contribute to increased productivity in handwerk. Boyer, Zwischen Zwangswirtschaft und Gewerbefreiheit: Handwerk in Bayern 1945-1949 (Munich, 1992), 31–32. Keller, Handwerk im faschistischen Deutschland, 76; Bernd Holtwick, “Krieg, Kontrolle, Konkurrenz: Handwerkswirtschaft in den Jahren 1939 bis 1945,” Werner Abelshauser, ed., Die etwas andere Industrialisierung: Studien zur Wirtschaftsgeschichte des Minden-Lübbecker Landes im 19. und 20. Jahrhundert (Essen, 1999), 229. For a brief review of this debate, see Boyer, Zwischen Zwangswirtschaft und Gewerbefreiheit, 30. See Theo Wolsing, Untersuchungen zur Berufsausbildung im Dritten Reich (Kastellaun, 1977); John Gillingham “The ‘Deproletarianization’ of German Society: Vocational Training in the

From Zünfte to Nazism | 27

97. 98. 99. 100.

101. 102. 103.

104. 105.

106.

107.

108. 109. 110. 111.

112. 113.

Third Reich” in Journal of Social History 19 (1986); Werner Abelshauser, “Germany: Guns, Butter, and Economic Miracles,” in The Economics of World War II: Six Great Powers in International Comparison, ed. Mark Harrison (Cambridge, UK, 1998); Meskill, Optimizing the German Workforce, 141–165. Nazi reform in vocational training will be examined more thoroughly in the next chapter. The setting of prices, until the imposition of economic controls by the state in connection with war preparations, was to be left to the market; Lenger, Handwerker seit 1800, 196. Keller, Handwerk im faschistischen Deutschland, 60–70. Ian Kershaw, Popular Opinion and Political Dissent in the Third Reich, Bavaria 1933–1945 (Oxford, 1983), 122–132. Von Saldern, Mittelstand im “Dritten Reich,” 95–104; on building programs, see Michael Wolffsohn, Industrie und Handwerk im Konflikt mit staatlicher Wirtschaftspolitik? Studien zur Politik der Arbeitsbeschaffung in Deutschland 1930–1934 (Berlin, 1977), 353–365. Timothy W. Mason, Sozialpolitik im Dritten Reich: Arbeiterklasse und Volksgemeinschaft (Wiesbaden, 1977), 235–236. Lenger, Handwerker seit 1800, 200. Kershaw, Popular Opinion, 155; see also 120–127. See also von Saldern, Mittelstand im “Dritten Reich,” 176, 182; more generally, see Detlev J. K. Peukert, Inside Nazi Germany: Conformity, Opposition and Racism in Everyday Life (New Haven, Conn., and London, 1987), chapter 6. Von Saldern, Mittelstand im “Dritten Reich,” 125–126. Von Saldern, Mittelstand im “Dritten Reich,” 227; Lenger, Handwerker seit 1800, 200. I will offer a more differentiated picture of Nazi closing policy as it operated in practice in the next chapter. Von Saldern, Mittelstand im “Dritten Reich,” 101. For example, traditional trades like shoemaker and cartwright, which had been under assault from industry for decades, continued to have little prospect of expansion, while building and metal trades did well. For other accounts of the DAF-Handwerk conflict, which do not differ in the basic facts, see Keller, Handwerk im faschistischen Deutschland, 85–87; and Chesi, Struktur und Funktionen, 105–110. Schweitzer, Big Business, 110–238. Schweitzer, Big Business, 110–177. Schweitzer, Big Business, 171. Heinrich August Winkler, “Der entbehrliche Stand. Zur Mittelstandspolitik im ‘Dritten Reich,’” in Archiv für Sozialgeschichte 17 (1977): 1–40; and his “Ein neuer Mythos vom alten Mittelstand,” in Geschichte und Gesellschaft 12, no. 4 (1986). For von Saldern’s rebuttal, see “‘Alter Mittelstand’ im ‘Dritten Reich,’” in Geschichte und Gesellschaft 12 (1986): 235–243. Von Saldern, Mittelstand im “Dritten Reich,” 126, 127, 187, 227. The assumption that the push to wartime efficiency worked to the disadvantage of handwerk is virtually universal; for example, see Dietmar Petzina, Die Deutsche Wirtschaft in der Zwischenkriegszeit (Wiesbaden, 1977), 142. Petzina argues that the drop in the total number of handwerk firms in the 1936–1939 period speaks most eloquently about the net effects of Nazi policy on handwerk. See also von Saldern, Mittelstand im “Dritten Reich,” 214. I will be arguing that what was really important was not so much the fate of individual masters, but rather the economic health of those remaining firms and thus that of the Stand as a whole.

Part II

Handwerk at War, 1939–1945

Chapter 2

HANDWERK IN THE WAR ECONOMY, 1939–1941

 Through the first two years of the Second World War, Nazi policy toward

handwerk combined a rational emphasis on productivity with a neglect in favor of industry. Although Nazi propaganda never ceased to extol the virtues of the hard-working small proprietor in the familiar blood and soil (Blut und Boden) way, and indeed support for the Mittelstand as the “heart of society” (Herz der Gesellschaft) formed an important ideological basis of the regime’s legitimacy,1 hard reality was somewhat different. In conscription policy and in the allocation of scarce raw materials, handwerk continuously came up short relative to industry. From the late 1930s when the German economy again reached full employment, the Nazi government pursued a policy of weeding out unproductive handwerker.2 In no way did policy-makers allow a quaint romanticism to intrude upon rational calculations of productivity. This policy took concrete form in 1938 as Martin Bormann, head of the Party Chancellery and Hitler’s private secretary, laid out the principles of new trading regulations. First and foremost, all notions of freedom of trade (or the operations of a free market) were dismissed as liberal relics overcome in a society where economic life was regulated by the needs of the state and people.3 The state, therefore, appropriated to itself the right to decide who was capable (technically and politically) to exercise a trade as well as whether there existed a need for it. Not only must anyone desiring to open a shop submit an application, but those shops already existing were to be reexamined according to these same criteria; they would be closed, and new applications would be denied, if they did not meet them. In addition, “It must under all circumstances be avoided that special rights develop in individual trades and Notes for this section begin on page 56.

32 | From Craftsmen to Capitalists

professions, especially practices and customs which stand in the way of a unified regulation of commercial law.”4 That the Party would have no truck with customary trade privileges, especially those that it considered protectionist, was even more directly spelled out by Hermann Göring in a memorandum on state control of commercial and trade education. Dismissing the notion that craft training was a purely private economic matter, Göring declared that practical and theoretical training formed an inseparable whole that demanded central direction. While political indoctrination was crucial to this, and indeed formed a part of every handwerker’s education under Nazism, Göring left no doubt as to the principal goal of the state-controlled training system: “For me of decisive significance is the requirement that under all circumstances productivity in the economy must be raised.”5 The Völkische Beobachter made the same point: “Of course National Socialism has been in favor of handwerk from the beginning, but this does not mean that the State is obliged to help the artisan with subsidies, etc. The best help is always self-help, achieved through greater efficiency. The strong side of the Reichsstand des Handwerks [the peak organization] was that it succeeded in resolving misunderstood traditional ideas, and understood how to adjust to advancing technological developments.”6 This, in other words, represented a clear break with Nazi promises, made before the seizure of power, to protect the estate (Stand ) of small proprietors from the market pressures of industrial capitalism. Bormann’s and Göring’s statements formalized what in fact had been Nazi policy for several years before the war: handwerker (as well as small retailers) were to be subject to the same rules, and pressures, of the market economy as all other businesses.7 Politics entered the matter at the level of indoctrination (to which all social strata were subject) and propaganda (because the key position of the Mittelstand was essential to the Nazi mythos) but not much farther. Economic pressure, specifically the need to improve arms production for war, made social protectionism a luxury that the Nazis were not prepared to indulge. Not that it disappeared entirely, especially in certain die-hard segments of the Party and, as we shall see, this traditional view continued to be a dynamic feature of Nazi policy. However, generally speaking, the pressure on handwerk from the period of the Four Year Plan onward would be to modernize and rationalize its production methods according to the same criteria as industry—maximum efficiency and productivity.8 In the first years of the war this drive to modernization led to a neglect of handwerk by planners—a neglect that has been reflected in most economic histories of the war. Indeed, throughout the war the regime’s emphasis remained, logically enough, on mass production. But after about eighteen months handwerk’s position in the war economy developed in unexpected ways. The above quotations notwithstanding, in no way did Nazi economic policy lead to the disappearance of handwerk as a social and economic class and certainly not to a diminishing of its role in war production. The relationship of handwerk to industry was in fact revolutionized during this period, but that meant not the

Handwerk in the War Economy, 1939–1941 | 33

reduction of handwerk’s importance but rather its augmentation—both in its productive capacities and as a key to social stabilization.

The Early Neglect of Handwerk The economic viability of many branches of handwerk was most directly affected from the period of economic recovery and full employment (1936–1937) through the first war years by five features of state policy: wage and price controls, apportionment of raw materials, conscription, labor service, and the allocation of public contracts. In all of these areas, masters complained bitterly that they bore the brunt of such measures, and the statistics as well as ministerial opinion generally confirmed their views. From the time of full employment, when wages rose steadily and workers changed jobs frequently in pursuit of higher pay, masters, as employers of journeymen and apprentices, felt the effects of a wage–price squeeze. Although the government put numerous ceilings on wages and attempted to restrict the ability to change jobs, these measures had limited effect.9 Industries, especially those with fat government arms contracts, outbid each other for scarce manpower, and wage restrictions were widely circumvented. Workers who could get away with it availed themselves of the opportunity to change jobs often in pursuit of higher pay. While industrial firms, too, complained about the destructive expense of these practices, they were in a better position than masters to absorb them. With generally smaller workforces and less flexible budgets, many small shop owners were unable to match the wages offered by industry and thus lost valuable journeymen they themselves had trained.10 Handwerker also felt shortchanged in the area of raw materials, the apportionment of which was regulated by the state. The SS noted in early 1939 that shortages of raw materials, as well as skilled labor, often made it impossible for small shops to fulfill work orders, while industrial firms were assured a reliable supply of both because they were more often under contract to the government.11 The builders’ guild of Berlin reported extraordinary unrest among its members, many of whom, it said, were engaged in a desperate struggle for existence. Not only were materials in short supply and their timely delivery unreliable, but the scant administrative apparatus of most small shops made them poorly equipped to deal with the complex and contradictory government regulations. That each raw material was administered differently, and that owners were forbidden to pass along the often unannounced and arbitrary price increases, meant that small builders were subject to continuous and unpredictable interruptions they could ill afford. With their more developed administrative staffs, bigger construction companies working on larger and generally government-sponsored projects were less subject to supply restrictions and less vulnerable to administrative chaos in the government.12

34 | From Craftsmen to Capitalists

Far more devastating were Nazi conscription and labor service policies (under labor service (Dienstpflicht) rules anyone could be pulled out of a lower-priority shop or factory and assigned elsewhere). Although the Economics Ministry had prepared mobilization guidelines before the war to ensure that enough handwerker remained behind to provide for the needs of the civilian population (it did not as yet envisage more than an incidental role for handwerk in actual arms production),13 mobilization in practice decimated many trades and provoked widespread criticism and resentment.14 The Labor Ministry reported that in the last six weeks of 1939, 11.9 percent of all masters and nearly 25 percent of all nonfamily help had been drafted either into the Wehrmacht or into labor service.15 Especially hard hit were tailors, shoemakers, carpenters, bakers, and butchers.16 While many individual trades and firms pleaded special hardship,17 most masters seemed to accept conscription resignedly as an obligation to which all were subject. It was labor service, however, that provoked real outrage, because it meant being shifted to industry as a mere wage worker—the same diminution in social position that had brought handwerker such anxiety in the 1920s.18 What especially galled them was that factories often used the handwerker they had ordered through the Labor Bureau for tasks either far below or inappropriate to their real skills. Clearly any factory placed a high priority on having sufficient manpower at its disposal. Having the authority to do so by virtue of being under contract to the government, factories requisitioned labor wherever they could with little concern as to its appropriate use. Masters, for their part, complained that local labor bureaus automatically assumed that labor employed by handwerk was engaged less productively, and they thus automatically and with no overall review, reassigned workers to industry.19 The final area in which handwerk production was neglected in favor of industry was in the allocation of public contracts. In order to grasp the importance of this issue, the extent to which the German economic recovery of the 1930s was stimulated by government spending must be appreciated. For example, a government comparison of the entire industrial production for the city of Berlin in 1938 and in 1929 (the last period of full employment) shows a rise of only one-third. Yet, spending for government contracts almost tripled, and half of this amount came from the Wehrmacht. In large part the Nazi economic recovery was the direct result of government spending, especially in armaments and capital goods, rather than of private sector demand.20 In this area industry was heavily favored. In 1938 large firms in Berlin—that is, those employing a hundred or more persons—received 89.2 percent of all government contracts.21 The report offered some of the reasons why this might be so. Larger firms, having more-developed and more-specialized administrative staffs, were simply better equipped to adapt to and cope with a state- and corporate-guided economy. Government agents, for their part, could more easily deal with a few large firms with unified, coordinated managements and be more ensured of secrecy than with many smaller firms with less-sophisticated or less-specialized administrations. The effect of government contracts, in both their scope and emphasis, had been responsible, the report

Handwerk in the War Economy, 1939–1941 | 35

concluded, for a marked shift in the structure of the Berlin economy to the benefit of big firms.22 From the immediate prewar years through 1940, changes in the economy, in large part determined by the heavy government spending in preparation for war and characterized by a deep government involvement at every level, favored larger industrial enterprises and neglected smaller handwerk ones. In part, this policy was a clearly thought-out continuation of Nazi practice since the mid-1930s of weeding out smaller and weaker firms according to principles of rationalization and efficiency.23 In part too, as discussed above, it was a matter of simple administrative convenience. But more than that, official neglect of handwerk was the result of a poorly thought-out policy that failed to take systematic account of handwerk’s actual productive capacities. It also reflected a war economy that, however clearly the top leadership was committed to full mobilization for war, was still so inefficiently, even chaotically, managed that enormous reserves of production were left untapped. In a few years, as Albert Speer, as Minister of Armaments and War Production, began to succeed in applying productive resources more rationally, this would change—and in a way that would help revolutionize handwerk’s position in the German economy in the long term.24 The shortsightedness of government policy that automatically favored industrial production was pointed out in the same documents that reported it. The SS warned that preference for industry in raw material allocation in leather for tanners and fat for soap makers, for example, jeopardized the existence of many handwerk shops and threatened to result in a monopoly of a few big industrial firms. The warning was made not on political or ideological grounds—although these, too, played a part—but for strict reasons of rationality: “What is striking about fat allocation is that, while the productivity of many handwerk soap makers is considerably higher than that of industry, this is not taken into consideration.”25 Another report made the same point for leather: The productivity of the handwerk firms—contrary to what one might expect—outdid that of industry.26 The government neglect of handwerk described above, besides its direct effect upon the firms themselves, had unexpected consequences in the civilian population. The proponents of the view that in the first two years of the war Hitler pursued a comprehensive strategy of blitzkrieg argue that this strategy combined short overwhelming applications of military force with a shallow economic armament in breadth rather than depth. Thus, the regime could avoid putting too great a strain on a population of whose reliability it was continuously uncertain.27 The attack on the blitzkrieg thesis has argued that the production of consumer goods was either strongly curtailed at the outset of the war or diverted to the military. Yet another aspect of civilian consumption was deeply affected—namely, repair work and other areas of supplying the civilian population—and these were performed almost exclusively by handwerk. Handwerker in crucial trades had been drafted in such large numbers as to cause shortages even before the war began. A special report issued in late 1940 titled “The Effects of the Shortage of Handwerker” noted that in many sections of the country people had to wait

36 | From Craftsmen to Capitalists

months to get their shoes repaired. This was more than a mere inconvenience or fashion crisis, for in winter, in the report’s judgment, it represented a dangerous health problem. Many children had shoes in such a poor state of repair that they were unable to attend school. The problem was so striking that after two months of war even the Wehrmacht recommended that shoemaker masters be released from the army in order to address the crisis in the civilian population.28 In other trades where the Wehrmacht, with no regard for the consequences, had drafted established masters as well as younger journeymen, the lack of butchers, bakers, and locksmiths had resulted in disruptive shortages. In Munich bakers had been so decimated by conscription that the scarcity of bread and baked goods had become acute. The report warned of dire political consequences from continued shortages: “In conclusion, it must be emphasized once again that the shortage of handwerker must by all means be removed in order to prevent further unrest among the population.”29 These shortages hit rural areas especially hard. There the difficulty in getting farm machinery repaired not only seriously threatened agricultural production, but also worked to accelerate the flight from the land that Nazis had already found troubling for economic and ideological reasons before the war.30 Moreover, the report’s authors found the large numbers of women who had taken over the shops of their absent husbands to be an unacceptable solution. They deplored the entrance of women into the workforce—which most Party stalwarts continued to oppose throughout the war regardless of labor shortages—and fretted that long hours would overtire them. The political consequences of handwerk closings, due either to conscription or to decisions by local bureaus of the Economics Ministry, extended even farther. Security reports warned continuously of the unfavorable effects that closings had upon the population, which often perceived them as arbitrary and unjust. When a village’s only shoemaker, wheelwright, or a seventy-year-old master who could not possibly be assigned to other work was forced to close, the reports warned, people would talk.31 In addition, already in 1940 Allied bombing had political ramifications. The Düsseldorf City Council (Stadtrat) reported that after two nights of air attacks no roofers, glaziers, or bricklayers were to be found, and that morale in the city might weaken as well.32 The nature of the social role that the government expected handwerker to play in the National Socialist state, and the particular importance that this role assumed in wartime, is aptly illustrated by the issue of workers’ housing settlements. In conjunction with the Four Year Plan in the late 1930s, the DAF had supervised the foundation of a number of Strength through Joy towns (Kraft durch Freude Siedlungen) throughout Germany. These were planned settlements with the economic aim of ensuring a dependable supply of labor to factories crucial to arms production. Many were built as satellites to the various plants of the Hermann Göring Werke, but others were built to service production for the navy as well as other key factories. The settlements also had the political and social purpose of providing material proof to the skeptical working class of the benefits

Handwerk in the War Economy, 1939–1941 | 37

of National Socialism. The DAF attempted to build these essentially dormitory towns as model worker communities, paying special attention to architectural beauty, varied building styles, and roomy, sanitary conditions. But these projects, at least initially, were less than successful. Perhaps because they had been conceived primarily as bedroom communities, planners grossly underestimated the services that the towns required. Handwerk, retail, and medical services were in absurdly short supply. The DAF immediately recognized that the grumblings from residents having to travel many kilometers to do their grocery shopping or to have their shoes repaired could have undesirable political ramifications. But it also perceived that the benefits of having these services and the people who provided them went far beyond mere convenience. The “healthy social/political integration”33 of such new communities—filled with workers and their families uprooted from familiar surroundings and traditional social ties—depended, planners soon realized, on more than a secure job and a clean, even beautiful place to live. While older, more organically developed towns provided a certain continuity and social stability, the very uprootedness of the workers in these artificial political creations demanded, the DAF argued, the existence of its opposite—namely, an established, small property–owning middle class. The necessary precondition for the social, cultural, and above all political alignment of the modern working class—necessarily mobile and therefore unstable—could best be countered by the salutary presence of small proprietors. What is more, the writer of this memo continued, “In order to emphasize the special significance of this problem, I refer to the fact that most of the large settlements serve overwhelmingly economic defense purposes, and thus the economic and social-political balance of settlement life is not only a question of National Socialist world view but is also a question of Reich security.”34 Thus the wideranging significance of an intact Mittelstand presence in helping to hold together a society under the stress of upheaval and war was an idea that began to receive serious attention in certain quarters even before the war began.35

The Shift in Government Policy During the first two years of the war, then, it was the political and social consequences of the handwerker shortage that brought the matter to the attention of Nazi officials. An Economics Ministry memo deploring the neglect of handwerk in the war economy stated: “For reasons of social balance, including a healthy mixture of firm sizes and the future supply of skilled labor, handwerk production should be protected and maintained so long as overwhelming war economic considerations in the individual trades do not stand in the way of their participation.”36 The importance of small proprietors as a socially stabilizing force was clearly recognized early on in the war.37 Yet it was to be rational economic considerations that were to prove decisive in the shift in Nazi policy. A full war economy would demand that all sectors be mobilized according to standards of

38 | From Craftsmen to Capitalists

maximum productivity. This was certainly to be an imperative in the period of “total war” from 1942 but many planners called for it even earlier. Thus what the Nazis were to attempt—and successfully so—was to make modern standards of efficiency compatible with handwerk’s social role as a stable, small property– owning middle class. Since handwerk embraces more than one hundred different trades, we must distinguish them according to their social and economic functions, especially as they pertain to war. Some of those trades that were more directly engaged in supplying the needs of the civilian population—food, clothing and shoes, construction, and machine repair, for example—have already been briefly touched upon. Here the principal concern of policy-makers was to keep the population supplied to an extent that would still be politically tolerable while freeing as much manpower as possible for other uses. (The detailed reasons why handwerk remained the most appropriate form for these functions will be examined more deeply later.) Handwerk more directly involved in arms production, however—and here the metal trades were of primary importance—posed more of a problem: Could these trades, which many assumed by their very nature to be less efficient than industry, be somehow brought into the manufacturing process in a way consistent with modern standards of rationality? Even before the war began some in the bureaucracy suggested ways in which this might be done.38 Of primary importance, these officials decided, was that a shop should never be closed and its master relegated to wage labor without a thorough review of the particular case: “Robbed of his independence and severed from familiar work surroundings, the handwerker becomes less productive than in his own shop with his accustomed procedures and tools.”39 In order not to squander this valuable resource, this writer suggested a fundamental restructuring of handwerk. Rather than produce competitively with industry, handwerk, where appropriate, should develop itself as a supplier or as a subcontractor to industry. In many situations handwerk could perform entire stages of a manufacturing process more efficiently than industry, thereby freeing the latter’s resources for plant expansion and more-specialized mass production.40 In addition to transforming the relation of industry to handwerk, the report advocated deep changes for handwerk itself. For one it called for the combination of several small firms into cooperative workshops (Gemeinschaftswerkstätten) in which each shop owner, while working cooperatively with other masters, would preserve his own independence (Selbständigkeit). Such group shops would not only offer handwerker the same economies of scale available to larger enterprises, but also would enable them to afford more sophisticated machinery and thus to keep step with innovations in production technology. In addition, the system of supply cooperatives (Lieferungsgenossenschaften) should be expanded. These were another cooperative arrangement established to supply finished or semifinished goods to industry, often under continuous contract to a single firm, that also offered to small business the same advantages that large firms enjoyed while allowing them to preserve their independence.41 In other words, what this report, and others like it from other ministries, advocated was the coordinated inclusion

Handwerk in the War Economy, 1939–1941 | 39

of handwerk production and services into an industrial economy. Rather than producing the same articles as industry did, handwerk should produce for industry. Its economic relation should not remain competitive—for in these trades handwerk could only lose. It should become complementary. The consequences of this were to be that handwerk would share in the prosperity of a capitalist economy (in war and later at peace) while maintaining, even buttressing, its social and organizational identity. In 1940, however, these changes still lay in the future. For the moment, the sources tell us, handwerk capacities “have still not been enlisted for public contracts to the required extent and therefore generally remain underemployed.”42 One exception to this policy of neglect—and one that was to prove the wave of the future—was reported by the City President of Berlin. There, in 1939, a program to integrate handwerk into industrial production in the war economy had met with great success. It worked like this: The War Economic Inspectorate and other local agencies had persuaded big firms like Siemens & Halske to contract certain types of fine metal work out to handwerk. The industrial firms accordingly assigned to individual shops or to work cooperatives jobs that, by virtue of their scale or the degree of precision they required, would be more appropriately, and economically, performed by handwerk. Such arrangements had the virtue of enabling industry to expand its mass production work and to draw in handwerk in a way that made innovative and productive use of its skills. They offered a more rational alternative to the manpower released by shop closings being taken up by industry and then assigned work that wasted their specialized skills.43 While the report warned that such arrangements might lead to an excessive reliance on industry and a loss of independence, it called for their extension as the most rational way to deepen production capacity. Handwerk itself did not remain passive during this period. Although during the early phases of the war handwerk was relatively neglected by the government bureaucracy, within handwerk itself there had been developing institutional innovations that enabled small firms to adapt to more industrially oriented production and to participate more competitively in the war economy. Most of these developments involved some sort of cooperative arrangement among handwerker, similar to those just discussed. One branch of handwerk for which cooperatives were especially appropriate was the building trades. During the mid to late 1930s, as the grandiose building projects of the Third Reich moved into high gear, the organizations that represented construction handwerk decided to form “work cooperatives” (Arbeitsgemeinschaften). These were associations of small firms where each pooled equipment, tools, and labor while preserving its own independence. Their purpose was to enable small firms to overcome the disadvantages of their size in bidding on the large building projects everywhere in progress. In 1936 the Economics Ministry gave permission for work cooperatives of glaziers to form for this purpose, but on an ad hoc basis only. The Ministry emphasized, however, that the cooperatives were not to be permitted to function as cartels—that is, to fix prices among themselves or otherwise to restrict com-

40 | From Craftsmen to Capitalists

petition. Cooperatives, in other words, were not to be protectionist devices, but rather were to enable small firms to remain independent and competitive while lowering costs.44 The work cooperatives, initiated and overseen by the building guilds, proved enormously successful in enabling handwerker to participate in large government-sponsored projects like the construction of the Westwall, Germany’s western line of defenses. Although handwerk organizations had to lobby hard to persuade authorities to allow their participation, the project’s director, Fritz Todt, afterwards praised the cooperatives as a productive application of manpower and material, and recommended their extension.45 Work cooperatives, then, were organizational forms that, in effect, rationalized building handwerk in such a way as to put it on an equal competitive footing with its industrial counterpart. Unlike the metal trades just discussed, where handwerk moved towards a noncompetitive relation to industry, the nature of construction is such that, given the proper circumstances, small firms can effectively compete against larger ones. At the same time, cooperatives offered flexibility; small firms could either join one to work on a large project or work alone on smaller ones. They also offered the important social advantage of enabling small proprietors to survive and remain independent, with no loss in productivity. Other trades won niches in the war economy based upon their particular abilities to maintain or achieve high productivity or to adapt to the needs of war production in a way superior to industry. Motor vehicle repair, for example, was a relatively new trade—legally defined and organized as handwerk—of obvious critical importance to a modern motorized army. The nature of this trade was such that it did not lend itself to industrialization. Assembly-line methods were inappropriate because auto and truck repair, even in the army, requires smaller scattered workshops. The Wehrmacht recognized early on the necessity of ensuring for itself a supply of trained mechanics both at home and in the occupied territories. Because mechanics were also needed to maintain production on the home front (the repairing of agricultural machinery would be only one example), the issue was approached in a coordinated way among the Economics and Labor Ministries, the Wehrmacht, and the mechanics’ guilds. Before the war began the Wehrmacht established motor vehicle depots (Kraftfahrzeugheimatparks) which brought in small and medium-sized handwerk firms, but under conditions that preserved their independence. All the agencies recognized, in this case, that there was nothing to be gained in productivity by stripping the constituent firms of their independence and making them wage workers on an assembly line and thus turning their operation into an industrial one. Handwerk was to remain handwerk. Numerous one-man auto repair shops were shut down, but only if their work methods were inefficient. There was no need, all agreed, to close small shops whose productivity met competitive standards. Even the manpower freed by the closing of less-productive shops, were to be assigned not to industry but to larger or more-efficient handwerk firms.46

Handwerk in the War Economy, 1939–1941 | 41

A few months later the Economics Ministry and the Wehrmacht went even farther in recognizing the particular superiority of smaller shops in this trade. An order from 1937 stipulating that motor vehicle repair shops must have ten or more employees was rescinded. The common assumption, discussed above, that “small” ipso facto meant “less efficient” was here abandoned. Repair shops were to be closed or permitted to remain open purely according to criteria of the most rational use of manpower and materials, and work was to be assigned to them without prejudice. Handwerk organizations themselves examined shops using these standards and ordered them closed, moved, or expanded as the case merited.47 To be sure, this did result in an increase in average number of employees per shop. The optimal shop size did turn out to be larger than that which prevailed before the war. Probably the majority of one-man-shops were forcibly closed, and we see many bitter complaints from such masters assigned to work duty in the Wehrmacht that their talents were not being properly used.48 Notwithstanding the bitterness from some quarters (and it was effectively marginalized), this trade emerged from the transition on the whole stronger and more efficient, and secured for itself a recognized place in a modern war economy.

The Role of the Examination System As discussed in chapter 1, the Nazis had in 1934–1935 granted to handwerk its long-sought organizational demands, culminating in the Große Befähigungsnachweis. Henceforth, anyone wishing to set himself up independently (selbständig) in any one of the more than a hundred trades legally defined as handwerk had to go through a prescribed course of study: as apprentice, journeyman, and finally master. The curriculum and examinations were set and administered by handwerk organizations themselves, which were (and are) private bodies with certain sovereign rights, or corporations of public law (Körperschaften des öffentlichen Rechts), a German legal distinction having no equivalent in the United States. Membership in these organizations was (and is) obligatory. This meant, in short, that handwerk itself controlled entrance to every trade. Without doubt, many handwerker had long wished for this law in part out of a protectionist impulse in order to limit competition as analogous restrictive practices had in the Middle Ages. But it also represented the culmination of handwerk leaders’ ambitions, strongly shared by masters themselves, for increased status, recognition, and power both for their organizations and for their Stand as a whole. The Nazis, for their part, promulgated these laws partly to toss a bone to one of their principal constituencies, but also as a measure of Gleichschaltung—that is, to bring this important social and economic group under state control.49 This was accomplished with infinitely greater ease with handwerk than with the working class. No politically troublesome unions had to be dissolved nor new Nazi creations foisted upon a sullen and hostile membership. The organizations were already in place. The Nazis simply made membership obligatory and introduced the examination

42 | From Craftsmen to Capitalists

system, which virtually all masters had wanted anyway, and they substituted the leadership principle for a democratically elected leadership, which met with almost no opposition.50 Thus the motives of handwerker, their leadership, and the Nazis were all compatible. In addition, while on the face of it the “coordinated” handwerk institutions were to be instruments of state policy, the reality, as was usual in the Nazi state, was more complex. The Nazis needed these organizations to administer their policies, and even in part to formulate them. The leadership of these groups were always certified masters—Nazified, perhaps, but loyal to their Stand. Thus, there were limitations on how far Nazi policy could deviate from what handwerk leaders perceived to be their and their membership’s true interests. In any case, as we shall see, a basic conflict of principle did not arise. Protectionism—the maintenance of old-fashioned, small masters shielded from market forces by anticompetitive measures—did remain an impulse among handwerker, some of their leadership, and certain elements of the Party and state bureaucracy, but it was restricted, channeled in certain inconsequential directions, and eventually marginalized. Although handwerk organizations always fought for measures that would promote economic development and social recognition for handwerk, in no way did they argue for the coddling of firms, or entire trades for that matter, that could not compete in a market economy.51 In a 1937 report on the national distribution of shops by district, handwerk leaders discussed trends in the various trades since the late 1920s. During the Depression many unemployed workers and journeymen had scrambled to set up their own small shops as the only possibility to eke out a bare existence for themselves.52 With economic revival and the introduction of the examination system, the trend reversed itself, and from 1936 the number of firms slowly but steadily decreased. The leadership regarded the disappearance of the more marginal firms (whose owners they also considered underqualified) as a salutary development for handwerk as a whole: This decrease in the number of handwerk firms is not to be regarded as an unhealthy development just as the sharp increase in the number of firms could not be characterized by handwerk as healthy. Rather the drop-off in firm numbers is the beginning of a process of recovery for handwerk. It does no damage either to handwerk or to the entire economy when firms disappear which are not viable because they are unproductive or poorly managed. … Thus, the disappearance of such firms in no way works against the creation and maintenance of a broad strata of middle class [mittelständlicher] existence desired by National Socialism.53

There are two aspects to the point of view contained in this citation that merit attention. One is the desire, clearly exclusivist, to keep the overall number of firms low enough to ensure a reasonable livelihood for the masters privileged to own a shop. This same impulse was behind another longstanding demand for the so-called examination of need (Bedürfnisprüfung) as a precondition for opening a shop. This requirement, finally achieved in 1942 for both handwerk and retail, stipulated that before a shop could open the local chamber had to conduct a

Handwerk in the War Economy, 1939–1941 | 43

review to determine that a real need existed there for such a service—that is, to ensure that the livelihoods of other shops already in existence would not be jeopardized by the competition.54 (The Nazis introduced this measure during the war, not as a protectionist concession but as an emergency wartime measure to ensure control over the distribution of scarce resources.) These are examples of pure protectionism that has always existed in handwerk. It was satisfied coincidentally under the Nazis but eventually abolished after the war with the approval of handwerk leaders.55 But we also see in this citation a tendency, especially among the leadership, to recognize the reality and permanence of industry-dominated competition and market forces and to attempt to adapt in various ways appropriate to particular trades, some of which have already been discussed. In this regard, the falling away of smaller, weaker firms passed without regret—even when their closings were mandated by the Nazi state. The active weeding out of thousands of such shops, which followed in the wake of the Four Year Plan in an attempt to apply resources more rationally in preparation for war, caused much suffering and provoked much outrage among those directly affected, but was accepted as healthy, and even applauded, by handwerk organizations. It made, they argued, the Stand stronger, as a whole. Moreover, with the language of economic rationality so much a part of the common currency, leaders found it more difficult to air protectionist arguments openly or to suffer them from their members. Thus in the wake of the closings and the neglect in the allocation of public contracts, labor, and raw materials during the early war period discussed above, handwerk groups argued for the support of those toughened and made more efficient by the market rather than for the losers. Help should be made available—in the form of easily available credit, tax breaks, and the absence of red tape—to those masters who demonstrated the ability to adapt to modern production methods and to the continuous change required by the marketplace.56 The reward, as it were, under Nazism for the pragmatism of this stance was an increased responsibility for handwerk organizations in the administration of Nazi policy—a reward fully obtained only after Speer was appointed Minister of Armaments and War Production in 1942.57 The legal basis of handwerk’s corporate authority, then, was established in 1934– 1935 and was to be the cornerstone of its cohesiveness as Stand and therefore of handwerker self-identity. Then, by a series of ordinances between 1936 and 1938, the training-educational system was given more-uniform and more-rigorous shape. Various levels of vocational and technical schools were established for apprentices and journeymen, and the examination requirements were codified. The training system and standards, both in-shop training and the schools, were overseen by the chambers, with the clear purpose of raising the level of technical skill, productivity, and managerial ability58—as well as of inculcating Nazi ideology.59 Planners had believed in the utility of this system initially, but it was confirmed, and handwerk thereby strengthened, by the experience of war. In 1939 the Economics Ministry ordered the extension of this regulated system of train-

44 | From Craftsmen to Capitalists

ing to 171 additional skilled trades outside of handwerk. The Ministry based this decision upon the success of the handwerk system: the apprentice–journeyman– master relation constituted an ordered and hierarchical work structure that maintained authority at the same time that it provided a structured incentive to higher levels of craftsmanship and productivity. The freedom of trade (Gewerbefreiheit 60) of the liberal, pre–National Socialist era had proved itself a failure, the Ministry argued, by its inability to maintain standards of quality production and training. Industry had been able to develop without such a structured training system mainly because it could rely on a steady supply of skilled workers trained by handwerk. Specialized technological knowledge, high-quality work, and skilled labor were especially crucial in war, and therefore the present was a time not to relax such standards, but rather to extend them.61 The apprentice training system for handwerk was actually part of an industry-wide initiative both to raise levels of skill and to consolidate political support among the working class. Introduced early in the Third Reich and kept up through the end of the war, it embodied the modernizing impulses in the regime as well as its contradictions. The push to systematize the training of industrial workers originated both among trade unionists in the 1920s and among conservatives like Carl (later Karl) Arnhold of the German Institute for Technical Education (Deutsches Institut für technische Arbeitsschulung, DINTA) who believed that the extension of vocational training could undermine worker “class consciousness.”62 The idea was taken up by the Nazis both as a means of preparing for war and for the political reasons mentioned above. DINTA’s ideas were instituted piecemeal beginning in 1933, culminating in the 1936 law that required all construction and metal firms employing ten or more persons to institute apprenticeship training programs on the handwerk model.63 After 1938, 90 percent of all boys and some girls leaving elementary school entered a three-year apprenticeship in industry, trade, handwerk, or agriculture.64 According to Werner Abelshauser, the program became so successful that “industrial vocational training and certificates became a mass movement during the Third Reich.” He adds that even after the regime wanted to cut back training during the war because of a shortage or unskilled labor, it decided not to do so because of the program’s popularity. The legacy of the training program was an ample supply of skilled labor that formed one of the preconditions for the economic revival in the late 1940s.65 The examination system was maintained even in the Wehrmacht throughout the war. The Economics Ministry and the Wehrmacht cooperated with handwerk organizations to ensure that soldiers had ample opportunity to prepare for and take the master examinations (Meisterprüfung). Preparatory courses offered to soldiers were well attended and strongly supported by the government.66 Early in the war special leave was granted to soldiers who wanted to return home and take the master examination.67 By mid-1944, when the military crisis was such that soldiers could no longer be spared, special arrangements were made so that the exams could be taken right at the front.68 The reasons for the care taken in

Handwerk in the War Economy, 1939–1941 | 45

maintaining this system even under emergency conditions were in part political, in part economic. The government was conscious of the need for young soldiers to be able to continue the preparation for their civilian professions, certainly being aware of the political dangers of demobilized soldiers with nothing to do.69 In addition, if courses were unavailable to soldiers or if there were no opportunities to take the examinations, soldiers became discouraged and bitter. The Wehrmacht recognized this as a morale problem70 and extended itself to make the examinations available. Beyond the political complications resulting from a wartime disruption of vocational training, the government feared a drop in productivity resulting from a shortage of handwerker or handwerk trained skilled workers, especially given the increased motorization of both the Wehrmacht and civilian society.71 The importance for war production that the government assigned to the proper training and examination of handwerker is illustrated by the strictness with which it maintained these standards throughout the war. Although the prescribed periods for apprenticeship and journeymanship were shortened somewhat during this period to increase the supply of handwerker,72 any attempts to water down the training or to do away with even the journeyman’s examination were strongly rejected. The grounds were that strict standards, and especially the requirement of exams, provided the best incentive for the highest possible productivity for both masters and apprentices. Thus restricted entrance to a trade was not regarded as a protectionist measure—in a government that strongly rejected such measures— but rather as the best assurance of efficiency and increased productivity.73 That this system served technocratic rather than protectionist ends is further demonstrated by Albert Speer’s handwerk policies. The Minister of Armaments ordered in 1944 that the period of apprenticeship in many trades be shortened and that apprentices be assigned productive work sooner in their training. But Speer was explicit that “the basics of training not be neglected,” simply insisting that the stepping and fetching that apprentices traditionally performed for their masters in the first stages of training should be curtailed or eliminated. Furthermore, he in no way intended that handwerk or its training degenerate into mass production: “It is neither necessary nor is it consistent with the goal of [handwerk] education that only work of mass production be selected for trade training. Every [industrial] firm has continuous need of devices, tools and other difficult-to-get parts, the production of which is not bound to any strict time plan, and therefore this may be included in the curriculum.”74 Thus although Speer curtailed part of the training period, he clearly recognized the necessity for careful handwerk training in the economy as a whole and, as will be seem more clearly in the next chapter, as a crucial adjunct to industry—an adjunct, however, that must retain its particular methods of training and production. The handwerk education system was also expanded territorially. In all areas annexed directly to the Reich (Austria, the Sudetenland, parts of Poland, the Saar, and Alsace-Lorraine), the handwerk associations already existing were made to conform structurally to the German organizations and brought under their

46 | From Craftsmen to Capitalists

central authority.75 In the occupied territories the system expanded as part of the Nazi New Economic Order for Europe—that is, as a means of imperialistic control as well as a means of achieving the maximum productive capacity there. As with most other aspects of Nazi policy in occupied territories, the New Economic Order differed widely between East and West. In Belgium and the Netherlands, where historically artisanal production had long since diminished in economic as well as organizational and political importance relative to industry, the Nazis by 1942 had established obligatory handwerk chambers. At first, previously existing artisanal groups there were allowed to continue functioning, but they proved to be a focus of political opposition and work sabotage and were dissolved. German training methods were mandated to ensure more-effective political control as well as maximum productivity and a dependable supply of consumer and military exports to the Reich. This policy also had a salutary propagandistic effect on handwerker within Germany, who were anxious that the social and economic definition that this system had accorded to their Stand be made the norm elsewhere. In the long term, planners saw the establishment of a coordinated system of vocational training and organization on the German (Nazi) model as essential if the New Europe was to be well furnished with handwerker and skilled workers.76 This assessment of the importance of handwerk did not come at the expense of industry, which as in the Reich remained the primary focus of production, nor was it part of any program to keep Western-occupied nations subservient to Germany by crippling them or demodernizing their productive capacities. Belgium and the Netherlands, as nations with Germanic peoples, were less subject to oppression of this character. In fact, the prosperity of Dutch artisans even excited the envy of their German colleagues across the boarder who, being subject to conscription and work duty, were often forced to either give up their own shops or have them run by family members.77 Nazi policy on handwerk in the East was, as was a good deal else, conducted according to an entirely different set of principles. The training and examination system was likewise exported, but with racial criteria: Only ethnic Germans could hold master certificates whose validity would be recognized within the entire Reich.78 Because Nazi policy on handwerk in the East tied in with the question of German settlement or colonization programs there, and because the SS played a key role in this policy, this issue will be examined in greater detail later in this chapter.

Responsibilities of Handwerk Organizations By the war’s middle years handwerk had passed from the neglect and haphazard treatment of 1939–1940 to a period of full engagement in the war economy. One very visible area in which the need for well-organized and mobile handwerk was brought home both to the authorities and to the general public was damage from enemy air attacks.79 Quite apart from damage to armament factories,

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which was always addressed immediately, local officials had repeatedly warned of the political consequences if damaged housing were not repaired with greater dispatch. They argued strenuously that handwerker should be released from the Wehrmacht to cope with that problem.80 Because bomb damage was generally too extensive to be handled without central coordination, already in early 1941 special task forces of handwerker had been organized at Speer’s initiative to cope with the emergency.81 By mid-year the system had been extended. Handwerk organizations were assigned the responsibility, and the authority, to select firms, organize them into teams, assign them projects, and establish priorities.82 Bomb damage repair, then, represented another area in which handwerk organizations extended their responsibilities in wartime and in which they made themselves indispensable to the organization of economic life. But this was not accomplished at the expense of the economic integrity of their member firms: handwerker brought into these teams were not reduced to wage laborers. No advantage in productivity was seen in taking such a step.83 Instead, the task forces were associations or cooperatives of masters whose independence was maintained.84 Even when a labor shortage necessitated the reassignment of employees from one firm to another, this was to be on a strictly ad hoc basis.85 On Hitler’s orders, prisoners of war with building skills were organized in 1941 into special work gangs to repair bomb damage.86 This constituted no threat to handwerk, however, nor was it any attempt to make masters superfluous. Such gangs could only be formed with the approval of the appropriate guild or when all German handwerker were fully occupied, and they were only to work under the supervision of a local master.87 The crisis of Allied bombardment of German urban centers, then, did more than highlight the need for certain handwerk skills. It also provided an incentive for handwerk organizations to develop further the cooperative organizational innovations discussed above. Because handwerk could exist in small firms but then combine ad hoc for particular projects, it offered a flexibility that the industrially organized building companies could not match. It was also capable of absorbing a large influx of prisoner of war labor with its organizational, if not its moral, integrity intact. The role that its organizations played in administering and coordinating this work and in helping handwerk adapt to circumstances in which considerations of productivity were paramount augmented their own indispensability both to the regime and to their own members. Handwerk’s value in the war economy was recognized in another way. The Wehrmacht came to appreciate early in the war the advantages that certain types of handwerk goods and services had over industry. A good illustration of this is the case of dry cleaning. Within a few months after the invasion of the Soviet Union, the Wehrmacht and Luftwaffe decided that they required several dyeing and dry cleaning plants in the East for the cleaning, repair, and disinfecting of their uniforms88—presumably so officers would appear trim and crisp while carrying out atrocities there. The Luftwaffe first turned to industrial organizations to arrange for the establishment of a plant in Kiev, believing that given the scope

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of the task, industrial methods and capital would accomplish this most expeditiously. These expectations, however, were disappointed. The industrial organizations that coordinated the financing of the plant and the mustering of interested participants had neither sufficient capital nor labor power at their disposal to bring off such a project in a timely manner. Industry was simply not flexible enough. As a consequence, the Luftwaffe was completely disgusted with industry and turned instead to handwerk. In the case of the dyeing and dry cleaning trades, the relative efficiency of industry and handwerk lay not in their respective methods of operation because, scale aside, their production techniques were virtually the same. What qualitatively distinguished industry and handwerk here, and determined the organization to which each individual firm belonged, was the size of the firm alone. In general, plants with fewer than fifty employees were categorized as handwerk, while those with fifty or more belonged to industry.89 The wartime advantage that handwerk had over industry in this particular trade was that handwerk organizations had many more, smaller firms at their disposal than did industry. Handwerk had 2,600—many of which, like small handwerk firms in other trades, were quite prepared to relocate to the East to take advantage of the presumed golden opportunities there; industry, meanwhile, had no more than a hundred firms. This meant in effect that the mobilization of the number of workers and technical expertise required to construct plants of the type demanded by the Luftwaffe could be effected more expeditiously by handwerk organizations than by industry. Handwerk also had organizational flexibility that the more unwieldy industry lacked. Handwerk organizations were able to unite various numbers of formerly independent masters in one plant. For the duration of the war, the Nazis had forbidden the establishment of firms in the East that were fully independent. Yet in the meantime, cooperative arrangements—of a kind similar to those being developed in other trades to enhance handwerk’s competitiveness—could be established by handwerk groups under government auspices to draw German handwerker into the occupied territories and to have them supervise foreign slave labor. Independent masters could establish themselves as cooperative members under protected circumstances, and share in the collective profits, with the promise of an independent existence in the East after the war. Handwerk organizations, besides being flexible enough to form such cooperatives, offered the additional advantage of being able to mobilize the necessary capital more easily than industry. What is more, they possessed the determination to seek and demand government help when their own resources were insufficient. Thus although the Wehrmacht in this particular instance had begun with the assumption—common enough in the government, as we have seen—that industry could offer in this area the same efficiency and economies of scale that it offered in mass production, experience proved the contrary. Within a service trade demanding great flexibility and mobility, handwerk, as it turned out, offered advantages in wartime that industry could not match. It appears that the Wehrmacht recognized this earlier than other government departments.90

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Nor was this trade an exception. A more generalized picture confirms that by the middle war period handwerk had demonstrated its indispensability to the war economy. By mid-1941 virtually all branches of handwerk were directly involved in production or services for the Wehrmacht. The rest supplied vital services for the civilian population or for agriculture. Those in the construction trades not engaged in bomb damage repair, built army barracks (including those at Auschwitz91), and constructed air defenses. The woodworker trades furnished one quarter of all animal-drawn vehicles for the army as well as thirty thousand sleds in 1941. Metal trades engaged directly by the Wehrmacht supplied 70 to 90 percent of its tools and repaired its motor vehicles, while others worked as subcontractors to the arms industry. Other important trades were wicker makers who made munitions packaging and coopers (wooden barrels were then still used for storage). Food handwerk supplied an important part of the Wehrmacht’s requirements,92 although most of its efforts were directed for the benefit of the civilian population. While the clothing trades furnished the Wehrmacht with uniforms and boots, raw material shortages coincided with a long-term trend toward industrial production of these items. Here, then, handwerk’s activity turned to repair work.93 Although by mid 1941 almost every handwerk trade was fully occupied either directly in arms or war equipment production, or in providing for the vital needs of the civilian population, especially agriculture, handwerker still complained of neglect when it came to allocation of labor. Handwerk firms, they said, received far less than their “fair share” of prisoners of war, and still their best journeymen were siphoned off for work duty in industry. Because the manpower that small firms did receive was too often less qualified, handwerk was disadvantaged in keeping pace with rapid technological change. The area of labor power where handwerk had the advantage of flexibility was that of family members, especially women. Although handwerk trades were still rigidly segregated by sex, wives or widows commonly and traditionally stepped in to take over their husbands’ shops in the event of their absence or death. In this way many small firms were able to survive their owners’ conscription.94 The trades where great numbers of women were active as masters—primarily clothing and food—offered the greatest flexibility in labor. While Nazi policy made for a great reluctance to allow increases in female labor in the factory and in the “male” trades, in clothing and food handwerk women increased the workforce by as much as 50 percent.

Structural Change The ultimate welfare of handwerk as a Stand in German society was not, however, dependent merely upon whether it happened to be fully employed. The key factor was the structural relationship of handwerk to other social groups, and most especially to industry. The years 1941–1943 marked the crucial turning point in this regard. Under the relentless pressure of total war continuously to raise pro-

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ductivity, handwerk was forced to choose between protectionism and modernity. In doing so, handwerk was poised to part with the old world forever. During this period two important tensions affected handwerk. One was the pressure to become more “industrial” both in its work organization and methods and in the scale and scope of its activities. The other issue was the possibilities offered by settlement in the East. Both were areas in which various parts of the Nazi bureaucracy also had an interest. These two issues were interconnected and their outcome proved crucial to the structure of handwerk in the late war and postwar periods. As we have seen, in certain appropriate trades pressure to raise productivity led handwerk to develop various cooperative forms of association that placed small firms in a better competitive position relative to industry. These cooperatives achieved industrial economies of scale—sharing equipment and more-rational application of manpower—while preserving the independence of their constituent firms. Building and metal were two trades that especially lent themselves to such schemes. Handwerk faced, however, a double problem here. On the one hand, during the first years of the war it had to fight to get its cooperatives recognized by the authorities—that is, to get them assigned scarce raw materials and manpower (especially prisoners of war), as well as to obtain the work contracts themselves. This seemed to have been a continuous struggle (in any case, handwerk was perennially given to bitter complaints about it), yet one that met with a considerable measure of success. Thus in late 1941 in response to handwerk’s complaints of government favoritism toward industry, the Wehrmacht, at the suggestion of the Labor Ministry, instituted a mechanism to seek out suitable handwerk firms or cooperatives for building projects. The Labor Ministry also ordered that its local bureaus review building sites to see if they could be similarly covered. For, it concluded, “in fact to a considerable extent handwerk cooperatives have recently successfully undertaken large building contracts or worked as subcontractors.”95 The Ministry also responded to complaints that small firms in the new Eastern territories were going under to the benefit of larger industrial ones. Not only, in the bureaucrats’ view, did the disappearance of handwerk seem socially and politically dangerous, but they also considered the existence of a healthy stratum of small and medium-sized firms essential to complete postwar housing plans as well as to the continued training of skilled workers. Consequently, the Labor Ministry ordered that handwerk cooperatives also be encouraged in the East.96 The other potential problem with handwerk cooperatives was that they themselves might become industrial. Cooperatives, by virtue of their size, wielded economic power that itself became a threat to those very small firms whose existence they were created to ensure. Small shops entering a cooperative that included larger firms were especially vulnerable, for the larger naturally dominated. Despite their success in winning a place in the war economy, a handwerk report on the building trades observed that within cooperatives a tendency could be observed “which leads not to the maintenance and strengthening of indepen-

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dence but rather to the ‘sucking up’ of smaller firms by the greater.”97 Within handwerk itself, then, existed the very same contradiction of big versus small that pitted handwerk against industry. This tendency was also recognized within the Party, which viewed it with alarm: “Despite all the advantages of the work co-ops [Arbeitsgewerke] it appears dangerous to me that out of them develop co-op firms which sooner or later tend to the exclusion of the small and medium firms.”98 How was this contradiction to be resolved? From the Party Chancery the answer was unequivocal: “In my view a large firm may not develop out of a work co-op which would destroy the existence of individual handwerk firms.”99 Within handwerk organizations the answer was less emphatic. These groups had already experimented with so-called work-task cooperatives (Arbeitseinsatzgesellschaften) whose horizontal organization (that is, including firms of the same trade; other cooperatives included all trades that would be employed on a building site) successfully lent themselves to the preservation of smaller firms. Yet such forms remained peripheral. The handwerk memo recognized that small firms, especially in larger building projects, were in fact less productive. Their future, then, lay with repair work rather than with construction itself. The optimal size of these small firms, furthermore, was defined as between ten and twenty workers. No mention is made here of the one-man-shop of yore. Here, then, is handwerk itself—that is, its organizations—under the pressure of circumstance, reconstructing its own future. While many in the Party, like the official quoted above, continued an old-fashioned argument to preserve small firms regardless of market realities, handwerk groups showed themselves to be more adaptable. First, they redefined what a small firm was, which did not include what were formerly the smallest, in order to allow them better to adapt to new types of building. Second, continuing the cold logic of productivity, they recommended that these small firms abandon their construction ambitions once and for all and refocus exclusively on repair.100 The same logic and advice was also to apply to other trades displaced by industry, such as tailors and shoemakers—that is, that they turn to repair work. Even though the author of this report, Reich handwerker master (Reichshandwerkmeister) Ferdinand Schramm, was no economic liberal—in his view the market as a mechanism to regulate wages and prices had been superseded by the achievements of National Socialism—he came down squarely in favor of productivity as the standard by which handwerk should be judged. He maintained that by these criteria there continued to be a niche for small firms, but the creation of that niche entailed big changes in the type and organization of work that these firms would do.101 As handwerk strove to adapt to a war economy that demanded productivity above all, it faced, as we have seen in the case of the building trades, the danger of itself becoming industrial. Here it addressed this problem in the way already described: First, by developing structures (horizontally organized work task cooperatives) that allowed small firms to compete against big ones but that did not threaten each other; and second, by steering the smallest firms off into another

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area altogether, repair, where their continued existence was ensured but that took them out of competition with industry. This same problem—handwerk becoming industrial and losing its identity—developed in other trades as well. While the steps taken by the building trades were acceptable to most of the authorities, innovations proposed by other branches sometimes met with strong governmental opposition. The case of the Viennese butchers illustrates the types of objections they made. In 1942 the Vienna butchers’ guild, with the vigorous support of its members, proposed the establishment of a joint-stock company to set up a central slaughterhouse. It had heretofore been the custom in Vienna that each individual butcher also did his own slaughtering and sold off the animal by-products (fat, skins, etc.) himself. By contrast, in most cities in Germany proper slaughtering had long been performed industrially—that is, by large firms using production-line methods, which in turn sold meat to handwerk butchers for finer cutting and retail sale. Wartime demands for higher productivity brought pressure on the relatively inefficient Viennese system. The butchers there responded with the joint-stock company proposal: they themselves should set up a central slaughterhouse on the German model. The difference would be, however, that in Vienna this industrial enterprise would be owned and controlled by masters who would themselves benefit from the savings this more-efficient system afforded as well as share the profits from the sale of the animal by-products. The capital risk of the enterprise would be shared by the handwerk organizations. The response of the Economics Ministry to this scheme was one of stiff opposition. For one thing, the Ministry argued that such a company would involve the expansion of handwerk into an industrial enterprise in which it had no business. For social and political reasons, handwerk should remain distinct from industry. Admittedly, with handwerk busily adapting itself to industrial methods, the line between the two had long become fuzzy. But an enterprise like the one proposed by the Viennese butchers contained a further danger. Although at the company’s founding the stock would be proportionately distributed, by the nature of things stock would tend to accumulate in the hands of a few. In a short time, the landscape of small proprietors would become dominated by a few big ones. Thus, exactly as in the case of the builders’ cooperatives, the very remedy proposed to increase productivity and competitiveness of small firms threatened their extinction. What is more, the Ministry foresaw that the centralization of slaughtering, controlled by handwerk as a whole, could constitute an effective monopoly and a protectionist force against competition. It feared the spread of such schemes to other trades.102 The blurred borders of industry and handwerk posed a further complication. As an Economics Ministry memorandum posed the problem, “The fact is that numerous branches of handwerk, as a result of rationalization and standardization in the wake of their participation in arms production, have necessarily gone over to industrial methods of production.” An organizational problem therefore arose: Should such “industrialized” firms—or to put it another way, should suc-

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cessful firms—continue to be classified as handwerk and be represented by their organizations, or should they be shifted to industry’s organizations?103 The outcome was of decisive significance for handwerk. For if the legal definition of handwerk was not flexible enough to accommodate adaptation to modern industrial methods and even size, then the industrial organizations would siphon off its strongest firms, and handwerk as an organized social group would be relegated to economic ghettoization. In the event, the result was a confirmation of the current system. Firms that had registered as handwerk, whatever the production changes they introduced as a result of war, remained handwerk.104 This meant that, while handwerk could adapt to a modern economy, it could nevertheless preserve its social and legal identity through its organizations, and with it all the traditional cultural accoutrements of which it was so proud.

The Promise of the East In the preceding sections we have viewed the innovations made by certain branches of handwerk, and by particular individuals, to adapt to the demands of the war economy. Critical to these innovations, as we have seen, were the organizations that took an active role in initiating and coordinating them. Some adaptations consisted of organizational forms designed to enable handwerk to compete better against industry. In other trades the emphasis shifted away from production and into repair. In still others production moved away from a competitive and toward a subcontractual or supply relationship to industry. The common impetus to all these innovations was standards of rationality and productivity demanded by both a modernizing handwerk leadership and the Nazi war machine. But in this period of rapid change in handwerk some avoided the pressure to change by looking elsewhere for opportunity—colonization in the East. Immediately after the outbreak of war, handwerk organizations were flooded with inquiries about establishing shops in the conquered territories. On October 1, 1939 the head of the mill builders guild in Frankfurt/Oder wrote expressing the demands of his members that handwerk be given preference to industry in the resettlement and rebuilding of the conquered Eastern territories to be incorporated into the Reich.105 Often within hours after possibilities for handwerker to settle in Poland and Bohemia were announced, applications poured in to guilds and government offices.106 Here, too, handwerk organizations moved aggressively to assume a key role for themselves as the agency for colonization. Early on they won a jurisdictional battle with the DAF to process applications and coordinate settlement.107 They looked forward confidently to the creation of sixty thousand new positions for handwerker in the East.108 Yet the efforts of handwerk in this area were considerably different from those described above. Most strikingly (though perhaps unsurprisingly), handwerk leaders added a racial dimension to their usual depiction of handwerk virtues. The newly conquered areas, they said, would best be secured by the importation

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of “peasants and handwerker, the bearers of native [soil-rooted] Germanness.”109 Polish and Jewish handwerker should be forcibly removed and replaced by native Germans. Yet handwerker racism turned out to be more readily tempered by opportunism than the considerably more doctrinaire (and rabid) policy of the SS. While Himmler insisted on the strict “genetic health” (Erbgesundheit) of all settlers, handwerk groups soon complained that the investigations of family background, including medical exams, were too time-consuming and made for a failure rate (one-third) among applicants that was too high.110 Suddenly, racial requirements became “exaggerated.” Moreover, positions should be filled by properly trained and certified handwerker, the groups maintained, and not according to the racial-political criteria of the SS that stressed “pure” German veterans and fathers of “children rich” families.111 Beyond the matter of the racial composition of settlers lay a struggle for competency and authority in the East between handwerk organizations and the SS, with the latter obviously having the upper hand. More germane to this discussion, however, is the social and economic position envisioned by handwerk for itself in the occupied territories. Handwerk organizations did not foresee the East as an extension of the articulated, modern industrial society to which it was adapting in the Reich proper. Rather, because the level of industrialization there still lay far below that of the West, Poland appeared to offer an ideal theater for the growth of the smallest firms, precisely those under the most pressure at home, as well as the surest way to secure true Germanness in the East. Even the expansion of average firm size, increasingly common in the Reich, was to be avoided.112 In the East handwerk could freely revert to old fantasies of an idyllic society of small proprietors uncontaminated by mass society and protected from the vicious competition of the capitalist marketplace. Handwerk leaders were not so naïve as to think that firms in the East would have completely protected markets and remain blissfully isolated from modern methods. Handwerk, they said, would have to be competitive there too.113 But the vision the leaders had of lebensraum for handwerk, in contradistinction to the adaptive creativity and progressiveness of their policy in Germany, was essentially preindustrial. It was here that they indulged that part of their constituency that they were perfectly prepared to abandon at home. Indeed, the types of handwerker who applied to settle were not those with the ambition to become entrepreneurs and expand already established enterprises Eastward. Instead, they were either journeymen without sufficient capital to set up in the Reich or masters who could no longer make ends meet. They were those on the margins—the “losers,”—of industrial society. They were also tenacious in holding onto a particular way of life. In the words of one SS report, “These handwerker will grasp at every available possibility to maintain their independence.”114 It was undoubtedly this sort, whose positions in a capitalist economy had become the most tenuous, who had turned to Nazism in greatest numbers in the 1920s. In fact, the dominant elements of the Nazi Party had no more than

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propagandistic use for this type of handwerker. To be sure, they had trumpeted handwerk’s good old German virtues and continuously held out the carrot of promised riches in the East,115 but policy as actually carried out was another matter. The shops of the inefficient were closed down, or “combed out,” without regret. For those whose productivity was high and who adapted to an industrial economy, there was a place and an important one, especially after 1941, as we have seen. But for the old-fashioned, the only prospect held out was lebensraum. The ultimate expression of the old point of view is to be found in Himmler himself, for whom handwerk’s place in the East was an issue of some importance.116 In responding to the Schramm memo discussed above on improving productivity in the construction trades,117 Himmler generally approved of Schramm’s proposals to raise efficiency. He did not approve, however, of the cooperative ventures designed to render handwerk more competitive vis-à-vis industry. “In the memorandum,” Himmler wrote, “the struggle for existence between construction industry and handwerk moves like a red flag, by which handwerk is apparently the loser.” 118 In contrast to handwerk leaders, who even at their most old-fashioned did not see their future in so static a light, Himmler strongly opposed any steps that would make handwerk like industry. Handwerk distinguished itself, he insisted, by the personal involvement and responsibility of the firm master, whose relation of reciprocal duty and authority to those in his charge was comparable to that of the lord of the manor. Such schemes to improve efficiency might be necessary in wartime, he conceded, but in the long term they contradicted what was essential to handwerk; moreover, they could not resolve the basic antipathy between the two forms of production. Any cooperative venture would only poison handwerk with the anonymity found in industry. True Germanness meant preserving this unique non-Western human relation. How did Himmler prepare to overcome the struggle for existence that necessarily threatened to make the small shop extinct? “The development of our space in the East will … render this struggle illusory… [It] will offer German building handwerk a bigger and more attractive sphere of activity than it has ever known in its history.” He projected that there would be so much room to expand in the East, and so much postwar building to occupy both handwerk and industry there, that all would be assured a livelihood. What is more, the aging handwerk shops within the old Reich itself would be refreshed and renewed with the “more lively blood” of their daughter firms in the new lands. Industry, too, was enticed by promises of riches in the East, but for ideologues like Himmler the promise gave handwerk’s old-fashioned way of life a reprieve from industrial competition. The contradictions of capitalism in the West were to be overcome by their displacement in the East.119 This hope could obviously be held out only as long as German armies were victorious in the Soviet Union, and after the reversals that began in late 1942 the illusion faded. For the increasingly capitalist and more-productive handwerker at home, however, the dream of a pastoral, uncompetitive idyll remained largely irrelevant.120

56 | From Craftsmen to Capitalists

Notes 1. On the legitimizing function of National Socialist ideology and handwerk’s place in it, see von Saldern, Mittelstand im “Dritten Reich,” 211–219. 2. See introduction to this volume. See also von Saldern, Mittelstand im “Dritten Reich,” 140– 146. 3. For a discussion of this issue and references to the relevant literature, see Boyer, Zwischen Zwangswirtschaft und Gewerbefreiheit, 27–30. 4. Martin Bormann, Deputy Führer (Stellvertreter des Führers) to the Economics Ministry (Reichswirtschaftsministerium, or RWM), September 30, 1938, in Bundesarchiv (BA), R7/ 4106, Item 73–74. On Bormann’s role in the Nazi power structure, see Peter Longerich, Hitlers Stellvertreter. Führung der Partei and Kontrolle des Staatsapparates durch den Stab Heß und die Partei-Kanzlei Bormann (Munich, 1992). 5. Göring (Ministerpräsident Generalfeldmarschall, Beauftragter für den Vierjahresplan) to the Reichsminister für Wissenschaft, Erziehung und Volksbildung, December 14, 1938, in BA, R7/2116, Item 355–357 (my emphasis). 6. “Das deutsche Handwerk im Aufschwung,” Völkische Beobachter, July 1, 1939; cited in Schoenbaum, Hitler’s Social Revolution, 143 (my emphasis). See also “Sichtbares und Unsichtbares im organisierten Staat,” in Frankfurter Zeitung (Aug. 8, 1936), cited in von Saldern, “The Old Mittelstand,” 44: “Lebensraum is not to be secured either by subsidies to the artisanry or by restrictions on the expanding industries, but rather by the emphasis on and the increase of economic efficiency; that means by selection and education.” 7. On the disappointment of handwerker and other small proprietors to the failure of the Nazis to fulfill their pre-1933 promises of protectionism, see Schoenbaum, Hitler’s Social Revolution, chapter 4; the greatest anti-market sympathies lay at the local levels of government and the Nazi Party; 140. 8. For a review of the substantial literature on Nazi modernization and reationalization measures in the prewar period, see Ricardo Bavaj, Die Ambivalenz der Moderne im Nationalismus: Eine Bilanz der Forschung (Munich, 2003), 117–123. 9. Mason, Sozialpolitik, 270. Abelshauser, “Germany: Guns, Butter, and Economic Miracles,” 149. 10. For example, the Stadtspräsident (City President) der Reichshauptstadt (the Capital) Berlin in “Lage der Berliner Industrie und des Handwerks,” October 12, 1937, reported that in the building and metal trades it was impossible to acquire labor for the regulation wage, in BA, R41/151, Item 2. 11. See “First Quarterly Report of 1939 of the Sicherheitshauptamt,” 18, in BA, R58/717, Item 156–159. 12. Builders’ Guild (Baugewerks-Innung) Berlin to Berlin Chamber (Handwerkskammer Berlin; hereafter in the notes I will use the English for names of chambers), November 22, 1938, in BA, R41/155, Item 70–73. 13. See RWM to Handwerkskammern, February 2, 1939, in BA, R7/4103, Item 31–35. 14. Of the 7.5 million drafted out of the labor force in the first two and a half years of the war, handwerk seems to have been hardest hit; Alan S. Milward, The German Economy at War (London, 1965), 46–47; see also Andreas Heusler, Ausländereinsatz: Zwangsarbeit für die Münchner Kriegswirtschaft 1939–1945 (Munich, 1996), 86. 15. See Reich Labor Ministry (Reichsarbeitsministerium; RAM) memo, August 19, 1940, in BA, R41/144, Item 214–216. 16. Meldungen aus dem Reich, November 17, 1937, 10–11, in BA, R58/144, Item 243–244. I will return to the significance of these particular trades later. See also Ludolf Herbst, Der Totale Krieg und die Ordnung der Wirtschaft: Die Kriegswirtschaft im Spannungsfeld von Politik, Ideologie und Propaganda 1939–1945 (Stuttgart, 1982), 120. 17. Thus, for example, the chimneysweeps’ guild argued that so many of their journeymen had

Handwerk in the War Economy, 1939–1941 | 57

18.

19.

20.

21.

22. 23.

24.

25.

been called up that a substantial fire hazard existed in many communities. See correspondence between the Reichsinnungsverband (RIV)–Schornsteinfeger and RWM, September 1938, in BA, R7/4103, Item 4–7 and 147–149. On handwerk fears in 1941 of the tendency of small shops to be “swallowed up” by “capitalist large firms,” see Walter Naasner, Neue Machtzentren in der deutschen Kriegswirtschaft 1942–1945 (Boppard am Rhein, 1994), 82. See Meldungen aus dem Reich, February 14, 1940, 14–15, in BA, R58/148, Item 90–91; April 3, 1940, 16, in BA, R58/150–1, Item 35. Also see RWM Lagebericht excerpt, September 28, 1939, in BA, R7/4103, Item 286. Meldungen reported that by early 1940 these abuses had decreased somewhat. Critics pointed out, too, that shops were often closed even though they were making important contributions to the war economy; Heusler, Ausländereinsatz, 87. Stadtspräsident Berlin, “The Effects of Public Contracts on the Berlin Economy,” Preliminary Report (“Auswirkungen der öffentlichen Aufträge auf die Berliner Wirtschaft,” Vorbericht), January 15, 1940, 29–36, in BA, R41/157, Item 41–47. From 1933 to 1936 public spending on goods and services grew by an average rate of 18.7 percent per year, while private consumption rose only 3.6 percent per year. Of the 27.5 billion RM the government spent in that period 21 billion RM went directly into rearmament. See Avraham Barkai, Nazi Economics: Ideology, Theory, and Policy (Oxford, 1990), 158, 160, 217, 250–251. See also Volker R. Berghahn, Modern Germany: Society, Economy and Politics in the Twentieth Century (Cambridge, UK 1987), 146. The main beneficiaries of government contracts were electrotechnics, machine building, and optics, with 97.7 percent, 94.3 percent, and 92.5 percent, respectively, of all government monies going to those industrial firms. At the lower end were musical instruments; copying devices; and stove building and paper industries, with 42.9 percent, 44.8 percent, and 45.1 percent, respectively. In the latter trades, then, handwerk production still dominated and received the bulk of government contracts. Stadtspräsident Berlin, Main Report, April 27, 1940, 19–22, in BA, R41/157, Item 104–108. See Stadtspräsident Berlin, “Auswirkungen der öffentlichen Aufträge auf die Berliner Wirtschaft,” Preliminary Report, January 15, 1940, 34, in BA, R41/157, Item 45. For example, the Labor Bureau–Berlin had no sympathy with handwerk complaints on manpower and raw material shortages because, the Bureau wrote, they came from older masters unable or unwilling to adapt to modern, more-efficient methods. Arbeitsamt Berlin to Präsidenten des Landesarbeitsamts Brandenburg, December 20, 1937, in BA, R41/151, Item 11–14. On Nazi shop closing policy in the late 1930s, see von Saldern, Mittelstand im “Dritten Reich,” 140–146. Von Saldern argues, as I do here, that the shop closings, while they obviously hurt the individuals directly affected, strengthened handwerk as a whole because they encouraged principles of efficiency and as such were supported by the leadership. She thus opposes Schoenbaum and Winkler who, looking at the matter strictly politically, interpret the closings as an indication of handwerk’s loss of influence in the regime. See Winkler, “Der entbehrliche Stand,” 31. Schoenbaum argues that the “relative position [of small business to big] deteriorated directly and irreversibly from a point of initial strength,” and cites the imposition of various rationalization measures including the certificate of competency (!). Handwerk, he says, “was being hustled into the industrial age.” This is certainly true, but a progressive handwerk leadership strongly supported rationalization measures (including the certificate of competency that all handwerker, progressive and conservative, had long favored), and, as we will argue throughout the remainder of this volume, the longer-term effects of these measures was handwerk’s successful adaptation to modern capitalism. Schoenbaum, Hitler’s Social Revolution, 129–132, 140. These conclusions on the war economy as a whole parallel those of Richard J. Overy, “Guns or Butter? Living Standards, Finance, and Labour in Germany, 1939–1942” in War and Economy in the Third Reich, ed. Overy (Oxford, 1994)?,” 312–313. Meldungen aus dem Reich, November 17,1939, 11, in BA, R58/144, Item 244 (my emphasis).

58 | From Craftsmen to Capitalists 26. Meldungen aus dem Reich, February 5, 1939, 11, in BA, R58/148, Item 30. 27. The first to argue this was the United States Strategic Bombing Survey (Washington, D.C., 1945), chapter 1. The most important proponent of blitzkrieg has been Milward, German Economy at War, passim. The notion of the blitzkrieg as a coherent military-economic strategy has been fully rejected by Richard J. Overy, “Hitler’s War and the German Economy: A Reinterpretation,” Economic History Review, second series 35, 2 (May 1982): 272–291. 28. Imperial Defense Minister for War Area III to the Plenipotentiary for the Economy (Reichsverteidigungsminister für den Wehrkreis III to the Generalbevollmächtigten für die Wirtschaft (GBW)), October 27, 1939, in BA, R41/154, Item 92. 29. Der Stellvertreter des Führers, “Die Auswirkungen des Handwerkermangels,” December 12, 1940, in BA, NSD3/19. 30. Von Saldern, Mittelstand im “Dritten Reich,” 82; John E. Farquharson, The Plough and the Swastika. The NSDAP and Agriculture in Germany 1928–1945 (London and Beverly Hills, Calif., 1976), chapter 12. 31. Meldungen aus dem Reich, June 3, 1940, 21–22, in BA, R58/151, Item 76–77. 32. Düsseldorf City Council (Stadtrat Düsseldorf ) to RAM, December 9, 1940, in BA, R41/167, Item 89. 33. “Sozialpolitische gesunde Eingliederung,” DAF memo, June 8, 1939, in BA, R7/4117, Item 63–66. 34. “Sozialpolitische gesunde Eingliederung,” DAF memo. 35. For additional documentation on this question see, Reichsstand Handwerks (RS-HW) memo, April 26, 1939, Item 39–45; DAF memo, October 18, 1939, Item 67–71; Oberkommando der Kriegsmarine memo, March 21, 1940; all in BA, R7/4117. 36. RWM memo on “Participation of Handwerk in Production Planning,” January 8, 1940, in BA, R7/4103, Item 269–271. 37. As we will see in succeeding chapters, handwerk’s function as a stable, property-owning social element was also to be recognized by the Allied occupiers, the Soviets included, as well as the founders of the Federal Republic, both CDU and SPD. 38. See RWM to RS-HW, January 8, 1939, in BA, R7/4103, Item 282. 39. RWM memo on “Participation of Handwerk in Production Planning” (my emphasis). 40. A list of industries and the handwerk trades for which an association could be appropriately developed was laid out in the RWM memo on “Participation of Handwerk in Production Planning.” 41. RWM memo on “Participation of Handwerk in Production Planning.” The same RWM official had proposed some of these ideas even before the war began. See RWM to RS-HW, January 8, 1939, in BA, R7/4103, Item 282. As I shall discuss later, these ideas were extensions of schemes developed within handwerk organizations themselves. 42. GBW, Übersicht über die Gesamtlage der Wirtschaft,” November 8, 1939, in BA, R41/154, Item 87–91. 43. City President (Stadtspräsident) Berlin, report for January–March 1939, March 24, 1939, in BA, R41/156, Item 40. This is also the point made by A. R. L. Gurland in The Fate of Small Business in Nazi Germany (Washington, DC, 1943); see below, chapter 3, this volume. 44. Reichs- und Preußische Wirtschaftsminister memo, August 17, 1936, in BA, R41/78, Item 33–34, 37–38. 45. Press report June 1, 1939 from the Neue Wiener Tageblatt, in BA, R120/130, Item 58–59. See also the discussion of handwerk in the construction trades in United States Strategic Bombing Survey (USSBS), chapter 5. 46. RWM memo on talks with the RIV Kraftfahrzeug Handwerks (Kfz), February 28, 1939, in BA, R7/4103, Item 70–71. 47. RWM Order, September 15, 1939, in BA, R7/4103, Item 283–285. 48. For example, see RIV-Kfz to Oberkommando des Heeres (OKH), November 29, 1940, in BA, R97II/108. Generally, handwerk organizations did not have much sympathy with such com-

Handwerk in the War Economy, 1939–1941 | 59

49. 50. 51.

52.

53. 54. 55.

56. 57.

58.

59. 60.

61. 62.

63. 64. 65. 66. 67. 68. 69.

plaints. In any case, indications are that, while other trades were often underutilized during the first years of the war (for whatever reasons), mechanics generally had done well from the very beginning. Prosperity seems to preempt such complaints. GBW, Economic Report, November 8, 1939, in BA, R41/154, Item 87–91. John R. Gillingham, Industry and Politics in the Third Reich: Ruhr Coal, Hitler and Europe (Stuttgart, 1985), 45; Richard J. Evans, The Coming of the Third Reich (New York, 2003), 385. See Keller, Handwerk im faschistischen Deutschland, 64–65; and chapter 1 this volume. On the background of handwerk organizations before 1933, see Chesi, Struktur und Funktionen, 17–24. On the measures taken by handwerk organizations to promote rationalization and greater efficiency, especially local consultation bureaus for masters that were greatly extended in the last prewar years, see Chesi, Struktur und Funktionen, 81–87. “Der Standort der Handwerkszweige am 1. April 1937,” in BA, R7/4115. The increase in the number of firms from 1926 to 1934 was 18 percent (p. 10). This same phenomenon, Die Flucht in die Selbständigkeit (flight into independence) was to be repeated during the economic collapse following the surrender in 1945; see chapter 5, this volume. “Der Standort der Handwerkszweige am 1. April 1937,” BA, R7/4115, 11. Chesi, Struktur und Funktionen, 116. The Bedürfnisprüfung was initially retained by the Allied occupation forces as a method of controling the apportionment of scarce raw materials but was by 1948 abolished in most trades as supplies allowed. See chapters 4–7, this volume. State Handwerk Master for Saarpfalz (Der Landeshandwerksmeister für Saarpfalz), September 29, 1939, in BA, R7/4106, Item 29–41. This view is the direct opposite of Chesi, who regards 1942 with the institution of the Bedürfnisprüfung as the high point of handwerk organizational influence. But he judges this on protectionist grounds. The organizations after 1942 were perhaps under stronger state control, but, as I argue here, their control over their membership and their ability during this period to shape the whole structure of their Stand was in no way diminished. Wolsing, Untersuchungen zur Berufsausbildung. Chesi, Struktur und Funktionen, 74–76. These efforts should be seen in the context of a broader, long-term effort by the German state to deepen and broaden vocational training across the economy to develop what Meskill calls the German skills machine; Optimizing the German Workforce, 141–165. Jahrbuch des deutschen Handwerks, 1938/39 (Munich, 1939). Gewerbefreiheit in this regard means that, excepting trades where competency was a matter of health or public safety, the qualifications of a craftsman were to be determined by the marketplace and not by a private body. The Americans, believing the German system to be monopolistic, introduced Gewerbefreiheit in their zone in 1948. The British and French, with some important changes, kept the examination system that had been introduced in 1935. See chapters 5 and 6, this volumne. “Begründung zur Verordnung über die Eignung der Betriebe zur Berufsausbildung und die Lehrbefugnis in Handel und Gewerbe,” RWM, [n.d.] 1939, in BA, R7/2116, Item 139–146. Gillingham, “The ‘Deproletarianization’ of German Society,” 424. Arnhold changed the spelling of his first name to a more Germanic Karl after 1933. See also Meskill, Optimizing the German Workforce, 129–131. Abelshauser, “Germany: Guns, Butter, and Economic Miracles,” 164. Gillingham “The ‘Deproletarianization’ of German Society,” 426. Abelshauser, “Germany: Guns, Butter, and Economic Miracles,” 165. See also, Meskill, Optimizing the German Workforce, 171. See RWM memo, April 1944, in BA, R7/4114, Item 102–103. Oberkommando der Wehrmacht (OKW) to RWM, August 20, 1942, in BA, R97II/107. The order allowing this is RdErl.d (memo).RWM, July 14, 1944. Copy in BA, R7/2116, Item 335–336. OKW to RWM, August 20, 1942, in BA, R97II/107.

60 | From Craftsmen to Capitalists 70. OKW to RWM, January 14, 1944, Item 74–75; and OKW to RWM, March 28, 1944, Item 76–81; both in BA, R7/4114. 71. Thus the Ministry of Science, Education and Culture (Wissenschaft, Erziehung und Volksbildung) ordered a comprehensive plan for training in motor vehicle repair: RdErl.d.MfWEV of July 28, 1942; copy in BA, R97II/107. 72. The period of training for apprentices and journeymen was prescribed by law for each trade, about three to three and a half years for each stage for most trades, and longer for skills like goldsmiths or silversmiths. The times by which these were shortened during the war was generally no more than six months. 73. Reich Economic Chanber, Handwerk Division (Reichswirtschaftskammer-Abteilung Handwerk) to Reich Guild Association (Reichsinnungsverbände), April 27, 1943, in BA, R7/2116, Item 417–418; see also RWM memo, July 29, 1943, in BA, R7/4106, Item 449. 74. Excerpt from “Nachrichten des Reichsministers für Rüstung und Kriegsproduktion,” no. 35, March 27, 1944, in BA, R7/2116, Item 9–10. 75. See “Berufsausbildung im Krieg; Ausbildungverhältnisse Jugendlicher aus Freimachungsgebieten,” RdErl.d.RWM, March 11, 1940; copy in BA, R7/2116, Item 109–111. 76. See “Das Handwerk in Holland und Belgien” in Deutsches Handwerk, No. 29/30/31, August 6, 1943; copy in BA, R7/4106, Item 464. See also Dienstreise Bericht by the same author, September 15–23, 1943, in BA, R7/4106, Item 455–462. 77. Meldungen aus dem Reich, June 26, 1941, 28–29, in BA, R58/161, Item 181–182. 78. RWM to Regierung des Generalgouverments (Administration of the General Gouverment [Poland]) , April 3, 1943, in BA, R7/2116, Item 67–68. 79. Reichshandwerkmeister Ferdinand Schramm later attributed the turnaround in handwerk’s war fortunes to the need for them after the bombing began. See Schramm, “Denkschrift über Probleme der Handwerkswirtschaft und der Handwerksorganisation,” April 28, 1944, in BA, R7/4107, Item 75–100. 80. For example, Oberbürgermeister of Essen to RAM, May 8, 1941, in BA, R7/4118, Item 71. 81. This was in Speer’s capacity as General Building Inspector of Berlin. See Speer to Schramm, September 6, 1941, in BA, R3/1600, Item 15. 82. RS-HW to all local handwerk organizations, August 2, 1941, in BA, R7/4118, Item 18–21. 83. RS-HW to all local handwerk organizations, August 2, 1941. 84. On the organization of these cooperatives see, RS-HW to Minister für Bewaffnung und Munition, May 9, 1941, in BA, R7/4118, Item 72–79. 85. RAM to Land Labor Offices (Landesarbeitsämter), July 8, 1941, in BA, R7/4118, Item 22–24. The regime, for reasons that were a combination of worry over political reliability and over productivity, was in certain improbable cases reluctant to push too far. Thus, it ordered that handwerker who had to travel for bomb damage repair not be kept away from home too long. See RAM to Schramm, June 3, 1941, in BA, R7/4118, Item 48. 86. RAM to OKW, January 11, 1941, in BA, R41/167, Item 59. 87. “OKH Merkblatt,” June 15, 1941, Item 193–204; also OKH to RAM, December 3, 1941, Item 15; both in BA, R41/167. 88. On the high standards of the German armed forces for uniforms and equipment (“almost certainly the highest in Europe”) and the effect of this high demand on the availability of consumer goods for the civilian population, see Overy, “Guns or Butter?,” 288. 89. This is atypical. For most trades, what determines whether a firm is classified as handwerk as opposed to industry is not size: handwerk firms of two hundred employees or more are not uncommon. It is rather the position of its owner who must be a certified master. On the flexible position of the German courts on this issue as an important precondition for handwerk’s continued adaptability, see Wolfgang Streeck, Social Institutions and Economic Performance: Studies of Industrial Relations in Advanced Capitalist Economies (London, 1992), chapter 12. 90. For the documents on this issue, see RWM memos dated October 27 and November 10, 13, and 18, 1942, in BA, R7/4119, Item 101–108.

Handwerk in the War Economy, 1939–1941 | 61 91. See RWM memo, May–June 1943, in BA, R7/4199, Item 210–213. 92. Meldungen aus dem Reich, April 17, 1941, 22–23, reported that the Wehrmacht opposed the construction of a bread factory near Bielefeld because handwerk supplied its needs quite well enough. In BA, R58/159, Item 106–107. 93. For handwerk’s contribution to war production, see speech of Chef des Heereswaffenamtes, General der Artillerie Leeb on June 8, 1942, in BA, R7/4106, Item 327. Also see Deutscher Handwerks- und Gewerbekammertag, Report for 2nd Quarter 1941, in BA, R7/4106, Item 371–377. 94. Handwerkskammer Flensburg 1990 bis 1975, 197. 95. RAM to RWM, November 24, 1941, in BA, R7/4106, Item 315. 96. RAM to RWM, November 24, 1941, in BA, R7/4106, Item 315; also RAM to Landesarbeitsämter, July 3, 1941, in BA, R7/4106, Item 296. 97. RS-HW, “Denkschrift zur Leistungssteigerung in der handwerkerlichen Bauwirtschaft,” March 1941, 10, in BA, R43II/278, Item 81–102. 98. (Gölz of the Party Chancellery) to RS-HW, February 19, 1942, in BA, NS6/651, Item 5. 99. (Reichsstellenleiter) Willi Gölz to Landeshandwerksmeister Gramer of the RS-HW, April 27, 1942, in BA, NS6/651, Item 8. 100. RS-HW, “Denkschrift zur Leistungssteigerung.” 101. RS-HW, “Denkschrift zur Leistungssteigerung.” 102. The technical dimension of the RWM’s objection was the direct participation of handwerk organizations and their sharing in the risk of the undertaking. This the Ministry forbad, but, if individuals wanted to purchase stock in such an enterprise, they were free to do so. On the Vienna butchers episode see BA, R7/4119, Item 220–268, esp. RWM “Bericht über die Treuhand-A.G. des Wiener Fleischerhandwerks,” December 4, 1942, Item 229–233. 103. RWM memo, July 11, 1942, in BA, R7/4106, Item 381. 104. RWM memo, July 11, 1942, in BA, R7/4106, Item 381. Also Streeck, Social Institutions and Economic Performance, chapter 12. 105. Mühlenbauer Innungen (mill builders‘ guild) Frankfurt/Oder to RWM, October 1, 1939, in BA, R7/4106. For background on this issue, see Anna Bramwell, Blood and Soil: Richard Walther Darré and Hitler’s ‘Green Party’ (Abbotsbrook, 1985), chapter 7; Valdis O. Lumans, Himmler’s Auxiliaries: The Volksdeutsche Mittelstelle and the German National Minorities of Europe, 1933–1945 (Chapel Hill, N.C., and London, 1993); Harmann Kaienburg, Die Wirtschaft der SS (Berlin, 2003). 106. Meldungen aus dem Reich, January 12, 1940, 12–13, in BA, R58/147, Item 47–48. For more examples of handwerker applications, see R97II/51, passim. See also, Holtwick, “Krieg, Kontrolle, Kondurrenz,” 241. 107. RS-HW to RWM, March 27, 1940, in BA, R7/4106, Item 112. 108. RS-HW memo, December 2, 1940, in BA, R7/4117, Item 96–97. 109. RS-HW memo, December 2, 1940, in BA, R7/4117, Item 96–97. 110. “Ansiedlung deutscher Handwerker im Osten,” RS-HW memo to Reichskanzlei, September 21, 1940, in BA, R43II/647b, Item 1–20; 9–10. 111. “Ansiedlung deutscher Handwerker im Osten,” 10, 15. 112. “Ansiedlung deutscher Handwerker im Osten,” 6, 17. 113. RS-HW memo, December 2 1940, in BA, R7/4117, Item 96–97. 114. Meldungen aus dem Reich, January 12, 1940, 12–13, in BA, R58/147, Item 47–48. 115. As one of countless examples of this type of propaganda, see “Bedeutung und Zukunft des gewerblichen Mittelstands” by Economics Minister Walther Funk in Deutsches Handwerk, No. 29/30/31, August 6, 1943. 116. On Himmler’s sympathy to handwerk, see Herbst, Der Totale Krieg, 154; Naasner, Neue Machtzentren, 82. 117. RS-HW, “Denkschrift zur Leistungssteigerung.“ 118. Himmler to Schramm, October 13, 1941, in BA, R43II/278, Item 75–79.

62 | From Craftsmen to Capitalists 119. Himmler to Schramm, October 13, 1941, in BA, R43II/278, Item 75–79. 120. This issue of the hope of Eastern settlement is also treated in Herbst, Der Totale Krieg, 154– 155; von Saldern, Mittelstand im “Dritten Reich,” 207–210; and Winkler, “Der entbehrliche Stand,“ 36–38. All correctly point out that the function of Nazi policy here was to offer the expectation of Eastern settlement as compensation to those handwerker whose shops at home had been closed for reasons of efficiency—especially von Saldern who stresses that the policy acted to alleviate and displace the contradictions of the two modes of production. However, a crucial distinction must be made between those handwerker for whom this policy had a function and those for whom it did not. Winkler, taking an extreme position, sees the expectations raised by Himmler as merely another false hope in a general Nazi wartime policy that amounted to a complete neglect of handwerk interests and their subordination to industry. See also his Mittelstand, Demokratie und Nationalsozialismus, 183, and his “Mittelstandsbewegung oder Volkspartei? Zur sozialen Basis der NSDAP,” in Faschismus als soziale Bewegung: Deutschland und Italien im Vergleich, ed. Wolfgang Schieder (Hamburg, 1976), 113. My argument here is that for those inefficient so-called losers at home Nazi policy certainly was no more than an illusion and an attempt to remove capitalist–handwerk conflict. But because the overall effect of Nazi policy during the war was to make handwerk economically stronger in a capitalist context, such preindustrial utopian fantasies held little real interest for those remaining and more-successful handwerker at home—in other words, there was no longer any capitalist– handwerk contradiction to displace.

Chapter 3

THE SPEER MINISTRY, 1942–1945 The Coordination of Industry and Handwerk

 On the night of February 8, 1942, Dr. Fritz Todt, Reich Minister of Armaments

and Munitions, who had successfully concentrated a good deal of the responsibility for war production in his ministry, perished in a mysterious plane crash after leaving Hitler’s headquarters at Rastenburg in East Prussia. In a move that surprised everyone, Hitler named Albert Speer to the job the next morning.1 The man who up to that point had served as Hitler’s chief architect and held several technical war-planning posts proved an even greater organizational genius than his predecessor. By managing to squeeze every last bit of productive capacity out of the German war economy, he enabled the Wehrmacht to prolong the war, according to some estimates, by at least two years.2 Virtually every study of the German war economy under Speer has focused primarily or exclusively on his efforts in industry. This at first glance is natural enough, for the most spectacular increases in armaments production were accomplished industrially. Most such studies do not even mention handwerk, and, if they do, it is either peripherally or to assume that this period of furious industrialization represented the final eclipse of handwerk production as a significant sector of the German economy.3 These assumptions are false. It was, in fact, precisely during the Speer era, the period of the most intensified increases in industrial armaments output, that handwerk finally participated in all areas of arms production and emerged as a fully integrated sector in the German industrial economy.

Notes for this section begin on page 77.

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Accelerated Integration into the War Economy It was during the course of 1943 that Speer took the decisive steps to bring handwerk—productively and organizationally—into the war economy. A significant bottleneck in the economy generally, as he described the problem in 1943, was the existence within handwerk of vast reserves of unexploited productive capacity: “There are today thousands of small industrial and handwerk firms which are active as suppliers and sub-contractors to the armaments industry. However, there are still many small and medium-sized firms whose capacities are not yet realized or not rationally applied. These firms could, however, be most effectively brought into arms production. The premise must be, however, that pressing the firm owner into work service would be counter-productive. Rather, the inclusion of small and medium firms can be usefully and effectively achieved only by maintaining their independence.”4 It is clear here that, in his drive to higher productivity, Speer in no way deemed it efficacious to rationalize handwerk out of existence and move masters into the factories. In part, this view was based not on an ideology of smallness but rather on considerations of the most rational application of skilled labor power: some active firm owners were simply too old to be switched to factory work. But more generally, as independent entrepreneurs they were accustomed to working twelve to sixteen hours per day as a matter of course. If moved to factories, they would work set schedules with little incentive to work more. “The independent little man,” on the other hand, “strives in his independence through overtime and increased production to earn more than wage work would guarantee him.”5 In industry Speer was forced to work within the limitations of the National Socialist system that, he said, never dared demand as much from its people as did the British and Americans.6 He faced no such problem with handwerk. The small independent producer not only worked hours unheard of in industry but could, and normally did, draw on the unpaid labor of family members, especially of women. While recent research has shown that women played a more important role in the war economy than has previously been believed,7 two features of female labor in handwerk made it especially valuable. First, although Nazi ideological opposition to women working outside the home proved to be no real barrier to the attempt to recruit women into the workforce, nonetheless the regime did regard women working in this traditional way as part of a family unit as a positive socially stabilizing good, a reality that Speer took seriously.8 Second, and more important for Speer, the elimination of a small shop would mean the loss of cheap, hard-working labor that was unlikely to be drawn into the war economy in any other way. The many women who kept shops running in their husbands’ absence while they served at the front represented a source of productivity that would simply be squandered if the shops were closed. These social factors that made handwerk labor under certain conditions more efficient than its factory equivalent were, however, only part of the rationale for exploiting this resource more deeply. Handwerk labor offered additional advan-

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tages in productivity, but their realization depended on handwerk capacities being applied in a radically different way. Handwerk—and here the metal trades are central—should not, in Speer’s view, produce competitively to industry, but rather complementarily. “As a rule,” Speer instructed the main committees and rings he established to implement policy, “Handwerk will be engaged as … the supplier to an armament firm.”9 Handwerk, then, was to be steered (by certain mechanisms to be considered later in this chapter) into a coordinated relationship to industry. Speer attempted to reapportion tasks between industry and handwerk based on rational considerations for the war economy as a whole. On the one hand, “handwerk tries too much to take over types of production which could be carried out industrially with less difficulty and expenditure.”10 This could also work in reverse: “In arms factories production is still carried out which could be taken over by handwerk suppliers without damage.”11 Absent here are any of the social or political considerations important to Party ideologues or simply to those functionaries concerned with social or political stability. For Speer, pure rational productivity was always paramount.12 Therefore, when a phase of production might be more efficiently performed by handwerk, he pushed it in that direction, and in cases where the reverse was true, he pushed it toward industry. The mechanism the Speer Ministry used to intensify handwerk’s participation in the war economy, in a manner coordinated with that of industry, had actually been in development for some time. Speer intensified and formalized this process. Extended workbench (verlängerten Werkbank) is the term coined by the Robert Bosch Corporation in 1940 to describe the web of interdependencies— dominated, naturally, by big business—that had grown up between handwerk and industry. The bulk of business for handwerk firms operating in this relationship was subcontracted, specialized tasks given out by a large concern. In turn, the contracting industry offered the handwerk firms technological assistance, “facilities for using patents, special processes, and highly specialized machinery which small establishments could not have used before.”13 This connection to industry eliminated the element of competition with industry in which handwerk could for the most part only lose, and offered it easy and, of crucial importance for low capitalized enterprises, cheap access to complex technology. (It did not, of course, nor was it intended to, eliminate competition with other handwerk firms.) According to a 1943 U.S. commissioned study, “Without having to renounce its financial independence, without being swallowed by a bigger concern, without even having to surrender to the big one as much as a minority interest in its stock, the small enterprise becomes actually a kind of protectorate or dependency, and comes to be only legally distinguishable from a subsidiary, nay, a department of the plant for which it works.”14 In the view of the report’s author, this dependency constituted a dangerous threat to handwerk’s real, if not its legal, independence. We will return to this problem shortly. Speer took this relationship—which had developed spontaneously and more or less ad hoc during the prewar period—and streamlined it and made it contractual.15 His ministry developed a model contract (Musterrahmenvertrag) for

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this purpose. Its essential features were as follows: It redefined handwerk’s general work relation to industry as that of a supplier or subcontractor. For the duration of the contract, generally six months, the handwerk firm put itself at the disposal of its contracted partner(s) and agreed to carry out tasks according to priorities set by them. In the event of conflicts, priorities would be adjudicated by a ministry representative. The industrial firm, in its turn, was obligated to keep the handwerk firm supplied with suitable work and to furnish it with the required raw materials, tools and machinery, credits if required, and even additional labor power.16 Of key importance was that handwerk labor should no longer be subject to labor service: “As subcontractors, medium and small firms must receive a regulated committee protection of their work force.”17 In sum, the independent handwerk firms under this arrangement received in full all the required items of business that had been in such short supply earlier in the war. What about the issue of independence? In the view of the U.S. study cited above, which appeared in 1943 before Speer developed the model contract, such a relation between business and handwerk, “While it seemingly still gives small business its chance, it in reality inveigles the small producer or distributor into a network of functional dependencies, wherein every more or less voluntarily taken step involves a whole sequence of economic and organizational effects which becomes impossible to elude.”18 Yet, what was the alternative? The experience of those trades affected by these developments (and, again, these were for the most part the metal trades) we have already seen. Deprived of many necessary raw materials, their labor power subject to work service, and their shops subject to productivity evaluations—any one of which could result in a shop’s closure—many handwerk firms already led an uncertain existence if they remained outside the war economy or maintained uncompetitive levels of productivity. Moreover, this wartime crisis was merely an intensification of the one that had gripped handwerk before 1933—indeed, the same one that pushed handwerk toward Nazism in the first place: handwerk confronted with the economies of scale enjoyed by industrial production faced extinction. Arrangements with industry such as the workbench extension and its more developed contractual manifestation under Speer offered handwerk its only real escape from this crisis, and a prosperous one at that. What the U.S. report characterized as a network of functional dependencies was in fact no more than a description of a complex, modern industrial economy, where all sectors are necessarily interdependent. What is of special note about the resolution of the crisis of industrialism for handwerk during the Nazi period is that it was accomplished neither by destroying handwerk nor by marginalizing it. Handwerk was brought into the mainstream of industrial capitalism with its distinct identity more strongly intact than it had been before 1933. Industry’s increased concentration under Speer’s system of standardized mass production made possible the use of large numbers of foreign and slave labor with low or unspecialized levels of skill in order to replace the German workers called to the Wehrmacht.19 The benefits in increased output offered by the use of

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less skilled though certainly not highly motivated labor further highlighted, paradoxically, the significance of handwerk in the war economy. Handwerk offered the reserves of specialized production and technical skill suddenly deemphasized in industry but still vitally important nonetheless. Crucial to this distinct identity, and perhaps just as important to handwerk’s position, was the strength and vitality of its organizations. These, too, had increased in responsibility under Speer. In April 1942, as the organizational component of Goebbels’s call for total war, the Nazis dissolved all industry, trade, and handwerk chambers that had heretofore operated as distinct, if coordinated, entities with a considerable measure of self-responsibility (Selbstverantwortung). They were all subsumed into Gau Economic Chambers (Gauwirtschaftskammern), and each was reduced to a department of the Economics Ministry.20 This loss of organizational autonomy is generally regarded as the final betrayal of Nazi promises to handwerk and the extinction of its organizational independence.21 Indeed, the measure was met with initial opposition by the officials of all the affected organizations; yet it betokened no real reversal of influence or even independence for them.22 First, the personnel in all the organizations remained unchanged by the restructuring. All along, Party membership and “political reliability” had naturally been prerequisites for all such positions, but handwerk officials do not seem to have been appointed on political grounds alone. All, from the highest to the lowest levels, were certified masters of a trade.23 One sample of new appointees in the masons and stoneworkers guild in 1942 showed that all were independent masters who had received their certification before the seizure of power; many had not even joined the Party until 1938.24 Second, in no way did the responsibility of handwerk officials diminish with the change. In fact, under Speer it actually developed further in a way commensurate with the changed and augmented economic role for handwerk just discussed. In reorganizing the German economy to make armaments production the highest priority, Speer employed principles inherited from his predecessor, Dr. Todt, and, even farther back, from Walther Rathenau, Speer’s counterpart during World War I. The guiding ideal was “industrial self-responsibility” that turned the management of different areas of armaments over to leading technical experts. A key objective of this system was to avoid the build-up of a massive war bureaucracy that would only make decision-making cumbersome. Therefore, the experts who planned production were drawn from industry itself. They in turn were organized into a series of main committees and main rings responsible for coordinating the production of different sorts of weapons and the allocation of supplies, respectively. This organization marked a sharp break from that of the first years of the war when arms production was more shallow and ad hoc— trucks for Poland, tanks for France, and airplanes for Britain. This system enabled consumer production to remain only slightly below prewar levels and thus postponed inflicting hardship on the civilian population and the testing of its loyalty. Furthermore, because most arms contracts were only of a limited and uncertain duration, industry could not afford to dedicate itself entirely to armaments.

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Speer discarded this inefficient system and substituted a standardization of production and a division of labor from plant to plant. Factories were assigned specialized production tasks for a guaranteed length of time. Thus each, producing specialized components under guaranteed conditions, could dedicate itself fully to arms production at maximum productivity.25 Because the respective industries themselves furnished the technical experts for the planning of these operations, the role of government administration was greatly simplified. It also meant, however, that the ability of government to deviate from what was in industry’s own interests was limited. These same organizational principles were also applied to handwerk. Along with Speer’s recognition that handwerk’s productive and technical capacities remained overexploited came the resolution to include its officials in the planning process alongside their industrial counterparts. Therefore, in June 1943 he ordered handwerk representatives, chosen in agreement with Reichshandwerkmeister Ferdinand Schramm, to sit on each of the main committees and rings. Their task was to make proposals for the further inclusion of handwerk in the war economy and to see that the committees’ orders in this regard were carried out. The Arms Supply Office was also assigned a permanent handwerk representative to coordinate work with Speer’s committees and rings, and so on down through the Gau and district levels. Speer’s order was accompanied by instructions to all other relevant agencies to extend their full cooperation to handwerk’s representatives.26 The manner in which handwerk officials implemented these orders was fully consistent with their own aims as well as with those of the Organization Speer. Reichshandwerkmeister Schramm in a memo to the individual guilds noted that personal negotiations with Speer had secured the complete participation of handwerk in war production planning, based on the same principles of selfresponsibility that applied to industry. He continued, “The Order of Reich Minister Speer gives full room henceforth for the complete participation of handwerk in the arms economy. It will be up to the representatives of handwerk and the handwerk masters themselves to make full use of these possibilities.”27 The selection of the handwerk representatives to the main committees and rings, Schramm went on, must be made with special care, for a good deal was at stake. Seats on the committees were to be full-time paid positions, which, most importantly, required extensive technical expertise both in planning and in the particular trades involved.28 The same criteria for the selection of handwerk representatives obtained all the way down to the local level (although in practice this proved somewhat more problematic, as we shall see later). What Speer demanded, and what Schramm gave him, were technocratic experts of the same sort and caliber furnished by industry. And, like their counterparts, handwerk experts produced according to the same standards of efficiency and productivity. The principle of self-responsibility appears from all the evidence to have functioned in practice to the satisfaction of handwerk leaders. The placement of its representatives on Speer’s committees did not turn out to be a handy mechanism to preempt and silence handwerk politically while reducing it economically to an

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appendage of industry. The very core of Speer’s system—streamlining administration by the reliance on experts from the various industries and trades—itself precluded marginalizing the handwerk leadership. Speer needed them too much. Indeed, Speer formally empowered Schramm to carry out the structurally formative work of the committees. On fundamental principles, as we have seen, there was no real disagreement between Speer’s technocrats and handwerk officials: handwerk had to modernize and rationalize its production methods to achieve continuously higher levels of productivity. On the need for an economic sector that was distinctly handwerk there was likewise no disagreement. Speer recognized that the expertise of specialized production was even more vital as industry moved in the opposite direction to more and more mass production. Consequently, Schramm had no problem with the responsibilities Speer assigned to him. His first organizational task was to coordinate the various levels of trade organizations (Reichs group handwerk of the Economics Ministry, the various guild associations, down to the Gau masters) to carry out the directives of the committees. (How this functioned in practice will be examined in a moment.) His second, formative, task was to review each individual firm as to its place in the war economy and to take steps to ensure its more effective engagement. Thus, although handwerk organizations lost their nominal autonomy with their amalgamation into the Gau economic chambers in 1942,29 in fact under Speer their power to effect the work of restructuring their Stand actually increased. Their organizations themselves were given the authority to carry out handwerk’s own modernization.30 This experience was to stand them in good stead in the postwar period.

Rationalization Initiatives from Handwerk In working to ensure that handwerk shared the profits of war in a way compatible with a modern industrial economy, its organizations expanded on some of the innovations they had developed earlier. The most important of these were the various cooperative arrangements discussed in the previous chapter, which enabled numerous small firms to compete effectively against industry for government contracts while preserving their own independence. Cooperatives were most suited to and most widespread in the building trades. Although they seemed to offer many advantages to both handwerker and to the economy as a whole, the expansion of cooperatives during the war was not without opposition. On the one hand were individual, small masters who were mistrustful of anything new and fearful of the loss of independence that even temporary participation in a cooperative entailed. This sort of conservatism represented a delicate problem for handwerk groups as well as for the state. Nazi functionaries recognized that the substantial reserves of productive capacity of skilled craftsmen could be lost or greatly reduced if independence were eliminated. As official reports tirelessly pointed out, the multiple shifts that the Nazis were so re-

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luctant to introduce in factories already existed among masters and their families working twelve to sixteen hours per day in their shops. On the other hand, if the productivity of these small firms were not improved, the waste would be just as great, and pressure from the Speer ministry was heavy to improve productivity. Considering work cooperatives to be an effective balance—increased productivity while preserving the incentives of independence—the Economics Ministry debated dictatorial measures to force reluctant masters to join them (threat of work service or being sent to the front, for example). The Ministry rejected state compulsion, however, as ultimately less effective than pressure from handwerk’s own leadership.31 The latter, for their part, had every interest in applying such pressure. Having long been convinced that the future of handwerk lay in raising productivity by modernizing work methods and emphasizing management, leaders recognized in addition that their own strength as organizations depended on an economically strong and competitive membership. The role of the institutions in organizing such cooperative enterprises and in persuading reluctant masters to participate in them without doubt saved many small firms from perishing during the war. But far beyond that, the development and encouragement of these cooperatives, as well as the contractual agreements with industry, essentially and permanently changed the structural position of handwerk in the economy and especially its relation to industry. This happened under the enormous pressure of war and the state, but its supervision and coordination came from handwerk’s own organizations.32 Another source of hesitation, if not opposition, to these cooperative ventures came from the Economics Ministry. Bureaucrats there regarded with suspicion the financial involvement of state or public bodies, which included handwerk organizations, with the private cooperatives as well as their overlap in personnel. What is more, they had ideological misgivings about the loss of identity handwerk would suffer with the adaptation of industrial methods and organization. Officials eventually constructed safeguards to maintain financial separation between handwerk organizations and the cooperatives, and swallowed reservations by treating cooperatives as a necessity imposed by the war emergency. With peace, they reasoned, handwerk’s industrial enterprises would be modified. Whatever misgivings it might have had, however, Ministry officials understood the ways in which cooperatives forced innovation on handwerk. In this regard they had no doubts. An eighty-five-page study of this matter by the Ministry in 1943 concluded that the cooperatives redressed a competitive balance that was not only of great economic benefit to society as a whole, but was also of inestimable social and cultural value. The cooperatives not only enabled masters to raise their productivity level but, even more importantly, forced them to adapt to modern methods of business organization and administration.33 Going farther, the report acknowledged the key role played by handwerk organizations in setting up the cooperatives.34 Underlying the dispute over the value and structure of cooperatives was an organizational struggle for recognition and control by handwerk groups with the

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Economics Ministry. This struggle paralleled the course of handwerk’s economic treatment over the course of the war generally. From its neglect in the first years of the war—from the assumption that it was necessarily less productive than industry and, in any case, only incidental to the war effort—handwerk came to be regarded, especially under Speer, as a crucial component of industrial production. Organizationally, handwerk officials complained that in the early war years they had been treated dismissively by other agencies, especially as far as their economic innovations were concerned. Either the need for handwerk cooperatives was not taken seriously, leaders claimed, or their organizations had no real control over them. Although Ministry officials dismissed such charges, two developments did help improve the position of handwerk groups. One was the increased recognition of the effectiveness of cooperatives,35 and the second was the policies of Speer whose principles of administrative simplification and control by experts worked to the advantage of the handwerk organizations. It simply made more sense for cooperatives to be overseen by their appropriate guilds. The consolidation of various guilds to reflect shifts in the structure of trades (combining the tailor and clothing guilds, for example) perhaps diluted the identity of some trades that no longer had their own guilds. But the restructuring, along with the augmentation of their responsibilities, made handwerk representation more streamlined and powerful. By 1943 representatives generally expressed satisfaction over the current state of their relations with the Economics Ministry and certainly with the Speer organization.36 Organizations emerged in 1943 and 1944 nominally less autonomous but with increased organizational coherence and responsibility for shaping the structure of handwerk.

Handwerk Resistance to Rationalization Handwerk organizations, then, saw eye to eye for the most part with Speer on matters of general policy, and their officials had by 1943 resolved most of their earlier competitive differences with the Economics Ministry. However, the impression that the rationalization measures and the restructuring of handwerk’s relation to industry, formulated from above, were smoothly transmitted to those below would be an oversimplification. In fact, rationalization, and Nazi policy to handwerk generally, met with appreciable resistance in certain quarters. Resistance took several forms. On the passive side, an apathy or lack of cooperation with officials became very widespread by mid-1944 as economic life began to disintegrate under heavy bombing. Many whose shops had been bombed out refused orders to reopen or to work elsewhere.37 Many small masters who believed cooperatives were a threat to their independence simply refused to work for money, preferring instead to barter their services to relatives and acquaintances in exchange for goods.38 This came on top of a widespread cynicism among both handwerker and the public at large with regard to Nazi policy toward the Mittelstand. By early 1943 many saw the ubiquitous closings of small, unproductive

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shops less as rationalization measures—that they in principle supported—than as a deep betrayal of Nazi promises to protect the small proprietor. That Nazi bigwigs ostentatiously flaunted banned luxuries did not help matters.39 More serious than individual dissatisfactions and cynicism, however anxious such grumbling made the Party officialdom, was a structural resistance to rationalization. Many of Speer’s committees met with foot-dragging opposition not from the handwerk leadership, but from middle- or low-level officials both in the organizations and within the Party itself.40 Here lurked functionaries who resisted closing or consolidation actions not only out of a personal sympathy for those affected but, especially in the Party, out of an ideological commitment to small production, regardless of how productive it was. The last bastions of Nazi anticapitalism resided here.41 The committee reports on this problem did not recommend force to effect rationalization; this was to be used only as a last resort. Far more effective, they argued, would be pressure from a more-efficient inspection system with personal visits by committees. Closings should not be made arbitrarily, merely with the view of achieving a quota, but qualitatively according to productivity. To preempt opposition, closings should be rational, quick, and final.42 The tendency in the Speer bureaucracy, as far can be concluded from the documents, was to counter this kind of resistance by a refinement of the Ministry’s own technocratic apparatus and by a greater reliance on the incentives of private ownership and independence. For example, one SS report observed that rationalization programs that steered individual firms toward specialized work were more efficacious than those that merged them into cooperative shops, especially because many small proprietors viewed Speer’s committees as agents of big business.43 Speer’s committees themselves came to similar conclusions: channeling contracts to small shops in a way that forced them to specialize met with little opposition and raised productivity while preserving all the advantages of independence.44 It should again be emphasized that the handwerk leadership worked hand in hand with Speer’s committees on these issues. Cooperation was best achieved on a voluntary basis, both agreed, but ultimately the firms must be brought into line. One handwerk official went so far as to say, “Today small unproductive firms no longer have a justification for existence.”45 A local mechanics’ guild wrote to its head office complaining bitterly that the government had starved them of raw materials and labor and that it blindly favored big firms regardless of productivity. The central guild answered that, contrary to these complaints, Speer’s allotment and administration simplification policies had been the key factor in enabling these trades to increase their productivity in wartime despite their loss of workers. The government closing policy, the central guild office continued, was a painful but necessary means of improving efficiency, and it was the admittedly difficult duty of local guilds to carry it out.46 Schramm wrote in July 1944 that many firms still spread themselves too thin, producing for both the military and civil sectors, while continuing to do repair work. To raise productivity, he argued, firms should be directed into specialized tasks.47

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By the fall of 1944, as the war situation became more desperate and production needs even greater, Speer in no way abandoned his policy toward handwerk. On the contrary, he further intensified it, convinced that with the great changes he had continued or initiated handwerk had developed a necessary and vital role to play in the war economy. Of the opinion that the reserves of skilled productive capacity in armaments could be even more fully exploited, Speer saw two impediments to growth. One was organizational: the coordination of the main committees and rings with the innumerable small and medium-size firms was cumbersome and too ineffectual, in part due to the resistance discussed above. The other was the work methods of handwerker themselves, which Speer considered still too tradition-bound and individualistic. In response he created a Handwerk Production Headquarters, directly responsible to his committees and rings. Its responsibility was to step up the participation of firms in arms production in ways prescribed by Speer’s program. Above all, handwerk was not to produce concurrently with industry but rather must continue the shift to a role as supplier or subcontractor to industry—that is, from a competitive to a complementary relation. Within the individual firms, the Production Headquarters was to oversee rationalization measures using the same methods common in industry: careful regulation of work time, minimalization of wasted effort, and wage incentives for productivity. Taylorism was to come to handwerk. Yet, while handwerk was to adopt industrial methods of rationalization, its independence—still recognized, even this late in the war, as the crucial incentive to productivity—would be left uncompromised and its organizations unmolested.48

Nazism as Instrument of Modernization The experience of German handwerk during World War II evolved over three periods: first, underestimation of handwerk’s importance to the war economy; second, a greater official appreciation of handwerk’s productive value; and third, handwerk fully coming into its own. The first period, from the beginning of the Four Year Plan in 1936 through 1940, was characterized by neglect and a general underestimation of its potential importance to the war economy. Labor employed by handwerk was conscripted into both the Wehrmacht and the Labor Service with little regard for even the short-term consequences for the particular trades in question. Many trades likewise came up short in the allocation of scarce raw materials and in the apportionment of public contracts. In addition, rigid price controls put handwerk at a competitive disadvantage relative to industry, which could better afford to pay the higher wages then common for scarce labor. This policy of neglect, however haphazard it might have been, sprang from a generally held assumption that industry in any particular trade could produce more efficiently than handwerk. This view persisted into the war’s first years in the face of direct evidence to the

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contrary. Thus an efficient handwerk shop might be shut down to free labor and materials while its less productive industrial neighbor continued to operate. In the second period, starting in late 1940, this policy had given way to a greater official appreciation of the productive value of handwerk products and services. The shift had a number of causes. First, although the prevailing economic strategy—founded as it was on the premise that the war would be brief, fought in discrete phases, and could be won with only a shallow level of economic armament—was not to be abandoned until after the beginning of the Russian campaign, it had become apparent even by mid-1940 that the economy as a whole must be made more productive for war. The particular value of handwerk in this regard was first brought to public and official attention after the first British bombing raids on German cities and factories.49 Not only did the raids demonstrate the vulnerability of concentrated production in large factories, but in the matter of repair work small, independent handwerk construction firms were able to form ad hoc cooperatives (arrangements that their organizations had originally helped develop to put handwerk in a better competitive position relative to industry) in order to cope with such emergencies. Handwerk thus offered the skills and flexibility that large, industrial-type construction firms could not match. Handwerk’s political value was also recognized in this connection, for many officials feared public unrest if bomb damage were not promptly repaired (although as it turned out the German public had remarkably more tolerance in this regard than they had feared). In any case, handwerk’s value as a socially stabilizing element of the population for the restive working class, the political importance of its contribution to the consumer economy in a time of shortages (especially with regard to repair), and the need for at least the appearance of fair treatment for this hard-working segment of the population all helped prompt a reevaluation of handwerk’s overall role in the war economy. The Wehrmacht perhaps earlier and more keenly appreciated the advantages that certain handwerk trades could offer. Mobility and flexibility were two obvious virtues to an army rapidly overrunning most of Europe. Handwerk trades that offered these advantages over industry were, to name only three examples, construction (army barracks, including those in concentration camps), uniform cleaning and repair, and motor vehicle repair. While by the midwar period virtually all segments of handwerk were fully employed in the war economy, either directly in armaments production or for the Wehrmacht, or indirectly in services for the civilian sector, it was only after Speer became Minister of Armaments and War Production that handwerk fully came into its own, beginning the third period of German handwerk experience during World War II. What is more, it was during this period that handwerk’s position in the German economy was revolutionized. What Speer did was to consolidate and institutionalize certain structural changes that had been already slowly developing within handwerk generally. The shift in production in certain trades—away from that of a manufacturer of finished goods and toward that of a subcontractor or supplier to industry—was formalized and broadened by Speer

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in his Musterrahmenvertrag, and the cooperative arrangements developed by handwerk were brought even more widely into use. In the first case, handwerk’s relation to industry became complementary, not competitive; in the second, it became able to compete effectively. Among the great variety of trades, overall handwerk participated in the war economy in four ways: (1) the direct production of war goods—generally, as described above, as supplier or subcontractor to industry; (2) the repairing of bomb damage; (3) direct services for the Wehrmacht; and (4) repair work and services for the civilian sector. In each of these areas handwerk possessed particular qualities and skills that made its own form of productive organization and methods particularly appropriate. These were vital economic niches that industry could not possibly fill. However, handwerk did not arrive at the very profitable levels of engagement that it enjoyed in all these areas during the war’s final years by continuing its traditional craft and business methods. The economic imperatives of war (that in a sense were an intensification of trends associated with the rise of industrial capitalism generally), and ultimately the pressures of consciously directed Nazi policy, had accelerated certain revolutionary trends evident even before the war. These were (1) the transformation of production toward a complementary relationship with industry, (2) the tendency toward increased specialization of production, (3) a move away from production altogether in certain trades and into repair work, and (4) the adaptation of such flexible organizational forms as cooperatives, which put handwerk on a better competitive footing relative to industry. All of these trends dovetailed with Speer’s principles of standardization and simplification of production as well as the fullest possible mobilization of all of the nation’s productive forces. The result was a more highly articulated social division of labor, with handwerk assigned to roles for which it was particularly suited. Less prevalent, although by no means entirely gone, was the old-fashioned craftsman who covered all stages of production in an isolated local market. In his place stood a master employing more-modern production and business methods, integrated into a national market, accomplishing one stage of production in a process finished elsewhere, or repairing or installing industrial goods originating far away. Such a person became more of a cog in a national machine—less independent in the traditional sense, but fully employed. Crucial to handwerk’s adaptability during this period, and absolutely instrumental in the preservation of its social identity, were its interest organizations. Two factors were essential to the powerful role they played. The first factor was their sole authority to control training—that is, to determine the course of study and to issue the master’s certificate without which no one could open a shop. Both the Nazis and handwerk leaders used this authority to introduce modern craft techniques and business methods into the curriculum. Modernization and rationalization were the handwerk watchwords of the 1930s and 1940s, as they have been ever since. Vocational schools trained handwerker to operate in a modern market economy. The second factor was the “coordination” of these institutions after 1934, which meant that they wielded enormous power even if that

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authority had as its aim the controlling of this class and the enforcement of measures originating elsewhere. While the dissolution of working-class institutions had eliminated a source of real opposition to Nazism, in the case of handwerk there were really no fundamental differences in policy between its leaders and their ministerial superiors. When differences arose, they were generally confined to disputes over jurisdiction rather than to matters of real substance.50 Although throughout the war handwerk complained continuously that it was being shortchanged in raw material and labor power allocations, leaders were generally highly satisfied with the Speer system. Furthermore, as Speer’s system actually functioned, relying as it did on the self-administration of the various economic sectors, great power and authority was of necessity given to handwerk organizations, just as it was to their industrial equivalents. That the system functioned as effectively as it did is testimony to the congruence of views between handwerk officials and the Speer technocrats. None of the above is meant to suggest that handwerk became fully modernized during these few years. In fact, there were several traditional aspects of handwerk as a productive Stand that gave it a role in modern warfare. There was still a substantial demand in an army and society not yet fully motorized for traditional crafts, such as wheelwright, wagon builder, and wicker weaver (crafts that by the late 1950s would be obsolete). What is more, as craftsmen working for themselves, masters were willing and accustomed to putting in twelve- to sixteen-hour days and seven-day weeks, as were their family members, especially the women. This represented a level of commitment that the Nazis were unwilling to demand from the wage-earning population, but that was readily available in the context of traditional production. Thus handwerk could offer a more productive use of male labor and could engage women in the workforce who would have been left out altogether. Finally, the Nazis believed—as did all governments that succeeded them—that handwerker as a small property-owning middle class constituted a vital stabilizing element in society even in wartime. They provided a quietistic and salutary example to the working class that hard work could pay off in property ownership and social advancement. These traditional aspects of handwerk, however, did not, and do not, constitute a hindrance to its modernization. Only protectionism—a resistance to modernization and an insistence on secured, protected markets—could do that, and, as we have seen, these forces were marginalized or defeated by Nazi technocrats. That being said, however, it must still be recognized that the Nazis did abandon, or betray, the traditional handwerker. These were the craftsmen working with old-fashioned methods and unsophisticated business techniques, who were most threatened by industrial competition and the pressure to innovate, and who in all likelihood were the ones who voted for the Nazis in the greatest numbers in the first place. They, as well as the general public, clearly recognized the hypocritical disparity here between official propaganda and hard reality.51 The reality was that, nostalgic talk of Germanic craft aside, hard standards of productivity were the order of the day.

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Ironically, then, it was during the war—a time of accelerated social and technological change, a time when the demands on productive capacity were the greatest—that this old-fashioned Stand came into its own. As the postwar president of the Düsseldorf Chamber stated emphatically and unequivocally, “Nazism was good for handwerk!”52 The handwerk that emerged from the war was modernized, yet it preserved a social identity as handwerk that was tied to a celebrated tradition extending back to the Middle Ages. Crucial to the success of this most conservative revolution was that handwerk throughout the war, as well as the entire period covered by this study, preserved its organizational and juridical identity. Old methods, even entire trades, became obsolete and fell away, yet the new ones that emerged to take their place were still legally defined as handwerk and so administered. This administrative continuity determined continuity in consciousness as well. A master working with sophisticated electronic equipment could still conceive of himself as partaking of a long, proud tradition and might participate in all its cultural rituals no less than could those in the more traditional trades. This alone was a stabilizing factor of enormous importance. In the struggle within Nazism between the technocrats and the protectors of the traditional Stände, the protectionists were twice isolated. Under the pressure to increase production in order to wage war, most Nazis chose productivity over protection. Even the SS, whose policy in this regard is discussed in chapter 2 above, marginalized protectionism to the occupied territories in the East. Within the Reich itself the criteria the SS set for survival for firms were as productivity-determined as those of any technocrat.53 The true protectionists who remained, mostly, as we have seen, at the Gau level or at the lower levels of handwerk organizations, retained some ability to slow change piecemeal, but they could in no way halt its course. In the context, however, of modern capitalism gaining final ascendancy in German society, traditionalists could fight no more than a rear guard action. Handwerk’s real protectors were, in fact, the technocrats. It was they who helped adapt handwerk to a modern industrial society with its organizations, its juridical identity, and its self consciousness intact. As a further irony, these technocrats were Nazis who in the process of modernizing this segment of German society enabled it to accept what it had refused to accept in the 1920s: industrial standards of productivity as well as industry itself. In this way, then, Nazism itself paradoxically removed one of the key social preconditions for its own existence.

Notes 1. Joachim Fest, Speer: Eine Biographie (Berlin, 1999), 175–183. 2. Naasner, Neue Machtzentren, 195. On Speer’s contribution to building up Germany’s war economy, see Milward, German Economy at War, chapter 4; Herbst, Der Totale Krieg; Gregor Janssen, Das Ministerium Speer: Deutschlands Rüstung im Krieg (Frankfurt and Berlin, 1968);

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3.

4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

16. 17. 18.

19. 20. 21. 22.

Rolf-Dieter Müller, “Albert Speer und die Rüstungspolitik im Totalen Krieg” in Das Deutsche Reich und der Zwiete Weltkrieg, ed. Müller, Bernard R. Kroener, Hans Umbreit, vol. 5/2 (Stuttgart, 1999). In contrast, see Adam Tooze who regards Speer’s accomplishment as “far from miraculous” and stresses the innovations of this predecessors; The Wages of Destruction: The Making and Breaking of the Nazi Economy (London, 2007), 556. On Todt, see Franz W. Seidler, Fritz Todt: Baumeister des Dritten Reiches (Frankfurt and Berlin, 1988). See the works cited elsewhere in this chapter and chapter 2, this volume. Tooze in his important study of the Nazi war economy also mentions handwerk only once, but he does so to assert, contrary to the argument made here, “The Third Reich shrank from a dramatic rationalization of the most backward sectors of its society, peasant agriculture and the craft sector”; Wages of Destruction, 660. East German studies also ignore handwerk, treating the war economy as an expansion of monopoly capitalism; see Dietrich Eichholtz, Geschichte der Deutschen Kriegswirtschaft 1939–1945, Band 1: 1939–1941 (Berlin, 1984). Even Speer in his memoirs refers explicitly to handwerk only once, and that in a footnote; Albert Speer, Inside the Third Reich (New York, 1970), 216, fn4. Speer Ministry memo, late 1943, in BA, R3/1770, Item 37–38 (my emphasis). Speer Ministry memo, late 1943, in BA, R3/1770, Item 37–38. See Speer, Inside the Third Reich, 214. Overy, “Guns or Butter?, 303–311. See Speer Ministry memo, late 1943, in BA, R3/1770, Item 37–38. See “Nachrichten des Reichsministers für Rüstung und Kriegsproduktion,” No. 36, April 3, 1944, 368, in BA, R97II/30. “Reichsminister über verstärkten Einsatz in der Rüstungswirtschaft,” in Deutsches Handwerk, no. 29/30/31, August 6, 1943; in BA, R7/4106, Item 465. See “Nachrichten des Reichsministers für Rüstung und Kriegsproduktion,” No. 36, April 3, 1944, 368, in BA, R97II/30. This is not to suggest that Speer’s approach was apolitical, and it was certainly ruthless. Tooze’s point in this regard is well taken; Wages of Destruction, chapter 17, esp. 552–557. Gurland, Fate of Small Business, 105. Gurland, Fate of Small Business, 105–106. For an important regional analysis of the high value that Speer placed on coordinating production among industrial and smaller supplier firms, which was extremely disorganized before 1942, and the importance of this modernizing process as a precondition for the postwar economic boom, see Jeffrey Fear, “Die Rüstungsindustrie im Gau Schwaben 1939–1945,” in Vierteljahresheft für Zeitgeschichte (VfZ) 35/2 (1987): 193–216. Tooze also recognizes the important role of small suppliers and their representatives in Speer’s system, but does not distinguish handwerk from industrial firms; Wages of Destruction, 564. “Musterrahmenvertrag für die Einschaltung von Handwerksbetrieben in die Rüstungsfertigung,” March 1, 1944, in BA, R3/1770, Item 4–5. “Entwurf einer Anordnung des Chefs des Rüstungslieferungsamtes,” October 1943, in BA, R3/1770, Item 29. Gurland, Fate of Small Business, 106. Similarly, Gerhard Brandt, writing after the war, characterized this relation as “quaisifeudal”; “Der ‘Mythos des Mittelstandes’—Ökonomisch und Politisch,” Frankfurter Hefte 14 (1959): 881–889. Speer memo on the integration of handwerk into the arms economy, June 6, 1943, in BA, R7/4106, Item 444. Chesi, Struktur und Funktionen, 118–119. See Winkler, “Der entbehrliche Stand,” 38–40. Von Saldern is more balanced: Mittelstand im “Dritten Reich,” 36–37. On how the establishment of these Gauwirtschaftskammern corresponded to the interests of handwerk organizations as well as to those of other affected economic sectors and government agencies, see Naasner, Neue Machtzentren, 179–180.

The Speer Ministry, 1942–1945 | 79 23. See Reich Group Handwerk (Reichsgruppehandwerk, R-HW) memo, March 30, 1944, listing handwerk representatives at the Gau level, in BA, R97II/30. 24. See questionnaires in BA, R97I/33. 25. Speer, Inside the Third Reich, chapter 15, esp. 208–209. On Speer’s system, see Tooze, Wages of Destruction, chapter 17; Alfred C. Mierzejewski, The Collapse of the German War Economy, 1944–1945: Allied Air Power and the German National Railway (Chapel Hill, N.C., and London, 1988), chapter 1; and Milward, German Economy at War, chapter 5. 26. Speer memo on the integration of handwerk into the Arms Economy, June 6, 1943, in BA, R7/4106, Item 444. 27. Schramm to all Reich guild associations (Reichsinnungsverbände, RIV), June 30, 1943, in BA, R97II/30. 28. Schramm to all RIV , June 30, 1943, in BA, R97II/30. 29. Chesi stresses this loss of formal autonomy (Struktur und Funktionen, 118), and Winkler sees it as the final proof of handwerk’s “superfluity” (“Der entbehrliche Stand,” 38–40). 30. Speer to Schramm, December 15, 1943, in BA, R7/4106, Item 500. For Schramm’s transmission of these responsibilities to the local level, see Schramm to the RIV, June 30, 1943, in BA, R97II/30. 31. See RWM memo, October 28, 1943, 2–3, in BA, R7/4119, Item 490–492. This rejection of compulsion as a matter of general policy was taken with the view that it would not be the most effective means of achieving the desired ends. When it did not work, the regime, of course, had no other reservations about the use of force. 32. Minutes of meeting of R-HW officials on May 27, 1943; see esp. 12–14, in BA, R7/4119, Item 466–485. 33. Education in modern business methods, accounting, bookkeeping, and so on, had been a feature in Nazi handwerk educational policy since the mid-1930s. Handwerker had also to learn to be entrepreneurs. See chapter 1, this volume. 34. The study is quoted in RWM memo, June 10, 1943, in BA, R7/4119, Item 213. 35. Quoted in RWM memo, June 10, 1943, in BA, R7/4119, Item 213. 36. Minutes of meeting of R-HW officials on May 27, 1943; see esp. 12–14, Item 466–485. For the RWM response and the debate on this meeting, see RWM memo, October 28, 1943, Item 490–492; and RWM memo, November 4, 1943; all documents in this note are in BA, R7/4119. 37. For example, see Propaganda Ministry to RWM, February 8, 1944, Item 166–168. An RWM memo of June 14, 1944 considered coercive measures to prevent bombed-out handwerker from simply wandering off; Item 194–196. Both are in BA, R7/4114. 38. RWM memo, May 3, 1944, in BA, R7/4114, Item 45. 39. Meldungen aus dem Reich, April 1, 1943, 16–20, in BA, R58/182, Item 10–12. Although hair permanents were banned in 1943 because the chemicals were needed for war production (haircutting is a handwerk trade), the wives of Party officials made no attempt to conceal their illegal new coifs. 40. Travel reports by Speer’s Special Committee on Motor Vehicle Repair, July 7 and July 8, 1944, in BA, R97II/23. 41. Special Committee on Motor Vehicle Repair to Speer ministry, July 12, 1944, in BA, R97II/23. 42. peer’s Special Committee on Motor Vehicle Repair to Reich Guild Master (Reichsinnungsmeister) Stupp, July 27, 1944, in BA, R97II/130. Also travel report of July 27, 1944, in BA, R97II/23. 43. SS report on Rationalization in Motor Vehicle Repair, October 20, 1944, in BA, R97II/23. 44. Special Committee on Motor Vehicle Repair to Speer ministry, July 12, 1944, in BA, R97II/23. 45. Report of a meeting on vehicle repair shop closings by District President of the East Prussian Economic Bureau (Oberpräsident der Provinz Ostpreußen-Landeswirtschaftsamt), April 17, 1944, in BA, R97II/23. The speaker was a Gau handwerk master. 46. See RIV des Kfz-Sachsen to central office in Berlin, May 5, 1944, and reply of June 1, 1944, in BA, R97II/23.

80 | From Craftsmen to Capitalists 47. Schramm to Speer, July 28, 1944, in BA, R7/4107, Item 103–105. 48. Speer ministry to RWM, September 29, 1944, in BA, R7/4106, Item 493–496. 49. See R-HW, “Denkschrift über Probleme der Handwerkswirtschaft und der Handwerksorganisation,” April 28, 1944, 5, in BA, R7/4107, Item 75–100. 50. R-HW, “Denkschrift über Probleme der Handwerkswirtschaft und der Handwerksorganisation,” April 28, 1944, 5, in BA, R7/4107, Item 75–100. 51. Meldungen aus dem Reich, April 1, 1943, 16–20, in BA, R58/182, Item 10–12. 52. My interview with Georg Schulhoff, February 1990. Schulhoff was president of the Düsseldorf Chamber (Handwerkskammer Düsseldorf, HWK-Düss.) from 1948 and later member of the Bundestag. As a Jew who was pursued by the Nazis but survived the Third Reich underground in Düsseldorf, Schulhoff clearly had no personal reasons for making this statement. 53. SS to Speer Ministry, November 9, 1944, in BA, R7/4106, Item 497–498.

Part III

The Occupation Period, 1945–1949

The Confrontation with the American Free Market

Chapter 4

THE FIRST STAGES OF THE OCCUPATION AND THE REVIVAL OF HANDWERK INSTITUTIONS IN THE WEST

 The devastation of Germany in 1945 is difficult to imagine for anyone accus-

tomed to the routine and comforts of life in times of peace. It was so extreme that it shocked even Germany’s enemies. During the Potsdam Conference in July 1945, President Truman was deeply shaken after a tour of bombed and battlescarred Berlin with “the long, never-ending procession of old men, women, and children wandering aimlessly along the autobahn and the country roads carrying, pushing, or pulling what was left of their belongings.”1 The physical destruction of six years of war—mines flooded and unusable, industrial plants wrecked, and, even more crucially, housing in rubble and a complex transportation network in shambles—had reduced one of the world’s most advanced economies to a primitive and local one. Currency was virtually worthless and barter quickly replaced it as the normal means of exchange. But the material destruction paled beside the enormity of the human cost. Millions lay dead, while survivors picked through the rubble where their homes once stood. An entire generation had been decimated. Hunger was both a threat and a reality everywhere. Added to this was the moral burden of the most horrendous and uncivilized crimes in the history of the human race.2 Yet it is one more irony of German history that even among these smoky ruins handwerk as a group found itself better off at the end of the Third Reich than it had at the beginning. It is true that the Nazi regime had closed countless small shops without scruple and had demoted their proud owners to the status of wage Notes for this section begin on page 99.

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laborers. Even many of those with their business titles intact faced burned-out shops and useless tools. Almost everyone had to forage for the necessities of daily life and face the specter of famine. But we are speaking here of social groups, not of individuals. However brutal this was, by the even more brutal laws of the marketplace, handwerk as a Stand was stronger in two important ways. First, guided by Nazi policy, especially under Speer, handwerk’s position in the German economy was restructured so that its relation to industry was compatible rather than antagonistic. Second, its institutions emerged from the war with their authority to shape their Stand intact and with a leadership determined to continue the integration of handwerk into a modern competitive economy, even in the face of resistance from their own membership. The capitulation of May 8, 1945, however, placed these institutional gains in doubt. The point to which handwerk had developed had, of course, been under the auspices of, and in conformity with, the interests of the Third Reich. It was the clear intention of the occupying powers to root out and destroy all National Socialist institutions. Yet which institutions should be considered as essentially National Socialist (and which individuals were to be classified as compromised by Nazism)? The answer was by no means clear, and was to become the subject of considerable debate among Germans and among the Western Allies themselves in the coming years. In particular, were the Handwerk Innungen and Kammern, the individuals who led them, and the type of authority the institutions wielded fundamentally Nazi or, if not Nazi, were they restrictive in a way incompatible with the establishment of a stable, parliamentary political system and a free economic life? But the issue as it emerged in the first postwar decade was to be far broader than the immediate problem of denazification. The struggle that developed, as the Americans attempted to dismantle the handwerk system, was between two conflicting visions of capitalism, competition, and freedom. On the one side was an American idealization of the competitive marketplace as the best guarantee not only of higher productivity and greater wealth, but also of individual freedom and political democracy. On the other was a very German corporatism that assigned a key role to corporate bodies in the structuring of economic life and the shaping of individual and collective identity.

U.S. and British Planning for Occupation The way in which handwerk institutions reemerged as corporate bodies with important sovereign powers must be seen against the background of American and British occupation policy.3 Within the U.S. government throughout 1944–1945 the debate on the future of Germany may be roughly sketched as follows. The State Department, backed by a large segment of American big business, was committed to a multilateral, free-trade policy among nations. Only an internationalist world order, free of trade barriers and strengthened by worldwide networks among private business working in cooperation with established labor unions,

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they maintained, could effectively guarantee democracy and world peace.4 This policy stood in obvious contrast to the autarkic, German-dominated economic bloc envisioned by Hitler and German big business (and its Asian, Japan-dominated equivalent), and even to the British and French preference for protected trading relations with countries of their former empires.5 As a domestic corollary to multilateralism, the Justice Department represented the view (developed out of its responsibility for enforcing U.S. antitrust legislation) that all German restrictive business practices, including monopolies and price-fixing cartel agreements, must be smashed. Not only did such arrangements strangle free competition within Germany, the Department argued, but the prewar participation of foreign branches of American companies in such arrangements had even compromised U.S. security. German business must henceforth be conducted according to principles of free and open competition.6 While it was to have only a limited impact on the structure of German industry, in 1948 the American anticartel/monopoly policy, as well as its policy on free trade, was to come head on against the German handwerk system. Although the planners in both the U.S. State and Justice Departments envisioned a strong economic role for Germany in the new internationalist world order, the extent to which the German industrial giants would be broken up, and the precise level of industrial production they would be allowed to achieve, remained a matter of heated controversy within the U.S. government as a whole during 1944–1945.7 The (in)famous Morgenthau Plan represented an extreme position on this issue. First conceived in mid-1944 by Treasury Secretary Henry Morgenthau in reaction to what he considered to be the “reconstructionist” aims of the State Department, the plan foresaw a radical deindustrialization of Germany, the apportionment of certain of its territories to neighboring states, the internationalization of the Ruhr, and the breaking up of the remainder of the former Reich into smaller, pastoral republics.8 Although the Plan received both Roosevelt’s and Churchill’s endorsements for a brief period after the Quebec Conference in September 1944, it otherwise enjoyed no serious or widespread support. Segments of influential opinion in all the Allied nations, including the Soviet Union, recognized that a Germany reduced to agriculture alone would have no chance of supporting itself. Without industry and production for export, Germany would starve. However, quite aside from considerations of humanity, it was politically unthinkable for the Allies to allow such widespread misery in the center of Europe. The inevitable unrest would almost certainly have ugly repercussions on the rest of Europe, which, given the events of the past twelve years, the Allies were rather disinclined to risk. Moreover, to support a deindustrialized Germany with the necessary vast infusions of money would be an untenable burden to impose on taxpayers at home.9 While the Morgenthau Plan had no lasting effect on U.S. policy in Germany— its notoriety was out of all proportion to its actual impact—its influence was reflected in the Joint Chiefs of Staff (JCS) Directive 1067 (hereafter JCS 1067) issued to the U.S. High Command just before surrender in May 1945. JCS 1067

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instructed the Office of Military Government, U.S. (OMGUS), pending further agreement by the Allied Control Council (ACC), to prohibit all production of iron, steel, chemicals, machine tools, radio and electrical equipment, automobiles, or heavy machinery. Manufacture of light consumer articles and the mining of coal were to be permitted, but the military should take no further steps to revive the German economy beyond encouraging maximum agricultural production.10 As the U.S. military government moved in to establish control after surrender, its officers found the Carthaginian peace contemplated by JCS 1067 to be completely unrealistic and impossible to impose. By his own account, General Lucius D. Clay, the military commander of forces in the American zone, was shocked by the extent of misery and devastation he found on his arrival. He was likewise shocked at JCS 1067—“not at its punitive provisions but at its failure to grasp the realities of the financial and economic conditions which confronted us.” His financial advisor, Lewis Douglas, believing that any efforts at economic reconstruction would be useless under such draconian restrictions, resigned in protest.11 In fact, many of the provisions of JCS 1067 were general enough so that considerable leeway was left to the officer in the field, who had little time to be concerned with the refinements of government policy.12 An American officer in Bavaria responded to a journalist’s question by saying, “What’s our policy in Germany? … Brother, I don’t know. … They snow me under with all sorts of papers. How’m I going to read them when I’m doing forty-eleven different things to get this burg running again.”13 In any case, although JCS 1067 was not formally modified until July 1947, few Americans in either Germany or Washington, including General Clay, had any serious intention of fully putting it into effect. American policy as actually implemented day to day was primarily concerned with reviving a German peace economy in the shortest possible time.14 As we shall see, this approach was to hold true for American policy toward handwerk for the first three years, which, although initially influenced by certain preconceptions, soon became highly pragmatic and made extensive use of institutions already in place. It was only later that the conflict between American ideology and German practice emerged. To the extent that the British government ever developed a long-term concept of Germany’s economic future, it in no way embodied the extreme diversity of opinion of American thinking. British officials, guided by a constructive pragmatism, contemplated neither a vindictive deindustrialization of Germany nor a radical reorientation of world trade toward multilateralism. Britain hoped above all to reestablish some of its own eroded prewar position as a major exporter of manufactured goods in a worldwide context of protected trading relations among countries of its Commonwealth and concern about a growth in the power of the Soviet Union.15 The British debate on the specific role Germany was to play ranged as follows: The report of the Malkin Committee in 1943—chaired by John Maynard

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Keynes and reflecting his views developed after World War I that a crippled Germany would in turn damage Britain economically—foresaw Germany’s revival as a major exporting nation (by eliminating discriminatory trade practices) as the linchpin in the reconstruction of Europe, and as Britain’s most important trading partner on the continent. Reparations were to be moderate and taken only if they did not reduce Germany’s capacity to pay for (British) imports.16 The other main influence on British policy was the report issued by the interdepartmental Economic and Industrial Planning Staff (EIPS) in 1944. In contrast to Keynes’s view, the EIPS report laid heavier emphasis on Britain’s economic security through a greater reduction of Germany’s heavy industrial potential. Its centerpiece was a proposal for drastic limits on German steel production (to a maximum of 50 per cent of prewar levels), which would have the effect of severely restricting the amount of heavy industrial output available for export. Germany’s exports would then be effectively limited to raw materials and light consumer articles, and Britain would have room to reestablish its export dominance in heavy industry.17 Yet however great the range of opinion, similar to American policy the British guidelines for its military governors were formulated in general terms, and in the practical administration of day-to-day affairs allowed considerable discretion to the local commanding officer. Thus prior to capitulation the differences between British and American occupation policy were twofold: First, while proposals in both governments ranged from the punitive to a restoration of German prewar economic strength, no one in Britain advocated anything as harsh as Secretary Morgenthau. In actual fact, however, these differences turned out to be minimal for the reasons discussed above, and by the onset of the Cold War in 1947 it was forgotten completely. Of far greater consequence was the difference between the U.S. determination to impose freedom of trade both in international trade and in German domestic economic practices, and the British interest in a more-restrictive Commonwealth system internationally and a greater tolerance for and understanding of German corporate practices domestically.18 This difference was to have enormous repercussions for handwerk. Whereas in the British zone handwerk corporate bodies continued to exercise much the same authority they had during the Third Reich, in the U.S. zone the Americans’ determination to smash this system led in 1948 to a protracted struggle resolved only in 1953. Let us now turn from the background of policy to the first confrontation of the occupation authorities with German handwerk.

The Reestablishment of Handwerk Institutions The revival of handwerk corporate life under occupation began—as did all other forms of German administration—at the local level. Aachen on October 21, 1944, was the first German city to be occupied by the Americans.19 The military authorities took the first step toward reestablishing civilian life by appointing a

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new mayor, a lawyer named Franz Oppenhoff, and charging him with forming a city administration. Because of the American unfamiliarity with handwerk as a distinct occupational group with its own institutions of self-administration, Oppenhoff decided provisionally to create a handwerk department within city government, rather than risk a U.S. veto by immediately allowing the reestablishment of a fully autonomous chamber. Under the directorship of Walter Bachmann (a master mechanic and machine builder), the department energetically set about creating the conditions to enable the revival of handwerk economic life in a city with a scattered population, damaged workshops, and no post, telephone, gas, or electricity. The way Bachmann did this is significant. He found out who the remaining masters were and matched them with useable buildings, machines, and tools that he placed in trust so they could be productively used pending resolution of their legal ownership. The procurement of scarce raw materials was handled in a similarly cooperative fashion and likewise under the auspices of the department.20 Thus from the very beginning the handwerk organization in Aachen (even as it was still formally a department of city government) made itself indispensable to handwerk existence—no individual firm could survive without it—as well as to a city administration seeking to revive economic life. The Americans had two problems with this approach. As an economic strategy, the revival of so many small shops actually encountered resistance from the Americans, who had assumed that the physical rebuilding and the provision of daily necessities (especially food) would be best accomplished by larger economic units. Likewise, military authorities balked at handwerk’s efforts to reestablish trade guilds and a chamber fully independent from city government to oversee this. They not only viewed such groups as outmoded but objected to their independence from government.21 However, the success of handwerk in the production and distribution of food and other essentials gradually convinced the American authorities of the efficacy of the German system,22 and by January 1945 the mayor was able to persuade them to allow the reestablishment of the guilds and an autonomous chamber.23 The elections that followed of guild and chamber leaders (including Bachmann as chamber president) constituted the first free and secret elections held in Germany since 1932.24 From the Aachen experience the U.S. occupation authorities accustomed themselves to the economic function of German small business and the role played by their organizations in coordinating commercial life.25 Thus elsewhere in the American zone, guilds and chambers were able to establish themselves separate from government more rapidly than they had in Aachen, although in some districts it took time for the chambers to become independent from the industry and trade chambers (Industrie- und Handelskammern; IHK).26 In Cologne27 the Americans wanted to perpetuate the combination of handwerk, industry, and trade, as well as labor in one umbrella economic chamber. However, they were persuaded to allow separate handwerk chambers by Konrad Adenauer, who regarded handwerker as conservative, socially stabilizing property owners who would be materially and politically most effective in reconstruction with their

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own independent institutions.28 In all other districts in the U.S. zone, guilds29 were allowed to continue operations uninterrupted after being purged of their Nazi leadership.30 Thereafter, whether the handwerk chambers31 were able to escape from the Gau economic chambers immediately (as they did in Darmstadt and Wiesbaden) or had to remain for a longer time departments in umbrella chambers along with industry and trade (as in Kassel and Frankfurt) was a matter of local conditions and power struggles32 rather than a result of American policy preferences.33 In any case, by early 1946 all chambers had reestablished full autonomy, and by mid-year the regional umbrella organizations for both guilds and chambers34 had likewise been reconstituted in the U.S. zone.35 In districts first occupied by the British, the reestablishment of handwerk institutions did not suffer the kind of delays they did in Aachen and Cologne, both because the British were not as unfamiliar as the Americans with handwerk’s economic role and because they had no particular ideological reservations concerning the regulatory powers of its corporate bodies. Thus in Münster, captured in April 1945, the British immediately instructed the chamber “to carry on its work in the old accustomed manner.”36 Yet except for an initial American hesitancy, for the first three years of occupation the British, French, and U.S. policies with regard to handwerk were quite similar. The speed with which its chambers were able to reachieve full independence from the industry and trade chambers depended more on local conditions than on the particular policy of the occupation forces.37 We will now turn to an analysis of handwerk’s revival in more detail.

The Revival of Handwerk Institutions in the West The resurgence of local handwerk organizations as autonomous bodies and their reemergence as powerful organs of self-administration with extensive regulatory authority was favored by circumstances particular to the devastated German economy and to the nature of the occupation. The Allies in general quickly became very dependent on German expertise and upon preexisting administrative structures. There were several reasons for this. Experts with extensive knowledge of conditions in Germany, especially at the local level, were in short supply in all the Western military governments. John Gimbel’s local study of the American occupation of Marburg, for example, found that in seven years of occupation “the detachment had only two men who were adequately trained in German history, politics, and culture.”38 In the U.S. Army as a whole only 5 percent of the American personnel knew enough German even to read a newspaper.39 More importantly, as a matter of policy motivated by pure pragmatism as well as a desire to build up German self-responsibility as a prelude to democracy, Western Allied military governments confined themselves to a supervisory role on most matters and left the execution of policy and the administration of day-to-day affairs to German agencies.40 Additionally, the development of German institutions at the local level was favored by the Allied understanding at Potsdam that the partition of the former

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Reich into zones of occupation was to be merely temporary and that eventually Germany would again be administered as a political whole. In practice this meant that district boundaries and administrations would be highly provisional, and even that in the beginning no central zonal governments would be established, since their functions were to be performed jointly by the ACC in Berlin.41 Only as Soviet–Western relations hardened did the zonal administrations take on a more permanent character. The resulting vacuum in central government (zonal and national) led necessarily to a greater focus and reliance on local institutions, both governmental and nongovernmental. This reliance became all the greater given British and American immediate economic and political goals. First and foremost was the need to provide for the basic needs of the population while avoiding inflation and unrest and at the same time reducing Germany’s industrial capacity and its ability to wage war. In addition, in order to rebuild the nation’s infrastructure, planners wanted to divert resources away from production of consumer goods and toward the basic and capital goods industries. These opposing goals—a focus on infrastructure and a (limited) satisfaction of consumer needs—in a context of massive physical destruction, the scarcity of goods of all kinds (aggravated by Allied reparations and dismantling policies), a suffering and deprived population, and the instability of the Reichsmark (RM), required a very delicate balance. The accomplishment of these goals could in no way be entrusted to the free market. The Allied solution, therefore, was simply to take over the system of labor allocation, wage/price controls, rationing of food and raw materials, and rent and housing controls that they had inherited from the Nazis.42 Given that the Allies’ decision was to continue Nazi economic controls, the logical choice to administer them was the same bureaucracies that had done so under the Third Reich. Handwerk chambers and guilds were perfectly placed to take advantage of this situation. Their functionaries as a rule possessed a far more detailed knowledge of economic conditions in their localities than did city officials, having continued their work of administering Nazi economic controls, often without interruption, through the very end of the Third Reich.43 Thus as economic administrative units, the chambers quickly became indispensable to the occupation authorities—as did their industrial equivalents, the industry and trade chambers.44 With time, their usefulness only deepened, because the experience of dealing with the military government made chamber officials in turn indispensable to individual firms. The chambers quickly assumed a key authoritative role in administering the local economy.

Economic Functions of Handwerk Organizations The most important role played by handwerk organizations in the controlled economy was the allocation and distribution of raw materials. Since virtually every commodity was in short supply, and therefore rationed, and since the liveli-

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hood of every handwerker was obviously directly dependent on their availability, this role quickly became a vital one. In the British zone, although general priorities of allocation were set by the German distric economic bureaus45 in consultation with the military governments (for example, whether bakers or metal workers would be entitled to more coal, how many bicycles per dorf ), the evaluation of the needs of each individual firm was made by the local guilds. In general, a shop owner submitted an application for a particular raw material to his local guild, which in turn forwarded it along with its own recommendations to the appropriate government offices, which approved allotments according to their own guidelines. When the district’s shipment arrived, it was the guild’s responsibility to allot shares to the individual shops.46 The same system existed with only slight regional variations in the U.S. zone.47 Even as the Americans in 1946 contemplated stripping guilds and chambers of these responsibilities along with their other corporate powers sometime in the future, planners advised that for the present they continue to “be authorized to break down overall quotas allocated to establishments of handicraft in accordance with respective directives.”48 The clear organizational advantages that this authority offered in these extraordinary circumstances caused the Americans to put aside their ideological reservations about the handwerk system for the duration of the crisis. Handwerk chambers also participated in the control of wages and prices. They represented handwerk on the wage/price boards and advised officials on the need for price changes. The responsibility of monitoring prices was entrusted to them. They also advised military governments and German authorities on transport and trade matters that affected them, as well as on the licensing of new firms.49 The implications of its role in the allocation of raw materials in fact extended far beyond that of a merely administrative role for handwerk institutions. The guilds and chambers were the only representation for individual masters whose livelihoods were at stake in the competition with industry for limited resources. As an official of the Düsseldorf Chamber put it, “The provision of raw materials is above all a political question. … It is the task of handwerk organizations to secure for handwerk its due portion from the amount released to the German economy by the occupying powers.” The problem was, the speaker continued, that not only were the British unfamiliar with German handwerk, but that many of the economic experts in the German bureaucracy were drawn from industry and thus tended to give handwerk short shrift.50 The complaint that handwerk received less than its fair share of raw materials relative to industry was to be repeated constantly during the occupation period.51 But under these conditions, where the guilds and chambers represented the only hope of legally obtaining materials vital to existence, handwerk institutions proved themselves increasingly indispensable to their members as representatives of their interests, just as they proved themselves indispensable to the military governments and German officials for their knowledge of the local economy. The officials of handwerk organizations did more than act politically as the representatives of their members’ interests vis-à-vis industry. Since the allotment

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of raw materials any one firm received was in large part a factor of how efficiently the firm used them, the organizations also worked with their members to increase their ability to compete for those raw materials. They did this by encouraging masters to modernize. As a trade union representative in the American zone put it, “In order to make the best possible use of the few, available raw materials, the handwerk chambers must give the highest priority to the task of working out of proposals for the reordering of handwerk and for rationalization. This would include not only the introduction and application of machines and technological innovations, but far more all what comes under the concept of rationalization.” The representative added to these the further use and development of cooperatives and a system of cheap credit as means for improving handwerk’s competitive position.52 Chambers also encouraged members to produce articles for export, because they would then receive preferential treatment in raw materials and fuel.53 Thus the conditions of material scarcity and government controls provided powerful incentives for handwerk organizations to advocate, and for masters to adopt, measures to modernize and rationalize their shops. In this regard, developments of the occupation period represent a striking continuity with the effects of Nazi policy during the war years. Just as had been the case during the Third Reich, the pressing need to make the most of scarce materials and the strong controls placed on the economy in the occupation period had led neither to the marginalization of handwerk as an economic sector nor to the diminution of its institutions. Quite the opposite took place. Their importance was strongly augmented during both periods, and in neither case did conditions lead to a rigidification of old-fashioned handwerk practice but rather to its qualitative modernization. Instead, prodded by their institutions, masters reacted by modernizing their production and management techniques.54 Moreover, even as organizations competed with industry for scarce raw materials, in no way did this political battle imply a return to the views typical in the 1920s in which handwerk saw itself locked in a life-and-death struggle for existence with industry. The two sectors still had sometimes competing political and economic interests, but handwerk no longer considered them irreconcilable.55

Denazification in Handwerk The application of the Allied policy of denazification to handwerk paralleled that toward German people and institutions generally. It responded to the twists and reversals of Allied policy and reflected the tension between policy as formulated and policy applied. Denazification affected handwerk institutions as well as the master-owners of individual shops and their employees. While in one sense the policy in the Western zones amounted to little more than a temporary disruption in the overall continuity of personnel, in another important sense it could be argued that denazification, more broadly defined in the context of Allied occupation policy as a whole, had indeed a long-term impact on German handwerk.

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The Allied goal, agreed on in the wartime conferences, was to remove those forces that had given rise to Nazism and militarism in the first place. Whereas in the Soviet zone this came to mean a fundamental restructuring of property relations, in the West the focus was restricted to the purging of individuals.56 As formulated in the American JCS 1067, this meant, “All members of the Nazi Party who have been more than nominal participants in its activities, all active supporters of Nazism or militarism and all other persons hostile to Allied purposes will be removed and excluded from public office and from positions of importance in quasi-public and private enterprises.”57 In the first months following capitulation the top priority of military government officers was the restoration of essential services, and purges were limited to government officials.58 Yet in the fall of 1945 after a number of strongly critical articles appeared in the American press denouncing the return of alleged Nazis to positions of responsibility, the British and American military governments radically stepped up the pace of denazification and extended its reach to the private economy.59 There were two major difficulties with its implementation, however. The first was the vexing question of who was a Nazi. As military commanders soon discovered, neither Party membership, date of joining the Party, or even activities during the Third Reich (assuming they could be determined with any accuracy) proved reliable guides to a person’s political dependability and certainly not to how well he did his job. Second, the great majority of commanding officers in the military governments were decidedly unenthusiastic about denazification. These men were “temperamentally interested in ‘getting things done’ not in tearing down,” and in rebuilding local government they were naturally drawn to stable elements like the Catholic church and conservative civil servants, people who, if without an activist Nazi past, were not always especially democratic.60 Handwerk chambers and guilds, as part of the extended governing apparatus of the Third Reich, the Gau economic chambers were specifically designated as “Nazi-affiliated institutions” to be purged.61 The extent to which purging took place differed according to the policy and practice of each occupying military government. These were least disruptive in the French zone because authorities there did not consider Party membership in itself sufficient grounds for dismissal.62 Thus in the Koblenz chamber only five out of twenty-eight employees were let go.63 In the British zone many chambers suffered a greater loss as those officials who had joined the Party before April 1, 1933, or who were otherwise especially culpable, were removed and replaced by politically unencumbered (unbelastete) individuals.64 The policy, however, was extremely unevenly applied from district to district according to the interpretation of policy by local commanders and the availability of qualified replacements.65 It was in the American zone during the first months that denazification was pursued most consequentially, but also unevenly and with sharp differences of opinion among military officials.66 In some areas personnel turnover was close to 100 percent.67 By early 1946 the Western Allied military governments began to shift the responsibility for administering denazification onto German shoulders. German

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tribunals (Spruchkammern) tried individual cases subject to military government review, based on the famous form containing 131 questions pertaining to every aspect of past political activity (Fragebögen) that every German over eighteen years of age had to complete.68 As the scope of denazification widened to include individual masters and journeymen, handwerk organizations functioned as administrators to military and German officials at the same time that they continued to represent the interests of their membership. They were assigned the task of supplying the military with lists of all firm owners in their districts, distributing the Fragebögen and of informing their members on details of procedure.69 Chambers continued to speak up for the interests of individual members and, in difficult cases, appealed to them to furnish the required paperwork so they might argue their causes more effectively.70 How did handwerk officials view this issue? Indeed, organization officials recognized full well that Nazism had made deep inroads among individual handwerker. For example, in discussing the difficulty in assembling a committee to examine candidates for the master title, the vice-president of the Düsseldorf Chamber remarked, “The difficulty in finding suitable men lies exclusively in the fact that a great portion of handwerker as well as the majority of the teaching staff were members of the Nazi Party, and therefore are out of the question for use in school or advanced vocational training.”71 The president of the Cologne Chamber (Handwerkskammer Köln, HWK-K), Bernard Günther, later acknowledged the same problem even as he claimed that his own district was exempt from it. “By and large we can say that, unlike handwerk in middle and North Germany and in other districts, handwerk in Cologne remained free of National Socialism.”72 Yet for the most part officials’ primary concern was reinstating experienced and capable colleagues who had been purged in what they considered a pointless, even harmful exercise of Allied zeal and naïveté as to real German conditions.73 The executive committee of the Düsseldorf Chamber narrowly defeated a proposal to refuse business licenses to all former Nazi Party members.74 The Darmstadt Chamber bitterly observed, “Almost daily the military government ordered the removal of a head official [Obermeister] of many years’ standing because in the view of the victor power he is politically intolerable.”75 With the important exception of the Nuremberg and other related trials, a more thoroughgoing denazification in the Western zones foundered on lack of enthusiasm of ground-level military officers, the shifting of priorities of the Western allies with the onset of the Cold War, the reality that the loss of so many experienced individuals, however compromised their background, would disrupt German economic revival, and, not least, the strong and virtually universal opposition of Germans themselves. Thus, the abandonment of denazification by the end of the 1940s and the return of so many individuals to their former positions may be considered an acknowledgment of its failure, and one that embittered many contemporaries who worked on the policy’s implementation. But if we recall that most Allied planners considered denazification less an end in itself than a means to the greater end of a democratic and stable Germany integrated

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in the West, then we might modify this conclusion. As Jeffrey Herf, reflecting on the clear opposition of the German people to continued denazification and the response of the political parties to this obvious popular will, has observed, in this regard democracy triumphed over justice.76

The Flight into Independence A phenomenon all over Germany in the first postwar years were the lines in front of city business licensing offices of people waiting to apply to open up their own shops. Because economic chaos made other types of work harder to come by, and because the system of barter exchange reduced the utility of money wages, many sought the relative security of an independent existence. This impulse was well founded, for although problems of scarcity plagued business of every kind, demand for handwerk products exceeded supply all throughout this period. The wide range of people who applied reflected the social confusion of the postwar world: handwerker whose shops had been closed, or combed out, by the war-time rationalization measures or those who for the same reasons had been prevented from ever opening one; skilled workers or engineers unemployed because of diminished industrial output, and especially because of the ban on arms production; widows of masters killed in war who wanted to continue their husbands’ trades; Nazi Party members whose political past made it (temporarily) difficult for them to find work in the civil service; demobilized soldiers who had learned a trade in the Wehrmacht and now wanted to set up their own shops; and finally, those who wanted a business as a front for black market activities.77 A special case among those fleeing into independence were the refugees and expellees (Flüchtlinge and Ausvertriebene). These were ethnic Germans living in the East—including territories lost to Poland, Czechoslovakia, Poland proper, the Soviet Union, Hungary, and elsewhere—who had either fled the Red Army or who, according to the terms of the Potsdam Agreement, were driven from their homes toward the West. The total number of those driven from the East in the period from 1944 to 1948 amounted to about 12 million78—or, in words of one historian, a restoration of “the ethnic map to something like the status quo ante A.D. 1200.”79 Among them were many handwerker who expected to pick up again as independent craftsmen in their new homes. While the great increase in handwerker (as well as retailers) seeking to become independent had historically been a typical response to economic downturn,80 the period 1945–1948 contained distinct features besides the extraordinary situations of the individuals involved: specifically, the existence of various restrictions on the free market. First, the chambers since 1935 had wielded the authority to restrict entrance to a trade to those who could demonstrate their competency in it. Second, applicants faced the complex web of economic regulations inherited from the Nazis. Although the changing legal situation will be discussed in greater detail in the next chapter, it may meanwhile be noted that these restrictions in-

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cluded the ability to demonstrate an economic need for the shop in the particular locality (the Bedürfnisprüfung), proof of “personal reliability,” and proof of access to a reliable supply of raw materials. While the military governments and German administrators alike agreed on the economic rationale for such regulations (i.e., spreading scarce resources too thin would inhibit growth), their restrictive character posed dangers. Given that the great influx of handwerker represented a possible threat in the form of unwelcome competition to those already established, the latter as well as their institutions could attempt to see that these regulations were applied in a protectionist manner, that is, simply to exclude outsiders and protect themselves from competition. This was clearly quite common, and some local studies of the American zone have provided numerous examples of the old-fashioned, anticompetitive mentality prevailing in city halls, whose primary objective was to protect the turf of those already in business rather than to foster economic growth. Hans Woller relates, for example, how in Ansbach the mayor’s industrial committee, which included one handwerker and several small store owners, frequently refused the licensing of new businesses, although they would have created numerous new jobs. The ostensible grounds for denial were most commonly the shortage of raw materials, but simple fear of competition and change were often the real reasons.81 Similarly, Christoph Boyer argues that in Bavaria the handwerk chambers behaved in an obstructionist fashion to oppose new business or simply “lost” applications. Local guilds, under heavy pressure from their members, sometimes behaved in the same way.82 Protectionism certainly was far from dead. Franz Bauer refers to an “exaggerated dread of competition” among the Mittelstand generally, amounting to “a near phobia that discharged itself in public polemics against the throngs of [small business] applicants.”83 Handwerk sources, too, reflect the critical reaction of its institutions to the influx. One handwerk newspaper in the British zone argued that a “deterioration in the quality of work as a result of the strong trend toward independence” had taken place,84 while another warned of “an unhealthy overfilling of handwerk.”85 A closer look, however, reveals that while local guilds, and certainly many individual masters, may have felt ambivalent about the increase in their ranks, the chambers (which included all trades in a larger region) and the national organizations represented in this matter, as they did in many others, an effective force for inclusion and modernization against the often protectionist tendencies of their membership.86 In thinking about this issue one must be careful to distinguish, too, between the economic emergency measures that were intended as merely temporary restrictions and the corporate authority that handwerk expected to be permanent. The former—including the certificate of need, of personal reliability, and proof of raw material supplies—were, it seems clear, often applied in an exclusionist manner by local handwerker in a context of great scarcity where anxiety concerning competition indeed had a rational basis. In this regard, then, it should be kept in mind that handwerk’s resistance to the newcomers was probably no more pronounced than it was among the population at large,87 and in

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fact its corporate powers to control entrance to a trade seem to have been applied fairly liberally to refugees. The latter qualifications—the requirement that handwerker go through a proper course of training and have a master title issued by a chamber—were not invoked in a protectionist way to keep the numbers of handwerker low, nor do Boyer or Woller cite any such examples. Handwerk’s behavior in this period in no way betokened a return to the protectionism of the past in the sense of demanding special privileges as a Stand to protect them from the forces of the marketplace. The matter of the refugees was especially sensitive. Everyone was, in theory, sympathetic to the plight of fellow Germans driven from their homelands under conditions of indescribable hardship. To the extent that enormous pressure existed to be sensitive, at least in public, to the suffering of the refugees (and it is clear that the Allies expected this as well88), the matter had political implications. In the case of handwerk, the granting of permission to a refugee to open his or her own shop was complicated by the fact that many arrived not only without the tools of their trades, but also without any certification of ever having passed the master (or journeyman’s) examination or of having owned a shop. It was the chambers that had the authority to evaluate the qualifications of such refugee applicants and grant exceptions to the requirement for proper certification. Their officials grappled with the problem of balancing generosity with that of sorting out the legitimately qualified. The leadership of the Düsseldorf Chamber, for example, recognized already in the fall of 1945 that the refugee problem was going to be enormous and would require a response from handwerk. One member of the executive committee argued simply that their ranks should be closed and a ban on all new applications be instituted. But within the Düsseldorf Chamber expressions of such rigid exclusionism were isolated and met with no resonance.89 Instead, committee members agreed that refugee handwerker, as well as other victims of war, should receive some sort of special or preferential consideration, but were concerned that the level of skill would be compromised, and the reputation of handwerker with it, if those without proper qualification were allowed in. Various proposals for examination of credentials were debated, and at one point the committee resolved that refugees lacking papers would have to work in the shop of an established master for a period of one year to demonstrate competency. But this was reversed after only a few months, presumably because it was unworkable and overly burdensome.90 Overall, the policy of handwerk organizations toward refugees appears indeed to have been generous. According to a study conducted by the Ministry of Economics in 1950, “handwerk organs of self-administration have succeeded in administering the Certificate of Competency [Große Befähigungsnachweis] so as to take full account of the needs of the refugee population.”91 Similarly, Ernst Detlef Balzar concludes, “In general there was no resistance to the integration of refugees on the part of handwerk organizations. On the contrary the handwerk chambers made every effort to enroll expellees in so far as any possible basis could

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be established. Thus the granting of exceptions [to the requirement for paper certification] was handled with extraordinary generosity.”92 The decisive factor in determining whether a handwerker from the East—or anywhere else for that matter—became independent was not exclusionism by established masters but rather the amount of capital needed to start up a business. Numerous regional studies of the economic integration of refugees point to the unavailability of cheap credit as the most important reason why more of them had not been able to set up their own shops. This was reflected in the trades in which refugees did establish independence (i.e., precisely those that required the least amount of capital, such as textiles and small consumer articles), while trades that required a higher initial capital investment (e.g., food trades like butcher and baker and many metal trades) were underpopulated.93 The primary goal for handwerk leadership, then, in its use of the qualification requirements during this period was not to exclude outsiders. While obstructionism clearly did occur, especially at the local level, it cannot be considered typical of the top leadership. This would have been politically awkward, practically difficult, and would have seriously jeopardized the organizations’ relations with the occupation authorities.94 Of far greater importance to them was that the crisis be dealt with and guided through handwerk institutions or at least strongly influenced by them. Thus the chambers in North-Rhine Westphalia acted already in 1945 to set up a regional clearinghouse to examine and guide handwerker coming from the East.95 Likewise, they supported a government proposal to establish repair workshops for such large public employers as the railroad and the post/telephone that would employ refugee handwerker. While government firms of this type were generally vigorously opposed by handwerk, which preferred strictly private ownership, the chambers in this case insisted only that the people employed or contracted there be qualified handwerker—that is, that the chambers continue to have control over who was defined as a master.96 That handwerk organizations used their corporate powers to determine qualifications to practice a trade not in a protectionist manner but as an element of control was also the view of the Economics Ministry study cited above: “As to the overall outcome of the integration of refugees, it may be said that the appropriate consideration for the refugee population in the opening of new handwerk firms is promoted by the Certificate of Competency, because it could be used in this sense as an instrument of regulation.”97 If indeed it was the view of individual handwerker, for protectionist reasons, that licensing procedures should be strict, it was also the view of German officials, and of the British and eventually the American authorities, as a means of regulation of scarce economic resources. Finally, in order to evaluate the existence of exclusionism in the exercise of handwerk corporate authority, one must listen to the voices of the refugees themselves. Refugee publications pointed out repeatedly that the number of refugeeowned firms and refugees employed in handwerk was well below their percentage of the population. For example, in Bavaria (U.S. zone) where refugees formed 18.6 percent of the population, they constituted only 12.4 percent of those em-

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ployed in handwerk that required no master certificate and only 5.9 percent of all firm owners that did require a master certificate or permission from the chamber. In Schleswig-Holstein (British zone), refugees formed 32.2 percent of the population, yet were only 23.5 percent of handwerk employees and 12.6 percent of master-owners.98 But the refugee publications in no way blamed handwerk corporatism and the requirement of the certificate of competency. On the contrary, they maintained that the proportion of exceptions granted to refugees lacking papers (which was 50 percent) was extremely generous.99 Rather they blamed the disadvantages that refugees as opposed to local established masters faced in the lack of living and work space, relatives to help, and above all the restrictions on credit that, they complained, made the founding of a new firm virtually impossible.100 As we will see in more detail below in chapter 8, refugees fundamentally approved of the principles of handwerk corporatism and the maintenance of the high levels of skill they had achieved before being driven from their homes, and they were convinced that the chambers were treating them fairly. Their complaints were directed at the lack of credit for capital investment, claiming that this lack was the responsibility of the state.

Notes 1. Harry S. Truman, Memoirs. Vol. 1: Year of Decisions (Garden City, N.Y., 1955), 341. 2. For conditions of daily life in postwar Germany, see Christoph Kleßmann, Die doppelte Staatsgründung: Deutsche Geschichte 1945–1955 (Göttingen, 1982), chapter 2; Saul K. Padover, Experiment in Germany (London, 1946); Richard Bessel, Germany 1945: From War to Peace (New York, 2009), chapter 7. 3. Since a central purpose of this study is to examine the resolution of the crisis between handwerk and industrial capitalism, I am omitting any discussion of handwerk in the Soviet zone and in the later German Democratic Republic. Within the Western zones, as we will see, it was British and American policies toward handwerk that formed the main context for artisanal economic, political, and organizational activity in the occupation period, with French policy conforming in large part to that of the British. 4. Volker Berghahn, The Americanisation of West German Industry 1945–1973 (New York, 1986), 33–39, 263. For a historical overview of the Wilsonian origins of this position, see Bruce Kuklick, American Policy and the Division of Germany: The Clash with Russia over Reparations (Ithaca, N.Y., and London, 1972), 1–18. 5. Alan Kramer, The West German Economy, 1945–1955 (New York and Oxford, 1991), 40, 48. 6. James F. J. Gillen, Deconcentration and Decartelization in West Germany, 1945–1953 (1953); Kramer, West German Economy, 42. 7. James C. Van Hook, Rebuilding Germany: The Creation of the Social Market Economy, 1945– 1957 (Cambridge, UK, 2004), 21–34; Berghahn, The Americanisation of West German Industry, 84ff. 8. Morganthau outlined his proposasl in Henry Morgenthau, Jr., Germany Is Our Problem (New York and London, 1945). See also Wilfried Mausbach, Zwischen Morgenthau und Marshall: Die wirtschaftspolitische Deutschlandkonzept der USA 1944–1947 (Düsseldorf, 1996), 41–80.

100 | From Craftsmen to Capitalists 9. Kramer, West German Economy, 42–45. 10. Gen. Lucius D. Clay, Decision in Germany (Garden City, N.Y., 1950), 18. For the text of Joint Chiefs of Staff (JCS) 1067, see Beate Ruhm von Oppen, ed., Documents on Germany under Occupation 1945–1954 (Oxford, 1955), 13–27. On JCS 1067 as a compromise between the State Department and Morgenthau, see Thomas A Schwartz, “Germany into Europe: United States Policy in Germany, 1945–1949,” in 1945 in Europe and Asia: Reconsidering the End of World War II and the Change of the World Order, ed. Gerhard Krebs and Christian Oberläder (Munich, 1997), 41–42; Mausbach, Zwischen Morgenthau und Marshall, 97–102; KlausDietmar Henke, Die Amerikanische Besetzung Deutschlands (Munich, 1995), 112–114; Earl F. Ziemke, The U.S. Army in the Occupation of Germany 1944–1946 (Washington, D.C., 1975), 98–106, 209–214. 11. Clay, Decision in Germany, 18. See also, Clay to McCloy, June 16, 1945, in Jean Edward Smith, ed., The Papers of General Lucius D. Clay: Germany 1945–1949, Vol. 1 (Bloomington, Ind., and London, 1974); Robert Murphy (a career diplomat who served from 1940 as Roosevelt’s personal envoy and in 1945 as political advisor to Clay), Diplomat among Warriors (Garden City, N.Y., 1964), 250–251; John H. Backer, Priming the German Economy: American Occupational Policies 1945–1948 (Durham N.C., 1971), 36–38. 12. Clay, Decision in Germany, 18–19. For the almost “planned” chaos of the occupation allowed by JCS 1067 and the compromises it contained, see Kuklick, American Policy, 53–56. 13. Drew Middleton, The Struggle for Germany (Indianapolis, Ind., 1949), 33–34, quoted in Kuklick, American Policy, 188. 14. Kuklick, American Policy, 186; Wolfgang Krieger, General Lucius D. Clay und die amerikanische Deutschlandpolitik 1945–1949 (Stuttgart, 1987), 98; John H. Backer, Die Deutschen Jahren des General Clay: Der Weg zur Bundesrepublik 1945–1949 (Munich, 1983), 52, 69, 101–102, 110; Bessel, Germany 1945, 283; van Hook, Rebuilding Germany, 34–44. 15. Kramer, West German Economy, 48; Ulrich Schneider, “Britische Besatzungspolitik 1945: Besatzungsmacht, deutsche Exekutive und die Probleme der unmittelbaren Nachkriegszeit, dargestellt am Beispiel des späteren Landes Niedersachsen von April bis Oktober 1945” (unpublished diss.). University of Hanover, Hanover, 1980) 17–18. 16. Lothar Kettenacker, Krieg zur Friedenssicherung: Die Deutschlandplannung der britischen Regierung während des Zweiten Weltkrieges (Göttingen and Zürich, 1989), 394–409; Albrect Tyrell, Grossbritannien und die Deutschlandplannung der Allierten 1941–1945 (Frankfurt, 1987), 175, 181–182; Alec Cairncross, The Price of War: British Policy on German Reparations 1941–1949 (Oxford, 1986), 17–33; Kramer, West German Economy, 49–52; van Hook, Rebuilding Germany, 23–24. 17. Kramer, West German Economy, 52–53; Kettenacker, Krieg zur Friedenssicherung, 411–434; Tyrell, Grossbritannien, 210; Cairncross, Price of War, 49–53. 18. For a discussion of contrasting American and British practice with regard to economic policy in Germany, see H. H. E. Hymans, “Anglo-American Policies in Occupied Germany 1945– 1952” (unpublished diss., London School of Economics 1960), chapter 2. 19. Ziemke, U.S. Army in the Occupation of Germany, 144–148. Although Aachen lies in the part of Germany that had been designated as Britain’s zone of occupation, American troops were the first to arrive there and were thus the city’s administrators for the first few months after its surrender. 20. Kursbestimmung im Handwerk: Handwerkskammer Aachen 1900–1945–1975 (Aachen, 1975), 32–33. 21. According to the report of Saul K. Padover, a captain in the Psychological Warfare Division, Supreme Headquarters Allied Expeditionary Force, “In short, under the nose of MG [military government], the Oppenhoff administration was setting up the framework of an authoritarian, hierarchical, bureaucratic, corporate fascism—a type of Staendesstaat that even the Nazis had rejected.” Padover, Experiment in Germany, 222. 22. Kursbestimmung im Handwerk (Aachen), 33.

The First Stages of the Occupation and the Revival of Handwerk Institutions in the West | 101 23. Detlef Perner, “Die ‘Reorganisation’ der Handwerkskammern in der britischen Besatzungszone nach 1945,” in Wirtschaftspolitik im britischen Besatzungsgebiet 1945–1949, ed. Dietmar Petzina and Walter Euchner (Düsseldorf, 1984), 259. 24. Kursbestimmung im Handwerk (Aachen), 34. 25. Oppenhoff came under heavy criticism for other reasons by some American authorities who considered his administration to be a conservative Catholic clique, insufficiently anti-Nazi, and undemocratic. (Oppenhoff was frankly authoritarian and chose a staff of likeminded men.) The military, in turn, came under heavy criticism from the American press. Oppenhoff was assassinated on March 22, 1945, by an SS “Werewolf ” squad on Himmler’s orders. For his administration and its political consequences, see Henke, Die amerikanische Besetzung Deutschlands, 266–297; Ziemke, U.S. Army in the Occupation of Germany, 181–184; Lutz Niethammer, “Die amerikanische Besatzungsmacht zwischen Verwaltungstradition und politischen Parteien in Bayern 1945,” VfZ, 15 (1967): 172–177. 26. The handwerk chambers had been combined with the industry and trade chambers (Industrieund Handelskammern, IHK) into the umbrella Gau economic chambers in 1942. See chapter 3, this volume. 27. Like Aachen, Cologne was part of the zone designated as British but first occupied by the Americans (on March 7, 1945). 28. See Handwerk, Brücke zur Zukunft. 75 Jahre Handwerkskammern in Deutschland (Cologne, 1975) 126; cited by Perner, “Die ‘Reorganisation’ im Handwerk,” 273, fn22. 29. Guilds were the lowest level of organization, representing individual trades locally. Unlike the chambers, guilds did not possess extensive regulatory powers over their membership. This made their reestablishment in the eyes of the occupation authorities much less problematic. 30. Chesi, Struktur und Funktionen, 162. 31. Handwerk chambers are districtwide organizations covering all trades. They have the legal status of corporations of public law, which grants them certain sovereign powers in the regulation of the trades. In the hierarchical scheme of handwerk organizations, the chambers supervise the guilds. 32. In some areas the IHK were reluctant to let “their” handwerk chambers go; see Detlef Perner, Mitbestimmung im Handwerk? Die politische und soziale Funktion der Handwerkskammern im Geflecht der Unternehmerorganisationen (Cologne, 1983), 89. 33. 50 Jahre Dienst am Handwerk, 1913–1963 (Frankfurt, 1963), 25–26. 34. The district handwerk associations (or Kreishandwerkerschaften) are districtwide associations of guilds of all trades and are subject to the authority of that district’s chamber. The Councils of Chambers of Handwerk (Handwerkskammertage or HWKT were, during this period, the zonal-wide associations of handwerk chambers. 35. Chesi, Struktur und Funktionen, 162–166. 36. Translated by myself from the German [“die Arbeit in altgewohnter Weise fortzusetzen”]; quoted in Westdeutscher Handwerkskammertag (WDHT), Geschäftsbericht 1986 (Düsseldorf, 1987), 49. 37. Perner, Mitbestimmung im Handwerk, 89. 38. John Gimbel, A German Community Under American Occupation: Marburg, 1945–52 (Stanford, Calif., 1961), 38. Gimbel also cites the rapid demobilization of soldiers after Victory in Europe Day and the American policy of rotating military government officers at least once a year (three and one-half months was the average stay of a military governor in Marburg) as reasons for the heavy reliance on German officials and civilian employees (Gimbel, A German Community, 39–40). See also Frank Ninkovich, Germany and the United States: The Transformation of the German Question since 1945 (Boston, 1988), 29; Ziemke, U.S. Army in the Occupation of Germany, 442; William E. Griffen, “Denazification in the United States Zone of Germany,” Annals of the American Academy of Political and Social Science, vol. 267 (January 1950), 68; John Willoughby, Remaking the Conquering Heroes: The Postwar American Occupation of Germany (New York, 2001).

102 | From Craftsmen to Capitalists 39. The French and British were not much better prepared; only the Soviets seem to have been well staffed with qualified personnel; see Kleßmann, Die doppelte Staatsgründung, 71. 40. For example, see “Six Months Report: 4 January–3 July 1946,” OMGUS-Berlin District, 38: “Except for a general supervision exercised by Military Government, complete responsibility for maintaining control over prices and rationing has been placed on the German administrative agencies by order of the Allied Kommandatura for Berlin.” Also Clay to McCloy, September 16, 1945; Clay to War Department, September 18, 1945; in Smith, Papers of General Lucius D. Clay, vol. 1, 77, 82–83. See also Henke, Die amerikanische Besetzung Deutschlands, 983–984. 41. Kleßmann, Die doppelte Staatsgründung, 74. For the problems the Hesse chamber had keeping step with constantly shifting district boundaries, see 50 Jahre Dienst am Handwerk, 20–28. 42. For a more detailed description of Nazi economic controls and how the Allies continued them, see Nicholas Balabkins, Germany under Direct Controls: Economic Aspects of Industrial Disarmament, 1945–1948 (New Brunswick, N.J., 1964), chapters 6–7. The effectiveness of the controls under the Allies, however, was considerably reduced because popular support for them no longer existed as it had during the war either out of ideological conviction, patriotic support for the war, or simple fear of punishment; see Karl Hardach, The Political Economy of Germany in the Twentieth Century (Berkeley and Los Angeles, Calif., 1976), 102–103. 43. Perner, “Die ‘Reorganisation’ der Handwerkskammern,” 257–258, 260; Chesi, Struktur und Funktionen, 135. 44. On the analogous role played by the IHK, see Kleßmann, Die doppelte Staatsgründung, 114– 117; Werner Plumpe, Vom Plan zum Markt: Wirtschaftsverwaltung und Unternehmerverbände in der britischen Zone (Düsseldorf, 1987); and Ingo Tornow, “Die deutschen Unternehmerverbände 1945–1950” in Vorgeschichte der Bundesrepublik Deutschland, ed. Josef Becker, Theo Stammen, and Peter Waldmann (Munich, 1979). 45. District economic bureaus (Bezirkswirtschaftsämter) were set up by the British in their zone in early 1946. The bureaus assumed some of the state-administrative functions that handwerk chambers and the IHK had exercised during the Third Reich—to which the British had objected—and at the same time relieved the Land economics einistries of some of their burdens. Although the handwerk as well as the industry and trade chambers played more of an advisory than a direct decision-making role under the British than they had during the Third Reich, it seems that the chambers’ evaluation of the needs of each individual firm carried great weight. Neither the handwerk nor the industry chambers objected to this change; in fact, they welcomed the diminishing of these quasistate functions so they could concentrate on their role as interest organizations. See Regierungsbezirk Düsseldorf memo, “Funktionelle Entwicklung der Bezirkswirtschaftsämter und ihre Arbeitsmethodik”; and memo to Wirtschaftsministerium Düsseldorf, February 4, 1947; Nordrhein-Westfälisches Hauptstaatsarchiv, Düsseldorf (HstAD), BR 1049, no.5. 46. For application procedures in detail, see Kreishandwerkerschaft Duisburg, Informationsdienst Nr. 11, September 30, 1946, §§ 18–32; copy in HStAD, BR 1049 no. 5. 47. Memo from Großhessisches Staatsministerium (State Ministry of Hesse) to Zentralamt für Wirtschaft (ZAW) in the British zone, May 15, 1946, in BA, Z1/434, Item 116. 48. Minutes of OMGUS working committee, “Organization of Chambers of Handicraft” meeting, July 9, 1946, in BA, Z1/102, Item 42. 49. Kreishandwerkerschaft Duisburg, Informationsdienst no. 11, September 30, 1946, § 2–IX; also WDHT, Geschäftsbericht, 45, 50. The functions of handwerk organizations in the American zone generally paralleled those in the British zone; see Chesi Struktur und Funktionen, 166. 50. Minutes of the general meeting (Vollversammlung) of HWK-Düss., on July 11, 1946, 5; in HWK-Düss., folder “Vollversammlung 1946 bis 1948” (emphasis in original). 51. The complaint could be heard in all the Western zones. See “Grundsätzliche Forderungen des Handwerks” in Handwerkswirtschaftliche Informationen, Hanover, June 8, 1947; copy in Archive for Christian Democratic Policy (Archiv für Christlich-Demokratische Politik, ACDP),

The First Stages of the Occupation and the Revival of Handwerk Institutions in the West | 103

52.

53. 54. 55.

56.

57.

58. 59.

60.

61. 62.

I-020/005/3; “Unsere Rohstoffstelle des Handwerks” in Hessisches Handwerk (1:1), May 10, 1948, 3; “Sozialpolitische Umschau” in Nouvelles de France, Konstanz, September 10, 1948. Otto Klette (trade union representative for Großhesse) to Dr. Möller, Labor Office of the Länderrat (states’ council), Stuttgart, May 6, 1946, in BA, Z1/434, Item 122–125. Since journeymen were organized in the same unions as industrial workers, union leaders had a direct interest in the competitive position of handwerk. Kreishandwerkerschaft Duisburg, Informationsdienst no. 11, September 30, 1946, § 8; copy in HStAD, BR 1049 no. 5. In chapter 7 I will discuss in greater detail the role of the leadership in forcing handwerk’s modernization. For example, leaders recognizing handwerk and industry’s interdependence fiercly opposed the continued dismantling of factories. See minutes of HWK-Düss. general meeting, July 11, 1946, HWK-Düss., folder “Vollversammlung 1946–1948”; and Innungsdienst der Kreishandwerkerschaft Duisburg (3:6), July 30, 1948, copy in HStAD, BR 1049, no. 5. See also minutes of the HWK-Düss. general meeting, July 2, 1948, HWK-Düss., folder “Vollversammlung 1946–1948.” For general treatments of denazification, see Mary Fulbrook, History of Germany 1918–2000: The Divided Nation, 2nd ed. (Malden, Mass., 2004), 116–123; Kleßmann, Die doppelte Staatsgründung, 78–92; Clemens Vollnahals, Entnazifizierung: Politische Säuberung und Rehabilitierung in den vier Besatzungszonen 1945–1949 (Munich, 1991), 7–64; Steven Remy, The Heidelberg Myth: the Nazification and Denazification of a Germany University (Cambridge, Mass., 2002), chapter 5. JCS 1067 § 6c text in von Oppen, Documents on Germany under Occupation, 17. On precapitulation American planning for denazification, see Lutz Niethammer, “Entnazifizierung” in Bayern: Säuberung und Rehabilitierung unter amerikanischer Besatzung (Frankfurt, 1972), 31–68. For British planning, see Jörg D. Krämer, Das Verhältnis der politischen Parteien zur Entnazifizierung in Nordrhein-Westfalen (Frankfurt, 2001), 35–53; Jill Jones, “Eradicating Nazism from the British Zone of Germany: Early Policy and Practice,” German History, 8, no. 1 (February 1990): 145–162; Ian Turner, “British Policy towards German Industry, 1945–9: Reconstruction, Restriction or Exploitation,” in Reconstruction in Post-War Germany: British Occupation Policy and the Western Zones, 1945–55, ed. Turner (Oxford and New York, 1989). Imgard Lange, Entnazifizierung in Nordrhein-Westfalen (Siegburg, 1976), 16–17. Ziemke, U.S. Army in the Occupation of Germany, 386. The new policy was embodied in the hastily written and much criticized U.S. Military Government Law no. 8 (“Prohibition of Employment of Members of Nazi Party in Positions of Business other than Ordinary Labor and for other Purposes”) of September 26, 1946. For text, see Ruth Hemken, ed., Sammulung der vom Alliierten Kontrollrat und der Amerikanischen Militärregierung erlassenen Proklamationen, Gesetze, Verordnungen, Befehle, Vol. 2 (Stuttgart, 1956). Law no. 8 was repealed as of May 10, 1948. Griffen, “Denazification in the United States Zone,” 68. See also Joseph F. Napoli (Chief of Denazification Division, Office of Military Government for Bremen), “Denazification from an American’s Viewpoint,” Annals of the American Academy of Political and Social Science, vol. 264 (July 1949), 118; Marshall Knappen, And Call it Peace (Chicago, 1947), 127; Harold Zink (former chief historian of the U.S. High Commission for Germany), The United States in Germany 1944–1955 (Princeton, N.J., New York, Toronto, 1957), 151; Anonymous (a German anti-Nazi lawyer), forward by Alvin Johnson, “Denazification,” Social Research 14, no. 1 (March 1947): 61–74. According to one American officer, “If all Nazis had been exceedingly unpleasant and rude, denazification would have been easy”; quoted in Ziemke, U.S. Army in the Occupation of Germany, 331. Lange, Entnazifizierung, docs. 85–91 (89); Niethammer, “Entnazifizierung“ in Bayern, 349. Reinhard Grohnert, Die Entnazifizierung in Baden 1945–1949: Konzeptionen und Praxis der “Epuration” am Beispiel eines Landes der französischer Besatzungszone (Stuttgart, 1991), 64;

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63. 64. 65. 66.

67. 68.

69.

70. 71.

72.

73. 74. 75. 76. 77.

78.

79.

Klaus-Dietmar Henke, Politische Säuberung unter französischer Besatzung: Die Entnazifizierung in Würtemberg-Hohenzollern (Stuttgart, 1981), 72–76. John, Handwerkskammern im Zwielicht, 166–167. Handwerkskammer Flensburg 1900 bis 1975, 210–211 Lange, Entnazifizierung, 16–17, 31. Armin Schuster, Die Entnazifizierung in Hessen 1945–1951: Vergangenheitspolitik in der Nachkriegszeit (Wiesbaden, 1999), 37 (for the analogous role played by the IHK, see 283–286); Rainer Schulze, Unternehmerische Selbsverwaltung und Politik: Die Rolle der Industrie- und Handelskammern in Niedersachsen und Bremen als Vertretungen der Unternehmerinteressen nach dem Ende des Zweiten Weltkrieges (Hildesheim, 1988). John, Handwerkskammern im Zwielicht, 166–167. Gimbel, American Occupation of Germany, 104–106. Ziemke, U.S. Army in the Occupation of Germany, 308–310. “The Law for the Liberation from National Socialism and Militarism” was the legislation that provided for the passing of responsibility to the Germans. For text, see Regierungsblatt der Regierung Württemberg-Baden, Stuttgart (April 1,1946), 71–92. See memo from the Dortmund Chamber, “Personalbereinigung in der Privatwirtschaft” of October 17, 1945; and minutes of conference with chamber president and the Dortmund mayor, October 20, 1945; both reprinted in Lange, Entnazifizierung, 163–164 (for text of the questionnaire (Fragebögen), 420–445. Mitteilungen der Handwerkskammer Köln, no. 1, January 1, 1946, §§ 3–4. Minutes of the executive committee (Vorstand) of the HWK-Düss. of August 29, 1945, 3; HWK-Düss., folder “Vorstandssitzung 1945/46.” The speaker was Georg Schulhoff, elected chamber president in 1948. Schulhoff, who was Jewish and survived Nazi purges by remaining underground in Düsseldorf throughout the war, seems to have been one of few, if not the only, handwerk official to have raised this issue. Vollversammlung am 21. August 1948 mit Tätigkeitsbericht (Cologne, 1948), 14. Günther said that 22 percent of Cologne’s masters had been Nazi Party members. Bernard Günther (1906– 1981), one of the most important figures in postwar handwerk, was politically active during his time as a journeyman in the youth movement of the Center Party and was a member of the Christian trade union. In 1935 he passed his master’s examination as an electrical installer and founded his own firm. After the war he became president of the Cologne Chamber (Handwerkskammer Köln, or HWK-K) as well as a member of the Wirtschaftsrat (economic council or WR) der Bizone and, from 1949 to 1975, a member of the Bundestag. Beiträge zur Geschichte des Osnabrücker Handwerks, 457; Schulze, Unternehmerische Selfsverwaltung und Politik, 439–440. Executive committee minutes of the HWK-Düss., November 22, 1945, HWK-Düss., folder “Vorstandssitzung 1945/46.” The vote was six to four. Quoted in John, Handwerkskammern im Zwielicht, 167–168. Jeffrey Herf, Divided Memory: The Nazi Past in the Two Germanys (Cambridge, Mass., 1997), 208. Hans Woller, Gesellschaft und Politik in der amerikanischen Besatzungszone: Die Region Ansbach und Fürth (Munich, 1986), 264–265; also Christoph Boyer, “‘Deutsche Handwerksordnung’ oder ‘zügellose Gewerbefreiheit,’” Das Handwerk zwischen Kriegswirtschaft und Wirtschaftswunder,” in Von Stalingrad zur Währungsreform: Zur Sozialgeschichte des Umbruchs in Deutschland, ed. Martin Broszat, Klaus-Dietmar Henke, and Hans Woller (Munich, 1988), 434. Kleßmann, Die doppelte Staatsgründung, 39–44. See also Alfred M. De Zayas, Nemesis at Potsdam: The Anglo-Americans and the Expulsion of the Germans: Background, Execution, Consequences, rev. 2nd ed. (London, 1979). Arnold Toynbee and Veronica M. Toynbee, eds., The Realignment of Europe (London, 1955), 7. This was in addition to other refugees and displaced persons such as released soldiers, POWs, concentration camp inmates, and others who could not return to their homes. Here for the sake of simplicity I will use the term refugee throughout.

The First Stages of the Occupation and the Revival of Handwerk Institutions in the West | 105 80. This same flight into independence (Flucht in die Selbständigkeit) had also been a feature of the Great Depression of 1929. 81. Woller, Gesellschaft und Politik, 270–272. 82. Boyer, “Deutsche Handwerksordnung,” 439–442. On guild resistance to the integration of refugees in handwerk, see Ernst Detlef Balzar, “Entwicklungen im Handwerk,” in Die Vertriebenen in Westdeutschland: Ihre Eingliederung und ihr Einfluss auf Gesellschaft, Wirtschaft, Politik und Geistesleben, ed. Eugen Lemberg and Friedrich Edding (Kiel, 1959), 173. 83. Franz J. Bauer, Flüchtlinge und Flüchtlingspolitik in Bayern 1945–1950 (Stuttgart, 1982), 335– 336. 84. Mitteilungen der Handwerkskammer Köln, January 1, 1946, § 1. 85. “Der goldene Boden,” Mitteilungen der Handwerkskammer Münster, April 1, 1947. 86. For example, Bauer relates how during a speech to a general meeting by the president of the Mittelfranken chamber in 1946 the membership interrupted with “thunderous applause and cries of approval” to what they thought was his expression of skepticism as to the level of qualifications of refugee applicants. In fact the president was urging a liberal policy of evaluating those applicants. Bauer, Flüchtlinge und Flüchtlingspolitik, 336, note 302. 87. The obstructionism illustrated by Woller includes numerous examples from small industry and retail as well as handwerk; Gesellschaft und Politik, 264–281. 88. General Clay, for example, was horrified at the German suggestion that the food rations for refugees be reduced to those of all other Germans; see Clay, Decision in Germany, 100. 89. Minutes of the executive committee meeting of the HWK-Düss., November 8, 1945, HWKDüss., folder “Vorstandssitzung 1945–46.” 90. Executive committee minutes of HWK-Düss. for meetings of December 13, 1945, June 6, 1946, and October 24, 1946, HWK-Düss., folder “Vorstandssitzung 1945/46.” 91. “Die Auswirkungen einer uneingeschränkten Gewerbefreiheit im Handwerk”; report by the Federal Minister for Economics, Ludwig Erhard, sent to Konrad Adenauer September 26, 1950, 21, in BA, B102/9144b-2 (referred to hereafter as “BMWi report-9/26/50”). This conclusion was borne out by the ministry’s statistics. In the British and American zones combined, the percentage of refugees who became independent handwerker (19.2 percent) was only slightly below the percentage of refugees in the population at large (20.1 percent). The breakdown by zone is as follows: In the American zone the proportion of the population who were refugees was 18 percent, while the proportion of handwerker who were refugees was 21.3 percent. For the British zone the figures were 21.7 percent and 18.5 percent, respectively. The figures Chesi cites for the British zone show an even more favorable situation for refugees: 17.2 percent refugees in the population at large and almost 20 percent newly opened shops owned by refugees (Chesi, Struktur und Funktionen, 145). The proportion of refugee-owned shops of all handwerk firms (newly opened and already existing) was much less advantageous to refugees. According to the Refugee Interest Association (Interessengemeinschaft Heimatvertriebenen) handwerker in Bayern, in the British zone 4.7 percent of all shops were refugee owned while 16.5 percent of the population were refugees, and 5.2 percent in the U.S. zone where 18.4 percent were refugees. “Heimatvertriebenes Handwerk und Gewerbefreiheit,” in Mitteilungsblatt der Hauptausschusses der Flüchtlinge und Ausgewiesenen in Bayern (hereafter Mitteilungsblatt), 2 Jhrg., no. 21 (October 20, 1950), 9. 92. Balzar, “Entwicklungen im Handwerk,” 173. Chesi comes to the same conclusion (Struktur und Funktionen, 145). 93. Helmut R Kollai, Die Eingliederung der Vertriebenen und Zuwanderer in Niedersachsen (Berlin, 1959), 70–71; Gerhard Albrecht, Die Wirtschaftliche Eiegliederung der Heimatvertriebenen in Hessen (Berlin, 1954), 173; Ingeborg Esenwein-Roth, Die Eingliederung der Flüchtlinge in die Stadtstaaten Bremen und Hamburg (Berlin, 1955), 81–82, 85; Erwin Müller, Die Heimatvertriebenen in Baden-Württemberg (Berlin, 1962), 149; Gertrude Stahlberg, Die Vertriebenen in Nordrhin-Westfalen (Berlin, 1957), 154. See also Theo Beckermann, Auslese, Wachstum und Differenzierung im Modernen Handwerk (Essen, 1960), 19. Only one study, that of West Ber-

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94.

95. 96. 97. 98.

99.

100.

lin, mentions obstructionism by business organizations in the granting of licenses and fear of competition among those already established among small business, including handwerk: Hans Joachim von Koeber, Die Heimatvertriebenen und Flüchtlinge aus der Sowjetzone in Westberlin (Berlin, 1954), 106. HWK-Düss executive committee minutes, meeting of June 6, 1946, HWK-Düss., folder “Vorstandssitzung 1945/46.” Officials were well aware of the lack of sympathy for handwerk corporatism in circles of the American military government and endeavored to avoid giving rise to great numbers of complaints regarding denied applications that could be used as grounds for its abolition; Balzar “Entwicklungen in Handwerk,” 173. HWK-Düss. executive committee minutes, meetings of November 8, 1945 and November 22, 1945, HWK-Düss., folder “Vorstandssitzung 1945/46.” HWK-Düss. executive committee minutes, meeting of June 6, 1946, HWK-Düss., folder “Vorstandssitzung 1945/46.” BMWi report-9/26/50, 22. “Nur 6 Prozent der selbständigen Handwerker,” Mitteilungsblatt 2 Jhrg. no. 19 (October 1, 1950),7; “Dem Bevölkerungsanteil nicht entsprechend,” in Mitteilungsblatt 2 Jhrg. no. 27 (December 20, 1950), 6. “Vertriebene und die Handwerksordnung,” Mitteilungsblatt 2 Jhrg. no. 22 (November 1, 1950), 5–6. The refugee press reported positive cooperation with handwerk chambers on other matters as well; see “Eingliederung des Handwerks,” Mitteilungsblatt 2 Jhrg. no. 8 (April 15, 1950). “Heimatvertriebenes Handwerk und Gewerbefreiheit,” 9. These put refugee handwerker at a disadvantage in applying for Marshall Aid as well. The article represented the views of the Interessengemeinschaft Heimatvertriebener Handwerk. On this refugee organization see Bauer, Flüchtlinge und Flüchtlingspolitik, 280–301.

Chapter 5

THE LEGAL CONSOLIDATION OF HANDWERK CORPORATISM IN THE BRITISH ZONE

 The corporate powers of handwerk institutions and the regulatory authority

they exercised during the war economy, then, carried over with little change or interruption into the controlled economy of the occupation. In fact, the particular circumstances of this period—scarcity and economic controls—enabled the organizations to deepen their authority and thus make themselves indispensable both to government and military authorities as well as to their own members. The tendency did exist, especially among individual handwerker and at the most local organizational level, to use this authority for protectionist or anticompetitive ends. However, the decisive and predominant motivation for the actions of handwerk organizations and their top leadership was to consolidate their own institutional authority in the face of the potentially critical military governments and public opinion. This required a certain amount of responsible or pragmatic behavior and the repression of some of the more retrograde impulses of their membership.1 Yet despite the increased importance that their responsibilities in the controlled economy gave handwerk organizations, no one expected, or within handwerk even wanted, economic controls to continue. It was self-evident to all that the restrictions were to be no more than provisional and that with the expected currency reform a free market of goods and services would return. Handwerk, just like all other business, looked forward to the end of scarcity and with it the end of economic planning. However, there was one feature of Nazi commercial regulation carried over to occupation controls that handwerk absolutely did not want to see abolished, Notes for this section begin on page 119.

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and this was the power to control entrance to the trades by means of the certificate of competency (the Große Befähigungsnachweis; see chapter 2, this volume). For handwerk the legislation of the Nazi years represented gains of inestimable importance. The powers of self-administration that this legislation conferred had increased the political influence of the organizations and augmented their bargaining power vis-à-vis other social groups. More subtly, the enhanced authority of the institutions had helped to define handwerk in all its variety as a distinct Stand with its own traditions and work ethic and thus helped to confer on it an increased dignity and self-respect. Above all, control of the vocational training system gave organizations the specific means to introduce rationalized production and capitalist managerial techniques to a Stand more noted for stubborn traditionalism than innovation. In the history of handwerk during this period its modernization and the authority of its corporate institutions go hand in hand.

Issues of Deconcentration and Decartelization As we have seen, in all the Western zones handwerk organizations succeeded in reestablishing themselves as independent bodies and continued to exercise the important authority won during the Third Reich. However, despite Allied permission to resume operations as before, there were as yet no legal guarantees that this would be any more permanent than the economic controls themselves were expected to be. Commercial law in general, and that regulating and defining handwerk in particular, remained in the immediate postwar period an ad hoc mixture of Weimar- and Nazi-era codes and customary practices. The essential problems around which this issue centered were the matters of denazification and democratization. All the Allies were determined to root out institutions and practices that in their view had contributed to the rise of National Socialism or had been otherwise essential to it. Allied denazification policy, examined in chapter 4, focused on the removal of suspect individuals from political and economic life. With regard to reforming Germany’s economic structure, the Allies were determined to break up excessive concentrations of economic power that, in their view, had contributed to the rise of Nazism. This resolution was contained in the Potsdam Agreement and aimed in particular at cartels and other price-fixing or monopolistic arrangements that restricted free competition and that had long been common, even normal, practice in Germany and Western European industry. Among the Western Allies, however, great tensions existed over the extent to which their Allied denazification policy should be carried out. Generally speaking, the British lacked the strong trust-busting tradition of the Americans and indeed were afraid that the American obsession with decartelization and deconcentration could impede German economic recovery by creating in place of the gigantic trusts successor enterprises with insufficient resources to be competitive. The British were also more inclined to tolerate large nongovernmental organiza-

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tions with considerable regulatory authority, like the chambers. They were also at times even prepared to tolerate industrial price-fixing if its abolition would impede economic recovery. The Americans, by contrast, were strongly committed to “free enterprise”—that is, to smaller economic units free from protectionist arrangements that might shield them from healthy competition—and were convinced that this system was not only economically more efficient but also more conducive to the growth of political democracy.2 The resolution of the issue of deconcentration and decartelization with regard to industry was central to the European Coal and Steel Community and to the foundation of the common market. It is an interesting and complex story well treated elsewhere.3 At first glance, it would not seem that Allied policy here would be a matter relevant to handwerk since its shops would hardly seem to be “excessive concentrations of economic power.” However, as we shall see in chapter 6, the Americans in particular would indeed come to consider handwerk corporate authority to be a constraint on economic freedom. In addition, since its corporate authority was a goal attained only during the Nazi period, there was considerable anxiety in handwerk circles that the Allies might force its abolition on these grounds alone. Handwerk’s conundrum was how to keep the letter of the Nazi law while convincing the Allies that that law contained nothing essentially Nazi—that it represented continuous and traditional practice, when in fact these “traditions” were innovations of 1933–1935. Since the British view was more compatible with German practice in this area, there turned out to be a far greater degree of continuity for handwerk in the British and French zones, and its organizations there succeeded by the end of 1946 in reestablishing a permanent legal basis for their authority. How this was accomplished is the subject of the following section.

The Handwerk Ordinance of 1946 The success of handwerk in the British zone in holding on to the gains made during the Nazi period was due to a combination of organizational cohesion, political pragmatism, shrewd public relations, and a British willingness to see corporate economic bodies as compatible with democratic institutions. In June 1946 the British military government, with a view to impending economic reforms, instructed the German Economic Advisory Board (Zentralamt für Wirtschaft; ZAW)4 to prepare a report on basic questions of state-economic organization, including the self-administration of the industrial and handwerk sectors.5 Handwerk organizations by that time were already well positioned to exert their influence on this report because three months earlier the chambers of the British zone had been permitted to combine in order to found a peak organization with its headquarters in Hanover. Thus handwerk already had the institutional apparatus in place to coordinate its interests and effectively represent them to both the British and German authorities.6

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The way toward a successful passage of a handwerk law was further cleared by a shift within the ZAW itself. Whereas in early 1946 the ZAW had shown itself singularly unwilling to accommodate itself to handwerk’s organizational demands, by midyear, due to handwerk’s more effective representation of its own interests as well as to the support of the ZAW’s socialist leader, Viktor Agartz, the ZAW had come to support handwerk very strongly.7 The ZAW report on handwerk as well as its draft for the new law were in fact written by officials closely associated with handwerk,8 and the law eventually adopted by the British on December 69 followed its language virtually word for word. This law was the first great victory for the organizations in the postwar period. “The Ordinance on the Organization of Handwerk of December 6, 1946 laid the foundation for the new currents and developments [in handwerk] and at the same time became a milestone in the development of German handwerk law.” This was the judgment of handwerk institutions on the fortieth anniversary of the law’s promulgation.10 The law not only confirmed in all essentials the legal gains made during the Nazi period, but it also contained innovative sections providing for one-third representation of journeymen on the chambers’ executive committees, thus anticipating the “codetermination” later adopted by certain industries and helping to set the tone of handwerk’s new strategy of social partnership. The December 6, 1946, Handwerk Ordinance (hereafter the 1946 Ordinance) perpetuated the following important features of Nazi law. First, it confirmed the legal status of the chambers (as well as of their regional councils, the Handwerkskammertag) as corporations of public law. This legal category, which has no real equivalent in Anglo-Saxon law, confers a considerable corporate authority of self-administration on institutions representing an occupational group as well as extensive powers of control over how its members conduct their businesses. Even though overseen by government, corporations of public law in Germany enjoy regulatory autonomy unknown in this country.11 Second, and of essential importance for the power of handwerk organizations, it retained the certificate of competency, first introduced in 1935. This provided that anyone who wanted to open a shop (to become independent) in any of the ninety-odd trades legally defined as handwerk had first to go through a prescribed apprenticeship and journeymanship, including classroom study and examinations, and culminating in the submission of a masterpiece and an examination before a commission of master handwerker. The curriculum, the length of study, and the content of the examinations were to be set and administered by these non–state corporations, the chambers. Anyone who had not studied under a master craftsman and passed the examination could not (and cannot) legally operate a shop in Germany, nor could anyone who was not a master, whatever his or her craft skills, practice the trade except in the employ of a titled master. Several features of Nazi law were abolished in the 1946 Ordinance, some at the insistence of the British in the interests of democratic reform. The selection of all officials by the “leadership principle” (Führerprinzip)—that is, according to political criteria and from above—had been imposed by the Nazis as part of its “coor-

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dination” of all institutions during the course of 1933. All the Western military governments had abolished the leadership principle immediately on occupation and restored the free election of chamber officials by the membership according to democratic principles. Democratic election procedures were mandated by the 1946 Ordinance, which was fully in accordance with handwerk wishes.12 Two other changes in Nazi law were made, however, against the opposition of handwerk. One concerned the obligatory guild membership (Pflicht- or Zwangsinnung). While every gainfully employed person was compelled to join the occupational organization representing his or her field during the Third Reich, in handwerk a form of obligatory guild membership actually went back to the Reich Commercial Code of 1897. A provision in this code, which had been a demand of handwerk throughout the nineteenth century, stipulated that handwerker in any trade could decide by simple majority vote whether membership in their local guild would be obligatory for all within that district. Gradually more and more guilds had elected to become obligatory, so that by 1933 some 90 percent of handwerker were organized in obligatory guilds.13 The Nazis in 1934 simply abolished the element of choice and forced the remainder into the guilds. After the war handwerk institutions hoped to retain obligatory guild membership as an important means of maintaining their financial and organizational strength. However, given both British and American opposition to forced membership in organizations of any kind, leaders were compelled to accept a trade-off and relinquish the obligatory guilds in return for the far more critical certificate of competency.14 In any case, the change had very little immediate effect on the level of guild membership. Loyalty to their organizations was apparently so high that three years later guilds in the British zone still maintained membership rates of 90 to 100 percent.15 The other important feature of Nazi law dropped from the 1946 Ordinance was the handwerk courts of honor (Ehrengerichte). These courts, another longtime demand first realized in 1934, heard cases of handwerker accused of “injury to Stand honor or a violation of the community spirit.” This referred chiefly to the cheating of customers, but in wartime it also became a means of enforcing antihoarding laws and other emergency economic measures. Punishments had ranged from warnings and fines to removal of the license to teach apprentices and, in more-extreme cases, to stripping of the master title or even prison.16 After the war, however, neither the British nor the Americans were willing to allow such juridical authority to remain in private hands. Valentin Chesi argues that handwerk leaders made no effort to retain the courts because they had proved ineffective during the Third Reich, and that to make the courts an effective deterrent to black market activities in the postwar period would have necessitated raising punishments to levels unthinkable except under a dictatorship.17 In fact, handwerk leaders, as well as some German officials, very much wanted to keep the courts of honor as a means of upholding handwerk’s reputation with the public.18 And they continued even after the promulgation of the 1946 Ordinance to press for their reimposition, especially

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during the period of shortages prior to currency reform in 1948. They believed that the insistence of some handwerker on payment in kind (which they would in turn barter on the black market) rather than in cash for their services threatened to engender widespread public resentment against handwerk and thereby to undermine its political influence—even though, they claimed, such unscrupulous handwerker remained a tiny minority.19 Far from rejecting out of hand the suggestion of using the courts to enforce anti–black market measures, leaders expressly advocated the imposition of even more-severe penalties than those provided by the 1934 legislation in order to maintain the public impression of handwerk as honorable and fair as well as to ensure institutional control during a time of economic chaos.20 Leaders got nowhere with this objective. Officials in the Bizonal Economic Administration (Verwaltungsamt für Wirtschaft; VfW)21 were certainly sympathetic to handwerk’s desire to police itself and to maintain its reputation with the public. They argued, however, that since the problem of illegal black market activity was widespread and virtually tolerated throughout the entire economy, similar jurisdictional powers would have to be given equally to all other economic groups, which, given the views of the Allies on policing powers granted to private organizations, would be impossible. Any reimposition of the courts of honor, Bizonal Economic Administration officials said, would have to wait for a politically more propitious time.22 Leaders continued to argue for the reinstatement of the courts but, as with the matter of the obligatory guilds, were compelled to accept their abolition as a political trade-off against the certificate of competency. With currency reform and the consequent end of the black market economy, the issue did not reemerge.

Rationalization as a Function of Handwerk Organizations In the provisions of the 1946 Ordinance discussed so far, the British made adjustments in preexisting (Nazi) legislation. Those sections of the law pertaining to the chambers’ legal status and authority to set standards for admission to the trades thus consolidated the corporate gains for handwerk institutions made during the Nazi period. Those sections abolishing the leadership principle, obligatory guild membership, and the courts of honor removed what the British considered the old law’s most coercive or antidemocratic features. But the 1946 Ordinance also contained several provisions that had not been included in Nazi or any previous legislation.23 In one sense, these innovations merely reflected the culmination of de facto changes in the activities of the institutions that had taken place during the Nazi period. But more pertinent for the purposes of this study, these new provisions illuminate the role of organizations in the economic and political stabilization of handwerk in the postwar period. They demonstrate how the responsibilities and outlook of the institutions had expanded beyond that of protectionism into becoming active instruments of handwerk modernization.

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According to these new provisions, the guilds, chambers, and their peak associations were now charged among their most important tasks to “promote or support all technical, economic and cultural measures … [and] to improve working conditions and methods of management in order to raise the standard of efficiency.”24 The promotion of firm rationalization and modern management techniques had been a role that a few forward-looking handwerk leaders had sought to assume for their organizations ever since the early part of the century. In 1919 the Research Institute for Rational Firm Management in Handwerk was founded in Karlsruhe with the aim of promoting modern technical innovation and theories of scientific management then in vogue in industry.25 As we saw in the previous chapters, the Nazi period saw a decisive intensification of this trend but under the pressure and direction of the state, which obviously added an element of persuasion beyond the powers of the average trade journal. With the emergence in the postwar period of a new generation of handwerk leadership, the application of scientific methods to production and management— begun as a relatively isolated movement in the 1920s—came fully into its own. In fact, these new leaders specifically saw it as their mission to encourage innovations that would keep handwerk efficient and competitive in a modern capitalist marketplace.26 They were also clear about the central role that their organizations must play in this modernization. The leaders who participated in the drafting of the 1946 Ordinance recognized that while big industrial firms could finance their own research, the smaller size of handwerk firms and their more limited resources gave to their institutions a necessarily greater role in the research, coordination, and encouragement of modern improvements and in convincing the often tradition-bound masters of their efficacy. In the coming years leaders worked to make sure that this principle was to be enshrined in law. In the same vein, leaders wished to expand on important wartime innovations that had helped handwerk to achieve some of the advantages of economies of scale that industry naturally enjoyed. Thus the 1946 Ordinance authorized the guilds and chambers to “support, establish or maintain organisations which further the aims of handicraft and in particular to support the handicraft cooperative system.”27 Although the cooperative movement in handwerk, like other measures that encouraged rationalization, had existed since before the turn of the century,28 as we saw in the previous chapters, cooperative schemes had also received a big boost during the war when pressure to raise efficiency was enormous. Cooperative arrangements took two principal forms. One was the ad hoc joining together of several small firms to improve their efficiency and thus their competitive positions when bidding on certain projects. These cooperatives were used extensively in the construction trades where they offered great flexibility in adapting to building jobs varying widely in scope. Thus a small roofing firm, for example, might participate in a cooperative with other roofers and/or other trades in order to be able to participate in a big project without losing its independence or its ability to take on smaller jobs. Purchasing and marketing cooperatives were the other widely used cooperative form. These specialized in the bulk purchase

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or shared use of raw materials or equipment and chiefly benefited smaller shops that could not afford the huge capital outlays required to buy economically in large quantities. Marketing cooperatives performed an analogous function on the selling end, offering wider distribution, advertising, and marketing networks beyond the resources of small masters.29 With the 1946 Ordinance the function of encouraging and organizing cooperatives was a task now specifically assigned to handwerk organizations by law. The 1946 Ordinance also formalized into law the exercise by the organizations of certain state functions similar to those which they had exercised in the war economy and that the Western military governments had retained as part of their continuation of Nazi economic controls. These responsibilities were to expire with the eventual lifting of controls and the return of the free market. In the meantime, however, handwerk groups were obliged to execute these functions when the state chose to delegate them, but were nonetheless still subject to the “supervision and direction” of governmental authorities. According to the new law, these responsibilities included the following: (a) Collecting bids for raw, auxiliary and manufacturing materials, tools, and other products necessary for the practice of handicrafts; (b) Fixing production quotas; and (c) Distributing materials or goods after allocation.30 These statutory functions were thus carried over from Nazi law to the occupation period but, in line with the abolition of obligatory guild membership, with the stipulation that all guild and chamber members could freely inspect the distribution lists and that no discrimination could be made between guild members and nonmembers. Thus the procedure was made less authoritarian. Although I have already discussed (in chapter 4, this volume) the importance of these measures to the guilds and chambers in augmenting their own power vis-à-vis state officials, other interest groups, and their own membership, it should here again be emphasized that the embodiment into law of this authority to supervise matters vital to the existence of every firm lent further legitimacy and prestige to handwerk organizations. The 1946 Ordinance confirmed in law yet another long-term goal of handwerk that had been attained only under the Third Reich: the supervisory authority of the chambers over local guilds (Innungsverbände) and their regional associations (Kreishandwerkerschaften). This meant that the pyramidal structure of the various handwerk organizations (the guilds, regional guild associations, chambers, and umbrella organizations embracing all of them) along clear lines of responsibility and authority was confirmed. With this the guilds and chambers were granted authority to mediate in disputes between individual masters and their apprentices or customers.31 Thus the entire network of organizations could operate as an efficient, articulated whole, with legally recognized authority over its membership, and as an effective representative of their interests. Because the or-

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ganizations were able to fulfill the expectations of their members, the support the latter gave them increased, with the result that any rival interest groups outside the guild/chamber system remained insignificant or nonexistent in the postwar years.32 The ascendancy of the chambers over the guilds is significant in yet another important sense. The guilds, representing only one trade in a particular locality, tended to be havens for the old-fashioned exclusivism that progressives in the chambers were striving to marginalize. The streamlining of the organizational structure enabled them to continue moving handwerk in the direction of modernization and accommodation.

Continuity and the Reinvention of Tradition That the British ordinance on the organization of handwerk of December 6, 1946 (1946 Ordinance) represented a direct continuity in its essential features from Nazi law and practice was certainly not openly argued at the time—political discretion made it prudent to do just the opposite—but it is far more readily conceded by handwerk today. Thus, its main newspaper, the Handwerker Zeitung, on the fortieth anniversary of the law’s promulgation could be quite frank: “People are fond of referring to the economic, administrative and political developments after the collapse of the German Reich in early 1945 as a new beginning or ‘zero hour’. But with this characterization one must keep in mind that actual developments grew out of pre-existing structures—and necessarily so. This is especially valid for the development of handwerk organizations after the Second World War.”33 Not only was the letter of the 1946 Ordinance the same as the decrees of 1933, 1934, and 1935 (with the relatively minor exceptions discussed above), but also the expansion of the role of the organizations that occurred most dramatically in wartime—especially with regard to the organization of the cooperative system, the administration of economic controls, and the promotion of modernization in production and management—were all reflected and formalized in the 1946 Ordinance. The continuity in the law itself is demonstrated conclusively by Chesi who, after a detailed comparison of Nazi era legislation and 1946 statute, concludes, The comparison of its [the 1946 Ordinance] wording with the text of the three major National Socialist Handwerk decrees and with the Commercial Decree in its January 30, 1933 version shows that the [handwerk] demand for a “restoration of pre-1933 democratic handwerk law” was merely a pretext in order more easily to secure permission for the law. In reality, except for the obligatory guilds, the leadership principle and the courts of honor, the essential sections of the First Handwerk Decree of June 15, 1934 were taken over. The Third Handwerk Decree [of January 1, 1935], and with it the Great Certificate of Competency as precondition for the practicing of any trade, were even expressly retained.34

In 1986 the organizations themselves could be equally frank about how this had been accomplished: “The legal continuity with key provisions of handwerk law

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from the period after 1933 was not immediately apparent, because they [the provisions of the 1946 Ordinance] were consciously formulated as if they had been derived from the fundamental principles of the Commercial Ordinance of 1929.”35 In reality, however, it was not any juridical sleight of hand that convinced the British to approve the essential recommendations of the ZAW and the handwerk organizations. The British were fully aware of the explicit continuity of Nazi law. The report issued by the ZAW to the British (and on which the final version of the 1946 Ordinance was based) freely acknowledged this but nonetheless concluded, “Even if the provisions concerning the ‘Handwerksrolle’ [list of those firms permitted to operate as Handwerk] and the ‘großen Befähigungsnachweis’ were issued by the Nazi Regime, it is deemed advisable to maintain them, since they will become democratic measures of self administration of handicraft after the authoritarian principle has been abolished.”36 Rather it was a shrewd and pragmatic public relations campaign conducted by the organizations directed at British and German officialdom, handwerker, and the public at large that helped convince them of the validity of the argument discussed above. The central message of this campaign was that the formation of the organizations as corporate bodies with corresponding legal status and authority was in its essence democratic and that it represented the continuation of a long and proud artisanal tradition. The arguments used by leaders would deserve detailed examination if only because of the deep and lasting impression they have made on the way the German public views handwerk as well as on the way handwerk now sees itself. But even more profoundly, the arguments represent a remarkable reinvention of handwerk tradition37—that is, the conscious taking over of an ancient and respected corporate ethos, formulated originally in an entirely different socioeconomic context, and its adaptation to suit very particular modern circumstances. Essential to this was an historical reinterpretation that deemphasized the traditional function of guilds (Zünfte) as restrictive, protectionist bodies headed by entrenched oligarchies that stifled innovation and shielded the inefficient. In its place developed a reworked tradition that saw medieval corporatism as the germ of democratic self-administration and self-help. Needless to say, these arguments were designed in part to appeal to the British and Americans, for whom the development of democratic institutions was of paramount importance. But perhaps equally important, leaders worked to instill within handwerker themselves the conviction that Nazism was in no way essential to their Stand and that handwerk in its modern incarnation was a direct descendent of this “democratic” medieval tradition. The argument appeared in innumerable variations in the handwerk press and elsewhere. One particularly well-formulated article took as its starting point the “12-year false path of totalitarian state leadership” and the need of the German people as a whole to “find their way back” from state control to democratic selfresponsibility.38 A purely individualist form of democracy on the Anglo-American model, the article continued, in which civil administration and the resolution

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of conflict were restricted to parliaments and political parties, would not only ignore a rich German tradition of (democratic) corporate life but also would arbitrarily restrict political life to the arena of the state and its bureaucracy and thus leave the way open for another dictator. True democracy must have institutional roots outside the state in social, economic, and cultural life: “Thus, the ‘reeducation of the German people’ cannot be restricted solely to the domain of party politics and parliament but must awake in all other areas of life the will to self-responsibility, and this self-responsibility will then pave the way for self-administration.”39 Having established the need for a plurality of democratic institutions outside those of traditional parliamentary politics, handwerk theorists then asked where their roots might be found. Their answer was contained in a carefully constructed and detailed historical argument. Ingeniously, but perhaps not surprisingly, they concluded that “the concept of self-responsibility on the foundation of a democratic self-administration is as old as the estate [Berufsstand ] of handwerk itself.”40 The formation of guilds and brotherhoods began this foundation in the early medieval town. Crucial to the strength of these institutions was their obligatory membership, that they were endowed with powers of judicial discipline,41 and that they included in their membership the entire Berufsstand of apprentices, journeymen, and masters. This last point is of special significance, because the notion that the workers in a handwerk shop represented an organic whole was touted by theorists as the great moral advantage of the handwerk mode of work organization: all performed the same work in different (hierarchical) levels of expertise with the apprentice learning from the master and in due course becoming a master himself. This was in direct contrast to industrial, mass production where this so-called natural unity had been shattered by the antagonism between capitalist and worker.42 Moreover, in another difference between the German and Anglo-American worlds, the democratic essence that theorists saw in the medieval guild did not derive from its being a voluntary assembly of free individuals. The limits and precariousness of the medieval economy could not accommodate such voluntarism. Democracy consisted instead of the guilds’ capacity for cooperative action for the benefit of all handwerker as members of a collective Stand rather than as autonomous, competing individuals.43 According to the new tradition formulated by the postwar generation of handwerk thinkers, it was the enduring legacy of artisanal corporatism—steeled by its disciplinary powers and leaving a powerful legacy of collective self-identity forged over generations—that enabled handwerk as a productive (and moral) Stand to survive the shocks that followed its formative medieval period. The rise of the princely state (Obrigkeitsstaat) in the seventeenth and eighteenth centuries, these thinkers argued, tipped the political balance of power away from the guilds—the implication being that the self-administration inherent in corporate life formed a natural counter to authoritarianism and state centralism. Even the rise of industrialism, which had helped make the old, admittedly rigid guild system obsolete,44 did not destroy handwerk nor its spirit of self-administration, they

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said. Contrary to the predictions of Marx and Marxists—who foresaw no future for outmoded handwerk in a political economy subject to inevitable polarization between capitalist and proletariat—and indeed contrary to the fears of handwerk itself before 1933, handwerk as means of production and as a social group remained vital. The reasons for this, they continued, must be sought beyond the measure of pure economic efficiency. Admittedly, industry could produce certain goods more cheaply but this was accomplished at the social and moral cost of alienating the worker from the materials he worked with, and thus from the act of creation through work itself. And just as the industrial proletariat had been alienated from production by virtue of the routinization of work on the assembly line, so had the worker lost the power to make the decisions concerning his own life by having been reduced to—and being fated to remain—a wage worker. The spirit of democratic self-government of its corporate bodies—preserved in tradition even while having been taken away in practice during the liberal nineteenth century—had seen handwerk through. “We have this consciousness of the old tradition [of self-government] to thank that handwerk has been able to prevail against all the influences pernicious to it.”45 Parallel to the enduring power of Stand consciousness and the spirit of its traditions, handwerk thinkers argued that the reemergence of corporate authority under Nazi law was itself no more and no less than the culmination of a long-term crisis within liberal capitalism. The early to mid-nineteenth century triumph of pure free market liberalism in Germany, they argued, was short lived and, by general consensus, a failure. The turning away from unrestrained competition began with the General Prussian Commercial Ordinance of 1845 (amended in 1849 and 1869 and extended to the Reich in 1871), a measure that slowly reestablished the responsibilities of corporate economic bodies, including those representing industry. Gradually under these laws the guilds increased their authority over such matters as the regulation of the apprentice system and training; arbitration of disputes among masters, journeymen, and employees; the establishment of training schools; the examination system; the provision of health insurance for members; the encouragement of cooperativeeratives; and the general cultivation of collective spirit and Stand honor (Gemeinschaftsgeist and Standesehre). The Reich Commercial Code of 1897 established the basis of obligatory guilds (by majority vote) and in 1900 the chambers were founded as corporations of public law with boards elected by their membership. Finally, in 1908 the so-called minor certificate of competency (kleine Befähigungsnachweis) was passed into law, providing that only those who had passed a master’s examination could take on and train apprentices. These and other legal developments, handwerk argued, buoyed by a Stand consciousness that had remained vital since the Middle Ages, demonstrated a clear and decisive trend away from the pure Manchester liberalism of the nineteenth century. Unbridled liberalism had been a failure rejected by handwerk and German society alike. Yet the failure of economic liberalism in no way implied the failure of political democracy (and handwerk thinkers intended quite clearly here to distinguish

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German custom from the Anglo-American tradition, which linked liberalism to parliamentary democracy), because the very institutions reasserting themselves against free-market liberalism were themselves the embodiment of (corporate) democracy. True, this trend had achieved its final aims during “the episode of National Socialist rule.”46 But precisely because these laws were merely the end point of developments antedating Nazism by almost one hundred years showed how shallow the roots of Nazism in handwerk really were. Whatever the validity of the assertion of the essential antipathy of handwerk corporatism and Nazism may be, we do know that handwerker were drawn to the Nazi movement in disproportionate numbers, at least in part as the result of a structural crisis in which handwerk found itself with respect to industry in the 1920s. The above argument, carefully formulated by handwerk thinkers in the postwar years, was an attempt to recover for their institutions a measure of democratic respectability that they had lost by their deep involvement with Nazism.47 The measure of its effectiveness is not just that it helped persuade the British to grant handwerk its organizational demands, but that it helped provide handwerker themselves, and through them the German public as a whole, with a coherent reinterpretation of their corporate traditions. There was, at the same time, a certain sense in which these arguments were not new. Ever since their participation in the revolution of 1848, handwerker had formulated their demands in a way that made corporate authority seem compatible with democracy. What made the postwar version effective was the combination of its appeal to tradition together with the expression of its corporatism not as a conservative defense against challenges from industry, but as the instrument of modernization. By the end of 1946, then, handwerk corporatism in the British zone had achieved a legal foundation and along with it an organizational coherency as well as an increasing indispensability to its members. But even as the deepening hostility between the Soviet Union and its former allies pushed the Western zones toward political consolidation, the prospects for unity with respect to handwerk law were not promising. The occupation authorities of the United States harbored deep reservations concerning the type of authority the organizations wielded that contradicted their vision of a democratic, multilateral, free enterprise world order. At the heart of the coming struggle were two competing visions of capitalism and the role of corporate bodies in structuring the marketplace.

Notes 1. I will deal with the efforts of handwerk leadership to bring their membership into line on certain economic issues in chapters 7 and 11. 2. Michael Balfour and John Mair, Four Power Control in Germany and Austria (London, 1956), 157–158; also see Hymans, Anglo-American Policies in Occupied Germany, 109.

120 | From Craftsmen to Capitalists 3. Berghahn, The Americanisation of West German Industry, 84–154. 4. The ZAW, created in March 1946, was located in Minden and constituted the highest German legislative/administrative body in the British zone. See Gerald Ambrosius, “Funktionswandel und Strukturveränderung der Bürokratie 1945 bis 1949: Das Beispiel der Wirtschaftsverwaltung,” in Politische Weichenstellungen im Nachkriegsdeutschland 1945–1953, ed. Heinrich August Winkler (Göttingen, 1979), 168–171, 181–183; Peter Hüttenberger, Nordrhein-Westfalen und die Entstehung seiner Parlamentarischen Demokratie (Siegburg, 1973), 320–322. 5. Perner, “Die ‘Reorganisation’ der Handwerkskammern,” 262. 6. The formation of regional associations of chambers, the councils of chambers of handwerk (the Landeshandwerkskammertage), had already been accomplished at the Land level in the British zone in 1945. (The states (Länder) in the British zone were Schleswig-Holstein, NordrheinWestfalen, Lower Saxony, and the Free City of Hamburg.) On March 29, 1946, these combined to form a peak organization, the Council of Chambers (Handwerkskammertag, HWKT), representing all the Länder in the British zone. Richard Uhlemeyer, president of the Hanover Handwerk Chamber, was elected president of the councils of chambers. After the founding of the Federal Republic in 1949, Uhlemeyer became head of the federal-level ZDH (Zentralverband des Deutschen Handwerks). This completed in this zone the reestablishment of the pyramidal organizational network of guilds and chambers which had first been built up in the Nazi period. See Chesi, Struktur und Funktionen, 139. 7. Perner, “Die ‘Reorganisation’ der Handwerkskammern,” 262. While Agartz supported the socialization of heavy industry and the big banks (since he believed the formation of monopolies had enabled Hitler to come to power), for handwerk, retail, and small farmers in a clear rejection of Soviet collectivism he favored the formation of semipublic chambers (such as handwerk already had) and cooperatives—with employees represented at parity—that would function as organs of self-administration. See Bernhard Koalen, Die wirtschafts- und gesellschaftspolitische Konzeption von Viktor Agartz zur Neuordnung der westdeutschen Nachkriegsgesellschaft (Cologne, 1978), 21–23, 101–102; Volker Gransow and Michael Kräthe, Viktor Agartz: Gewerkschaften und Wirtschaftspolitik (Berlin, 1978), 11, 87–89. On the official SPD support of this position, see the SPD party platform “Politische Leitsätze vom Mai 1946,” passed at its convention (Parteitag) in Hanover of May 11, 1946, in Ossip K. Flechtheim, Dokumente zur Parteipolitischen Entwicklung in Deutschland seit 1945, vol. 2. (Berlin, 1963), 18. 8. The Council of Handwerk Chambers in the British zone had assigned Hans Meusch and Karl Hartmann to draft the Handwerk Ordinance. Meusch had been president of the Council of German Handwerk and Commerce Chambers until 1934 and after 1945 was lecturer at the University of Göttingen. Hartmann wrote the commentary “Neues Handwerksrecht” in 1934/35 and 1938/41 and cowrote the commentary on the Handwerk Ordnung (Handwerkordnung) passed by the Bundestag on September 17, 1953; see Chesi, Struktur und Funktionen, 139, fn11. 9. Text of the law, “Verordnung über den Aufbau des Handwerks,” in Gesetz- und Verordnungsblatt (GVBl.) für das Land Nordrhein-Westfalen, February 12, 1947, no. 3, 21; Amtsblatt für Niedersachsen, 1947, no. 1, 7; Amtsblatt für Schleswig-Holstein, January 11, 1947, no. 2, 13; and Amtsblatt-Anzeiger, Beilage zum Hamburger GVBl., 1947, no. 5 (published in both English and German). Also in Perner, Mitbestimmung im Handwerk, 322–329. 10. “Am 6. Dezember 1946 begann der Wiederaufbau,” Handwerker Zeitung (Handwerker Times) 24, no. 86, December 18, 1986. 11. Other professional groups or institutions whose organizations enjoy public law status include the IHK, doctors, lawyers, and the religious institutions. 12. Handwerk leaders as well as provincial Oberpräsidenten (governors) in the British zone surveyed in 1946 by ZAW were decisively in favor of abolishing the leadership principle. See summation of responses to questionnaire circulated by the ZAW in the British zone (in Minden), 1946, in BA, B102/9141a.

The Legal Consolidation of Handwerk Corporatism in the British Zone | 121 13. ZAW report, “Staatliche Wirtschaftsorganisation und Selbstverwaltung der Wirtschaft,” July/ August 1946, English language draft in BA, B102/10322. 14. HWK-Düss executive committee minutes, December 21, 1946. 15. Perner, “Die ‘Reorganisation’ der Handwerkskammern,” 261. 16. Chesi, Struktur und Funktionen, 44–45. Other economic and labor organizations also had the equivalent of courts of honor under the Third Reich; Keller, Handwerk im faschistischen Deutschland, 73, 91. 17. Chesi, Struktur und Funktionen, 142. 18. In the 1946 ZAW survey on the leadership principle cited above, handwerk leaders and Oberpräsidenten in the British zone also favored the continuation of obligatory guilds and the courts of honor. See summation of responses to questionnaire circulated by the ZAW in the British zone (in Minden), 1946, in BA, B102/9141a. 19. Uhlemeyer, president of HWKT in the British zone, to Bizonal Economic Administration (Verwaltungsamt für Wirtschaft, or VfW) Handwerk Division, May 1947, in BA, B102/9179. 20. Uhlemeyer to RWM of Lower Saxony, March 19, 1948, in BA, B102/9179. 21. The VfW was the administrative body set up in Frankfurt after the merging of the British and American zones in January 1947. The WR was the legislative body, and the federal council (Länderrat) representing the Länder was the upper house. 22. Hartmann of VfW to HWKT in the British zone, June 23, 1947, in BA, B102/9179. (Hartmann was one of the authors of the VfW report on handwerk). As noted above, Hartmann wrote the commentary “Neues Handwerksrecht” in 1934/35 and 1938/41 and cowrote the commentary on the Handwerk Ordnung of 1953; see Chesi, Struktur und Funktionen, 139. 23. Chesi, Struktur und Funktionen, 143. 24. 1946 Ordinance, §§ 4(ix) and 18(vi); see also § 10. 25. The institute was Research Institute for Rational Firm Management in Handwerk (Forschungsinstitut für rationelle Betriebsführung im Handwerk) and Betriebsführung was its journal. See John, Handwerk im Spannungsfeld, 360; Beate Brodmeier, Das Deutsche Handwerksinstitut und seine Forschungs- und Förderungseinrichtungen (Münster, 1967); Holtwick, “‘Panik im Mittelstand?’,” 104. 26. I will treat the history of the rationalization movement in handwerk in more detail in chapter 10. 27. 1946 Ordinance, § 18(iv), also §§ 4(vii) and 10. 28. John, Handwerk im Spannungsfeld, 359. 29. The handwerk cooperative system will be examined in greater detail in chapter 10. 30. 1946 Ordinance, § 26 (2). 31. See 1946 Ordinance, §§ 4(v), 14(iv), 18(xiii) and 23. 32. Chesi also makes the point that these legal victories, and especially the success the organizations achieved in such matters as improved supplies of raw materials, helped strengthen the commitment of the membership to their institutions. Struktur und Funktionen, 148, fn28. 33. Handwerker Zeitung 22, no. 86, November 20, 1986 (reprinted in WDHT, Geschäftsbericht 1986, 43). 34. Chesi, Struktur und Funktionen, 140. 35. Handwerker Zeitung (24:86), December 18, 1986. 36. ZAW Report on Handwerk (English language version), July/August 1946, in BA, B102/10322. 37. On this concept of invented tradition, see the essays in Eric Hobsbawm and Terence Ranger, eds., The Invention of Tradition (Cambridge, UK; New York, 1983). 38. Although I will have more than one occasion to refer to other versions of these arguments later on, the citations here are taken from “Selbstverwaltung aus Selbstverantwortung,” in Mitteilung der Handwerkskammer Münster, April 1, 1947. 39. “Selbstverwaltung aus Selbstverantwortung.” 40. “Selbstverwaltung aus Selbstverantwortung.”

122 | From Craftsmen to Capitalists 41. These were points obviously formulated to support obligatory guild membership and the courts of honor. 42. The question of who actually controlled the guilds and the reality that the struggle between master and journeyman during certain periods resembled class war are contradictions conveniently left aside in these arguments. 43. In the matter of obligatory guilds, leaders reasoned that this was indeed democratic because whether a guild became obligatory was decided by majority vote; see ZAW Report on Handwerk (English language version), July/August 1946, in BA, B102/10322. 44. The residues of the medieval guilds (Zünfte) had actually been abolished by the Stein-Hardenberg reforms in 1810 (soon after the Le Chapelier law of 1791 had accomplished the same in France). The modern guilds, or Innungen, developed over the course of the nineteenth century. 45. “Selbstverwaltung aus Selbstverantwortung.” 46. “Selbstverwaltung aus Selbstverantwortung.” 47. The Allied (especially American) assumption that handwerk corporate authority was linked to Nazism was always implicitly or explicitly a part of any handwerk article on the subject. For example, referring to the certificate of competency, one author disingenuously began a sentence as follows: “When the Nazi plagiarizers tossed this gift into handwerk’s lap with almost no effort on its part.” See “Befähigungsnachweis und Gewerbefreiheit,” in Nachrichten der Handwerkskammer Konstanz, February 1949 (1), copy in BA, B102/9142. I will deal with the American association of Nazism and corporate economic regulation in chapter 6.

Chapter 6

DEVELOPMENTS IN THE US ZONE LEADING UP TO THE INTRODUCTION OF GEWERBEFREIHEIT

 We have seen how in the British zone the initial uncertainty as to the legal sta-

tus of handwerk organizations was resolved decisively with the promulgation of the December 6, 1946 Handwerk Ordinance, which represented a clear victory for handwerk and its organizations. But in the American zone, developments for handwerk took a strikingly different course. While during the period of the controlled economy the functions of handwerk organizations remained in practice virtually the same as those in the British zone, these responsibilities turned out to be only as provisional as the economic controls themselves. Not only did the US military government fail to provide the organizations with the same juridical foundation that they had been granted in the British zone, but the Americans proved to be fundamentally opposed to the principles on which the German handwerk system was based. Therefore, in December 1948, after the system of economic controls had been lifted, the US stripped the organizations of their corporate legal status and of their most important powers of self-administration. Thus from this date two different handwerk systems prevailed in Western Germany, and this dual system lasted through the foundation of the Federal Republic until the dispute was finally resolved in 1953. The attempt of the US to impose its vision of how small business should be constructed, and the struggle against it, proved formative in defining handwerk’s sociopolitical outlook and its place in West German society. The development of American opposition to handwerk corporatism and the German response to this attack will be the topic of this chapter. Notes for this section begin on page 136.

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Protectionism in the US Zone? In the months after capitulation, the conditions described above—economic collapse, shortages of every kind, and a constant influx of refugees—obtained in the American zone just as they did everywhere else. Here, too, refugees, unemployed industrial workers, returning soldiers, former Nazi Party members unable to work in government, widows, and others sought relative security in economic independence—including the handwerk trades. But although the Americans had perpetuated economic controls, in the first months after capitulation no one was sure which specific procedures were to be followed in the licensing and administration of businesses. Was Nazi law—including the requirement of the certificate of competency—still valid, or should authorities revert to Weimar law and practice? This uncertainty in commercial law was the bane of conscientious bureaucrats throughout the zone, and frustrated administrators complained of a “lawless condition.”1 American military authorities, for their part, at first did not concern themselves with licensing requirements nor with putting any controls on the streams of people seeking to open their own shops. In summer and fall of 1945 they were mainly interested in technical questions of production capacity and material requirements with a view toward economic revival. Only politically compromised individuals attempting to set up a business could expect trouble from the Americans. Far from seeking to limit shop openings, the view of American officials at the time was that, even under such chaotic conditions, the greatest possible number of firms introduced a healthy competition to commercial life.2 The impulse for tighter regulations, and in any case for a speedy clarification of legal authority, originated on the German side. But the Americans were soon won over. In January 1946 Ludwig Erhard, who had just become Minister of Economics for Bavaria, introduced legislation on licensing business, including handwerk, as part of a comprehensive economic strategy of encouraging capital growth. Controls restricting the entrance to business were necessary, he argued, because the flight into independence threatened to dissipate scarce resources and smother growth. “The smaller the social product is, the greater the number of people there are wanting to partake in its distribution. This must be counteracted.”3 The leading American officials, for the most part, had by then come to share Erhard’s view that under conditions of scarcity the numbers of handwerker, retailers, and industries should be kept low, and in subsequent negotiations on the new licensing laws they insisted only on stricter denazification provisions.4 The Bavarian licensing law (Law no. 42) went into force on September 23, 1946 and provided for extensive restrictions for anyone, including handwerker, seeking to open his or her own shop.5 Besides the requirement that they pass a master’s examination and receive the certificate of competency from a handwerk chamber, applicants had to furnish proof of “personal reliability,” to demonstrate that they were assured of a regular supply of materials necessary to maintain the business, and, finally, to show that there was an “economic need” for the

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shop in the area where they intended to establish it (the Bedürfnisprüfung). The law provided for exceptions in certain hardship and refugee cases and allowed considerable discretion to local officials. Although there was at the time no lack of voices questioning this clear limitation of economic freedom,6 the Bavarian restrictions—which were nothing new, being merely a direct extension of Nazi wartime regulations and a unification of existing practice—were typical commercial practice in all the Western zones from 1945 to 1948. Occupier and occupied alike agreed that the disparity between supply and demand was so great that a return to a pure free market in the licensing of businesses as well as in the exchange of goods would have resulted in economic chaos.7 Two levels of restrictions or controls on economic activity are of concern to us for the occupation period. The first is that just described—the emergency measures mandated by Law no. 42: the proof of personal reliability, supply of raw materials, and the evidence of economic need. No significant segment of either handwerk, German officialdom, or the US military expected these to be any more than provisional measures to cope with economic chaos (except for the proof of personal reliability, which many claimed was necessary to protect the public from dishonest shop owners), nor did anyone want them to be. The other type of restrictions included those essential to handwerk corporatism. These were the gains of the Nazi era, principally the legal status of corporation of public law and the right to set the standards for entrance to every trade through the certificate of competency. As we have seen in the British zone, these latter powers had been confirmed in law with virtually no disagreement by the Handwerk Ordinance of December 6, 1946, but in the US zone they were extended only provisionally along with the emergency measures of Law no. 42. Unlike the restrictions of the first level, however, where all looked forward to their eventual abolition, there was to develop great disagreement, mainly between the Germans and the Americans, over the future of the legal status of the organizations and the certificate of competency. We shall return to this issue shortly. Central to this study is the question of the adaptation of handwerk to a modern capitalist-industrial economy, and specifically the role of its corporate institutions—along with their (restrictive) powers of self-administration—in effecting that modernization. In examining this period in the US zone, the argument can be made that established masters used this licensing authority arbitrarily to exclude new applicants, and, moreover, that this obstructionism helped provoke the US to impose “freedom of trade” (Gewerbefreiheit) in December 1948.8 It is indeed the case that there are a number of examples of local committees denying (or “losing”) applications for reasons redolent of a moral economy mentality— “the number of presently existing workshops is sufficient, and every handwerker wants his daily bread.”9 It is true that old-fashioned exclusivism was widespread among individual masters (along with all sorts of other small businesses, not to mention heavy industry that still expected to reestablish its prewar cartel network). And many in turn applied heavy pressure on their guilds and chambers to limit the number of new firms. However, the actual means by which established

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handwerk attempted to keep out competition were almost exclusively those emergency measures contained in Law no. 42—the proof of need and the assurance of materials. All handwerk as well as other business, even though they used these measures in a protectionist manner during the period when they were in place, nonetheless eagerly awaited their repeal. The whole system of emergency economic controls and the lack of a stable currency strangled the free flow of goods, as everyone recognized, and stifled economic growth. As to their corporate authority, there is no evidence that handwerk organizations employed the certificate of competency in a protectionist way to exclude newcomers. The two types of restrictions were in fact used for entirely different purposes and were manifestations of very different impulses within handwerk: one protectionist, the other progressive. Second, although obstructionism was extremely offensive to the American authorities, it was not the determining factor in its decision to abolish handwerk’s corporate powers. The need for the restrictions of Law no. 42 and the need to limit the number of firms to prevent the dissipation of scarce resources were, after all, agreed to by the Americans themselves.10 True, the Americans did believe that handwerk corporatism originated in a medieval exclusivism, and they were unhappy with the way the controls were administered. But their decision to revoke the corporate status of the organizations and abolish the requirement of the certificate of competency was not ultimately based on how individual masters sought to apply the economic controls of 1945–1948. Rather, it sprang from a fundamental difference in German and American ways of doing business and from a US determination to reform the German system. It is to the development of the American position and its implementation that we may now turn.

Development of the US Position Although in 1946, during the period of economic emergency, the US military government provisionally sanctioned a whole series of restrictions in connection with handwerk, opposition to the German system in fact developed early within the US High Command. The licensing restrictions discussed above (principally, the certificate of need and proof of a secure raw material supply) were recognized by most to be contingent on conditions of scarcity, and no one in the Office of Military Government, US (OMGUS) expected or wanted them to continue beyond that. Rather, the American attack went far deeper. The first clear sign that the Americans intended far-reaching changes in handwerk came on May 13, 1946, when OMGUS convened a top-level meeting to discuss the future reorganization of the chambers. Invited were representatives of the economics ministries, the trade unions, and chambers from all three states (Länder) of the US zone (Bavaria, Hesse, and Württemberg-Baden). The American delegation was headed by Dr. Brodnitz, chief of the Deconcentration and Decartelization Department (hereafter Decartelization Branch), Economics Division, OMGUS, Berlin.

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To be sure, handwerk had already received indications that military authorities were uncomfortable with the extent of authority allowed to corporate bodies in German economic life.11 Shortly before, the US had moved to strip the industry and trade chambers in its zone of their corporation of public law status and transform them into private and voluntary interest organizations.12 Nonetheless, the handwerk representatives present were unprepared for the comprehensiveness of the American attack. Brodnitz opened the meeting with a lengthy critique of the handwerk system as developed by the OMGUS office in Berlin.13 Because General Clay himself intended later to make a final decision on the matter, the discussion did not result in a final directive, and it represented only the initial stages of American thinking on this issue. It did, however, point to how the US expected to reform handwerk in the future. Brodnitz’s critique focused on two essential themes of great importance to the Americans: the authority that handwerk associations were to have over individuals practicing a trade, and the proper boundaries between public and private authority. Brodnitz and others in the military government believed that the guilds in their present form were no longer an appropriate form of economic organization, principally insofar as membership in them was obligatory for everyone practicing any particular trade and as the guilds had the authority to levy dues that all members were obliged to pay. Thus the guilds presently enjoyed an organizational monopoly, with obligatory membership that OMGUS considered intolerable. Handwerker should be free to form, and to join exclusively if they so chose, other organizations to represent their interests as well as not to join any organization at all. For the chambers, which represented not individual trades but handwerk as a whole within a particular district, Brodnitz outlined the following functions that they would continue to exercise: moblilizing handwerk within overall economic planning and representing its interests therein, overseeing standards of production quality and issuing certificates of quality (to be used merely as a consumer guide), advising on the setting up of cooperative or credit endeavors, advising members on technical development and further education, working out in cooperation with Länder governments and the trade unions the standards for admission to the Handwerk Rolle,14 and drawing up the course of study and the examinations for masters and journeymen. The chambers would no longer, however, be allowed to administer the examinations themselves. This would in the future lie within the purview of the state. Thus Brodnitz had apparently not yet considered abolishing the chambers’ legal status as corporations of public law, nor did he as yet foresee entrance to a trade being free of the technical and skill qualifications that the examinations were designed to test (apparently the examinations as requirements to open a shop would continue to exist but would be administered by a governmental agency, not a private chamber). Nonetheless, he had already suggested stripping the chambers of certain important sovereign functions, in particular the right to administer the examinations and directly control entrance to the trades.

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What Brodnitz was moving toward here in his opening attack on the German system was a redrawing of the line between functions that should be exercised by the state and those that should be exercised by private bodies. He considered handwerk organizations to be the representatives of a purely private interest. In the American view, therefore, much of the authority presently wielded by the chambers—pertaining as it did to matters in which the organizations had an obvious self-interest—belonged most properly to the neutral state. Thus the United States sought to take the first steps to reduce the chambers from corporate bodies with certain sovereign functions to the status of purely private interest organizations. By breaking the monopoly of the guilds—and Brodnitz even spoke of eliminating them altogether and replacing them with less clearly defined handwerk committees—OMGUS hoped to eliminate the narrow, exclusivist mentality of handwerker or what it termed their “estate psychology.”15 The various German constituencies present at the May 13, 1946, meeting completely rejected the American point of view. The representatives of the Länder governments argued that the chambers performed invaluable regulatory and administrative functions in overseeing this important economic sector and thereby relieved the state bureaucracy of a burdensome responsibility. A comparison with the industry and trade chambers, they continued, was entirely inappropriate. The industrial chambers represented fewer but far more powerful firms, and, commanding far greater resources, these did indeed threaten to become a nexus of power outside of state control. Handwerk, on the other hand, was so diverse and made up of so many small units that it could never become an “excessive concentration of economic power” in any sense meant by the Americans. Moreover, government at all levels in fact relied heavily on the chamber system. Since government functionaries themselves naturally lacked the expertise of handwerk officials, such responsibilities, they argued, would be best left to the chambers (albeit with state overview), which could carry them out more expertly and efficiently. If the state were to assume these tasks, it would necessitate an enlargement of an already cumbersome bureaucracy. While conceding that the chambers should be further democratized, Länder representatives maintained that they must continue to hold corporation of public law status that would enable them to exercise these necessary administrative functions. “A return of most chamber functions to the hand of the state,” argued one official, playing to the sensibilities of the Americans, “would be a step back to the authoritarian state.”16 The trade union representatives at the meeting took a tactical position with regard to the American critique. They argued that in their present form the chambers were undemocratic and did indeed constitute an unhealthy concentration of extra-state entrepreneurial power. That the journeymen’s committees in the chambers had not yet been taken seriously by handwerk leaders, they said, was proof of this. However, the unions’ criticism was directed at the chambers only as they were presently constituted, not at their role as semipublic bodies. If codetermination in the form of 50 percent representation for journeymen were incorporated into the chamber structure, the union representatives would then

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be prepared to join government officials in fully supporting the corporation of public law status for the chambers and their authority to administer the certificate of competency.17 Unlike the Länder and union representatives who defended its position quite vigorously, handwerk leaders seem to have been caught surprisingly off guard and said very little at the meeting. It took them several days to file a response to Brodnitz’s critique. Their arguments were framed more by the ad hoc situation of economic crisis than by any real structural view of the long-term role their organizations should play in the German economy. They restricted their arguments to the matter of obligatory guild membership. The leaders asserted that, because under the current system of economic controls there was no free market competition in the German economy anyway, to introduce voluntary handwerk organizations now would place an entire economic sector outside of official control. This would have disastrous consequences because “experience has shown that those who operated as ‘outsiders’ did not join the guilds and at the same time were not very conscientious as to quality, social duties, and just prices. In the present situation the professional ethos and the morals of the handicraft system, as a whole, play an important part which should not be underestimated.” They argued that the present time of shortages and black market activity was no time to be relaxing regulations: “Considering the present attitude of handicraft as well as of the German people towards question of organization, it would be impossible to establish properly functioning organizations on a voluntary instead of a compulsory basis.”18 Thus leaders in their dispute with American officials as yet confined themselves to the most pressing issue of obligatory guild membership, arguing that voluntary guilds would undermine the whole system of economic controls that the Americans agreed were necessary under the circumstances of scarcity. In a few months handwerk in the British zone would be forced to surrender obligatory guild membership in order to hold on to the far more important corporation of public law status of the certificate of competency. As the American critique developed, handwerk in the US zone would be forced to do likewise and at the same time to work out a more comprehensive response to the American attack.

Toward Gewerbefreiheit The American attack on handwerk corporate authority originated in an interpretation of the structure of German industry and its responsibility in bringing Hitler to power and the world to war. Generally speaking, in the 1930s many top administration officials were convinced that the removal of barriers to international trade was the most effective guarantee for peace, and that the breaking up of concentrations of economic power created the most favorable conditions for democracy.19 In the planning for the postwar occupation of Germany, then, policy-makers were heavily influenced by a number of Marxist historical aca-

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demic studies that drew the link between patterns of German business organization and the Nazi dictatorship, the most well-known of which was Franz Neumann’s Behemoth.20 Such analyses acquired increased influence in 1943 as a number of important German émigrés, formerly of the Institute for Social Research (Institut für Sozialforschung) in Frankfurt, entered the Research and Analysis Branch of the Office of Strategic Services. There they wrote the Civil Affairs Handbook for use by the American occupation military government, passages of which are taken directly from the economic chapters of Behemoth.21 Without attempting to summarize the complex arguments of these thinkers, who in any case differed in important points of emphasis and analysis,22 for our purposes here it may be said that in their view the existence in Germany of powerful business interest associations as well as a long history of trusts, monopolies, and cartels not only formed an important precondition to the growth of fascism, but then, after 1933, were easily transformed into instruments of Nazi dictatorship and war.23 This interpretation of the authoritarian tendencies in German business was embodied in JSC 1067—modified in practice, as we have seen, by the pragmatic need to prevent starvation and political unrest as well as by a growing realization that European recovery was not possible without a strong revival of German industry. But at the same time a more general consensus existed among American occupation authorities, at the beginning at least, that it was the German cartel structure, rather than German big business as such, that contained the seeds of authoritarianism and in any case constituted a formidable barrier to the free trade and competition they considered essential to a new peaceful international order. Therefore, decartelization was one of the four Ds of American occupation policy ( the others being denazification, decartelization, and democratization) But the American hostility to handwerk corporatism also had other roots. These lay in an American trust-busting tradition and in an ideology, going at least as far back as Jefferson, that celebrated small proprietorship as a path to social mobility and as a foundation of democratic rights.24 Even though the American economy by the late nineteenth century had become dominated by big business, the freedom of the individual to start a business and to succeed—or to fail—on his own without government interference remained the feature of their national life that American occupation officials thought most necessary to implant in Germany.25 This anticartel view was not, however, fully shared by America’s Western Allies. British commercial law, in fact, had traditionally favored cartels, and the courts restricted cartels only when they were deemed to be inconsistent with the public interest (according to the “rule of reason”) and not because they considered them a restraint of trade per se.26 Moreover, many business leaders and leaders of the postwar Labour government suspected that the primary purpose of the American anticartel policy was to serve the interests of American corporations eager to expand in Europe.27 France, too, had a long tradition of agreements limiting competition going back to at least the early nineteenth century. In contrast to Britain, though, cartels in France were more highly developed and state involvement was

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much greater, especially in the interwar period, with the state itself founding cartels and taking an active role in monitoring prices.28 Thus neither government, lacking histories of trust busting, was prepared to make the same connection between economic liberalism and political democracy as the Americans. Differing national traditions notwithstanding, the Allies at Potsdam on August 2, 1945, had agreed on a policy of decartelization as a step toward eliminating Germany’s capacity to wage war.29 Yet it was only on February 12, 1947, that Britain and the United States were able to overcome their own differences and incorporate these principles in the Prohibition of Excessive Concentration of German Economic Power law decreed in the American zone as Law no. 56.30 The outcome of the Allied decartelization policy to industry is not our subject here, except to say that the efforts of liberal reformers were eventually thwarted not so much by German foot-dragging as they were by opposition within OMGUS and the American public who were convinced that postwar economic growth in Europe, and in the United States, required a policy friendly to big business.31 In addition, the escalation of the Cold War caused the US government to revise its whole policy limiting levels of German industrial production.32 Thus the Cold War and the opposition within the United States meant that decartelization was a dead letter by 1948–1949.33 The provisions of Law no. 56 were clearly aimed primarily at the giants of German industry, especially coal, iron and steel, and chemical.34 The purpose of the law was “to prevent Germany from endangering the safety of her neighbors and again constituting a threat to international peace” and “to destroy Germany’s economic potential to wage war.” In order to accomplish this, the law continued, “it is desirable that the German economy be reorganized and that concentrations of economic power as exemplified, in particular, by cartels, syndicates, trusts, combines, and other types of monopolistic or restrictive arrangements which could be used by Germany as instruments of political or economic aggression, be eliminated at the earliest practicable date.”35 Yet officials in the Decartelization Branch came to apply its principles to handwerk as well in a double sense. First, American officials considered an inter-Länder and inter-zonal handwerk organizational structure—corporations of public law exercising certain state powers— to fall into this category. Second, the chambers’ authority to admit only formally trained masters to the trades by means of the certificate of competency seemed likewise to constitute “a restriction of access to domestic or international markets,” which Law no. 56 expressly forbade. Aside from the military and economic presuppositions contained in Law no. 56—that Germany’s future capacity to wage war would be minimized by a breakup of concentrations of economic power and by the abolition of restrictive trade practices—American condemnation of German corporatism went even deeper. As a report on trade practices to a congressional committee put it, “The German economy has always been subjected to an inordinate amount of state control and government interference in business. The willingness with which the German people submitted to this interference furnishes an important expla-

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nation for the success of totalitarianism in the Reich.”36 Thus, in the American view, not only was a predisposition to accept extensive controls an important precondition for Nazism, but this predisposition had long been a peculiar feature of German life and culture. The report elaborated, In Germany … there has been no development of the free enterprise concepts comparable to those evolved in the United States and England. Here the medieval control device of the guild still holds prominence; a German Chamber of Commerce bears little similarity to its US counterpart, but is a powerful control device in the economic field; the trade association, along with the syndicate and cartel, developed into instruments of economic regimentation; all these institutions were integrated into the fabric of National Socialism and its extension of regulation over all phases of economic life. These institutions developed their own regulations under state sanction, not to assure competition, but as paternalistic controls aimed at a “conservation” of a status quo (on the guildsmen, to regulate quality; on association and syndicate members, to prevent “harmful” competition).37

On August 26, 1947, Brodnitz convened another meeting with handwerk and German government officials at which he bluntly echoed this view: “The obligatory membership and the mixing of state and economic functions is an anathema to the Military Government. It believes that the retention of such institutions leads to a paralysis in the development of democracy.”38 Although the Americans at the meeting protested (no doubt sincerely) that the United States had no wish to impose its own institutions on other countries, it is clear that they regarded these deeply rooted regulatory proclivities to be incompatible with the democracy they considered necessary for postwar stability. The message was clear and it represented a sharpening of the American position of the previous year: handwerk institutions were to be private, voluntary interest organizations, not semipublic ones with corporate responsibilities and authority. As in their earlier meeting with Brodnitz, handwerk officials remained relatively demure, while representatives of the Länder again took the lead in countering the concentration of power view as well as the American opinion that its organizations were creatures of Nazism. They repeated the argument that handwerk was made up of so many diverse trades and countless individual small firms that they could never assume a concentration of power in the way industry and its organizations could. Handwerk had originally built up its organizational strength reactively as a counterweight to more powerful industry, and not in order to accumulate power in itself. For it to be effective in this role of encouraging small business—which presumably went hand in hand with the avowed American goal of preventing domination by big business—the organizations, they maintained, required obligatory membership. Thus this apparent lack of freedom not to join the guilds was in no way antidemocratic.39 Unmoved by these arguments, the US military government during the course of 1947–1948 moved decisively toward dismantling the corporate authority of the organizations and the introduction of full freedom of trade.40 In early April 1947 OMGUS issued a new set of regulations that were meant to serve as guide-

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lines for the Länder of the US zone in drafting a new handwerk law. Regulations 13/120,41 as they were known, continued the American assault on the fundamentals of the German handwerk system. As in the principles outlined in the May 13, 1946, meeting, Regulations 13/120 demanded first that organizations have voluntary membership and enjoy no monopoly of representation, and, second, that they themselves exercise no state authority or functions (i.e., that they not administer the examinations and that their role in such tasks as the allocation of raw materials be merely advisory). But Regulations 13/120 went farther than the American position of the previous year. They directed that the organizations no longer be allowed the legal status of corporations of public law, and that the extent to which local and regional groups could affiliate to form inter-Länder organizations be limited.42 The following year military authorities stepped up the pressure on the Länder governments, which had shown no inclination toward developing a handwerk law of the kind envisioned by the Americans. On June 15, OMGUS sent a directive to the military governments of Bavaria, Hesse, and Württemberg-Baden, instructing them in turn to direct the Länder governments to review their commercial licensing laws and to propose replacement regulations within ninety days. The directive stated that OMGUS studies had shown that business licenses were being granted “in such a manner as to allow already established businesses and business or vocational groups to discriminate against prospective new businesses” and reminded the Länder that the exercise of state functions by private organizations constituted an excessive concentration of economic power according to the provisions of Law no. 56.43 There were several reasons for the timing of this new initiative. As discussed above, because of conditions of scarcity and economic chaos in 1946, OMGUS at Ludwig Erhard’s urging had acceded to the extraordinary measures of the licensing restrictions of Law no. 42. But by mid-1948 times had changed. Already in 1947 the view had developed within OMGUS that the economic restrictions currently in force, including those embodied in the handwerk system as well as those licensing requirements of Law no. 42, bore a large measure of responsibility for the continued economic stagnation. Then a year later the economic situation had improved to the point where Erhard could remove most economic controls the day after the new deutsche mark (DM) was introduced on June 20, 1948. Goods available for years only on the black market reappeared in the stores literally overnight.44 Thus with a stable currency and materials more freely available, the United States no longer saw the need for such stringent regulations. But the currency reform had other consequences that gave additional incentive for the Americans to act. While the new currency enabled the return of commodities to the open market, in the short run in fact it hurt broad sections of the population, particularly those poor in capital goods, and resulted in a sharp rise in unemployment. Since refugees were overrepresented among the latter groups, the United States hoped to alleviate their plight by allowing them easier access into handwerk.45

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Although the US directive had been to the Länder governments, the latter, having no desire to assume responsibility for such an unpopular measure, delayed action pending an initiative by the Bizonal Economic Council, which on July 9, 1948, passed a reformed commercial licensing law. This law, however, in no way fulfilled the expectations of the Americans. While it did abolish the examination of need for all business applications, the sections pertaining to handwerk expressly retained the requirements for the certificate of competency issued by the chambers, the chambers’ public law status, and the proof of personal reliability. The law also provided for journeymen, nominated by a special journeymen’s committee, to be represented on the chamber commissions that judged the master examinations.46 The law passed with the solid support of the major parties, which agreed that, although its main provisions were first passed into law in 1935, the law had a prehistory extending back far before 1933 and was therefore not essentially Nazi.47 The Christian Democratic Union (CDU) and the Christian Social Union (CSU) stood firmly behind the law.48 Some SPD representatives expressed concern that the certificate of competency requirement might inhibit handwerk initiative, but agreed that this potential problem could be overcome by controls within the examination commission itself. Above all, the public required protection from fraud and unqualified handwerker, they argued, and these requirements were the best method of ensuring this. The Social Democrats proposed only that the unions participate directly in nominating the journeymen representatives to the examination commission. This was rejected.49 Only the Liberal Party (Freie Demokratische Partei; FDP) objected that handwerk was retreating to “its old privileges and [medieval] guild system.”50 For the Americans the law in no way embodied the principles of economic freedom in handwerk that they had been discussing since 1946. The US military government thus rejected it.51 Further negotiations between the United States, the Bizonal Economic Council, and the Länder governments proved fruitless. Finally, frustrated with the German refusal to bend to US pressure, on November 29, 1948, OMGUS simply imposed its own version of freedom of trade by decree.52 The OMGUS directive,53 contained in letters to the various Länder, swept away customary German practice in all its aspects with regard to the regulation and administration of handwerk.54 The directive altered the German system in two fundamental ways. First, the chambers were stripped of their status as corporations of public law and were to be “permitted only as independent organizations … divorced from governmental functions and their membership shall be entirely voluntary.”55 Second, not only was the self-regulatory authority of the chambers abolished and their role reduced to that of purely private interest groups, but the whole licensing process for new firms was radically changed. All qualifications based on economic need (which had also been eliminated in the law passed by the Bizonal Economic Council on July 9, 1948) and personal reliability were abolished. Furthermore, and this struck at the heart of the handwerk system, the certificate of competency as a prerequisite for opening a shop was

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eliminated. Only a few trades where public health, safety, or welfare were involved were still to require licenses and proof of technical qualifications in order to open and operate.56 In these cases, however, the applicants’ qualifications were to be examined and approved no longer by handwerk corporate bodies but directly by the state. The chambers were to have no role in the process whatsoever. For the remainder of the trades, the market alone was to determine the qualifications of the shop owner. To the American mind, the need to remove such restrictions seemed selfevident. The notion that established masters could play a role in deciding whether an applicant could open a shop (through the chambers’ examination commissions) seemed to be an obvious conflict of interest, and the idea that master examinations could be a rational method of ensuring technical competency was dismissed by the Americans out of hand. As General Clay put it, “A Military Government order outlaws the old German system by which local vested interests prevent competition by denying applicants a license to open a new business on the grounds that they do not have the necessary ‘quailfications.’”57 To be sure, this view was not without opposition. The OMGUS economics adviser warned of the “considerable opposition” as well as the “upsetting psychological and industrial effect” that the abolition of this “established German custom” would have.58 But the liberal view prevailed, holding that except for matters of public health and safety, the market was the best regulator of qualifications. As one memorandum put it, “To an American all these criteria [licensing restrictions] appear to be irrelevant. If a man wants to open up a new business, set up as a fishmonger or a house painter, shoe repair man or printer, risking his capital, convinced that he has the qualifications for success [he] should be encouraged. And it is anything but encouraging to read, as I do every day, that some paternalistic committee of businessmen or bureaucrats has refused a license.”59 Restrictions of this kind (be they need, reliability, or qualifications) for most trades, and certainly those administered by a private body, seemed to the Americans to be an ancient relic inappropriate to modern times.60 The American opposition to handwerk corporate authority represented something of a paradox. The conviction that cartels and monopolies of big business enabled the rise of Nazism and its capacity to wage aggressive war resulted in a policy that hindered associations of small business. The belief that the ability to form small businesses in an unrestricted free market constituted a foundation of democracy led to a policy that compromised the ability of those businesses to survive. As to decartelization, it was to be the Germans themselves who would initiate an anticartel law, finally passed in 1957. Neoliberals around Ludwig Erhard believed, like the Americans, that concentrations of economic power in the form of monopolies and cartels led to concentrations of political power, in the form of authoritarian dictatorships. But this conviction led to a policy the opposite of the American one—the banning of cartels and the restoration of handwerk corporate authority. As we will see in more detail in the following chapters, neoliberals believed that it was precisely the unrestricted free market that enabled concentra-

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tions of economic power to form in the first place. Thus free competition resulted in its own negation. The way to preserve a truly competitive market lay, in part, in corporate institutions and authority of the kind wielded by handwerk. The preoccupation of German politicians and handwerk officials in all the Western zones over the next five years was to convince the Americans that corporatism was indeed compatible with modern capitalism.

Notes 1. 2. 3. 4. 5. 6.

7. 8. 9. 10. 11. 12.

13.

14. 15. 16.

17. 18. 19.

Quoted by Woller, Gesellschaft und Politik, 265. Woller, Gesellschaft und Politik, 266. Quoted by Woller, Gesellschaft und Politik, 267. Woller, Gesellschaft und Politik, 268. BGVBl. no. 20, 1946, 229f. Equivalent laws came into force in Württemberg-Baden (Law no. 64) on November 5, 1946 and in Hesse (Law no. 205) on June 24, 1947. The Bavarian minister of Culture, Franz Fendt (SPD), denounced Erhard’s proposal as “medieval privileges for the already-established proprietors”; cited by Woller, Gesellschaft und Politik, 267. Egon Tuchtfeldt, Gewerbefreiheit als wirtschaftspolitisches Problem (Berlin, 1955), 64–65. See Woller, Gesellschaft und Politik, 264–281; and Boyer, “Das Handwerk.” Quoted in Boyer, “Das Handwerk,” 442. Woller, Gesellschaft und Politik, 268; and Boyer “Das Handwerk,” 453. “Neuordnung im Handwerk -I,” Hessisches Handwerk (1:1), May 10, 1948, 2. The zonal variations in the history of the industry and trade chambers (IHK) in many respects parallel that of the handwerk chambers. While the Americans had reclassified the IHKs’ legal status and authority entirely, the British allowed them to retain their corporate status and obligatory membership; their only change was to make dues voluntary. The French made no change from the Weimar law. Thus, a dual system for the IHKs prevailed in the Federal Republic and was not unified until 1957, when the US changes were reversed. See Tornow, “Die deutschen Unternehmerverbände,” 237–238. Minutes of the meeting of May 13, 1946 in Stuttgart, in BA, Z1/434, Item 147–154. For an English summation, see BA, Z1/102, Item 51–52. A follow-up meeting of the Working Committee of Chambers of Handicraft met on July 9, 1946 and formalized the general principles laid down at the May 13 meeting in order to guide the drafting of a future law on handwerk, in BA, Z1/102, Item 42–44. The Handwerk Rolle is the list of individuals allowed by their qualifications to practice a handwerk trade. Minutes of May 13, 1946 meeting, in BA, Z1/434, Item 147–154. Minutes of May 13, 1946, meeting, in BA, Z1/434, Item 147–154. This issue was to be resolved to the unions’ satisfaction with the introduction of journeymen’s committees in the chambers in the early 1950s; see chapter 11, this volume. Minutes of May 13, 1946 meeting, in BA, Z1/434, Item 147–154, 4–5. Annex to the summary report of the subcommittee, Chambers of Handicraft Meeting, May 13, 1946 (English language), in BA, Z1/102, Item 52. Cordell Hull, Roosevelt’s Secretary of State from 1933 to 1944, had been a strong advocate of the view since his days as a congressman in 1916. The Memoirs of Cordell Hull, vol. 1 (London,

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20.

21.

22.

23.

24.

25.

1948), 363–365. Hull was also convinced in the mid-1930s that as long as Hitler’s policy of autarky effectively kept the United States out of the German market, the international trade the United States needed for a return to full employment and prosperity would not revive. Callum A. MacDonald, The United States, Britain and Appeasement, 1936–1939 (London, 1981), 10. Franz L. Neumann, Behemoth: The Structure and Practice of National Socialism (Toronto and New York, 1944). On Neumann’s influence in the formation of US policy, see Charles S. Maier, “The Politics of Productivity: Foundations of American International Economic Policy after World War II,” in Between Power and Plenty: Foreign Economic Policies of Advanced Industrial States, ed. Peter J. Katzenstein (Madison, WI, 1978), 33. Alfons Söllner, Zur Archäologie der Demokratie in Deutschland: Analysen politischer Emigranten im amerikanischen Geheimdienst, vol. 1. 1943–1945 (Frankfurt, 1982), 7, 88. The most important social, political, and economic analysts in this group were Franz L. Neumann, Max Horkheimer, Friedrich Pollock, A. R. L. Gurland, and Otto Kirchheimer. For a critical analysis, see the edited volume of their writings: Helmut Dubiel and Alfons Söllner, Wirtschaft, Recht und Staat im Nationalsozialismus: Analysen des Instituts für Sozialforschung 1939–1942 (Frankurt, 1981). See also Raffaele Laudani, ed., Secret Reports on Nazi Germany: The Frankfurt School Contribution to the War Effort (Princeton, N.J., 2013). Regina Ursula Gramer argues that the US occupation policy that emerged from the debate on whether German cartels were to be regarded as the root of Nazi aggression or an instrument of that agression was an uneven and unclear compromise. “Von der Entflechtung zur Rekonzentration: Das uneinheitliche Vermächtnis der wirtschaftlichen Umgestaltung,” in Die USA und Deutschland im Zeitalter des Kalten Krieges 1945–1990. Ein Handbuch, Vol. 1 1945–1968, ed. Detlev Junker (Stuttgart, 2001), 453. See, for example, the writings of Robert A. Brady, including The Rationalization Movement in German Industry: A Study in the Evolution of Economic Planning (Berkeley, Calif., 1933). In this work Brady traced the concentration trend in German industry, and especially the formation of cartels, back to the 1870s, which he described as the destruction of the foundations of laissez faire. In the preface completed in August 1933 he wrote that the new regime is a “dictatorship by joint action of the middle class and ‘big business’ as the economic, political, and cultural expression of an emergent (decadent?) age of monopoly capitalism” (p. viii). The Spirit and Structure of German Fascism (New York, 1969, first published 1937) examined Nazi economic policy in practice and argued that the regime’s strengthening of its political power was aided by its increase of monopolies and cartels and the erosion of free competition generally. In Business as a System of Power (New York, 1943), he argued that the seeds of Nazism, and now war, were sown in Bismarck’s rejection of Manchester capitalism (24–25) and that the Nazis only had to strengthen and streamline the system of cartels they found already in place in order to make that system an effective instrument of the dictatorship (p. 29). Occupation officials made this connection explicitly. For example, the general counsel of the Office of the US High Commissioner for Germany in a speech in Hamburg, August 18, 1950, explaining American decartelization and Gewerbefreiheit policies, said, “For us [Americans] this idea [of a wide distribution of power within the community] is traditional. For Thomas Jefferson the ideal state was composed of small independent proprietors, farmers and artisans. The last century has greatly changed this picture, but we believe that Jefferson’s idea is still valid.” Robert R. Bowie, “Freedom of Trade,” Information Bulletin: Monthly Magazine of the Office of the US High Commissioner for Germany (October 1950), 65. Jefferson’s classic formulation of this vision of the yeoman republic is to be found in his “Notes on the State of Virginia,” Query XIX, copy in idem., Writings (New York, 1984), 290–291. Among the contemporary American studies emphasizing small business as a contributor to national economic vitality and competitiveness and as a prerequisite of democratic life and arguing that entry to business should not be hindered by restrictions or collusive measures, see Clare E. Griffin, Enterprise in a Free Society (Chicago, 1949), 178–181, 191–193; Abraham

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26.

27.

28.

29.

30.

31.

32.

33.

34. 35.

D. H. Kaplan, Big Enterprise in a Competitive System (Washington, D.C., 1954), 40, 45; and Thomas C. Cochran, The American Business System. A Historical Perspective, 1900–1955 (Cambridge, Mass., 1957), 165–169. Otfried Lieberknecht, Patente, Lizenzverträge und Verbot von Wettbewerbsbeschränkungen: Eine vergleichende Darstellung der Rechtslage in Deutschland, Großbritanien und den Vereinigten Staaten (Frankfurt, 1953), 56–61. George W. Stocking and Myron W. Watkins, Cartels or Competition? The Economics of International Controls by Business and Government (New York, 1948), 359–366. See also Alan Derret Neale, The Antitrust Laws of the United States of America: A Study of Competition Enforced by Law (Cambridge, UK, 1960), 475–476. The French government during the interwar period had made an economic-political connection, however, but in a different way. Officials believed that by making the French economy and industry stronger, which they were convinced cartels would help accomplish, it would in turn enhance the power of the state, and to that end pursued competition-limiting agreements even with Nazi Germany through the mid-1930s. Only in the postwar period was price fixing prohibited (1953), but cartels were not finally legally prohibited until 1986 in order to conform to European Economic Community policy. Harm G. Schräter, “Cartelization and Decartelization in Europe, 1870–1995: Rise and Decline of an Economic Institution,” Journal of European Economic History, 25, no. 1 (spring 1996), 132, 135–136, 141, 146. Schräter puts France and Germany, for the period before 1945, in the category of nations most positive on cartels along with Austria, Belgium, Czechoslovakia, Finland, Netherlands, Norway, Sweden, and Switzerland (p. 141). See also the chapters on France and Great Britain in Paul Thomas Fischer and Horst Wagenführ, Kartelle in Europe (ohne Deutschland) (Nuremberg, 1929). Text of the relevant paragraphs of the Potsdam Agreement are found in Dokumente des Geteilten Deutschland, ed. Ingo von Münch (Stuttgart, 1968), 37. This, of course, did not include the French who were not at the Conference. Given the lack of enthusiasm for the law in the German Bizonal Verwaltung für Wirtschaft, the law was issued by decree as Law no. 56 in the US zone and as Law no. 78 in the British zone: Verbot der übermäßigen Konzentrierung deutscher Wirtschaftskraft, Bay GVBl. 1947, 77f; English text in Germany 1947–1949: The Story in Documents (Washington, D.C., 1950), 344–348. Clay, Decision in Germany, 326. See also Rüdiger Robert, Konzentrationspolitik in der Bundesrepublik—Das Beispiel der Entstehung des Gesetzes gegen Wettbewerbsbeschränkungen (Berlin, 1976), 87–88, 97–102; Gunther Mai, Der Allierte Kontrollrat in Deutschland 1945– 1948. Allierte Einheit—Deutsche Teilung? (Munich, 1995), 231–250; and Boyer, Zwischen Zwangswirtschaft und Gewerbefreiheit, 137–140. According to the bitter account of James Stewart Martin, chief of the Decartelization Branch from late 1945 to mid 1947, “We had not been stopped in Germany by German business. We had been stopped by American business.” All Honorable Men (Boston, 1950), 264. For Clay’s version of these events, see Decision in Germany, 325–334. See also Edward N. Peterson, The American Occupation of Germany: Retreat to Victory (Detroit, 1977), 126–131. Hans-Peter Schwarz sees the revised level-of-industry plan of August 1947 as the turning point in US policy, when the last traces of Morgenthau’s influences were abandoned. Vom Reich zur Bundesrepublik. Deutschland im Wiederstreit der außenpolitischen Konzeptionen in den Jahren der Besatzungsherrschaft 1945–1949 (Neuwied and Berlin, 1966), 129. On the tension in American domestic and foreign policy between the trust-busting opponents of monopoly and a pro-industry faction espousing what the Charles Maier calls the “politics of productivity” as well as how some frustrated reformers had left the Justice Department in the hope of instituting antimonopolistic reform in the defeated Japan and Germany (soon to be frustrated there, too), see Maier, “The Politics of Productivity,” 33–34. See Berghahn, Americanisation of West German Industry, 85–110; and Gillen, Deconcentration and Decartelization, 26–30. Preamble, Law no. 56, Germany 1947–1949, 344.

Developments in the US Zone Leading up to the Introduction of Gewerbefreiheit | 139 36. “Report to the Herter Committee on the Decartelization Program in Germany,” September 22, 1947, 23, copy in Columbia University Rare Book and Manuscript Library, Dorn Collection Box 17, folder “Additional Information for Select Committee on Foreign Aid; House of Representatives; Part Decartelization, September 1947.” 37. “Report to the Herter Committee on the Decartelization Program in Germany,” September 22, 1947, 21 (emphasis in original). History in this regard could be variously interpreted by occupation officials to suit their purposes. On other occasions they pointed to the German nineteenth century tradition of lifting controls, repudiated in the 1930s by the Nazis, which the Americans were then reintroducing. See “Decartelization,” Monthly Report of the Military Governor, OMGUS, no. 41 (November 1948): 83–84; Vaughn Smartt (Public Relations Division, Office of Public Affairs, US High Commission), “Gewerbefreiheit,” in Information Bulletin, Office of the US High Commissioner for Germany (April 1951): 5. 38. Minutes of handwerk meeting, August 26, 1947, 4, in BA, Z1/434, Item 46–50. 39. Minutes of handwerk meeting, August 26, 1947, 4, in BA, Z1/434, Item 46–50. Union leaders at this meeting took the position of being opposed to all organizations with obligatory membership but said that the semi-public functions carried out by the chambers could not successfully be transferred to the state and should therefore remain with the chambers; 8. 40. See the historical chronology, “Einführung der Gewerbefreiheit,” VfW memo, February 18, 1949, in BA, B102/9142. 41. See minutes of meeting on the question of the organization of handwerk, August 26, 1947, in BA, Z1/434, Item 46–50. As in most areas of German law where OMGUS wanted to exert an influence, it issued guidelines that the German legislators were expected to follow in drafting the actual legislation. 42. “Die Neuordnung im Handwerk-II,” in Hessisches Handwerk (1:2), June 10, 1948, 1. The author of this series, Karl Schöppler, was president of the Handwerk Chamber of Wiesbaden and present at all the meetings on this issue with OMGUS during the period. 43. OMGUS Directive AG 101 (PD) on Licensing of New Businesses, June 15, 1948, NA, Record Group (RG) 260 5/266-2/11. See also Gillen, Deconcentration and Decartelization, 69–70. 44. Kleßmann, Die doppelte Staatsgründung, 185–193; and Kramer, West German Economy, 134– 148. 45. Smartt, “Gewerbefreiheit,” 5. 46. For text of this reformed commercial licensing law (the Gewerbezulassungsgesetz), see Drucksache no. 406 in Wörtliche Berichte und Drucksachen des Wirtschaftsrats des Vereinigten Wirtschaftsgebietes 1947-1949, ed., Christopher Weitz and Hans Woller (Munich and Vienna, 1977) (hereafter WR Drucksache), Bd. 4, 647–649. 47. See debate of the Bizonal WR on July 9, 1948, 743, in WR Berichte, Bd. 2, 742–751. 48. WR Berichte, Bd. 2, 746. 49. WR Berichte, Bd. 2, 745–751. 50. WR Berichte, Bd. 2, 748. 51. For the ostensible and real reasons for the US rejection, see Tilman Pünder, Das Bizonale Interregnum: Die Geschichte des Vereinigten Wirtschaftsgebiets 1946–1949 (Waiblingen, 1966), 229–230; also Boyer “Das Handwerk,” 455, n. 130. 52. John Gimbel, The American Occupation of Germany (Stanford, Calif., 1968), 237–238. 53. OMGUS to Länder military governments, “Licensing of New Businesses,” November 29, 1948, NA, RG 260, 5/266-2/11. 54. Hans-Hermann Hartwich, Sozialstaatspostulat und Gesellschaftlicher Status Quo (Cologne, 1970), 89. 55. Office of military government for Bremen to president of the Bremen senate, on “Licensing Laws,” December 20, 1948, quoted by Gillen, Deconcentration and Decartelization, 71. 56. As of January 1949 there were thirty-two trades that fell into this category, most in the construction and food trades. Examples include mason, carpenter, electrician, plumber, auto mechanic, shipbuilder, butcher, baker, brewer, optician, surgical instrument maker, barber, dyer,

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57. 58. 59. 60.

clothes washer, and ironer. For a complete list of trades requiring a state license, see VfW memo, “Gewerbefreiheit Schutzliste,” January 28, 1949, in BA, Z13/221. Clay, Decision in Germany, 329. Memo from Lawrence Wilkinson to Clay; cited by Gillen, Deconcentration and Decartelization, 68–69. Draft outline for statement by Richard Bronson, then head of the Decartelization Branch, October 31, 1947, NA, RG 260, 11/11-3/7, cited by Boyer, “Das Handwerk,” 452, fn118. This view was so ingrained that one contemporary analyst could state flatly of the corporate authority granted by the 1935 law, “National Socialist legislation … reintroduced the medieval guild system”; Gillen, Deconcentration and Decartelization, 66. This same language is echoed by Henry C. Wallich, Mainsprings of the German Revival (New Haven, Conn., 1955), 135–136.

Chapter 7

THE ROLE OF ORGANIZATION AND LEADERSHIP IN THE MODERNIZATION OF HANDWERK

 The Americans worked to dismantle the corporate authority of handwerk organizations essentially because they believed as a matter of principle that in most cases the market was a better mechanism of regulation than a bureaucratic structure, and that such authority operated to the benefit of established businesses and kept out much-needed fresh blood. What is more, the Americans believed such restrictions in the economic sphere were necessarily linked—institutionally and by mentality—to political authoritarianism. The German response, as we have seen so far, was that the authority vested in the handwerk organizations performed the valuable functions of regulation that would otherwise have to be assumed by the state. Additionally, Germans by tradition had no real ideological problem with the overlap of private interest and public responsibility, long an important feature of their political economy, yet which to the Americans seemed an infringement of economic freedom and a restraint of political democracy. But beyond this United States–German doctrinal disagreement lay two questions of more-immediate practical importance: How did handwerk leaders view the problems facing their Stand, and how did they use their corporate authority to address them? The answer to these questions not only helps illuminate the struggle over the United States–imposed freedom of trade that was to continue until 1953, but is central to the problem of handwerk’s postwar stabilization and its adaptation to modern industrial capitalism. We shall see in the following section that, contrary to the undifferentiated portrait of handwerk protectionism, widespread as it may have been at the local level, there existed a cohort of progressive postwar leaders, dominant at the Land and federal levels, who had

Notes for this section begin on page 153.

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a modern, activist vision of how old-fashioned masters had to be transformed and how they as leaders must employ their apparently preindustrial corporate structures to these ends.

Liberal Advocacy in a Controlled Marketplace The purpose of the leadership’s efforts to adapt handwerker to an industrial economy may be put very simply: to persuade them to adopt technological innovations as well as modern methods of business management—to transform them, in other words, from old-world craftsmen into sophisticated entrepreneurs comfortable in the capitalist marketplace. During the immediate postwar years, the push to modernization fell into two periods: the first extended from capitulation until the currency reform and the lifting of economic controls in June 1948, and the second began after the important turning point characterized by the return of the free market and, later, full sovereignty for the new West German state. The efforts during the first period to adapt handwerk to the modern marketplace were complicated by the reality that there was, in fact, no modern marketplace. Wages and prices remained under government control, currency was virtually worthless, and goods of all kinds were scarce. The real economy existed on a primitive, if intricate, level of barter and postwar black market. Under these conditions, such matters as technological innovation and proper accounting methods naturally took second place to more-pressing issues such as the securing of raw materials and the legal basis for organizational survival. Nonetheless, handwerk organizations still had a strong interest in promoting long-term modernization. For one thing, they wanted to improve handwerk’s overall economic position, especially in ways that integrated it more fully into the multilateral world trading system advocated by the Americans. Thus the chambers cooperated to encourage masters to produce articles for export as well as to secure from government an export quota for handwerk and, as discussed earlier, a sufficient supply of raw materials to produce them.1 Moreover, given the particular circumstances of postwar life, the organizations had additional reasons for promoting modernization. The flood of applicants, including refugees, seeking to become independent provoked a response from the organizations as well as from government authorities. As described above, authorities sought to address this crisis by imposing a limit on the numbers of those establishing their own businesses in order to prevent the dissipation of scarce material resources, while the local reaction was often based on an impulse to protect the livelihoods of already-established businesses. Yet the organizations had another, more far-reaching, reason for wanting to ensure that the mechanism controlling entrance to the trades remained in place. It formed the very basis of their institutional authority and raison d’être. However, given the opposition of the Allies and the German public to “Stand egoism,” there was heavy pressure on the leadership to make the justification for this system fit a modern ratio-

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nale. Therefore, leaders were compelled continuously to defend their corporate authority and maintain that it had “nothing to do with either (medieval) guild eccentricities or a denial of the principles of freedom of trade,” but rather that the certificate of competency existed, above all, to ensure quality and to protect the public from incompetent and unscrupulous tradesmen.2 There were also solid reasons having to do with present circumstances for making this modern rationale a good deal more specific. Given the scarcity and the black market, handwerker often found themselves the object of public resentment for the high (real) costs of their goods and services. Dealing with customers directly, individual masters often received the blame when they were forced to charge more than their customers could afford or when they preferred customers who offered scarce commodities—far more valuable than cash—as payment. This resentment, simply as a matter of public relations, was of great concern to leaders who worked to correct the damage to handwerk’s reputation and who, in order to help secure popular support for their legal demands, emphasized that the best way to keep such “unscrupulous elements” out of handwerk was the certificate of competency. But to handwerker themselves officials offered something far more concrete: solid reasons for learning modern commercial practices and guidance on how to apply them. As expressed in one typical article of the period, “In so far as it is a matter of raw material or especially transport price rises [which are reflected in the cost of the finished product] … the handwerker businessman cannot be blamed [for this] if he, in accordance with careful calculations for his products, asks an appropriate price determined by consideration of all circumstances—indeed he must. A self-evident duty for every handwerker, however, is that he establish this price for every piece by proper calculation.”3 The proper and careful reckoning of costs and prices was thus not only sound business practice, it was necessary for good customer relations and for the reputation of handwerk as a whole—the maintenance of which was to be of crucial importance in defending its position against the Americans. This emphasis on modern accounting methods, while it took full recognition of the need of backward handwerker to adapt to the marketplace, did not divorce itself from the moral language of the so-called preindustrial mentality. The master who engaged in “dishonest business practices” by cheating customers or manipulating prices did grave disservice to all “respectable handwerker” and betrayed his “professional honor” and “tradition.” Indeed, the whole concept of profit itself was still sometimes viewed with ambivalence—as exemplified in the phrase, “the gratification of an unjustified pursuit of profit.” Unfair business practices were an offense not only against the moral precept of a “just price”—still a powerful concept among handwerker—but against the entire fabric of the community.4 Handwerk has never entirely abandoned the language of moral economy in favor of a “pure” profit-oriented work ethic. Indeed, handwerk’s portrayal of itself as a mode of production which fulfills the human spirit and which is conducted according to ethical principles beyond those of the amoral marketplace has always been, and continues to be, used to distinguish itself from soulless mass produc-

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tion capitalism. For handwerk in the postwar period the discourses of rationalization and moral economy have gone hand in hand.5 Yet within this moral context, in the face of the return of the free market in 1948, market rationality was to receive new emphasis.

Currency Reform and the End of Economic Controls By early 1948 it was clear to most that the postwar system of economic controls had outlived its usefulness. The controls had by then successfully stimulated the growth of the basic and production goods industries, which they had originally been designed to favor, but rationing and the lack of incentives for the production of consumer goods had made them greatly unpopular. The stronger position of basic industries and the growing popular frustration with the controls coincided with an ideological shift within the majority party in the Bizonal Economic Council, the CDU. In early 1947 the dominant faction in the CDU/CSU had favored a program emphasizing economic planning, codetermination, and public ownership of certain heavy industries. By early the following year, however, the neoliberal wing of the party had gained ascendancy. Konrad Adenauer regarded the replacement of Viktor Agartz (SPD) as director of the Bizonal Economic Administration in September 1947 as the key point in this transition.6 By March 2, 1948, when Ludwig Erhard was elected to that position, the free market liberals were in full control of the CDU/CSU and, the SPD having retreated into opposition, of the Bizonal Economic Council as a whole. Thus on June 21, 1948, the day after the introduction of the new currency, when Erhard announced the end of rationing and controls on most consumer goods, he did so not only from a position of political strength but with solid popular backing as well.7 For the first time since 1936 the free market determined the price and availability of goods and services. Handwerk officials, like most other Germans, welcomed the new economic course along with the sudden and dramatic availability of consumer goods that it brought and in general strongly supported Erhard’s policies.8 The return to a full free market economy, however, was not without problems for handwerk. For one, twelve years of controlled prices meant that most masters had to reaccustom themselves to competitive market principles. Second, given that handwerk was more structurally integrated into the Germany economy than it had been before the war (or, put another way, handwerker now served broader markets rather than the more isolated market niches they had filled prior to the war), the return of market forces suddenly subjected them to competitive pressures never before experienced. Leaders recognized these changes and used their corporate authority to address them.9 The overall efforts of the leadership to adapt handwerk to a modern industrial economy took place on two levels. The first took the form of articulating a general analysis of how its economic and social position had been transformed over

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the past twenty years and how its vision of itself must change along with it. The second consisted of practical efforts toward this end. The message to handwerker—that they must change their business practices as well as their view of themselves in order to conform to the new structural position of their Stand—was delivered through the media of its newspapers, its educational system, and, of special importance, the periodic general meetings of the chambers. In these venues leaders applauded the lifting of wage and price controls, asserting that this would not only make scarce goods available again but would also reintroduce a healthy spirit of competition. Bernard Günther, president of the Cologne Chamber, told members at the first postwar general meeting held on August 21, 1948, “Now it will be shown which firms are truly competitive and which, because through their own fault they lack the necessary productivity, are endangered. It is self-evident that handwerk organizations must do everything to assure handwerk a capability to compete equivalent to that of other economic groups.”10 In a similar vein, at the Mannheim general meeting the chamber president, Robert Sieber, stressed the ways in which handwerk must abandon its outmoded ways and focus on modernizing business practices in order to adapt to the return of free market competition and to ensure the stability of the new currency. In particular, he specifically welcomed the effects of the return of market competition: “If we want to move forward again, we must, no matter how difficult it may be, part with many of our fond ways and build our house anew from the ground up. … As far as price formation is concerned, handwerk must more than ever adopt rationalized methods of firm management and scrutinize all costs in order to lower its prices. For only by reasonable prices and good master-quality work can handwerk secure commissions. The competitive struggle in the economy, especially in handwerk, will contribute to the achievement of this goal.”11 In the general meeting of the Düsseldorf Chamber later that year, the SPD Economics Minister of North Rhine-Westphalia, Erik Nölting, told his listeners that, given the momentous economic changes of recent times, handwerker should reject the protectionism of the past and embrace competition: “Earlier, handwerk suffered the reputation of being somewhat grumpy and backward, attitudes which are no longer justified in modern professional life. Today, this also has been overcome. Handwerk today is cosmopolitan and technologically modern. Handwerk has recovered the belief in itself and no longer requires artificial means to maintain its existence.”12 The general message of these leaders was that structural changes had taken place within the German economy, making it necessary for handwerk to modernize and, furthermore, that the end of economic controls would result in a salutary weeding out of those whose production and management techniques had placed them in a poor competitive position. Most importantly, leaders no longer saw market competition as a necessarily hostile force that threatened a cherished way of life embodying hard work and virtue. Rather, they now saw it as a positive force for constructive change that would help handwerk to adapt and to increase its wealth.

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A more detailed analysis of these changes may be found in the extensive speeches that were generally featured at chamber general meetings of this period. One typical example was the lecture series given by Karl Rößle to the Cologne Chamber at its meetings in February 1949. Rößle was a professor of economics at the University of Munich, and from 1948 head of the Deutsches Handwerksinstitut in Munich and a fervent proponent of handwerk modernization.13 Judging by the sustained and enthusiastic applause with which those very long and often dry discourses were received, his listeners were most receptive to his ideas. At the heart of Rößle’s message was the bringing into line of the perceptions and practices of handwerker (and the public’s view of handwerk) with current economic realities.14 The new reality was that industry and handwerk no longer represented antagonistic sectors of the German economy: “Industry and handwerk are no longer hostile brothers but know full well that they are dependent upon one another.”15 The basis of this new interdependency lay in handwerk’s increased role as both supplier to industry and vice versa. Rößle noticed this as an outcome of war in 1942–1943 during tours of the Siemens plant in Berlin, which, he observed, depended on small and mid-sized handwerk firms as suppliers (they furnished 30 percent of its tools and parts) as well as customers for Siemens’s products. The interpenetration of the two forms of production and services went even deeper, Rößle said, because industry depended on handwerk for a large percentage of its skilled workforce. Because the training in handwerk was so extensive and thorough, some industries had even formalized this relationship by attaching their own apprentice programs directly to handwerk firms, thus making the apprentices members of the handwerk chambers. As a further demonstration of the solidarity of handwerk and industrial interests in this area, Rößle cited the recent strong protest of industry in Munich against the United States–imposed freedom of trade in handwerk. Industry feared that the end of chamber authority over vocational training would lead to a deterioration in the level of skill in workers available to it. Not only had handwerk become strongly linked to industry, but industry had become increasingly dependent on handwerk.16 This interdependency, and its implication of increasing similarity of production, work, and management methods, was not yet reflected in public perception, Rößle maintained. “Generally speaking, for very many people handwerk is identified with poor management and big industry with good management”— that is, industrial firms conducted their business according to sound capitalistic principles resulting in a rational price structure whereas handwerk did not. Handwerk, in the public view, set prices arbitrarily, and was out of touch and noncompetitive.17 While he said that he spent a good deal of his energy trying to counter such prejudice, Rößle told his audience that the general view of handwerk backwardness was not unjustified. He admonished them that they now had “the obligation to place the structural condition of their firms at the center of their endeavors. Structural condition means that the owner as well as his equip-

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ment must correspond to the modern market economy and technology and so forth in all regards. We are still far from being able to say that the greater number of handwerk firms, and also in part their organizations, are of this view.”18 No less than the instruction in the fundamentals of capitalism, then, was the central aim of Rößle’s lectures. The difference between (present) cash price and (or future) option price, as well as the various possibilities for conditions of payment (among them C.O.D. and installment payments) all must be clearly understood. Only when masters gained a feel for depreciation, proper calculation, and the proper investment of firm proceeds could they, with the coordination of outside financing, increase the net worth of their firms or accumulate investment capital for their own growth. Such capital accumulation Rößle characterized as “very primitive today.”19 That “precapitalist” mentalities and business practices were still widespread was confirmed in academic studies of the period—carried out within institutions having a special interest in studying the possibilities of improving productivity. One investigation into the lack of proper price–cost calculation in cabinetry (one of the more tradition-bound trades) concluded, “One of the main evils of this poor management is the sometimes excessive conservative position on economic knowledge and considerations which prevail in these trades as a whole and especially among the older owners or masters. According to this view, economic success is of only secondary importance, whereas the vocational concept which regards work as a calling or a labor of love is dominant.”20 Another study showed that even the concept of profit itself was still foreign to many masters, as were basic accounting methods: “The commercial side of running a firm is often severely neglected. The commercial work is done as the moment allows it, but a more consistent, long-term plan can only seldom be discovered.”21 For such masters, real wealth could only be represented by an actual increase in their bank accounts. A profit shown merely on their books seemed to them to be an unfathomable abstraction, morally speaking, unearned because it did not appear to be the direct product of real work. As illustrations, the author cited the not-uncommon phenomenon of those masters who did not understand how to factor taxes or freight into their costs or others who failed to separate the finances of home and firm in reckoning taxes (e.g., masters who did not count as employment expenses the room and board required to keep a journeyman or who neglected to include in their calculations the work performed by family members).22 While an old-fashioned mentality—characterized by a concentration on craft and a relative neglect of management—may still have been common in many trades, especially those less affected by the great changes of wartime, it did not typify the leadership. On the contrary, as we have seen, chamber officials saw it as their mission to reform this conservative thinking where it still persisted and to bring handwerk into line with industry and trade in the use of production rationalization and modern managerial techniques to boost productivity and to maintain competitiveness.23

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These points were consistently, if not numbingly, hammered home in the handwerk press and in its general meetings. One typical article asserted that the neglect of profit and concentration on the security of existence (“the maintenance of a solid middle-class livelihood”) characteristic of a traditional economy must now give way to a focus on productivity and sound (i.e., modern) management.24 The emphasis of the leadership’s efforts were on proper bookkeeping and calculation of costs and prices—all fundamental to maintaining a competitive position in the modern marketplace. Leaders also urged masters to broaden their markets—for example, by taking advantage of opportunities to export.25 Furthermore, old social and class antagonisms, they argued, no longer corresponded with current realities. Not only were handwerk and industry no longer mortal economic enemies, but handwerker must themselves adopt the same marketing and managerial techniques successfully employed by industry.26 Essential to these efforts to modernize was the role played by the institutions. Not only did the critique of residual handwerk conservatism and the analysis of the most effective means to change it originate within the leadership itself, especially within the chambers, but the actual means of enforcement did so as well. Methods of rationalization, bookkeeping, accounting, and price–cost calculation were all part of the standard curriculum that every trainee had to master in order to receive the certificate of competency without which no one could open and operate a shop. Thus the organizations played a formative role that went far beyond that of simple interest groups whose powers by definition did not extend beyond the advisory. To be sure, the organizations performed these functions too—forming cooperatives to put handwerk on a more equal footing with industry, offering technical advice and suggestions for rationalization and better firm management, promoting exports, and acting as political pressure groups. But their legal status as corporations of public law gave them the actual authority to ensure that the next generation was equipped with a thorough knowledge of how to operate a business. They saw the need for modernization and rationalization as self-evident.27 The efforts to modernize handwerk and integrate it fully into industrial capitalism became the central focus of its leadership in the postwar period. In order for their work to be effective, these leaders recognized that organizational strength and the integration of their institutions in the political system was of the utmost importance, not only as the principal mechanism of effecting modernization, but also as a source of power and influence vis-à-vis other socioeconomic groups.28 Thus the push to modernization and the struggle against the American attempt to weaken the organizations by means of freedom of trade went hand in hand. It is a theme that will be central in part III of this study. But meanwhile, in view of the strong political and ideological links developing during this period between handwerk and the CDU and CSU (discussed in chapter 9, this volume), we may turn to examine the views of the architect of postwar economic policy, Ludwig Erhard, on modern handwerk and freedom of trade.

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Ludwig Erhard’s Neoliberalism and Handwerk As described above, the slow shift within the CDU/CSU toward domination by the free-market liberal wing culminated in the election of Ludwig Erhard as director of the Bizonal Economic Administration on March 2, 1948. This move coincided with a steadily improving economy that was soon to make possible the long-awaited currency reform and the lifting of most economic controls the following June. All these events had special significance for handwerk. First, the economy of scarcity that had formed the context of its activity for the past three years—resulting most notably in raw material shortages that had put it at a disadvantage and in a great swelling of its ranks, or the flight into independence—was about to change. Second, handwerk was about to receive increased recognition of its political, economic, and social significance. And third, a new dimension in the struggle over the United States–imposed freedom of trade was about to commence. The symbolic turning point for handwerk was a major speech by Erhard to a meeting of its leaders on April 18, 1948.29 The purpose of the speech, given before the representatives of Bavarian handwerk in Munich, was twofold. One aim was to prepare this occupational group for the economic reforms Erhard was about to introduce and, more specifically, to outline his vision of how handwerk fit into the social market economy envisioned by neoliberals. The other was to consolidate handwerk support for his policies. Since Erhard’s ideas proved decisive in binding handwerk to the CDU/ CSU, thus bringing it definitively into the mainstream of parliamentary politics in (West) Germany, and since this thinking was most compatible with that of its postwar progressive leaders, Erhard’s speech merits examination in some detail. As for the controlled economy, which he was about to overturn, Erhard freely admitted that it had disadvantaged handwerk. The controls had been intended specifically to encourage growth in the basic, capital goods industries, and thus handwerk, which for the most part was consumer oriented, had indeed been treated like a stepchild to industry. Furthermore, in a planned, bureaucratically administered economy, officials tended to favor industry in the allocation of raw materials, if only for reasons of administrative simplicity. Even with handwerk organizations facilitating the distribution of raw materials to the numerous small firms, bureaucracies still seemed to favor industry in this period. In announcing a return to a consumer-oriented economy—an economy where production priorities are set by the market rather than the state—Erhard was obviously speaking to a receptive audience. However, the director in preparing the public, and handwerk in particular, for these changes did not pretend that they would come without great hardship. A market economy meant the return of hard competition, a period of weeding out the inefficient, and unemployment. It would also bring with it an element of the unknown. In Erhard’s words currency reform would mean, for business, “A return to proper calculation, proper estimates and the application of economic considerations” with the result “that

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all economic activity which is not immediately productive will no longer have any basis for existence.”30 It meant, in other words, a return to basic principles of capitalism. The promises that Erhard did make to handwerk—most importantly, easier access to cheap credit and greater availability of raw materials—were clearly designed to offer it the same advantages available to other market sectors and not to shield it from market competition. Yet the supposedly pervasive protectionism of handwerk notwithstanding, Erhard’s foretaste of the harsh realities of market economics in no way fell on unreceptive ears. His speech was interrupted numerous times by vigorous and sustained applause. After all, as we have seen above, the application of proper accounting and bookkeeping methods, of rationalization and modernization, was something for which the leadership had been preparing its membership for some time. Just as Erhard noted that handwerk had successfully adapted to the rise of industry while retaining “most important economic functions,”31 so had its officials and strong segments of their membership abandoned their Weimar-era view of industry as an existence-threatening rival in favor of a new strategy of accommodation. In part Erhard’s assessment of the continued importance of handwerk stemmed from his view of its role under the particular conditions of Germany in 1948. Because much industrial plant, machinery, and livable housing was still heavily damaged or in short supply, and because sufficient investment capital to rebuild was not yet at hand, Erhard argued that the answer to Germany’s immediate reconstruction problems could not be met by mass production and big industry alone. Handwerk, on the other hand, required relatively low levels of capitalization, its firms were smaller and thus more flexible, and the focus of its activity was often more on repair and maintenance than on production. Thus Erhard promised sufficient raw materials for areas that were more handwerk’s strong suit and what was most needed to get the economy as a whole back on its feet: for “the repair and maintenance of living quarters, the maintenance of technical apparatus, the maintenance of household equipment as well as consumer goods.”32 Germany required full-capacity mass production again, of course, especially for export, but since that was not as yet possible, a stronger focus was needed on the sector with the repair capability and flexibility to make the most of the nation’s damaged plant, infrastructure, and other resources. It was in connection with this reasoning that Erhard supported the most important of all handwerk demands: the corporate legal status of the chambers and especially their authority to issue the certificate of competency. Erhard was unequivocal on this point and, as we shall see in the following chapters, he along with Adenauer were to remain strong advocates of handwerk’s position in the coming struggle with the Americans. It is true that Erhard would have had political motives in taking such a position on behalf of this important electoral constituency. And, indeed, he did not fail to use the occasion to praise the very aspects of its culture that handwerk saw itself as upholding: strong roots in tradition and an almost spiritual individual involvement in craft that acted as a counterweight

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to anonymous mass production.33 But for this free-market liberal such considerations of political expediency were not decisive. For Erhard the function of the certificate of competency and its restriction of the trades to those with the most thorough training was not mere protectionism and exclusivism. Rather, he believed that the real economic function of this qualification was to ensure a high level of quality craftsmanship. Germany desperately needed to reestablish a strong export base, but given the current state of its industry, Erhard argued, any attempt to compete on equal terms with a highly developed mass production economy like that of the United States “would be completely pointless.” Instead, he insisted emphatically that Germany should offer for export what it did best: “What we need is highly finished work, the most refined handwerk skills, the transformation of material through German craftsmanship. That was the tradition which made Germany respected in the world and which has made German products sought-after in all civilized countries. It is in this area, then, that we must push forward.”34 Nor would the benefits of this policy be restricted to one occupational sector. He pointed out that the cultivation of highly skilled craftsmen by means of rigorous vocational training for some time already had had an enormous spillover effect on industry, which relied on handwerk for great numbers of its skilled workers.35 Thus its training system had real productive linkages throughout the economy. It was these purely market considerations which formed the basis of Erhard’s position on handwerk corporatism.36 In other speeches to handwerk that year Erhard repeated the theme that the particularities of Germany’s economic situation gave it a special role in that damaged industry and insufficient capital to invest in new plant highlighted the importance of lower-capitalized, more highly skilled firms emphasizing repair and maintenance. However, while handwerk as a repository of skilled labor made its contribution to the present economy indispensable, Erhard argued that the continued rationalization of its work methods must be a part of it: “Just as handwerk is the great school for industry, so has handwerk with its valuable qualities understood how to make use of industry’s progress and its rational work methods for its own advantage. One can speak of an interaction between industry and handwerk, which in contrast to other countries has led to there being no sharp break between the two.”37 A politic consideration for the sensibilities of his audience prevented Erhard from adding that this interaction, and the consciousness of it, was a relatively recent development. For Erhard, the modernization of handwerk by means of the same sort of production and managerial rationalization techniques common to industry was by no means contradicted by his support of the corporate legal status of the institutions, especially their authority to control entrance to the trades by means of the certificate of competency. In his view, this corporate authority was fully consistent with liberal economic principles because, as he recognized, its function was precisely to uphold an economically necessary level of technical skill and to promote competition rather than to protect the established or inefficient.38

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But Erhard’s reasoning went deeper and touched on his view of the role of the state and corporate institutions in economic life. Erhard was no liberal in the nineteenth-century sense envisioning a minimalist role for the state in a society of autonomous and freely competing individuals. As he told a gathering of handwerk leaders in the Paulskirche in Frankfurt in October 1948, the times were long past when one could consider the economic realm separate from the social and political, and thus “unlike 100 years ago, the state cannot be considered merely as the night watchman.”39 It was clear to him that, given the misery and destitution of postwar Europe, a third way that avoided the dangers of both the unregulated market as well as collectivism was the necessary precondition for prosperity. For Erhard, as well as other neoliberals, in the absence of state restrictions capitalism tended to form dangerous concentrations of economic power that led to the negation of free competition and posed the danger of political dictatorship.40 An expanded role for corporate institutions in general—including those of industry and labor—in economic planning and in the resolution of crises was another matter for Erhard. The liberal market economy introduced by him in 1948 succeeded initially in unleashing pent-up consumer demand and stimulating growth. By 1950, however, the enormous expansion in world demand occasioned by the outbreak of the Korean War began to cause severe bottlenecks in supplies of raw materials and threatened a serious crisis for the young Federal Republic. Partly at the insistence of the United States, which by now was more interested in increased arms production for the Korean War than in free market ideology, Erhard was forced to compromise principles and agree to an expanded role for industrial associations in the “formulation and execution of economic policy.” Because he opposed bureaucracy and economic planning at either the state or the private associational level, this shift in economic power back toward industry was something of a defeat.41 But although Erhard resisted an augmentation of associational power in industry, he strongly advocated it for handwerk. As he argued his position to General Clay in December 1948, immediately after the United States had imposed full freedom of trade, The reestablishment of freedom of trade is part of the policy advocated by me in connection with the measures accompanying the currency reform. However, it must be considered that the social and economic relations in handwerk are different here than in other lands and can in no way be correctly judged from abroad. We do not have here the long-term differentiation between industry and handwerk; handwerk has even in recent decades increased in size. The maintenance of handwerk is in Germany a question of the securing of quality work and new recruits to handwerk. We have over 700,000 handwerk firms with 2.3 million employees. [In addition,] Handwerk firms have great importance for the public safety and health systems. Therefore, a public interest exists in not introducing total freedom of trade. There is no notion here of a monopoly for handwerk or limiting entrance to it; rather it is only a question of the certificate of competency and the master title. Therefore, I ask the Military Governors to keep the certificate of competency for handwerk.42

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But again, his support of handwerk and its demands derived not from any dominant ideology of small business, nor was it the result of a pragmatic compromise of his neoliberal principles to get votes. Rather it was based on a sound economic rationality consistent with industrial growth and the free market.43 In the following chapters we will pursue this connection as we examine the effects of the American freedom of trade and the political strategies adopted to overturn it.

Notes 1. Kreishandwerkerschaft Duisburg, Informationsdienst, no. 11, September 30, 1946, § 8; copy in HStAD, BR 1049, no. 5. 2. “Der goldene Boden,” in Mitteilungen der Handwerkskammer Münster, April 1 1947, copy in HStAD, RWN 130/46. 3. “Zur Preisgestaltung,” in Mitteilungen der Handwerkskammer Köln, no. 1, February 15, 1946, 1. 4. All quotes from “Zur Preisgestaltung,” in Mitteilungen der Handwerkskammer Köln, no. 1, February 15, 1946, 1. 5. It is characteristic that the tireless advocate for rationalization, Karl Rößle, also celebrated these distinctive features of handwerk. See his Betriebswirtschaftslehre des Handwerks (Wiesbaden, 1952), 25–26. 6. Gerold Ambrosius, Die Durchsetzung der Sozialen Marktwirtschaft in Westdeutschland 1945– 1949 (Stuttgart, 1977), 62–63. 7. Controls were kept on staple foods, fuel, rents, transport, fertilizers, and iron and steel; see Kramer, West German Economy, 144–145; Volkhard Laitenberger, Ludwig Erhard: Der Nationalökonom als Politiker (Göttingen and Zurich, 1986), 69–73; Kleßmann, Die doppelte Staatsgründung, 188–191; Dennis L. Bark and David Gress, A History of West Germany, Vol. 1: From Shadow to Substance, 1945–1963 (Oxford, 1993), 198–209. 8. Handwerk support for Erhard had crystallized with the latter’s speech to a handwerk general meeting in April 1948 soon after assuming office (discussed in more detail below in this chapter). See “Zunehmendes Verständnis für das Handwerk” in Handwerkswirtschaftliche Informationen, May 25, 1948, copy in BA, NL5/501, Item 61. 9. In certain general ways, currency reform affected handwerk much as it did other economic sectors. Competition sharpened, “the customer was again king,” and, pressures to raise productivity being greater, many shops, especially small ones, were forced to let employees go. A steep rise in unemployment occurred in industry too. But many handwerk and other small businesses also faced problems particular to their own circumstances. Being poor in capital goods and having been unable to hoard supplies before currency reform, many firms found their ability to take advantage of the great upswing in demand limited. Construction firms with little capital, for example, were therefore often restricted to small jobs. Handwerk organizations reminded their members, however, that in this newly competitive atmosphere firms must above all remain economical to continue to benefit from high demand and that purchasing and supply cooperatives would guarantee them good prices on raw materials. See minutes of the HWK-Düss. general meeting, July 1, 1948, HWK-Düss., folder “Vollversammlung 1946–1950”; “Das Handwerk wird sich behaupten—Die Situation nach der Währungsre-

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10. 11. 12.

13.

14.

15.

16. 17. 18. 19. 20.

21.

22. 23.

24. 25. 26.

27.

28.

form” in Nordwest-Zeitung, Oldenburg, September 2, 1948; and “Handwerk in einer heiklen Lage,” in Neue Presse, Coburg, November 6, 1948. Vollversammlung am 21. August 1948 mit Tätigkeitsbericht, 56; copy in ACDP, Nachlaß Bernard Günther, I-020/001/2. Speech of chamber president Robert Sieber, August 22, 1948, 1–2, in BA, B102/9142. “Vortrag des Herrn Wirtschaftsministers Prof. Dr. Nölting in der Vollversammlung der Handwerkskammer Düsseldorf,” December 15, 1948, HWK-Düss., Folder “Sitzungen der Vollversammlung der Handwerkskammer am Juli 1946, 2. Juli 1948, 5. Dez. 1948, 17. January 1950.” For an overview of Rößle’s work, see Karl Banse, “Karl Rößles wissenschaftliches Werk,” in, Führungsprobleme personbezogener Unternehmen: Gedenkschrift zum 75. Geburtstag von Prof. Dr. Dr. h.c. Karl Friedrich Rößle, ed. Karl Rößle-Vereinigung (Stuttgart, 1968). Rößle’s views as described below in this chapter may also be found in his numerous published writings, including Wirtschaftslehre des Handwerks (Munich, 1964); Das Bayerische Handwerk (Munich, 1950); and Betriebswirtschaftslehre des Handwerks. “Niederschrift über die Versammlung der Handwerkskammer am 19. Februar 1949,” 8, HStAD, RW 218/6. Elsewhere Rößle makes it clear that this change began to affect handwerk in a widespread way only in the past decade; see Betriebswirtschaftslehre des Handwerks, 20–21. “Niederschrift über die Versammlung.” See also Rößle, Betriebswirtschaftslehre des Handwerks, 21. “Niederschrift über die Versammlung.” “Niederschrift über die Versammlung.” “Niederschrift über die Versammlung.” Helmut Richter, “Kalkulatorische Unterlagen für die handwerkliche Herstellung von Möbeln” (master’s essay in Berufspädagogischen Akademie in Solingen-Orligs, 1948/50), 3, copy in HWK-K library. Paul Riemer, “Die handwerkliche Kalkulation in der Praxis und kritische Untersuchung ihrer Mängel” (master’s essay in Berufspädagogischen Akademie in Solingen-Orligs, 1946/48), 5, 69–70, copy in HWK-K library. Riemer, “Die handwerkliche Kalkulation,” 5, 69–70. This opinion of progressive leaders was echoed by an outside observer who wrote, “Anyone who had the opportunity to hear the leading personalities at these two functions [meetings of the Bavarian Guild Association in February 1947] would soon be convinced that the reproach commonly made against handwerk of an ‘old grumpy (medieval) guild mentality’ was unjustified.” See “Adel des Handwerks,” in Hochlandbote Garmisch-Partenkirchen, July 23, 1948. “Der Leistungswettbewerb im Handwerk,” in Hessisches Handwerk (1:8), December 15, 1948, 3. “Exportmesse Hannover 1948,” in Handwerkswirtschaftliche Informationen, May 25, 1948; copy in BA, NL5/501, Item 61. In addition to the other sources cited in this section, all of which stress the need of following industry’s example, see Economic Report (Wirtschaftsbericht) for the third quarter 1948 by the Frankfurt Chamber, in BA, Z13/194. These principles were also embodied in law in the Handwerk Ordinance of December 6, 1946 (in the British zone)—that had for the most part been drafted by handwerk leadership and that specifically charged the guilds, chambers, and their peak organization with the task of “further[ing] the economic and technical efficiency of handicrafts” by means of “cooperativeerative arrangements for bulk acquisition of goods and services; technical schools, courses and lecture institutes and the continual instruction of craftsmen in technical matters through efficient technical publications”; see § 10; also § 4(vii), (ix) and § 18(iv), (v) and (vi). See chapter 5, this volume. See “Koordinierung der Aufgaben,” in Handwerkswirtschaftliche Informationen, May 25, 1948; copy in BA, NL5/501, Item 62.

The Role of Organization and Leadership in the Modernization of Handwerk | 155 29. For the full text of Erhard’s speech, see “Das Handwerk im Wiederaufbau,” Handwerkswirtschaftliche Informationen, May 25, 1948, copy in BA, NL5/501, Item 64–66. 30. Erhard, “Das Handwerk im Wiederaufbau” (emphasis in original). 31. Erhard, “Das Handwerk im Wiederaufbau.” 32. Erhard, “Das Handwerk im Wiederaufbau,” 3 of text. Erhard had put forth the argument for support of handwerk and small business the previous year; “Freie Marktwirtschaft oder Planwirtschaft,” Die Neue Zeitung, April 7, 1947, 8. 33. The matter of handwerk culture and virtues and their relation to the conservative social vision of the CDU/CSU is an important issue that I will develop more extensively in chapter 9. 34. Erhard, “Das Handwerk im Wiederaufbau,” 3, of text. The long-term effectiveness of this strategy may be illustrated by the continuing high reputation enjoyed by German workmanship. 35. According to a 1952 government report, no less than 70 percent of all industrial skilled workers had come through the handwerk apprentice system. See BMWi report, “Der Mittelstand in der deutschen Wirtschaft,” March 18, 1952, 10, in BA, B102/14652. See also Rößle, Betriebswirtschaftslehre des Handwerks, 21. 36. This conviction also guided Erhard’s monetary policy in the ensuing decades of keeping the value of the Deutsche Mark high, which benefited not only other nations exporting to Germany, but Germany’s own trade as well. His rationale, in Nicholl’s words, was that “German exports did not sell on their price, but on their quality, their advanced technical characteristics, reliability, and after-sales service. Under these circumstances an increase in the value of the mark simply cut the costs of imported materials and increased German profits. Small wonder that Erhard approved of it, despite the choruses of woe from the industrial lobby.” Anthony J. Nicholls, Freedom with Responsibility: The Social Market Economy in Germany, 1918–1963 (Oxford, 1994), 275. 37. Erhard’s speech to Schlosser- und Maschinenbauer Guild, Cologne, August 1, 1948; summary in Mitteilungen der Handwerkskammer Köln, no. 16, August 15, 1948; copy in HStAD, RW 218-6. 38. Erhard’s recognition of the importance of small business should also be seen in the context of a long-term push by government officials, with broad political support, for a strong system of vocational training in which handwerk played an essential role. See Meskill, Optimizing the German Workforce. 39. “Der neue wirtschaftspolitische Kurs,” Erhard’s speech to handwerkstag in the Paulskirche, October 1948, in Handwerkswirtschaftliche Informationen, November 1, 1948, copy in BA, NL5/501, Item 71–73. 40. For example, Erhard, “Sprachverwirrung und die Wirtschaftsordnung,” Die Neue Zeitung, June 23, 1947, 6; Nicholls, Freedom with Responsibility, 87; Alfred C. Mierzejewski, Ludwig Erhard: A Biography (Chapel Hill, N.C., and London, 2004), 29–30. 41. For a discussion of these developments, see Kramer, West German Economy, 163–173; and Mierzejewski, Ludwig Erhard, 79–81. 42. Conference including Erhard, General Clay (U.S.), and General Robertson (UK), among others, December 15, 1948, in Akten Zur Vorgeschichte der Bundesrepublik Deutschland, ed. Christoph Weisz, Hans-Dieter Kreikamp, and Bernd Steger (Munich, 1989), vol. 4, 1013. 43. This is consistent with Berghahn’s argument against those who, in his view, have overemphasized the mittelständische elements in Erhard’s economic programs. However, while Berghahn stresses the influence of American economic principles in Erhard’s thought with regard to industry, I am here arguing that Erhard is here preserving something very German—the importance of handwerk and the acceptance, even advocacy, of a strong role for its corporate institutions—at the same time that he is incorporating principles of economic rationality. See Volker Berghahn, “Ideas into Politics: The Case of Ludwig Erhard,” in Ideas into Politics: Aspects of European History, 1880–1950, ed. R. J. Bullen, H. Pogge von Strandmann, and A. B. Polonsky (Totowa, N.J., 1984).

Part IV

The Early Federal Republic, 1949–1953 Revolution in the German Mittelstand

Chapter 8

THE EFFECTS OF GEWERBEFREIHEIT ON HANDWERK

 The Federal Republic of Germany and its Siamese twin, the German Demo-

cratic Republic, were both creatures of the Cold War and the growing incompatibility of the rival social systems of East and West. This great shift among the former Allies from mutual fear of fascism to fear of each other hardened over the course of 1947 as most Western leaders became convinced of Stalin’s implacable opposition to democratic development in Europe. The decisive event in this process was the London Six-Power Conference from February 23 to June 2, 1948, which included Britain, France, Belgium, Luxembourg, the Netherlands, and the United States. The conference laid the basis for a Western strategy that led to the establishment of the North Atlantic Treaty Organization (NATO) the next year and the European Coal and Steel Community (ECSC) in 1951. The first outcome of the Six-Power Conference, however, was to recommend that the Western Allies authorize German officials in their zones to begin preparation for a provisional Western German state.1 The economic side of this process was accomplished, as we have seen, with the introduction of the Deutsche Mark in the Western zones on June 20, 1948. Then on September 1, 1948, a Parliamentary Council began deliberations in Bonn on a “Basic Law” that, after approval of the three Allies, was proclaimed on May 23, 1949. Elections for the first Federal Parliament (Bundestag) followed on August 14, 1949. The CDU/CSU emerged with a slim plurality of 31 percent, enough to enable Konrad Adenauer after a full month of negotiations to piece together a governing coalition, and on September 15, 1949, the Bundestag met for the first time to elect Adenauer as chancellor by a majority of a single vote—his Notes for this section begin on page 175.

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own. Meanwhile, in the Soviet zone the leaders of the Socialist Unity Party (Sozialistische Einheitspartei Deutschlands; SED), following in step with the West, staged elections in May 1949 for a Peoples’ Congress that constituted itself as the Provisional Government of the German Democratic Republic in the month following Adenauer’s accession to power. One cartoonist captured this singular moment in German history by the amending the former Nazi slogan to read, “Zwei Volk—Zwei Reich—Zwei Führer.”2 The Federal Republic at its founding embodied two peculiarities related to its being at once a product of the rivalry of external powers and a successor state to the defeated Reich. First, its existence as a state was consciously intended by all Western parties, including especially its German founders, to be provisional, pending the adoption of a formal peace treaty. Only then would the two Germanys be reunited and a legitimate nation be constituted. The Western powers, and the new Bonn government, meant to assert thereby the illegitimacy of the East German state as well as of the power of its Soviet patron and thus lay claim to being the sole representative of the German nation.3 The second peculiarity of the new state lay in the restrictions put on its powers. While the United States, Britain, and, with some remaining reservations, France seemed on their way to incorporating the Federal Republic into a new alliance of capitalist, industrialized nations based on free trade, European integration, and anticommunism, uncertainty as to the internal stability of the new state as well as a fear of a remilitarized and industrially powerful Germany remained strong in the West. The Allies, therefore, granted the Federal Republic only a limited sovereignty. As defined by the Occupation Statute of April 8, 1949, the legitimacy of the new state and the authority it wielded did not originate from the German people but were merely delegated to it by the Allies. Although the military governors had been formally replaced by an Allied High Commission,4 ultimate authority derived, as it had before, from the Western Allies who restricted the powers of the Federal Republic in both foreign and economic matters. Specifically, the Western Allies reserved to themselves authority in the following areas: (1) foreign affairs, including the power to conclude treaties and trade agreements with other nations; (2) disarmament and demilitarization, which meant that the Allies could still place prohibitions on war-related industries and restrictions on levels of other types of industrial production and even on the nature of scientific research; (3) the Ruhr, which remained subject to international supervision; and (4) on matters relating to reparations, decartelization, and deconcentration.5 The point of restricting the sovereignty of the Federal Republic was twofold. First, by circumscribing the political authority of the German government and by limiting the level and type of industrial output, the Allies would eliminate Germany’s ability to wage another aggressive war. Second, limited sovereignty would ensure that the Allies had continued authority to carry out far-reaching economic reforms so that Germany could be included in, and contribute to the prosperity of, the new multilateral order envisioned by the Americans in which international trade would function as the underpinning for political stability in

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the context of democracy and world peace. Among these intended reforms for the United States—the purpose of which was to eliminate all types of restrictive trade practices, both domestic and international—were measures to ban cartels and monopolies, which included the abolition of the authority of handwerk institutions. The achievement of full sovereignty took place in the context of the escalation of the Cold War as Chancellor Adenauer led the Federal Republic in a policy of anticommunism and integration with the West, thus necessarily accepting the division of Germany, accompanied by an assertion of German interests. This period of transition to full sovereignty, accomplished on May 5, 1955, as the Allied High Commission abolished itself, did not, however, proceed smoothly or as a matter of course. Adenauer had to fight tenaciously for every concession from the Allies, and the Americans, especially, were reluctant to abandon some of their cherished notions about how German society should be reformed. One of those notions was the Gewerbefreiheit imposed by the U.S. Military Government decree of November 29, 1948. The struggle to preserve the corporate authority that it had gained under Nazism—the building of a political coalition to overturn the freedom of trade and the countering of the American charges of protectionism or resistance to change—were to be formative in defining handwerk in the postwar period.

The Effects of the American Unrestrained Freedom of Trade on German Handwerk The OMGUS Directive of November 29, 1948, abolished the corporation of public law status of handwerk organizations in the American zone of occupation and their right to issue the certificate of competency as a precondition for opening a shop. The decree unleashed an immediate storm of protest from handwerker, their organizations, and public officials. Countless marches, demonstrations, and protest meetings of unusually large size took place in the Länder of the American zone in the months following the issuance of the Directive.6 A wide range of press opinion also opposed the U.S. reforms. The most important business newspaper called freedom of trade a misguided attempt to impose American ideas on German conditions.7 The independent left Catholic journal Frankfurter Hefte agreed, and predicted an increase in fraud and subquality work.8 And the SPD declared that the measure “would not only hurt handwerk productivity but would heavily damage the productive capacities of the entire German economy.”9 The reaction also tapped into the resentments felt by many Germans at the American occupation in general at the wide range of what they called their naïve attempts to reform German society. Reinhold Maier, the Minister President of Württemberg-Baden,10 the “handwerker land,” thundered, “handwerk is no plaything. … We say to the Americans: Enough of this treating us like children! We understand something of these matters, and about German handwerk we cer-

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tainly understand more than you! Don’t take us for dumber than we are, and don’t take yourselves for more clever and superior than you are!”11 Commenting on what many regarded as the American ignorance of German ways and in particular on their assumptions of handwerker exclusiveness, Maier later wrote, “Some Americans must have seen and heard the Meistersinger in the theater, perhaps even at Beyreuth, and there got their idea of German handwerk after 1945.”12 Indeed, as this resentment grew into disgruntlement over the limitations on German sovereignty in general, handwerk benefited from the backlash generated by the public discussion of this issue.13 To be sure, in the beginning there were also voices raised against the regulations imposed by handwerk organizations. The New York Times reported that the Decartelization Branch of OMGUS had received “a flood of mail from Germans [who were] almost lyric in their excitement and gratitude inspired by the recent directive abolishing licensing practices.” A housewife from Stuttgart wrote, “At last the insane spirit of class consciousness of the Germans will be abolished. … There is no country other than Germany where there are so many restrictions. I like Germany but I hate German laws.” One letter, saying that during “the Third Reich it was impossible for a non-party member to obtain a license for a trade,” offered “hearty thanks on behalf of all non-party members.” Four refugees wrote that the great numbers of handwerker would be relieved to be freed from “the terrible dictatorial force of trade chambers and other useless organizations and associations” which, they said, often demanded bribes to expedite license applications.14 In the German press a letter from a young journeyman appeared that asserted that the support of the certificate of competency by Bundestag deputies and handwerk officials merely showed how old-fashioned and out of touch with young people they really were. The high costs of preparing for the examinations, he asserted, made a master title prohibitive for most young people, unless they were sons of masters and refugees who received special help.15 While opinion was initially vocal on both sides, public sentiment gradually settled in handwerk’s favor,16 so much so that soon no politician with an eye to reelection was inclined to support the American position. Moreover, especially in rural areas, masters whose craft knowledge was confirmed by the certificate of competency enjoyed a higher level of prestige in the community than at any time in the past century.17 With respect to the structure of handwerk, the sudden lifting of the requirement of the chamber-issued certificate of competency for all trades and the elimination of the licenses except in those where public health, safety, or welfare were at issue did indeed initiate great, although temporary, changes in the U.S. zone. Surveys conducted by the Economic Ministries of Bavaria, Hesse, and Württemberg-Baden during this period show an enormous rise in the number of new firms immediately after the introduction of freedom of trade. Table 8.1 shows the numbers of newly registered firms reported by the seven chambers of Württemberg-Baden showing the rate of increase from 1947 to 1949 (the first full year of freedom of trade).

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Table 8.1. Rate of Increase in Handwerk Firms in Württemberg-Baden, 1947–1949 October Nov. New firms, New firms, New firms, 1949 1949 1st % 2nd % 3rd % Year quarter changea quarter changea quarter changea 4th quarter

1949 1948 1947

2,975 1,380 1,924

155 72 100

4,042 1,331 1,976

205 67 100

2,691 2,517 1,960

137 128 100

762 998 1,402 1,272

% changeb

208 110 100

a. 1947=100. b. Percent change for fourth quarter 1949 calculated by projecting a total for December 1949 based on an average of October and November. Source: Economics Ministry of Württemberg-Baden; December 1949; BA, B102/9144-b-1.

Table 8.1 shows that, while the numbers of new firms in 1948 had tended to stabilize or even drop from the 1947 levels (which had been exceptionally high due to the great influx immediately after the war—the so-called flight into independence discussed in chapter 4), the elimination of the certificate of competency resulted in a great inundation of new firms over the course of 1949, at times even doubling the rate of increase for 1947. Nor was this amount of increase exceptional to Württemberg-Baden. Representative figures for Hesse and Bavaria show a similar rush to open new firms. The Hesse Statistical Bureau reported only 734 new firms in the fourth quarter of 1948 under the old rules, yet in the first quarter of 1949 that figure more than quadrupled to 3,054, followed by 1,782 new firms in the second quarter and 2,349 in August and September.18 In Bavaria the Unterfranken Chamber reported a similarly dramatic movement (table 8.2). Table 8.2. Rate of Increase in Handwerk Firms in Unterfranken, 1948–1949 Year

1949 1948

New firms, % New firms, % New firms, % New firms, % 1st quarter changea 2nd quarter changea 3rd quarter changea 4th quarter changea

790 531

149 100

1,237 553

224 100

924 664

142 100

662 624

106 100

a. 1948=100. Source: Handwerk Chamber Unterfranken (Würzburg) to BfW, January 16, 1950; BA, B102/9144-b-1.

That the enormous increases of 1949 were the result of the freedom of trade is demonstrated by a comparison of several representative chamber districts in the U.S. zone with others in the British zone, where the certificate of competency continued to be a prerequisite for opening a handwerk shop (see table 8.3). Thus in the British zone the great increases in the numbers of firms during 1946–1947—which were the result partly of a correction from the war years and partly from the flight into independence—had abated and even reversed.

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Table 8.3. Rate of Increase (Decrease) in Handwerk Firms in British and U.S. Zones, 1948–1949 Chamber dstrict (zone)

Munich (U.S.) Kassel (U.S.) Münster (Brit.) Braunschwg. (Brit.) Flensburg (Brit.)

Total firms, end of 1948

Total firms, end of 1949

Change from 1948 to 1949

% change from 1948 to 1949

52,000 25,300 26,300 13,300 15,700

58,000 27,400 25,800 14,000 15,600

+ 6,000 + 2,100 – 500 + 700 – 100

+11.5% + 8.3% – 1.9% + 5.3% – 0.6%

Source: BMWi Report, “Die Auswirkungen einer uneingeschränkten Gewerbefreiheit im Handwerk,” September 21, 1950; p. 9; BA, B102/¬9144-b-1.

There were several reasons for this shakeout in the British zone. The currency reform of June 1948 had brought with it the return of sharp market competition. Many of the shops set up during the times of barter and the black market were simply not able to survive in more competitive conditions. Cash shortage and a lack of credit after 1948 further increased the difficulties of the more marginal small proprietors. While currency reform resulted initially in a huge rise in unemployment in industry as many firms were forced to cut superfluous workers, as the economy gathered steam in the early 1950s, factories again offered an attractive alternative to employment in handwerk and in other small businesses. Finally, because the war had resulted in an anomalous aging of the handwerk population, there were a great number of retirements by the early 1950s.19

Figure 8.1. Registered and Dissolved Handwerk Firms in Hesse, 1948–1949

Source: “Ein Jahr Gewerbefreiheit in der US-Zone,” DHWB (2:5), March 10, 1950, 72.

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Figure 8.2. Registered and Dissolved Handwerk Firms in Oberfranken, 1940–1949 Source: Handwerkskammer für Oberfranken to Bayerisches Staatsministerium für Wirtschaft (BfW), April 11, 1950, in BA, B102/9144-b-1.

The spectacular rise in the numbers of new firms in the American zone is illustrated in the following two graphs. Besides showing the dramatic rise in the number of new firms, these graphs illustrate another feature of freedom of trade, one that goes to the very heart of handwerk’s denunciation of it: the number of firms dissolving also rose no less spectacularly. Thus the net increases, even during the height of new registrations in the first half of 1949, were actually quite minimal. What is more, the wild fluctuations of that period proved to be of short duration, so that by early 1950 the Passau Chamber was able to report, “The extraordinarily strong movements in the registration and cancellation of handwerk firms … have sharply abated in the fourth quarter of 1949 and have reached virtually normal proportions.”20 By early 1952 there was even an annual net decrease from 1951 in the total number of firms in the Länder of the U.S. zone that was proportionally greater than the decrease in the Länder of the British zone, as shown in table 8.4. Handwerk officials did not consider the decrease as a sign of distress—quite the contrary. Currency reform and the end of economic controls in 1948 had Table 8.4. Comparative Rate of Firm Closings, in the British and U.S. Zones, 1950–1951

U.S. Zone British Zone

Decrease

Total firms October 1, 1949

Total firms January 1, 1952

Absolute

Percent

449,244 355,938

432,596 338,912

26,648 17,026

5.9% 4.8%

Source: “Zur Entwicklung der Betriebszahl im Handwerk,” DHWB (4:22), Nov. 25, 1952, 356.

166 | From Craftsmen to Capitalists

begun, in their view, a salutary weeding out of many firms that had been founded during the flight into independence of 1945–1948 that were not sound enough to endure normal market conditions.21 Rather, they argued that the strong fluctuations were economically unhealthy for handwerk. The handwerk newspaper for Hesse described the movements of 1949 (see figure 8.1) as “the temperature curve of a fever patient.”22 Most chambers ascribed the high number of dissolved firms that accompanied the rise in new firms to the poor economic foundation of many of these new firms and to the lack of knowledge and experience of their owners. Thus they argued that the certificate of competency, by restricting entrance to a trade to those with thorough training, was consistent with principles of a healthy marketplace, not antithetical to them as the Americans maintained.23 The significance of freedom of trade for handwerk and its officials lay deeper than any fluctuation or instability, temporary or otherwise, in the number of firms. The changes in the U.S. zone deeply altered the composition of the handwerker and, even more important, of their relation to their organizations. The most striking result of the new American regulations was a drastic and precipitous drop in the numbers of new shop owners who had taken and passed the master’s examination. With the removal of the certificate of competency (issued on successful completion of a set period of apprenticeship, a journeymanship, a masterpiece, and the master’s exam) as a precondition for opening a shop, it was overwhelmingly journeymen who had not yet completed their training who rushed to make themselves independent. From the war’s end until the introduction of freedom of trade in the U.S. zone in 1948, the proportion of new owners with a master title had been 57.7 percent.24 Yet in the second half of 1949 in Württemberg-Baden this figure plunged to 22.5 percent.25 In Hesse during the peak of new registrations in the second quarter of 1949, only 13 percent of new owners possessed a master title.26 In Bavaria, the Würzburg Chamber reported a figure of 20 percent for 1949.27 While these figures recovered slightly for Hesse and BadenWürttemberg over the next two years,28 a deep structural change with regard to the qualifications of handwerker began to develop in this period. Table 8.5 illustrates the growing divergence in the British and American zones. Table 8.5. New Firm Owners with Master Title in U.S. and British Zones, 1950–1951

Zone

U.S. British

1950

1951

Total new firms With master title Percent

Total new firms With master title Percent

34,028 28,547

9,140 16,913

26.9% 59.2%

28,115 21,369

6,931 12,800

24.7% 60.0%

Source: “Zur Entwicklung der Betriebszahl im Handwerk,” DHWB (4:22), Nov. 25, 1952, p. 356.

Thus three years after the introduction of freedom of trade—and well after the wild fluctuations of 1949 had abated—the formal qualifications of handwerker in the American zone continued to remain far below those of their fellows in the Brit-

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ish zone. The danger in this development for economic sectors beyond handwerk, argued proponents of the certificate of competency, lay in its effect on training. Because owners without a master title could not take on apprentices, this meant that there would be fewer skilled workers available in the economy as a whole.29 Another consequence of freedom of trade was its effect on refugees. One important reason why the United States had abolished the certificate of qualification as a requirement for opening a shop in the first place was the argument that by operating in an exclusionist manner it had hindered the integration of refugees into the West German economy. Yet, ironically, freedom of trade seems to have worked to the disadvantage of refugees. Whereas from 1945 to 1948 the proportion of new firms owned by refugees roughly corresponded to their numbers in the general population,30 after 1949 their numbers dropped sharply in the Länder of the U.S. zone. In Hesse the proportion of refugee-owned new firms fell to 12.7 percent in 1949 from 22.7 percent the previous year.31 The Würzburg Chamber (Bavaria) reported a similar falling off from 23 percent refugees in 1948 to 15 percent in 1949.32 The explanation for this drop-off offered by refugee organizations, which later took strong positions against freedom of trade, was that the new rules gave the advantage to those with relatively greater capital. Because most refugees had arrived with only their skills and perhaps a few tools, this tended to favor the Western-born.33 A discussion of trends within handwerk as a whole gives only an incomplete picture of the effects of freedom of trade, however. The abolition of the requirement of the certificate of competency affected the various trades quite differently. Thus a more specific analysis of the effects of freedom of trade is necessary if we are to understand its economic and political impact on handwerk’s corporate authority. With only slight regional variations, chambers everywhere reported the same trades being primarily affected by the new regulations: the clothing trades (tailoring, dressmaking, shoemaking), house painting, bricklaying, haircutting, carpentry were the primary trades subject to enormous increases in their ranks. Less frequently cited but also important were the trades of baking, butchery, locksmith, and blacksmith.34 The reason for the influx into these particular trades was simple: It was not that a tremendous demand for those services existed that only the regulations restricting access to those with a master title had prevented from being filled. These trades had already suffered from an oversupply of masters, and many of their current members, in fact, had operated at the margins of existence well before the introduction of freedom of trade. Rather, these trades became flooded simply because entrance was cheap and easy; that is, the start-up costs and capital investment in equipment needed to begin business were minimal. As one chamber summarized the situation, “[It is] precisely in those trades which must work with capital and equipment where a certificate of training is today still the rule; whereas those trades which are markedly labor intensive are characterized by a conspicuously strong influx of insufficiently trained workers. This is especially true for women dressmakers.”35 Indeed, trades like gold and silversmiths, orthopedic and surgical mechanics, milling, hammersmith, and tan-

168 | From Craftsmen to Capitalists

ning remained relatively immune from the effects of freedom of trade. In these trades the start-up costs and levels of skill required for a successful business were simply too high to be risked by anyone with insufficient training and experience. In addition, some trades, such as agricultural machine repair, relied heavily on customer trust developed over long experience, and therefore machinery suppliers were reluctant to sell their products to retailer-mechanics who could not prove competence.36 Within those trades most affected by freedom of trade and thus subject to a great influx of new competition, many firms faced loss of their livelihood. In electronics, the Bavarian guild association observed, “In the field of radio mechanic handwerk the effects of freedom of trade are now already so catastrophic that the economic collapse of many radio specialist firms must be expected in the near future.” The guild asserted that refugees avoided settling in the British zone where full qualifications were still required, so that Bavarian electronics was forced to absorb still greater numbers of refugee handwerker.37 In such a trade as barber/hairdresser, which, because of its low start-up costs and the fact that hair can be cut anywhere, was already weakened by a large amount of off-the-books work performed by unlicensed journeymen (Schwarzarbeit), freedom of trade made the livelihood of many masters all the more precarious. Handwerker feared, furthermore, that new regulations threatened by the High Commissioner that would remove barber/hairdressers from the list of trades requiring a state license for reasons of public health would worsen their economic situation even further. The guild also echoed a complaint made by many other trades that the lowered incomes of their members had caused many to leave the organization and thus severely worsened guild finances.38 In some trades the mood was close to despair. Shoemaking, always one of the poorer trades, was especially hard hit. The Passau Chamber reported, for example, that in many localities that previously had had one shoemaker with an adequate customer pool of about five hundred persons now, because of freedom of trade, had three or more active shoemakers, none of whom could make a living.39 The Bavarian shoemakers’ guild stated unequivocally, “The repercussions of freedom of trade on Bavarian shoemaker handwerk are psychologically, economically and organizationally absolutely devastating.” Even as the guild conceded that the greater number of new registered firms had properly completed their training and possessed a master title, it described a vicious cycle where new firms that had not registered along with others operating off the books (thus paying no taxes) now advertised openly and drew customers away from the established masters. The resulting drop in business forced the latter to lay off their journeymen, who in turn had no choice but to work off the books or to become independent themselves.40 The shoemakers’ guild reported effects that went even deeper than those affecting the economic livelihood of individuals. The swing from the strictly controlled economy under the Nazis and occupation to the unrestrained “freedoms” of the U.S. reforms, the guild claimed, combined with economic destitution to

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cause severe damage to the fabric of organizational life. Shoemakers now refused to recognize the authority and function of the guild officials (Obermeister), and the inability of the guild to protect them from the impact of these changes caused shoemakers to stop paying their dues and to leave the guild in large numbers. For these handwerker, freedom of trade had deprived the traditional guild hierarchies of all meaning and had diluted the corporate identity of their trade as well.41

Women and Freedom of Trade Another peculiarity of the U.S. freedom of trade, very little commented on in the contemporary documents, is evident from a closer examination of trades most upset by the new regulations: women were affected proportionally far more than men. As we have seen, among the trades most susceptible to an increase in new firms after abolition of the requirement of the certificate of competency were dressmaking, hairdressing, and tailoring. Indeed, dressmaking topped virtually every list of trades whose numbers were subject to the great fluctuations of this period.42 What is more, of the new firms founded, dressmaking had the lowest percentage of owners with a master title.43 We have seen above how freedom of trade affected institutional life in the low capitalized trades, whose members already operated at the margins and that were suddenly subject to a great influx of the underqualified less committed to institutional life. Thus dressmaking, too, was a trade where organizational ties were more likely to be weakened by large numbers of new members who had no stake in the corporate authority of handwerk institutions. The trades during this period were still divided along fairly strict gender lines. Female masters, journeymen, and apprentices were concentrated in the clothing and health and body care trades. Dressmaking, millinery, knitting, corset making, weaving, washing, and ironing were almost exclusively female trades, while women outnumbered men in hair care and wigmaking by almost four to one, and in photography by about two to one. In the building, metal, and wood trades, by contrast, women were the rare exception, and when women did appear they were most often widows of masters who, according to custom, had the right to inherit their husband’s title. Moreover, women’s trades were less populated overall, so that only 14.5 percent of all masters in 1949 were women and only 6.6 percent of master examinations that year were taken by women.44 Handwerk officials were aware of this imbalance as a problem insofar as it posed a potential crisis of unemployment for young women leaving school in 1950 and 1951. Officials looked to certain male-dominated trades that might be suitable to women and hoped that they would be able to enter them.45 However, they acknowledged that many masters in these trades harbored strong prejudices against taking on female apprentices and concluded that change would be possible “only through a fundamental transformation in public attitudes toward women’s work as such.”46 Still, the efforts to effect changes in the gender composition

170 | From Craftsmen to Capitalists

of the trades never seemed to go beyond discussion of the problem in the back pages of the handwerker press, and in any case the anticipated crisis in youth unemployment became a moot point with the Korea boom. Moreover, quite apart from the temporary crisis occasioned by freedom of trade in the American zone, the long-term economic problems of many of the trades in which women were predominant (especially leather and textiles) continued to worsen in West Germany as a whole during the early and mid-1950s. Further industrialization and consolidation firms in these sectors affected women’s trades disproportionately and led to a reduction in the numbers of firms in these trades (although not in the total number of persons employed in them), so that the percentage of women master-owners as a whole fell from 14.5 percent in 1949 to 13.2 percent in 1956.47

The Reaction of Handwerk Organizations to Freedom of Trade The arguments that leaders used in defense of the certificate of competency and the analysis they offered in their reports to the government on the effects of its abolition took several forms. A careful examination of them is vital to understanding the true function of the corporate authority that the Americans were doing their utmost to abolish. First and foremost, leaders steadfastly maintained that the purpose of the certificate of competency was to maintain high-quality work and with it handwerk’s time-honored reputation. The purpose behind the corporation of public law status for the chambers (which confirmed their authority to administer the master examination and to issue the certificate of competency), so the argument continued, was simply that a social-economic Stand was better administered democratically by itself rather than subject to arbitrary state control. This line of reasoning was intended to appeal to the fear of state bureaucratic power (read “communism and fascism”) shared by Americans and Germans alike. But the assumption that some sort of administration was needed was self-evident only to the Germans. These arguments were repeated so often that it is impossible to pick up a handwerk newspaper of the period without seeing them. So great was the conviction behind such arguments that they have been, and remain, essential to handwerk’s understanding of itself and therefore merit detailed examination. The unique economic-social contribution of handwerk, its leaders maintained, consisted in this high-quality work produced by individual hands. Industry, whose strong point was the serial production of uniform goods for mass consumption, simply could not fill this need. Nor, leaders never failed to add, could the alienating nature of factory manufacture match the human fulfillment essential to the handwerk mode of production.48 According to them, the American response—that the marketplace alone offered the best mechanism to regulate quality by compelling producers to address directly the needs of the consumer—missed the point. Handwerk did not oppose healthy competition, they

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said, but competition that truly benefitted the consumer must be of a certain character. In this sector competition among producers whose technical qualifications were subject to no review, their argument went, led not to the maintaining of high-quality work, but rather to its dilution. Competition among the underqualified (as demonstrated by the experience of freedom of trade and, indeed, historically by the state of handwerk before 1935) led simply to a “ruthless struggle for existence,” to “irrational price underbidding,” forcing masters to lay off their more highly qualified (and more highly paid) journeymen, to compromise their own skills, and to reduce their own pay. The reduction of handwerker to wage workers and proletarianization was the final, grim result of this process,49 the specter of which evoked a long-standing fear that had haunted handwerk politics ever since the beginnings of industrialization. Unrestrained competition meant not only the undermining of an economically and socially important segment of society, but also the domination of the market by those whom handwerk dismissed as “incompetents” and “bunglers” (Pfuscher). Leaders called instead for the “competition among experts.”50 Officials maintained that the limitation of trades to those with certified skills was neither, in the American phrase, a restraint of trade nor a restriction of economic freedom. This was neither protectionism nor the creation of a “protected nature reserve” for handwerk.51 Rather, the certificate of competency acted as a counterweight to “extreme anti-competitive phenomena in our present economic order.” Among such phenomena were the presence of industry whose enormous size gave it de facto monopolistic advantages (quite apart from the strong monopoly-cartel traditions in German business, in the reform of which Americans were losing interest); government-sponsored firms (Regiebetriebe) whose size and government patronage also gave them an unfair advantage over the small producer; and the prevalence of illegal, off-the-books work (Schwarzarbeit) that undercut the honest, taxpaying masters. Handwerker, they said, demanded no more than “equal start conditions” or competition within order, not the ruinous competition of classic Manchester liberalism.52 The ruinous effects of the abolition of the certificate of competency extended, officials maintained, to the consumer as well. While advocates of freedom of trade argued that it would lead to a greater range of choice for the consumer, leaders countered that the supply of services had always been more than adequate. The new rules would result only in an oversupply of handwerker, which if it brought lower prices would necessarily bring with them a drop in quality. This point is central to the contemporary economic distinction between industry and handwerk. Officials conceded that the decades-long competition to which handwerk was subjected from industry and trade had indeed made it technically and commercially more productive. Handwerk had been modernized by industrial competition and through this process had found the special economic niche it now occupied, as a producer of quality work serving individual needs. Especially because repair, maintenance, and installation work now formed a large part of its services, a high level of skill was required to maintain customer confidence. The underbidding

172 | From Craftsmen to Capitalists

resulting from an oversupply of its services would unavoidably lower quality. Since quality work is what distinguishes handwerk from industry, diminishing it would mean that the consumer effectively has less choice, not more. Lower prices would then be meaningless, for “poor handwerk service is always too expensive.”53 Such were (and are) the economic arguments used to justify the certificate of competency. They found a powerful echo elsewhere. Neoliberals, as we have seen, agreed as to the dangers of industrial monopolies, and most of them, including Ludwig Erhard, strongly believed that the certificate of competency was crucial in maintaining the high quality and reputation of German craftsmanship; this in turn would have a salutary spillover effect on industry (because large numbers of journeymen who did not become independent ended up as skilled workers in industry54), which was essential if Germany were to regain an important position in world markets.55 The economic validity of these arguments—whether this type of restriction of the marketplace really does operate to ensure quality and not merely to protect certain price structures and an established set of practitioners—remains highly controversial. Egon Tuchtfeldt, in a historical survey of the tension between freedom of trade and market interventionist measures in the German economy as a whole, concludes that the certificate of competency was justified on a number of grounds. It assured the apprentice that he or she would receive competent training in any particular craft at the hands of an accomplished master.56 It also provided protection for the consumer by reducing the number of incompetents in the marketplace (although Tuchtfeldt does argue that, since in many trades the market acted as a perfectly adequate mechanism of consumer protection, the certificate was not equally necessary across the board and should therefore be applied more selectively).57 Finally, while he concedes that the lengthy training period inhibited professional mobility, Tuchtfeldt maintains that the certificate of competency did not act as a protectionist measure shielding handwerk from the effects of the market, but rather acted to sharpen competition in the economy as a whole by acting to raise productivity and quality.58 Christopher Watrin, on the other hand, argues that the certificate of competency acts as a protectionist measure serving only the monopolistic interests of a single social group. The exam system offers no guaranty of technical progress (which was one of the main justifications for the system put forward by those favoring it); such progress could only be ensured by ongoing advanced training. The level of productivity in a profession, he writes, is threatened not by the entrance of those less qualified, but rather by the inability of its practitioners to adapt to new techniques. By restricting entrance to the trades, the certificate of competency acts to shield masters from competition and thus inhibits gains in productivity and—insofar as the regulations arbitrarily define where one trade ends and another begins—the entrepreneurial freedom to expand and innovate. The certificate of competency was, therefore, incompatible with the principles of a free market.59

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The effect of freedom of trade on the overall quality of handwerk production and on its competitive position vis-à-vis other economic sectors is difficult to evaluate with precision, given the relatively short period of time that the U.S. rules were actually in force.60 Therefore, the debate whether handwerk would be more productive without the certificate of competency requirement and whether the consumer would then benefit from lower prices must remain unresolved. The argument will be made in chapter 10, however, that with the certificate of competency in place handwerk’s increases in productivity have been impressive and have kept pace with those of every other economic group in the postwar period. In other words, in no economic sense has it functioned as a protective mechanism. Rather, its significance has been in facilitating handwerk’s economic, political, and social integration into the Federal Republic. The impact on the organizations, however, has been much more obvious— and for the argument made here, much more important. A few chambers reported little or no effect of freedom of trade on their guilds. The great majority of new handwerker, they said, joined the guilds and paid their dues; even though membership was now voluntary, there was no exodus of members from their organizations.61 Another chamber reported a heavy dropoff in guild dues payments, but believed that it was the difficult economic situation of early 1949 and not the new American regulations that had caused the worsening of organizational finances.62 However, most other local and district organizations had little doubt that they had been weakened by freedom of trade. Most of the six chambers in Württemberg-Baden reported a significant loss of guild membership and a decrease in dues payments of up to 50 percent.63 In Bavaria the Würzburg, Bayreuth, and Passau Chambers said that the finances of guilds had been hurt badly and worsened from day to day.64 Most of the chambers reporting a negative impact of freedom of trade on guild finances and membership and an overall attenuation of organizational loyalty did so in general terms. But a more differentiated examination of the effects of freedom of trade on the guilds of specific trades gives a much clearer notion of the nature of the crisis faced by handwerk during this period. Not surprisingly, the guilds whose stability was most undermined by the new rules were in precisely those trades subject to the greatest influx of new handwerker. In the Passau Chamber district, for example, payments to the dressmaker, shoemaker, and cooper guilds dropped to alarmingly low levels, while in such trades as optics and watchmaking, which were immune from the floods of new members, dues were paid without delay.65 The haircutters’ guild reported a significant worsening in its finances due to decreased payments, even as the total number of barbers and hairdressers increased.66 The shoemaker guild described a wide-ranging destruction of guild life, from financial troubles and decreased loyalties, to an overall disintegration of respect for traditional authority and hierarchies.67 A report of the Stuttgart Chamber made the connection clear: “In many guilds solidarity among members has suffered terribly. Many handwerker observe the damaging

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effects of total freedom of trade and determine that their organizations are not achieving any decisive success in the fight against it. This is the explanation for the widely observed lack of interest in organizational life and for the somewhat poor attendance at guild and other handwerk meetings.”68 While some chambers reported that the perceived American attack on handwerk traditions had led to an increased awareness of the need for solidarity,69 it is evident that among certain sectors freedom of trade had resulted in a real crisis in organizational life. It is without question that every segment of handwerk strongly and unequivocally supported the corporate authority of its institutions and especially the certificate of competency. But it was in the trades most directly affected by freedom of trade—the more–labor intensive, less–capitalized trades, disproportionately female, with a higher percentage of one-man-shops—where antipathy to the U.S.-imposed rules led to panic and resignation with regard to their organizations instead of to a renewed cohesion and a stronger will to fight.70 This resignation was especially widespread in some districts because of the great numbers of firms there that were still one-man-shops,71 but they presented their organizations with a special problem because of the character of their despair. The Passau Chamber summed up the paradox that confronted the organizations: The greater number of handwerk firms [in our district] consist of small firms. These owners are without exception people with an extremely narrow outlook. They have regarded the main value of their professional representation to be that the latter, by means of the maintenance of the certificate of competency and possibly the certificate of need [see chapter 5, this volume], play a part in the limitation or, if possible, the exclusion of new handwerk firms or decisively influence such protectionist measures. With the abolition especially of the certificate of competency, in the eyes of this segment of handwerker every professional organization has lost its determining purpose. As for the actual area of responsibility of professional organizations, which as a result of the war and immediate postwar situation has been very strongly forced into the background, a considerable part of especially the small firms lack the necessary understanding for this. On the other hand, it is precisely these small firms which to an especially high degree burden the handwerk chambers with the treatment of their daily woes.72

It was precisely those described above, then—those who saw the function of their organizations not to modernize them but to protect them—who posed an enormous problem for handwerk institutions. These were firms whose continued existence as one-man-shops, because of general economic trends toward consolidation, was under assault, but the great numbers of small firms meant that their presence for the moment could not be ignored. Their dispirited attitude toward organizational life in the face of the abolition of the certificate of competency threatened to undermine handwerk solidarity and, paradoxically, dilute its political resolve to overturn the very American decree that they so hated. On the other hand, precisely the accomplishment of that goal required that leaders convince the Americans, and German public opinion as well, that handwerk was modern, and that it had put aside the exclusivity and anticompetitiveness

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of the stereotypical, traditional masters. Moreover, many within the leadership were acutely aware that giving in to particularist impulses not only would relegate handwerk to a political and economic ghetto, but also could mean a disastrous repetition of the mistakes of Weimar. The struggle of the dominant segment of the leadership to suppress the old-fashioned, protectionist elements—and indeed the struggle to fashion out of the corporate authority of their institutions and especially the certificate of competency a progressive rather than a reactionary instrument—was to be central in its efforts to forge a political coalition to overturn the U.S. freedom of trade.

Notes 1. Bark and Gress, From Shadow to Substance, 210–211. 2. “Simpi,” Vol. 23 (1949), reprinted in Kleßmann, Die doppelte Staatsgründung, 171. 3. Alfred Grosser, Germany in Our Time: A Political History of the Postwar Years (New York, 1971), 93. 4. The U.S. High Commissioner was John J. McCloy; André François-Poncet represented France and Sir Brian Robertson, Britain. They assumed office on May 18, May 19, and June 1, 1949, respectively. 5. The Saar remained under French control. For text of the Occupation Statute, see von Oppen, Documents on Germany Under Occupation, 375–377. 6. See Chesi, Struktur und Funktionen, 168; and Boyer, “‘Deutsche Handwerksordnung,’” 461– 462. 7. “Umstrittene Gewerbefreiheit,” Handelsblatt (Düsseldorf ), December 7, 1948. See also Boyer, Zwishcen Zwangswirtschaft und Gewerbefreiheit, 220–221, who characterizes the protests as “shrill” and “panicked.” 8. “Zwang zur Freiheit,” Frankfurter Hefte, March 1948, vol. 4(3), 200–202. 9. “Zwischen ‘Freiheit’ und Ordnung,” Neuer Vorwärts, December 18, 1948, 3. 10. Baden-Württemberg was constituted as a separate Land of the Federal Republic only in 1952 after a plebiscite of December 6, 1951 out of the provinces Württemberg-Baden, Württemberg-Hohenzollern, and Baden. During the occupation these provinces had been divided between the Americans and the French. 11. Speech to a handwerk general meeting in Württemberg-Baden on December 13, 1948, in Reinhold Maier, Erinnerungen, 1948–1953, Tübingen, 1966, 127. 12. Maier, Erinnerungen, 1948–1953, 123. 13. Chesi, Struktur und Funktionen, 169. 14. New York Times, December 21, 1948, 10. 15. Frankfurter Rundschau, November 16, 1950. 16. Anna J. Merritt and Richard L. Merritt, Public Opinion in Semisovereign Germany: The HICOG [(Office of the) High Commissioner for Germany] Surveys, 1949–1955 (Urbana, Ill.; Chicago; London, 1980), Report no. 75 (April 18, 1951), 116–117. 17. Gerhard Wurzbacher and Renate Pflaum, Das Dorf im Spannungsfeld industrieller Entwicklung: Untersuchung an den 45 Dörfern und Weilern einer westdeutschen ländlichen Gemeinde (Stuttgart, 1954), 47–48. 18. “Mitteilungen des Hessischen Statistischen Landesamtes,” November 18, 1949, in BA, B102/ 9144-b-1.

176 | From Craftsmen to Capitalists 19. Many of those retirements had, in fact, been delayed because currency reform had wiped out many citizens’ retirement savings; these people were then often obliged to work until the end of their lives. “Zur Entwicklung der Betriebszahl im Handwerk,” Deutsches Handwerksblatt (DHWB) (4:22), November 25, 1952, 356. See also Theo Beckermann, Das Handwerk— Gestern und Heute (Essen, 1959), 9. 20. Handwerkskammer für Niederbayern (Passau) to BfW, January 2, 1950, in BA, B102/9144b-1. 21. “Zur Entwicklung der Betriebszahl,“ 356. As additional causes for the higher net decreases in all zones during the early 1950s, they cited the anomalous aging of the handwerk population during wartime who were retiring or dying. 22. “Ergebnis der Gewerbefreiheit,” Hessisches Handwerk (3:3), March 15, 1950. 23. “Ein Jahr Gewerbefreiheit in der US-Zone: Auswirkung der Gewerbefreiheit in WürttembergBaden,” DHWB (2:4), February 25, 1950, 57. 24. “Erhard Report,” September 1950, 18, in BA, B102/9144-b-2. The comparable figure for 1945–1948 in the British zone was even lower: 44.9 percent. These low figures are explained by the liberal policy of exceptions to the requirement of a master title granted during the occupation period and later to refugees, displaced persons who lacked proof of their qualifications, and widows of masters and to others. Sometimes chambers granted the exception with the provision that the applicant retake his exam at a later date, and in other cases the exceptions were granted with no restrictions. By 1950 when the stream of refugees from the East had by and large ended and as the process of their absorption into the population of West Germany was well under way, the proportion of new firm owners with a master title rose again in the British zone where it was still required, as is evident from the figures cited below in this chapter. 25. “Ein Jahr Gewerbefreiheit in der US-Zone,” DHWB (2:4), February 25, 1950, 57. 26. Frankfurt Chamber to VfW, July 19, 1949, in BA, B102/9144-b-1. 27. Handwerkskammer für Unterfranken (Würzburg) to BfW, January 16, 1950, in BA, B102/ 91144-b-1. 28. In Baden-Württemberg, the percentage of new firms whose owners possessed a master title rose from its 1949 low to 38.6 percent in 1950 and then fell slightly to 32.2 percent in 1951. The corresponding figures for Hesse are 25.1 percent in both 1950 and 1951. In Bavaria the percentage of new owners with a master title remained low: 19.2 percent in 1950 and 18.6 percent in 1951. The disparity between these Länder and those of the British zone is striking: Lower Saxony, 59.5 percent in 1950 and 59.9 percent in 1951; North Rhine-Westphalia, 57.3 percent in 1950 and 58.2 percent in 1951. “Zur Entwicklung der Betriebszahl im Handwerk,” 356. 29. “Erhard Report,” 1950, 20, in BA, B102/9144-b-1. Under the terms of the American law, the so-called kleine Befähigungsnachweis, originally passed into law in 1908, which stipulated that only certified masters could train apprentices, remained in force. 30. In the U.S. zone the proportion of refugees in the general population was 18 percent, while the proportion of new handwerk firms founded by refugees from 1945 to 1948 was 21.3 percent; in the British zone the figures were slightly less favorable to refugees: 21.7 percent and 18.5 percent, respectively. The combined total for the two zones was 20.1 percent refugees in the population; of new handwerker, 19.2 percent were refugees. “Erhard Report,” September 1950, in BA, B102/9144-b-2, 21. See also chapter 5, this volume. 31. “Ein Jahr Gewerbefreiheit in der US-Zone—Auswirkungen der Gewerbefreiheit beim Handwerk im Lande Hessen,” DHWB (2:5), March 10, 1950, 72–73. 32. Würzburg Chamber to BfW, January 16, 1950, in BA, B102/91144-b-1. 33. For a fuller treatment of this issue, see chapter 11, this volume. 34. See, for example, Bremen Chamber to Senator für die Wirtschaft, April 9, 1952, in BA, B102/9144-b-2. Also see “Gesamtübersicht über die Auswirkungen der Gewerbefreiheit im Handwerk bei der Handwerkskammern in Württemberg-Baden”, December 1949; and BfW to VfW, April 13, 1949; both are in BA, B102/9144-b-1. 35. Würzburg Chamber to BfW, January 16, 1950, in BA, B102/91144-b-1.

The Effects of Gewerbefreiheit on Handwerk | 177 36. See the following reports to the BfW: Landesinnung des Bayrischen Bandagisten, Orthopädieund Chirugie, Mechanikerhandwerks, Munich, April 1949; Bayerischer Landesverband des Gold- und Silberschmiedehandwerks, Augsburg, April 13, 1949; Landesverband der bayerischen Landmaschinen Handwerker Innungen und der Landmaschinen Fachbetriebe, March 21, 1949; Landesverband des Bayerischen Hammerschmiedhandwerks, March 24, 1949; Landesverband für das bayerische Gerberhandwerk, April 9, 1949; Bayerischer Müllerbund, April 1, 1949. All in BA, B102/9144-b-1. 37. Landesverband des Bayerischen Elektro-Handwerks to BfW, April 7, 1949, in BA, B102/9144b-1. 38. Landesverband des Bayerischen Friseurhandwerks to BfW, mid-1949 (n.d.), in BA, B102/ 9144-b-1. 39. Passau Chamber (Handwerkerkammer Passau) to BfW, January 2, 1950, in BA, B102/9144b-1. 40. Landesinnungsverband der Schuhmacherhandwerks to BfW, April 12, 1949, in BA, B102/ 9144-b-1. 41. Landesinnungsverband der Schuhmacherhandwerks to BfW, April 12, 1949, in BA, B102/ 9144-b-1. 42. See reports of the Augsburg, Bayreuth, Regensburg, and Passau Chambers in BfW to VfW, April 13, 1949, in BA, B102/9144-b-1. 43. For example, the Würzburg Chamber reported for the fourth quarter of 1949 only fourteen new dressmakers with sufficient training and fifty-seven without; in other words, only 20 percent of the total had a master title. By contrast, the percentage of shoemakers with sufficient training was a more favorable 32 percent. See Handwerkskammer für Unterfranken to BfW, January 16, 1950, in BA, B102/9144-b-1. 44. Beate Brodmeier, Die Frau im Handwerk in Historischer und Moderner Schicht (Münster, 1953), 72, 101–105. 45. “Die Frau im Handwerk,” Hessisches Handwerk (3:3), March 15, 1950, 3–4. 46. “Streifzüge durch das hessische Handwerk,” Handwerkerpost (2:1), February 16, 1951, 15. 47. Brodmeier, Die Frau im Handwerk, 72. 48. For example, see “Der Meisterbrief ” in Hessisches Handwerk (3:3), March 15, 1950. One sees this view in academic studies as well; see Rößle, Betriebswirtschaftslehre des Handwerks, 25–26. 49. For a typical example of this argument, see Stuttgart Chamber to Baden-Wüttemberg Ministry of Economics (Wirtschaftsministerium Württemberg-Baden), December 19, 1949, in BA, B102/9144-b-1. 50. “Ein Jahr Gewerbefreiheit in der US-zone,” DHWB (2:4), February 25, 1950, 57. 51. Tuchtfeldt, Gewerbefreiheit, 7. 52. See “Um die Ordnung des Wettbewerbs,” DHWB (1:23/24), December 15, 1949, 393. 53. “Verbraucherschaft und Großer Befähigungsnachweis,” DHWB (2:21), November 10, 1950, 325. 54. Wolfgang Gerss, Quantitative Untersuchung der Struktur und Entwicklung des Handwerks in Nordrhein-Westfalen Cologne, 1971), 126. 55. See also Nicholls, Freedom with Responsibility, 275. 56. This is the so-called small certificate of competency law, passed in 1908, that provided that only those who had passed the master’s exam supervised by the chambers could take on and train apprentices (discussed in chapter 1). 57. Tuchtfeldt, Gewerbefreiheit, 186–189. 58. Tuchtfeldt, Gewerbefreiheit, 137–139. 59. Christian Watrin, Der Befähigungsnachweis in Handwerk und Einzelhandel unter besonderer Berücksichtigung der Entwicklung in der Bundesrepublik (Unpublished diss., Cologne, 1957), 252–265. 60. The U.S.-imposed freedom of trade was overturned by the Handwerksordnung passed by the Bundestag on September 17, 1953, so the total period was just over four and one-half years.

178 | From Craftsmen to Capitalists 61. See reports of Frankfurt Chamber to VfW, July 19, 1949, and October 19, 1949; see also reports of the Augsburg and Regensburg Chambers in BfW to VfW, April 13, 1949; all in BA, B102/9144-b-1. 62. “Bericht der Handwerkskammer Coburg über die wirtschaftliche Lage des Handwerks im 2, Quartal” 1949, in BA, B102/9144-b-1. 63. “Gesamtübersicht über die Auswirkungen der Gewerbefreiheit im Handwerk bei der Handwerkskammern in Württemberg-Baden,” December 1949, in BA, B102/9144-b-1. 64. BfW, April 13, 1949, in BA, B102/9144-b-1. 65. Passau Chamber to BfW, January 2, 1950, in BA, B102/9144-b-1. 66. Landesinnungsverband des Bayerischen Friseurhandwerks to BfW, spring 1949 (n.d.), in BA, B102/9144-b-1. 67. Landesinnungsverband des Schuhmacherhandwerks to BfW, April 12, 1949, in BA, B102/ 9144-b-1. 68. Stuttgart Chamber to Baden-Wüttemberg Ministry of Economics, December 19, 1949, in BA, B102/9144-b-1. 69. Report of the Nuremberg Chamber in BfW to VfW, April 13, 1949, in BA, B102/9144-b-1. 70. While chambers did list the lower-capitalized trades most often in their reports on the effects of freedom of trade, even more highly capitalized and skilled trade were not immune from damage to their organizations. The Association of Bavarian Gold and Silversmith Guilds reported that many members were leaving the guilds because they considered them to be ineffective and no more than recipients of orders from the Military Government. See report of the Bayerischer Landesverband des Gold- und Silberschmiedehandwerks, Augsburg, April 13, 1949, in BA, B102/9144-b-1. 71. In Bavaria overall in October 1948, 38.6 percent of all handwerk firms were one-man-shops (with the concentrations in some districts being much higher), whereas the average for the area of the Federal Republic was the slightly lower 36 percent; see Rößle, Das Bayerische Handwerk, 21. Boyer gives a higher figure for Bavaria of 42 percent; Zwischen Zwangswirtschaft und Gewerbefreiheit, 222. 72. Comments of the Passau Chamber in BfW to VfW, April 13, 1949, in BA, B102/9144-b-1.

Chapter 9

THE INTEGRATION OF HANDWERK ORGANIZATIONS INTO THE POLITICAL FABRIC OF THE FEDERAL REPUBLIC

 I

n examining the effects of unrestrained freedom of trade we saw that, while the American policy resulted initially in a large influx of new firms into certain trades, the situation soon stabilized, and by 1950–1951 the difference in absolute numbers of new firms between the American zone and the British and French zones (where the old rules were still in force) was minimal. Market forces seem indeed to have acted as a corrective in adjusting the supply of handwerker, and the actual outcome did not correspond to the apprehension of leaders before the fact.1 What did change, however, was that the level of technical and managerial qualifications of the new handwerker in certain low-capitalized trades sank well below that of their fellows in the other Western zones. Far fewer people setting up their own shops, even after the influx of new firms peaked in 1949, bothered to complete a full course of training and acquire a master title. However, because the American policy remained in force for less than five years, the economic arguments around this issue must remain inconclusive and unproven. It is difficult to determine with any real certainty whether freedom of trade resulted in a great diminution of quality, a rise in fraud, or a proletarianization of handwerk (as organizations argued), or, conversely, whether the regulations of the certificate of competency amounted to a restraint of trade and acted to stifle innovation (as the Americans claimed). What is clear is that the vast majority of established masters and their leadership fervently believed in some version of the general argument that the certificate of competency was necessary to keep handwerk competitive Notes for this section begin on page 199.

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and to prevent its proletarianization. Certainly, too, the German government, most significantly and forcefully Economics Minister Ludwig Erhard, believed in the validity of the economic argument that the certificate of competency acted to cultivate and maintain high standards of German workmanship that extended beyond handwerk to industry and that would prove crucial if Germany were to regain its lost export markets. Beyond the economic debate, however, lay another set of reasons that made the overturning of the American freedom of trade policy an imperative for handwerk. Leaders were determined to establish for their institutions a secure power base on a par with those of other interest groups within the political system of the Federal Republic. The prerequisite for this was that the leadership had to preside over a Stand that, even in its great diversity of shop size and occupation, retained a strong sense of cohesion defined by common standards of training and the self-conscious cultivation of a collective spirit and shared tradition. The American policy threatened this ambition in several ways. First, it seemed to weaken handwerk by undermining that which distinguished it from other economic sectors—namely, a high level of technical skill. Second (an argument at once less tangible and more immediate), the loss of authority of the organizations to administer the certificate of competency threatened the very cohesion that was so politically necessary for them to establish. Finally, as we have seen, freedom of trade affected most strongly those trades, and their guilds, whose economic stability was already undermined by long-term factors. Already operating at the margin, these craftsmen and craftswomen saw the abolition of the certificate of competency as the removal of the last protective barrier against a precarious existence and complete immiseration. In addition, these handwerker lost faith in the ability of their organizations to do what they most expected of them: to shield them from the effects of modern, market competition. It brought out, in other words, their most retrograde and antimodern impulses—impulses that leaders were convinced had to be suppressed if they were to achieve their own political goals. These political ambitions amounted to no less than the full integration of their institutions into the political fabric of the Federal Republic. And as both a means to, and an end of, those ambitions they sought above all the restoration of their corporate powers and the certificate of competency. In working to fulfill this design, leaders were acutely conscious (as were many others in this period) of the need to avoid the mistakes that had brought about the downfall of Germany’s first republic. This meant principally abandoning the narrow interest politics that had paralyzed parliamentary politics in Weimar, and, instead, embracing full participation in political pluralism. Within this pluralistic context, in order to become an influential power and to achieve their cherished goal of the certificate of competency, institutions had themselves to become modern interest organizations, forging cooperative alliances with other socioeconomic groups and being prepared to accept pragmatic compromise. They had, moreover, to convince the American authorities as well

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as the German public that their political demands were consistent with the commonly professed postwar ideals of social partnership and economic competition. In addition, progressive leaders considered it imperative to marginalize the conservative, “preindustrial” elements that desired such authority for protectionist ends most contrary to this pluralist spirit, especially the small, one-man-shops in precarious trades that were nonetheless politically and economically still significant. The efforts of the leadership to establish handwerk as a political force in the Federal Republic took place at three levels. At the first level, institutions worked to develop a presence in all the major, democratic political parties, especially the CDU/CSU. In their turn, the parties, clearly recognizing the obvious electoral importance of these small proprietors, sought to build bridges—organizational and ideological—to handwerk. At the second level, handwerk in its capacity as employer of labor built alliances with other employers’ associations to further their common interests. Finally, at the third level handwerk joined together with deputies representing other Mittelstand groups within parliament to form a “Mittelstand Block.” At all three levels leaders worked to avoid the mistakes of Weimar characterized by interest politics, isolationism, and antagonism to other groups. This new position was a reflection both of structural changes in handwerk’s socialeconomic position after 1939 and of a consequent shift in power relations within handwerk itself—namely, the isolation of the protectionist and isolationist elements that resisted the initiatives of the more progressive leadership. It is this new orientation that will be the forcus of the current chapter.

Handwerk and the CDU/CSU The revival of political parties in occupied Germany could not begin with the reestablishment of centralized organizations with coherent programmatic goals. Twelve years of Nazi suppression of all independent political activity had left a political vacuum, and after 1945 zonal divisions and Allied policy, which at first permitted only the formation of local political parties, precluded centralization. As the Western Allies relaxed their restrictions, the SPD, because of its strong traditions and, not least, because of the dominating personality of its leader, Kurt Schumacher, did soon succeed in reestablishing a centralized party apparatus.2 The political center, on the other hand, was faced in 1945 with the need to completely realign pre-1933 party structures. Most thinkers in this group considered it imperative for the future stability of German politics that the system of splinter and narrow interest parties that had so paralyzed Weimar politics be reformed, and many leaders of the old Center Party were especially anxious to overcome the ghettoization of Catholic politics and to establish an interconfessional party on “Christian” principles.3 At the same time, neoliberals, entrepreneurs, Christian unionists, and the noncollectivist left4 all competed to put their stamp on the emerging CDU. Organizationally, however, the party could develop initially only

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at the district or Land level, with Berlin, Frankfurt, Cologne, and Munich competing for ideological dominance.5 In addition, the refusal of Bavarian Christian democrats to join the party of the other Länder preempted any attempt at a strict national party unity and brought the problem of centralism versus federalism— in the organization both of the new state and of the party—into high relief.6 The deep involvement of handwerk in the CDU/CSU began early on, but it developed at the initiative of certain leaders—who had a clear vision of the forms that handwerk postwar politics should and should not take—and in the face of a lack of interest on the part of their own membership and even on the part of leading figures in the CDU/CSU itself. In the first postwar years, leaders faced an uphill battle to overcome the alienation of individual handwerker to politics and the state. One organizational committee held a lecture series entitled “The State and Handwerk” to show the possibilities of state help and “to shake the Mittelstand out of its political sleep.”7 Another noted the “shamefully low” participation and membership of handwerker in the CDU, which it attributed to a lack of “necessary civil courage.”8 By 1949, however, this picture had improved at the local levels as handwerker began to participate actively in politics. In the Braunschweig Chamber district, for example, 17 percent of community, city, and district representatives were handwerker—well over their proportion in the general population. Yet at the higher levels, they were still scarcely to be found. In the parliaments of the Western Länder their percentage was only 5, and in the Bizonal Economic Council (the parliament for the combined West German zones before the founding of the West German state) only 3 out of 104 deputies were handwerker. By 1949 leaders no longer attributed this to a disinclination on the part of their members to engage in political activity but rather simply to pressures that made it difficult for the owner of a small shop to serve full-time in parliament in a distant city.9 But the CDU itself shared the blame for the low percentage of handwerk representatives. Before the North Rhine-Westphalia Landtag elections of 1947, its officials repeatedly criticized the party for the lack of consideration it gave to handwerk in drawing up its list of candidates and agitated for a greater role in the CDU leadership.10 The feeling among handwerker that the CDU did not adequately represent them or their interests eventually took its toll in the election. Party analysts attributed the loss of votes to the FDP in the Landtag elections of 1950 to precisely this neglect of the Mittelstand.11 Two years later, Konrad Adenauer acknowledged in retrospect this early indifference. In 1952, after handwerk had firmly established itself institutionally in the party and in the political system in general, and after the German economic recovery was well under way, the chancellor stressed the necessity for a more intensive Mittelstand policy, excusing his government’s earlier focus on industry as having been necessitated by the greater numbers of workers that industry employed. Now that industry and the economy as a whole were on their feet again, Adenauer explained, the government could afford to turn its attention to Mittelstand interests, and especially to handwerk.12

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Yet despite these initial difficulties in obtaining recognition within the CDU/ CSU, leaders were not discouraged in their efforts to establish an effective presence within the party apparatus. This determination resulted in part from lessons learned from the experience of the Third Reich and in part from a pragmatic view of handwerk’s power position in German society based on the social and economic changes of the past several decades. From the very beginning, handwerk activists within the CDU/CSU were determined—and here there was absolute unanimity on their part, as we shall see more extensively later on—to avoid the mistakes of Weimar. The chairman of the North Rhine-Westphalian Handwerk/ CDU committee, Bernard Günther, who was also president of the Cologne Chamber, emphasized repeatedly that handwerk should work within the CDU, not outside of it. In addition, he said, it should cooperate with other Mittelstand groups to achieve common goals. But while supporting a proposal for a handwerk advisory council in the CDU/CSU, Günther warned that the council should not attempt to establish itself as an independent power base within the party; it should not become a “state within a state.”13 This theme was echoed in CDU/ CSU campaign literature aimed at promoting cooperation between the party, the commercial Mittelstand, and the professions. In obvious reference to Weimar, flyers insisted that this alliance would not promote an “isolated interest politics” “but from the basis of a professional (berufsständigen) cooperation [would] seek to serve the welfare of the entire people.”14 Election hyperbole aside, leaders were determined, privately as well as publicly, to identify themselves with mainstream politics and, in the interest of avoiding the splinter parties of Weimar, to restrict their political activities to the main parties—the CDU/CSU, FDP, SPD, and the revived Center Party. The Rhineland Westphalian Handwerker Bund (Rheinisch-Westfälischer Handwerkerbund; RWHB), the political arm of handwerk in that Land, felt the need in 1950, as a revival of neo-Nazi activity received wide publicity before the Land elections of that year,15 to denounce political radicalism as a threat to the Mittelstand and to reaffirm its commitment to democratic principles of government.16 Heinrich Schild, general secretary of the RWHB (who had held the same office in the Nazi handwerk organization), put the case for handwerk commitment to the mainstream parties even more strongly in 1951: “[We] have again and again taken a stand against the radical parties and have declined to form a new party.” Schild conceded that the recent promises by the CDU to help the middle groups (Mittelschichten) had yet to yield concrete results. Yet the political committees of handwerk and the Mittelstand were making, he asserted, continual progress. In any event, he continued, there was no real alternative. Above all, “in no case should we make the mistake again of forming special interest parties which before had paved the way for National Socialism.”17 Even as they repeated the familiar complaint that the federal government continued to favor industry and labor over the Mittelstand, the commitment of the leadership to the mainstream parties remained unshaken.18

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While the desire on part of leaders to avoid the narrow interest politics of Weimar by working within the mainstream parties was strong, their commitment during this period to parliament as the main forum for political discourse and decision-making remained in a certain sense ambivalent and provisional. For some, party politics still necessarily implied a Marxist irreconcilable class conflict and governmental paralysis. In Schild’s words, “Our most fundamental principle must be this: handwerk politics goes before party politics. Political parties are a social evil, and party struggles at the present time are conducted in a humanly impossible form.”19 These lingering reservations about the efficacy of party politics, which had their roots in an almost atavistic tendency on the part of some leaders to conceptualize society in corporatist (ständisch) terms, did not, however, hold handwerk back from establishing itself institutionally in the party apparatus of the CDU/ CSU. The mechanism by which it exercised influence within the party was the CDU-Handwerk Advisory Council (CDU-Handwerkerbeirat). First proposed in 1947 at a time when handwerk had not yet established itself as a powerful presence within the CDU, the Advisory Council was established as a committee of CDU handwerker deputies who could bring into focus and promote their political and philosophical (weltanschaulich) views in parliament as well as offer an opportunity for the schooling of young handwerker in political democracy. The originators, however, ever mindful of the dangers of splinter parties, were careful to delimit its functions. In no case, they said, would the CDU-Handwerk Advisory Council be allowed to develop into a power center independent of either its sponsoring handwerk organizations or the CDU, and it was certainly not to be regarded as the germ of another party.20 Leaders were determined to reverse the alienation that had characterized handwerk’s relation to the state in Weimar. As one put it, one of the principal tasks of the CDU-Handwerk Advisory Council would be “to win over the conservative elements (in the good sense of the word) of the population of handwerk, retail, farming, and civil service more than before as bearers of state political responsibility.”21 The CDU-Handwerker Advisory Council as constituted in 1949 had organizational, political, and ideological goals beyond its obvious purpose of advocating legal measures that would be in the interests of handwerk. These goals had as much to do with shaping it as a Stand in its relation to its own institutions as they did with securing a place for those institutions vis-à-vis those of other social groups. The CDU-Handwerk Advisory Council supervised the organization of its committees at the commune and district levels not only in order to deal with greater political problems of interest to handwerk, but also to address matters of purely local interest with the express purpose of drawing individual handwerker into a relationship with the party and to cultivate within them a conviction of the efficacy of parliamentary politics.22 As to the SPD, even as leaders worked to emulate the political effectiveness of the party and the unions,23 and even as the SPD endorsed its position on the certificate of competency and programmatically supported—in a series of arguments

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most impressive in its non-Marxian logical gymnastics—the position of the small proprietor in society,24 SPD ideology still represented for them a fundamental contradiction to its vision of society. The SPD, in their view, however close it had already moved toward a “class collaborationist” position, still viewed capital and labor as “classes”—that is, as two social groups with fundamentally and necessarily different, and opposing, interests. The clash of these interests might be partially reconciled by a more equitable distribution of profits and of power (codetermination, for example), but the qualitative contradiction remained: class necessarily meant struggle.25 Handwerk, on the other hand, continued to conceive the totality of social relations on the model of the craft workshop where master, journeyman, and apprentice worked together as a supposedly organic whole with shared skills and common social aspirations. The work relation was hierarchical yet not, they claimed, structurally antagonistic. Yet this did not mean that organizations assumed a posture of doctrinaire disdain with regard to active involvement within the SPD. However determined it remained to distinguish its ständisch world view from that of the Social Democrats, handwerk had no desire to ghettoize itself politically in one party. Advisory councils were formed within the SPD as well as within the CDU/CSU, FDP, and the Center Party; leaders held extensive meetings with officials from all the parties, so that in 1950 one such leader could remark, “There is no party today that can say that it has not been instructed on the fundamental problems facing handwerk.”26 Nor did handwerk refuse to support SPD candidates where appropriate. In discussions on this question, the consensus among leaders was that “In principle handwerk seeks candidates first and foremost according to their ability to represent worthily the concerns of handwerk.” This meant in practice that handwerk candidates ran from all the democratic, middle class (bürgerlich) parties—which included the Social Democrats, though not the Communists.27 But even handwerk groups formed within the CDU/CSU did not necessarily meet the criteria of the leadership. In Munich in 1949, for example, when chamber officials decided that the Advisory Council in the CSU lacked the “basic convictions of handwerk,” they dissolved the it and formed a new one with their own hand-picked leadership.28 In this way the growth of its institutional influence in the CDU/CSU became a mechanism for ensuring the hegemony of a certain outlook within handwerk itself as well as a means of implementing into law its political goals.

Christian Ideological Affinity of Handwerk and the CDU/CSU The compatibility of handwerk with the CDU/CSU extended to each of the two major streams of thought that constituted Christian democracy in the postwar period, neoliberalism (in both its ordoliberal and social market forms), and Christian social teaching. Handwerker and their families were drawn early on to the CDU/CSU both as voters and as members,29 and thus, in the words of one

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party functionary, handwerker along with the rest of the productive Mittelstand “must be regarded as predestined supporters of the CDU.”30 What attracted them—and these were the same features that succeeded in unifying the very heterogeneous elements that together made up the party—were a social conservatism; a respect for private property, especially small property; an opposition to all forms of collectivism and state centralism; and, especially important in the immediate postwar years, a determination to correct the damaging effects of excessive concentrations of power in big capital. But what solidified handwerk’s ties to the party was not just the existence of a common denominator in doctrine and practice: it was also the very tension within the Party between the partially opposing tendencies of Christian social thought, which conceived of society as a community of constituent professional groups, and neoliberalism, which stressed the liberty and autonomy of the individual. Handwerk in the postwar period existed in a similar state of tension between its vision of itself as the bearer of a tradition of cooperative, if hierarchical, family enterprise and its willingness to embrace the competition of the modern, capitalist marketplace. In a way, the most intriguing intellectual affiliation between handwerk and the CDU/CSU was Christian social teaching. The influence of Christian social thought in Western Germany peaked in the years 1945–1947 when the conviction that industrial capitalism was inadequate for confronting either the nation’s economic or its moral devastation was also at its greatest. Yet although Christian social thought in a sense represented the road not taken, and although its direct influence was limited to a modification of the generally liberal CDU/CSU program, it did play an important historical role in the development of the party.31 The “Christian” worldview offered a point of consensus among conservatives and served to integrate and stabilize the diverse social groups and interests that made up the party.32 For the Mittelstand and handwerk it held up an idealized mirror to their lives and values. The links between Christian social thought and handwerk’s postwar outlook are worth examining in some detail because they were crucial to handwerk’s conception of itself and to how it would accommodate itself ideologically to industrial capitalism in this period. Catholic social teaching originated in Europe in the mid- to late nineteenth century as a critique of industrial capitalism and as an alternative to liberalism and socialism. Fundamentally, Social Catholicism opposed Enlightenment rationalism with the latter’s insistence on the autonomy and freedom of the individual. Individualism left man alone and unprotected in the world, Catholic thinkers argued, and ignored his necessary links to God and community—the community being not just a collection of autonomous free individuals as in the rationalist Enlightenment view, but also a network of reciprocal rights and duties.33 Social Catholicism also originated as a response to the growing power of social democracy and as an effort to bring workers and their families back into the Church. Like socialism, the movement sought to address what it considered to be the real misery of the working class and its alienation from the means of production. But social Catholicism parted company with Marxian socialism in

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that Christians saw the starting point to the resolution of the “social question” as a return to God and the Church. For Marxists, on the other hand, religion was only a narcotic that deceived man as to the true nature of freedom. Religion was itself part of the problem.34 The most important formulations of Catholic social teaching are contained in two papal encyclicals, Rerum novarum of 1891 and Quadragesimo anno of 1931. In Rerum novarum, Leo XIII stressed social-political reform within the context of a liberal capitalist economy as a means of raising the living standard of the working class and lifting its members out of the proletariat.35 Pius XI in Quadragesimo anno incorporated in encyclical form a deeper critique of the liberal social order that had already become part of Catholic social thinking. Catholic critics of industrial capitalism had long argued that the freedom defined by the French Revolution—freedom from feudal, state, and guild restrictions—was freedom for all only in abstract principle; indeed, it meant freedom only for the possessing few. Yet these critics did not oppose capitalism as such, nor did they argue for the abolition of its essence—namely, its division of propertyless labor and the owners of the means of production. Rather, the fault of contemporary society lay in the overwhelming dominance of capital over labor that obliterated the true function of the capital–labor relation, the furtherance of the common good. The outcome of this imbalance was class struggle with all its socially damaging effects. Similarly, Quadragesimo anno did not reject competition and the market as mechanisms for increasing productivity, but rejected them as the “invisible hand,” in fact the sole and natural regulator of the economy and value. In place of class struggle and the rule of the marketplace, Quadragesimo anno proposed a social order organized according to trades and professions. Regulating social relations—and Catholics did not deny the inevitability of either classes or even class tensions in the social order—Quadragesimo anno demanded a series of state and social institutions that would “guide” the economy according to principles of social justice and “social love” rather than leaving things to the amoral law of profit and the market.36 The Catholic view that human agency and will should regulate human affairs stood in direct contrast to the Enlightenment scientifically influenced view that tended to look for immutable laws in nature. The postwar version of this view originated in the midst of war. While for much of the duration of the Third Reich many Catholic thinkers had compromised with Nazism, a core of intellectual opposition had emerged, beginning in 1941 at the Dominican Walberberg Cloister near Cologne, consisting of clerics, leaders of the former Catholic trade unions, and a number of politicians who later became leading figures in the left wing of the CDU.37 The dominant figure in this Walberberg circle was the Dominican monk Eberhard Welty. Welty’s ideas, which during the war were the most prominent in shaping Christian social thinking, took the principles laid out in Quadragesimo anno as their starting point but were characterized by a stronger disillusionment with the ability of capitalism to alleviate human misery. Welty opposed a pure market economy. He believed in competition and in a certain amount of entrepreneurial freedom,

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but he approved of private initiative only insofar as social needs, not the market, determined production and priorities. In basic industries and in banks, actual socialization would be necessary in order to prevent a damaging concentration of economic power. Corporations of public law, representing the main economic sectors and operating in cooperation with the state, would assume responsibility for planning, again according to need and to the principle that everyone has a “right to existence.”38 After 1945, when dialogue could once again take place openly, another longterm tendency in Christian social thought reemerged. This was solidarism,39 the most important postwar exponent of which was Oswald von Nell-Breuning.40 Having first developed during Weimar, solidarism reemerged after the war less dogmatic and authoritarian and more adaptive than it had been before. Lacking Welty’s strong anticapitalism and antimarket bias, the goal of the solidarists was the reform of the liberal market economy, not its abolition. While they shared with Welty a belief in the social function of property and favored decartelization and some socialization of industry, solidarists stressed the possession of property as a natural right and supported market competition as a means of ordering production. But unlike the neoliberal proponents of social market economy, solidarists opposed an autonomous marketplace, which, they said, merely created a mass society of atomized, alienated individuals, and they opposed the liberal notion of a labor contract because they considered work to be a matter of human dignity and not a commodity. But like Welty, the solidarists believed in overcoming the class struggle of liberal capitalism by means of corporate institutions organized along trade and professional lines in which employees as well as employers participated fully in the regulation of economic life.41 Ideas from both streams of thought received concrete expression in the early programs of the CDU, especially in the area of strongest social Catholic influence, North Rhine-Westphalia. The Cologne Program of September 1945 blamed the catastrophe of Nazism on a contempt for fundamental Christian law and on the uncontrolled concentration of economic power in private hands. It called for bringing the largest industrial sectors under public control. The foundation of a healthy Christian social order, to be supported by the state, were the Church, the family, and small and middle-size firms, including small farms. The Program specifically supported the handwerk system of self-administration.42 The CDU’s Ahlener Program of 1947 went even farther in this direction. It explicitly blamed Nazism and economic misery on the unrestricted domination of private capitalism and, in the Third Reich, state capitalism. The most effective guarantee of human rights and social justice was to be public control of big capital, full parity for workers on basic questions of economic planning, support for small firms, especially handwerk, and a central role in government for corporate institutions representing the various economic sectors.43 The Ahlener Program represented the highest point of “leftist” social Catholic thinking within the CDU, and in any case such ideas never had more than a limited appeal outside of the Catholic Rhineland. After 1947 as the German

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economy began to recover and the remaining economic controls seemed more a hindrance to further growth, ideas of economic planning lost adherents. In early 1948 the CDU/CSU to the Frankfurt Economic Council voted to support the social market economy policies of the Council’s new director Ludwig Erhard. The next year the Party’s Düsseldorf Program specifically renounced economic planning and controls. Yet even as Adenauer worked to push the Party in a neoliberal direction, social Catholic thought remained influential, and it was Adenauer’s political genius to mold a party that embraced these diverse tendencies.44 Catholic social teaching resonated deeply within handwerk in the postwar period and formed an essential component of its worldview. The fundamental link between the two was their common critique of industrial capitalism and the belief in the efficacy of corporate bodies in binding society. Social Catholics and handwerk leaders alike, as well as Marxists and many others, shared a view of the basic paradox of post-Enlightenment society: that liberation of the individual and the focus on individual rights had led not to man’s true liberation, but rather to his depersonalization (Vermassung) in mass society. Man had become mass producers and—in the early 1950s the American wave of the future was already clear to many—mass consumers as well. This reality of modern capitalism was deeply antithetical to the traditional handwerk way of life. As expressed by one speaker, “Mass man is the real enemy of handwerk! Why? Because he has no personal, individual needs. His needs are satisfied by the factory, the newspaper, and film.”45 Industrial mass society threatened handwerk in a double sense. Handwerk, in theory, produced goods individually for individual consumption. The factory worker, on the other hand, mass-produced goods for mass consumption. The factory first alienated the worker from the means of production, his tools. It then made him an anonymous part of an assembly line with no personal relation to, or choice of, what he produced. But in addition the factory produced standardized articles for equally anonymous consumers. Thus the factory system robbed production as well as consumption of its individuality. These protests, however, already represented something of an anachronism. In fact, the reality of handwerk production in the early 1950s was such that a clearcut distinction between it and industrial production could no longer be made.46 Handwerker had long ago introduced machinery into manufacture,47 even as they maintained that the machines they used were mere extensions of their skill rather than the central focus of production as in capital-intensive industry. Many shops had grown as large as those of small industry and even used assembly-line techniques. Sometimes the master had even left his craft altogether to concentrate on management, leaving the actual production to his journeymen.48 In these circumstances the age-old personal relation with the customer was likewise transformed. Handwerk commonly produced for the market and even for export.49 But although the borderline between the two modes of production was becoming increasingly blurred, handwerk continued with good reason to insist on an essential distinction between them. In 1949 36.6 percent of all firms were still one-man-shops,50 and although the average firm size had steadily increased

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Table 9.1. Handwerk Shops by Firm Size 1939

1949

Firm Size

Percentage

Firm Size

Percentage

One-man 2–10 11–20 21–50 51–100 101–200 200 +

40.7 55.3 2.5 1.1 0.3 0.1 —

One-man 2–9 10–19 20–49 50–99 100–199 200 +

36.6 57.9 3.8 1.3 0.3 0.1 —

Source: “Betriebsgrößenklassen des Handwerks,” DHWB (3:22), December 1951, 359.

since the late nineteenth century, in 1949 57.9 percent of shops still employed only two to nine persons (see Table 9.1). Handwerk production remained small and still often oriented to the individual customer. But in addition, handwerk held onto the moral distinction between itself and industry which made its worldview compatible with that of social Catholic teaching: the handwerker retained an immediate relationship with his materials, and production remained an act of personal creativity. Handwerk, and the industrial Mittelstand as a whole, thus appropriated for itself a crucial role in modern society, the same one that Social Catholicism had traditionally assigned to it: that of a solid stratum of small proprietors acting as a buffer between capital and labor.51 Small property owners and producers provided a conservative, stable, social core, and offered to the proletariat possibilities of economic advancement and the chance to have a “real” stake in society through property ownership. In the view of both handwerk and postwar Christian socialists, a broader distribution of property would act as a moral as well as a social corrective to the overspecialization in production and in the division of labor. It would be a means of overcoming or at least mitigating the conflict between capital and labor, and of transcending the spiritual alienation of people from their labor.52 Handwerk production held another deep attraction for Christian socialists and the CDU/CSU, one touted proudly by handwerk itself as a virtue, that its organization was patriarchal. This related not only to the hierarchical work relation between master, journeyman, and apprentice, but also to the continued importance of the family as a unit of production53 and the segregation of trades by sex.54 The traditional father-headed family played a key role in CDU/CSU ideology in the postwar years. Social legislation (such as the family compensation law), wage policy, and even school hours were all predicated on the assumption that the healthiest and preferred norm was a family that comprised a father who was the sole wage earner and a stay-at-home mother who raised, it was hoped, many children.55 While the CDU/CSU sometimes paid lip service to the principle of equality of the husband and wife within the household, it nonetheless frankly ar-

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gued that the man should have the last word, it being a deplorable fact of modern life that “the family father has become a tragi-comic figure.”56 Christian socialists, too, found one of the most lamentable consequences of industrialization to have been the breakup of the family as an economic unit, together with the low wages paid to men, which forced women into the factories.57 The Christian socialist view of patriarchy, which became part of mainstream Christian Democratic thought, also extended to the workplace. Even though Christian socialists had now accepted the large industrial firm, including its “disastrous separation of capital and labor,” as inevitable because of modern technology, they continued to believe that the spiritual consequences of industrialization, the depersonalization of man (Vermassung der Menschen), could be overcome. The means to this recovery, in an argument that contained many interesting twists, was patriarchy. While conceding that “the word sounds very conservative and in a certain sense reactionary,” and that the notion of the entrepreneur as the “benevolent father of his staff” was no longer in keeping with the times, CDU/CSU thinkers maintained that patriarchy contained an essence that was worth bringing back, and they expressed it as restoring man (Menschen) to the center of the workplace. Their inspiration was the handwerk shop with its hierarchical, “affectionate,” and reciprocal relations of right and duty between master, journeyman, and apprentice. While this relation could not be directly brought into the factory, they admitted, its essence could be transposed there—and with it, as in the handwerk shop, a recognition of the firm as an enterprise embodying common rather than particular interests—in the form of “social partnership.”58 Handwerk, too, considered the master-journeyman-apprentice relation, with masters viewing their apprentices more as trainees than as employees, to be close to the essence of what it was and should be. Leaders called on government in its tax and wage policies to remember this, and accordingly “give to the handwerk master the incentive again to bring up his apprentices as the heirs of his handwerk skills according to patriarchal principles.” Again contrasting itself to industry, handwerk maintained, “We … see in the master-teaching the possibility of counteracting the destruction of the soul of work through mechanization. The handwerk journeyman should not be a class struggler who feels himself to be exploited and oppressed. It is rather love of his craft that should give him the feeling of personal worth.”59 The antipathy to a class-based vision of society, shared with Christian socialists, was also reflected in the interest on the part of many leaders in the formation of a corporatist economic council (Wirtschaftsrat; WR). The interest in such a body—that would be responsible for economic planning and advice as well as interest mediation at the local, state, and national levels parallel to, but not in place of, representative parliamentary bodies, and would represent various economic sectors including labor—was widespread in Germany after the war.60 Handwerk leaders in particular were attracted to such proposals, not only as effective means of representing their interests but out of a deeply held Christian socialist belief in the efficacy of a corporatist social order as a means to achieve social peace where the Weimar Republic had failed.61

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Even as interest in such corporate schemes faded by the early 1950s, the focus of handwerk’s political engagement in the Federal Republic remained in parliament and the mainstream parties. Leaders augmented their political muscle there in two important ways. First, within the Bundestag they spearheaded the formation in 1951 of a Mittelstand Block, along with the peak organizations of farmers, and home and property owners, to be joined the next year by retail and restaurant, civil servants, and eventually retailers.62 Leaders intended this to be an interparty coalition at the federal level, soon augmented by subsidiaries at the Land, district, and communal levels, and were adamant that it not become the germ of a separate Mittelstand party, which, they asserted, would be repeating the mistakes of Weimar.63 While the Mittelstand Block was originally formed to counter the perceived neglect of small business by the parties,64 by the mid-1950s Mittelstand interests had become imbedded in the parties, and, having become redundant, the Block dissolved in 1957.65 Second, because it had become, and was becoming, more capitalistic and thus its interests were becoming more congruent with those of other employers, including industry, handwerk deepened its relations with other business interest groups by being a founding member of the Federation of German Employers’ Associations (Bundesvereinigung deutscher Arbeitgeberverbände; BdA) in 1949, that represented business in negotiations with the unions (which represented journeymen and apprentices), and the Association of Independent Entrepreneurs (Arbeitsgemeinschaft selbständiger Unternehmer; ASU) that met to discuss social policy.66 The labor strategy here was explicitly to transcend the posture of class war of Weimar in favor of one of “social partnership” in order, in the words of one leader, “to give proof that the worker is better off under the social market economy than he is under the Soviet system.”67 Leaders regarded this strategy as a success. Not only did they consider their relations with the other associations to be excellent, but as to handwerk’s influence, “Since the summer of 1950 it has not yet happened that any essential social-political or general Land political question has been addressed and decided without the participation of handwerk.”68

Handwerk and the Liberalism of the CDU/CSU The most important points of ideological affinity between Christian socialism and many leading handwerk thinkers, then, were the belief in the efficacy of a corporatist social order in overcoming class antagonism and in the moral distinction between the mass society created by industrial capitalism and the world of the small producer. But while handwerk had close ties to Christian socialism, including a lingering distrust of parliamentary party politics, its leaders were also deeply imbued with neoliberal ideas that together with Christian socialism formed the most influential strains of social and economic thought within the CDU/CSU. Like virtually every other important body of thought in Germany during this period, liberalism had also been deeply influenced by the experience of the

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collapse of the Weimar Republic and the catastrophe of the Third Reich. Postwar liberals developed their ideas in reaction to what they saw as the worldwide trends in the growth from the late nineteenth and early twentieth centuries of monopoly capitalism and of state-directed economies. The combination of these two in Germany in National Socialism held special lessons for liberals: The “night watchman” view of the state had led not to the guarantee of the free market, but rather to its negation, the concentration of economic power in the hands of a few private individuals in the form of monopolies and cartels. This in turn had not only distorted the mechanism of the market and weakened the functioning of democracy, but when placed at the disposal of a powerful, determined state, had also offered staggering possibilities for destruction and loss of freedom.69 Out of the failures of laissez-faire liberalism, a revisionism developed in Germany in the 1930s and 1940s that argued that the state had a necessary role to play in ensuring the free competition of the market.70 While these neoliberals are customarily divided into ordoliberals and those adherents of social market economy,71 the two had more in common than they had differences, and all supported the policies of Ludwig Erhard.72 In addition, both strongly believed in the necessity of a vital small-property owning middle class, and in handwerk. Many handwerker and their leaders were likewise committed to neoliberal principles in the postwar period. An examination of these connections will form the subject of this section, and will conclude our discussion of the links between handwerk and the CDU/ CSU.73 Ordoliberalism—so called because of the strict, systematic theories of economic and social order (Ordnung) advocated by its proponents—developed in the 1930s out of a rejection of the old liberal notion of an autonomous economy following natural laws. Ordoliberals shared this view with Christian socialists, but unlike the latter who focused on the religious and spiritual-political dimensions of the problem of social misery, ordoliberals placed the economy at the center of their analysis.74 The market alone, they argued, could produce the necessities of human life. Yet they were not mere laissez-faire economists. The big mistake of the classical economists had been to believe that the market free of state interference offered the best guarantee of both prosperity and freedom.75 The uncontrolled market, they pointed out, had merely led to the formation of monopolies and cartels, which accumulated wealth into the hands of the few while they proletarianized the many, with the disastrous political consequences that were there for all to see. An uncontrolled market of free competition necessarily became its own contradiction, because its necessary outcome by definition eliminated competition. For the ordoliberals, then, the first rule of the marketplace was that it must be decentralized.76 As a necessary corollary, also gone was the old idea of the state as the night watchman. The state had a necessary role to play in establishing set principles of order and in the enforcement of those principles in order to maintain competition—or “liberal interventionism,” as its advocates termed it.77 This did not mean state planning, the ordoliberals insisted, and certainly not the corporate

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institutional controls that the Christian socialists envisioned.78 Excessive concentration of power in the state was even more dangerous, as recent history had convincingly demonstrated, and certainly less efficient than cartels or monopolies.79 The ordoliberals were resolutely anticollectivist, state or private. Only the productive competition (Leistungswettbewerb) of individuals, safeguarded against the formation of monopolies by the state, could simultaneously unleash the tremendous productive capacities of a people and preserve their freedom. While ordoliberals rejected a program for Germany’s revival grounded in religion in favor of one grounded in economics, they did share with Christian socialists a conviction of the necessity of addressing the question of social justice; the intellectual origins of their beliefs were often the same.80 The distinguishing feature of the ordoliberals’ position—and this set them apart from the proponents of social market economy as well—was the indivisibility of economic and social policy. Their economic and social analyses were of a piece and were founded on the premise of the economic and social efficacy of decentralization and competition with a heavy emphasis on individual and community self-sufficiency. Röpke, for example, argued that the point of view—taken for granted in the late nineteenth and early twentieth centuries—that the large industrial firm represented “an economic and social step forward” had been proven obsolete.81 Both the promise of big firms that they by means of great capital investment in machinery, increased division of labor, and mass production had benefited the consumer with cheaper products and the laborer with higher wages and shorter working hours, and the threat that they would ineluctably displace the small shop had in fact proved false. First, the number of small firms and the number of people employed in them, Röpke pointed out, had increased in all industrialized nations; the small firm, in other words, had held its own.82 But furthermore, Röpke continued, the productive advantages offered by a big firm, mainly economies of scale, do not apply to all economic sectors. Whether capital-intensive mass production is economical depends on the nature of the particular market. The manufacture of airplanes, tanks, war ships, and atom bombs was obviously only appropriate on a massive scale.83 But the more individual and shifting demand is, the less suitable mass production becomes. Production on such a scale, depending as it does on huge investment in highly specialized machinery, may often be more efficient, Röpke pointed out, but it did not always produce what the consumer actually wants. Nor did it have the necessary flexibility to accommodate to sudden shifts in demand.84 Big firms could in many cases prove to be dinosaurs that were not only politically dangerous, but also economically dangerous, because the tying up of such vast resources of capital and labor in a single inflexible operation meant that the negative repercussions in the event of a market shift could be wide-ranging throughout the economy. Small firms, on the other hand, due to their smaller size and greater reliance on human skill rather than expensive and specialized machinery, offered greater flexibility in responding to changing demand, and their wide geographical dispersal meant savings in transport costs. In any case,

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as Röpke pointed out, the introduction of the electric motor in the early part of the century meant that the small shop, too, had access to cheap mechanization.85 Hand in hand with the market inflexibility and economic risks entailed in an overreliance on mass production went tremendous social costs. Big factories concentrated huge numbers of uprooted workers in urban wastelands, performing mechanized tasks that took all joy out of work, and rendered ever more of the proletariat dependent on fewer and fewer owners. “It is now no longer a matter of who produces cheaper or better,” Röpke asserted, but rather whether “we give up on the great cultural and social crisis of our time.”86 An overemphasis on the big firm meant an unhealthy concentration of economic, social, and finally political power, which was in turn economically unproductive, socially unstable, and politically dangerous. It would lead to socialism and nationalism. Since the core evil (Kernübel) in Röpke’s view was concentration (economic concentration being only a necessary preliminary to concentration of political power87), decentralization offered civilization its best chance. Röpke called for a renewed emphasis on the small producer—the farmer and handwerker, as well as on the small retailer and the professions. He also advocated geographical decentralization, with more-productive units in rural areas as a counterweight to overurbanization. In general, he believed that the widest possible distribution of property offered the best protection against economic swings and against political tyranny, adding that property (house and garden) stabilized a (patriarchal) family life and encouraged the birth of more children.88 A more flexible and pragmatic brand of neoliberalism was represented by Alfred Müller-Armack and Ludwig Erhard. Born in 1901, Müller-Armack was the only prominent neoliberal to join the Nazi Party, which he did in May 1933 probably for a mixture of careerist reasons as well as in the hope that fascism, as an alternative to Marxism and traditional liberalism, could lead Germany out of the depression. But a few years later he began to distance himself from the Nazis. The economic reason for his shift was that the increased state controls on the economy formalized in the Four Year Plan conflicted with his own commitment to a free market. Yet morally, Müller-Armack came to believe that the influence of religion on economic life was greater than the race and culture at the center of Nazi ideology, and concluded that the lack of a developed theory of the relation of religious and political life in German theology, especially Lutheran, had left Germany particularly vulnerable to fascism.89 Thus, the experience of Nazism convinced Müller-Armack, as well as the ordoliberals and Christian socialists, of the key role of the free market and caused him to approach economics as inseparable from social and moral considerations.90 The key figure in neoliberal thought was Ludwig Erhard, director of the Bizonal Economic Administration from 1948 to 1949, then Minister of Economics where he gained the reputation of the architect of the German economic miracle, and finally Adenauer’s successor as chancellor in 1963. Erhard’s most important early influence was Franz Oppenheimer, professor of sociology and theoretical economics at the University of Frankfurt, under whom Erhard wrote

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his dissertation in the early 1920s. Oppenheimer’s own work took as its starting point a rejection of laissez-faire capitalism and evolved a theory of liberal socialism in which progressive social goals could be accomplished within the context of the free market protected from monopoly domination by an interventionist state. The commitment to free market forces and opposition to collectivism in all forms, including monopolies and cartels, remained constant themes throughout his career. In a 1932 polemic against the ideas of Hjalmar Schacht, the former Reichsbank president (1923–1930) and later Nazi Minister of Economics from 1934 to 1937, Erhard attacked the promonopoly “rigid capitalism of the German Nationalists” (with whom Schacht was allied) and the trend toward autarky (Autarkiebestrebungen).91 Later he ascribed the downfall of the Weimar Republic not only to the shallow roots of democracy, but also to the weakness of its economic system, which he described as a “fateful mixture of socialism, cartelization and old-fashioned capitalism.”92 During the Third Reich, Erhard remained in Germany but kept his distance from the Nazis, working at an economic research institute for consumer industries. During this period he developed contacts with Müller-Armack and other liberal economists of the Freiburg School, but by 1942 difficulties at the institute provoked by his critical views forced him to leave and set up his own research institute.93 It was in 1946, as disillusionment with state controls grew and as the ordoliberal advocacy of “perfect competition” began to appear less and less practical, that Müller-Armack coined the term social market economy (Soziale Marktwirtschaft)94 and that he, Erhard, and others began actively to push for their program and point of view. The main tenets of the social market economy as elaborated by these theorists overlapped on many points those of the ordoliberals, who indeed remained influential within the CDU/CSU and in the government.95 Uppermost for Müller-Armack and Erhard was the conviction that the free market was the best mechanism both to unleash the greatest productive capacities of society and to guarantee the highest degree of individual freedom. In addition, like the ordoliberals, they departed from the laissez-faire policies of earlier liberals in believing that the state must take an active role in correcting both the tendency to concentration and the social injustices of the unregulated market. Müller-Armack, countering Adam Smith, wrote that the market was a human creation rather than a natural phenomenon and, citing Montesquieu’s principle that the division and balance of political power is the best guarantee against tyranny, argued for checks against the concentration of economic power.96 But the proponents of a social market economy parted company with the ordoliberals on several subtle points. The main goal of the social market liberals was more to free productive market forces from state controls and less to subject them to a new state-defined order. Thus while they agreed in large part with the ordoliberals’ view that cartels and monopolies could become dangerous concentrations of economic power, they were less doctrinaire about maintaining a market of perfect competition and did not oppose bigness on principle.97 In addition, social market liberals, unlike the ordoliberals, did not conceive of economic and

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social policy as a unity. They were indeed committed to addressing social problems, but they regarded social policy as distinct from the economy and as a force that would function as a corrective to the inequities of distribution that were the inevitable outcome of the free market. Social justice could be achieved only by an elaborated and distinct social policy funded by economic surplus.98 Above all for our purposes, ordoliberals as well as proponents of a social market economy advocated strong support for small, Mittelstand businesses as a counterweight to anonymous industrial mass society.99 Perhaps more important ultimately than matters of doctrine, social market liberals were simply more pragmatic, or more vague, than were ordoliberals. The contours of their theory were less clearly defined, especially as to the role of the state.100 It could be all things to all people. Many supporters of the social market economy, for example, were entrepreneurs or members of the Liberal Party, and they stressed its market content. Others in the CDU/CSU emphasized the Christian social and pro-employee aspects; because parts of the party’s social program could have come out of the SPD, even some liberal socialists could identify with it.101 The two principal strands of neoliberal thought in West Germany, then, each maintained that for economic as well as social reasons small business had a key role to play. The ordoliberals, stressing the dangerous political and economic consequences of concentration, argued for an economy based on a strong and widely dispersed class of small proprietors coexisting with big firms. The small firm was an economically rational form of production as well as an effective counterweight to the possibilities of excessive growth in state power. Social market liberals also laid great weight on the economic and social benefits of small business, making many of the same arguments but being less doctrinaire about the dangers of bigness per se. While neoliberal theorists expressed strong support for the small proprietor, handwerk thinkers made it clear that the feeling was mutual. Leaders gave a prominent place in their publications to discussions of the views of neoliberal thinkers and stressed their compatibility with modern handwerk. Central to this compatibility was an uncompromising rejection of collectivism and a firm belief in the competitive marketplace as the best mechanism for the regulation of goods and services. But like the neoliberals, leaders were resolutely opposed to the unrestrained Manchester liberalism of the nineteenth century. In handwerk’s historical memory this was the period when it had suffered the most damage as rapid industrialization and the very lack of restraint had led to the extinction of many trades and the dominance of monopolies. In this view, unrestrained competition necessarily led to the formation of monopolies and thus to the negation of all competition. That the Nazi state was the product of this process was further demonstrated by its policies of economic controls and a preference for bigness—in short, a state institutionalization of the logical end of unrestrained competition.102 The necessity of state restraint on economic concentration was affirmed by neoliberals and handwerk alike; true competition, they argued, could only be maintained by the prevention of monopolies. In an approving discussion of

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Müller-Armack’s ideas, the national handwerk newspaper outlined the middle path that social market theory and the small proprietor took between a state-controlled economy and the unrestrained market, recognizing above all that the market is not a natural mechanism in the Smithian sense. First, the end of state controls: “Now it is important to recognize that the market economy is nothing more than an economic-political instrument by means of which we should strive to attain the highest degree of rationality in economic events because it makes cost and price once again the first aim of economic activity.” But that could only be the first step, the article continued: “The second [step], just as important and decisive, will consist of building the market economy as a system of competition into an economic order appropriate to our time, which must correspond internally to the social necessities of our age. Thus it is necessary to free ourselves from the outmoded [liberal] concepts, and formulations of the nineteenth century.”103 The “outmoded concept” referred to was that of the state as the (passive) night watchman. The modern free market, in Röpke’s words, “presupposed a state as independent as it is strong.” But neoliberals of all stripes were quick to point out that a stronger role for the state, while necessary to ensure free competition, did not mean state socialism: “The great problem of the concentration of economic power cannot be solved, as the socialists want, through an increase in concentration (state planned economy and socialization) but rather through a decrease in concentration.”104 And since the market if left to its own devices would extinguish freedom, a stronger state role was needed to ensure free competition. Nor, moreover, did handwerk disdain the need for a social policy to correct the distortions of even a market regulated according to social market principles. As its newspaper declared, the lack of a social policy represented yet another outmoded concept: “The basic error of the liberal market economy consisted of leaving the competitive mechanism of the market to run itself as if it were fully automatic while completely ignoring the social consequences.”105 In neoliberalism, then, in both its ordoliberal and social market forms, handwerk found the political-economic theory that suited its new economic position and postwar outlook. Together with Christian socialism, neoliberalism offered it both an ideology of economic competition as well as a socially conservative moral system that affirmed its traditional sense of itself as productive family units operating in a moral economy. Even as neoliberalism and Christian socialism represented in a sense two opposing values—free market competition on the one hand, and a morally determined economic order on the other—so did the two together function to obviate these contradictions. Social market theory conformed to a modernized handwerk, one now dominated by trades and a leadership that embraced technological and managerial rationalization, and for which competition operated to enhance wealth rather than to eliminate existences. For structural reasons alone, handwerk of the 1940s and 1950s no longer required a policy or ideology of protectionism.106 But at the same time, neoliberalism offered a theory that promised to dilute the oligarchic power of big business. Accordingly, handwerk supported Erhard’s proposal for an anticartel law insofar

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as it forbade cartel price-fixing arrangements among big industry. But handwerk was careful to oppose aspects of the law that would have given an anticartel bureau wide-ranging powers—that is, powers that would stand in the way of its own efforts at suprafirm rationalization. Chambers and guilds wanted to remain free to conclude agreements that coordinated technical development or organized supply or payment cooperatives among member firms. They applauded the exceptions in the law allowing regional rationalization and export cartels. Thus handwerk did not expect neoliberalism to furnish justifications for a system of perfect competition among independent small proprietors. Rather it expected to be able to use its own organizations as a quasi-managerial structure at the suprafirm level to achieve the same sorts of economies of scale and levels of rationalization that big business enjoyed.107 The ideological compatibility in the postwar period of the handwerk worldview with Christian socialism and neoliberalism, along with a determination of leaders not to forsake the mainstream political parties as they had done in Weimar, drew handwerk naturally to support the CDU/CSU as voters. But the value of handwerk—as well as other Mittelstand groups that shared their outlook—to the CDU/CSU went beyond their electoral contribution. What they represented economically and socially, as well as the virtues they embodied, were defined by CDU/CSU thinkers so as to confirm what the party saw as its political mission and moral outlook. Because handwerk (and the Mittelstand) stood between capital and labor and supposedly offered an opportunity for social advancement to the working class, their membership in the party confirmed the CDU/CSU claim to be neither a “worker” nor a “bourgeois” party but a “party for all.”108 Likewise, party theorists saw their ideological outlook anchored in handwerk and the Mittelstand. As supporters of private property and the free market (but with a social aspect) they represented in the eyes of the party—and indeed in their own—a bulwark against communism. As small, often family, proprietors, committed to individual initiative and opposed to income leveling, handwerker in an important way offered an embodiment of the proffered Christian (democratic) ideal of property, hard work, and patriarchal family.109

Notes 1. See Chesi, Struktur und Funktionen, 170–171. 2. Peter Pulzer, German Politics, 1945–1995 (Oxford, 1995), 33–37; Gerhard Braunthal, Parties and Politics in Modern Germany (Boulder, Colo., 1996). 3. Noel D. Gary, The Path to Christian Democracy: German Catholics and the Party System from Windthorst to Adenauer (Cambridge, Mass., 1996), chapter 7; Frederic Spotts, The Churches and Politics in Germany (Middletown, Conn., 1973), 292. 4. On the early leftism of the CDU/CSU and the gradual shift from 1946 to 1948 within the party to a more pragmatic liberalism under Adenauer, see Ambrosius, Die Durchsetzung; Frank

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5. 6.

7. 8. 9.

10. 11.

12. 13.

14.

15.

16.

17.

18. 19. 20. 21.

Bösch, Die Anenauer-CDU: Gründung, Aufsteig und Kriese einer Erfolgspartei, 1945–1949 (Stuttgart and Munich, 2001), 21–51. Winfried Becker, CDU und CSU 1945–1950: Vorläufer, Gründung und regionale Entwicklung bis zum Entstehen der CDU-Bundespartei (Mainz, 1987), 32, 53. On the early CSU, see Barbara Fait, Die Anfänge der CSU 1945–1948: der holprige Weg zur Erfolgspartei (Munich, 1995). On the strong handwerk presence in the CSU, see Alf Mintzel, Die CSU: Anatomie einer konservativen Partei 1945–1972 (Opladen, 1975), 431. CDU Rhineland to Max Kölges, December 19, 1947; HStAD, RWN 130/46 (Nachlaß Max Kölges), item 10. Minutes of the meeting of CDU handwerker in North Rhine-Westphalia, February 11, 1947, ACDP, I-020-004/3. “Handwerk fordert Mitbestimmungsrecht,” in the Press Service of CDU/CSU, DeutschlandUnion-Dienst (or DUD) (3:160), August 12, 1949, 3–5. See also “Bildung eines CDU-Handwerkerbeirates,” May 10, 1949, ACDP, I-020-004/3. Minutes of the meeting of CDU handwerker in North Rhine-Westphalia, February 11, 1947, ACDP, I-020-004/3. CDU-Rheinland, Wirtschaftsausschuß to Kreisgeschäftsstellen of CDU-Rheinland (n.d., but other documents in folder are July 1950), HWK-Düss., folder 1002. Among individual handwerker this neglect on the part of the CDU/CSU seems to have led to resignation rather than to a revival of political radicalism. See “Auf ‘goldenem boden,’” DUD (6:66), April 2, 1952, 3. “Ein Mittelstandsprogramm” in DUD (6:17), January 24, 1952, 1–2. Minutes of the meeting of CDU handwerker in North Rhine-Westphalia, February 11, 1947, ACDP, I-020-004/3. The reference to a state within a state was clearly to Weimar interest politics and Nazi political chaos. “An den gewerblichen Mittelstand und die selbständigen Berufe,” April 1948, HStAD, RWN 130/49 (Nachlaß Max Kölges), Item 64. The commercial (gewerblichen) Mittelstand addressed here included handwerk, small retailers, home owners, farmers, and other small proprietors. In a revealing choice of language, the flyers used the politically neutral words social levels and groups (Schichten und Gruppen) instead of class, associated with Marxian class struggle, or estate (Stände), meaning estate with its implication of a hierarchically ordered society. For an overview of personalities, parties, and publications on the radical right in postwar Western Germany through the early 1960s, see Hans Frederik, Die Rechtsradikalen (Würzburg, 1965). Rhineland Westphalian Handwerker Bund (Rheinisch-Westfälischer Handwerkerbund, or RWHB), minutes of executive committee meetings of March 28 and April 19, 1950, HWKDüss., loose files. RWHB, minutes of executive committee meeting, October 30, 1951, HWK-Düss., loose folder. Heinrich Schild was general secretary of the RS-HW during the Third Reich. After the war he served from 1949 to 1953 as general secretary of the RWHB and during the same period as editor-in-chief of the newspaper Handwerkerzeitung für Nordrhein-Westfalen. From 1953 to 1961 he was a member of the Bundestag, first for the German Party and then for the CDU; he also served as a member of the European Parliament until 1961. See John, Handwerkskammern in Zwielicht, 162. On Schild’s activities during the Third Reich, see Schweitzer, Big Business, 136–143. RWHB, minutes of executive committee meeting, October 30, 1951, HWK-Düss., loose folder. RWHB, minutes of executive committee meeting, October 30, 1951, HWK-Düss., loose folder. CDU-Handwerker Advisory Council meeting, February 11, 1947, ACDP, I-020-004/3. CDU-Handwerker Advisory Council meeting, minutes of September 9, 1951; ACDP, I-020004/3.

The Integration of Handwerk Organizations into the Political Fabric of the Federal Republic | 201 22. CDU of the Rheinland memo of April 25, 1949; and “Bildung eines CDU-Handwerkerbeirates,” 1, 9. 23. RWHB, executive committee meeting, October 30, 1951, HWK-Düss., loose file. Also “Bildung eines CDU-Handwerkerbeirates,” 2. 24. Kurt Schumacher, speech in Kiel, October 27, 1945, “Was wollen die Sozialdemokraten? Neubau nicht Wiederaufbau!”; and Declaration of the Socialist Internationale, Frankfurt, July 3, 1951, “Ziel und Aufgaben des demokratischen Sozialismus”; reprinted in Susanne Miller, Die SPD vor und nach Godesberg (Bonn-Bad Godesberg, 1974), 77–79, 92 §5. See also Eric Ott, Die Wirtschaftskonzeption der SPD nach 1945 (Marburg, 1978), 268–269. Also Harold Kent Schellenger Jr., The SPD in the Bonn Republic: A Socialist Party Modernizes (The Hague, 1968), 32–50, esp. 38. 25. See RWHB executive committee minutes of April 19, 1950, 2, HWK-Düss., loose folder. 26. RWHB executive committee meeting of April 19, 1950, minutes; HWK-Düss., loose folder. 27. After negotiations between handwerk and the four major (bourgeois) parties, the CDU agreed to put forth nine candidates for the Landtag elections of 1950; the FDP put forth three, the Center Party put forth two, and the SPD put forth three. RWHB executive committee meeting, February 28, 1950, HWK-Düss., loose folder. 28. “Bildung eines CDU-Handwerkerbeirates,” 6. 29. In the first years after the war, while the low level of handwerker active participation in the party distressed officials, handwerker and their families did vote for the CDU/CSU. See minutes of Handwerker/CDU of North Rhine-Westphalia, February 11, 1947, ACDP, I-020004/3. For an analysis of the importance of handwerk in the membership of the CDU/CSU, see Arnold J. Heidenheimer, “La Structure Confessionnelle, Sociale et Régionale de la CDU,” Revue Française de Science Politique 7, no. 3 (1957): 626–645. 30. CDU Rheinland Wirtschaftsausschuß to Kreisgeschäftsstellen der CDU des Rheinland (n.d., July 1950), HWK-Düss., folder 1022. 31. See Maria Mitchell, The Origins of Christian Democracy: Politics and Confession in Modern Germany (Ann Arbor, Mich., 2012), chapters 5 and 6. On the eventual marginalization of Christian socialism by Adenauer, see Franz Focke, Sozialismus aus Christlicher Verantwortung: die Idee eines christlichen Sozialismus in der katolisch-sozialen Bewegung und in der CDU (Wuppertal, 1978), 270–287, 299–300. 32. Rolf Wenzel, “Wirtschafts- und Sozialordnung,” in Becker et al., Vorgeschichte der Bundesrepublik Deutschland, 325–326. 33. Focke, Sozialismus aus Christlicher Verantwortung, 30–31. 34. Bernd Uhl, Die Idee des Christlichen Sozialismus in Deutschland, 1945–1947 (Mainz, 1975), 17–20; Geoffrey Crossick, “Metaphors of the Middle: The Discovery of the Petite Bourgeoisie 1880–1914,” Transactions of the Royal Historical Society, sixth series, vol. 4 (1994): 251–279, here 253–255. 35. Wenzel, “Wirtschafts- und Sozialordnung,” 318–319. 36. Uhl, Die Idee des Christlichen Sozialismus, 46–50. See also J. Heinz Müller, “Grundgedanken der Enzyklika Quadragesimo anno und die Nachkriegsentwicklung in der Bundesrepublik Deutschland,” in Die Enzyklika Quadragesimo anno und der Wandel der Sozialstaatlichen Ordnung, ed. Wolfgang J. Mückl (Paderborn and Munich, 1991): 9–23. 37. Among the most prominent of the political figures attending were Karl Arnold, Johannes Albers, and Jakob Kaiser. Wenzel “Wirtschafts- und Sozialordnung,” 319. 38. Wenzel, “Wirtschafts- und Sozialordnung,” 319. See also Eberhard Welty, Die Entscheidung in die Zukunft. Grundsätze und Hinweise zur Neuordnung im deutschen Lebensraum (Heidelberg, 1946). 39. The word is meant to emphasize the reciprocal dependency and obligation of the individual and society. Gustav Gundlach, “Solidarismus” in Handwörterbuch der Sozialwissenschaften, vol. 6 (Stuttgart, 1956), 296–298. 40. Oswald von Nell-Breuning, “Christlicher Sozialismus?,” Begegnung 2 (1947): 145–149; and

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41. 42.

43. 44.

45. 46. 47.

48.

49.

50.

51.

Wirtschaft und Gesellschaft Heute, 3 vols. (Freiburg, 1956–1960). On the origins of solidarism as a middle way between individualism and collectivism, see Peter Koslowski, “Solidarism, Capitalism, and Economic Ethics in Heinrich Pesch,” in The Theory of Capitalism in the German Economic Tradition: Historicism, Ordo-Liberalism, Critical Theory, Solidarism, ed. Koslowski (Heidelberg and New York, 2000): 371–394. See also Franz Josef Stegmenn, Der Soziale Katholizismus und die Mitbestimmung in Deutschland: Vom Beginn der Industrialisierung bis zum Jahre 1933 (Munich-Paderborn-Vienna, 1974), 157–174. Wenzel, “Wirtschafts- und Sozialordnung,” 322–323. “Leitsätze der Christliche-Demokratischen Partei im Phein und Westfalen—Zweite Fassung der Kölner Leitsätze,” September 1945. This formulation of the program dropped the term “Christian socialism” that had appeared in the earlier, June 1945, version as too provocative, and softened the language explicitly linking Nazism and large capitalist arms magnates. In contrast to these Cologne programs, see the Frankfurter Leitsätze of September 1945 of the Hessen CDU, which lacks the strong Christian language of the Catholic Rhineland CDU, but shared the emphatic, if vague, call for social oversight of big industry as well as the clear support for small shops and handwerk. Text of all documents in Flechtheim, Dokumente, vol. 2, 30–45. Text in Flechtheim, Dokumente, vol. 2, 30–45. See also Mitchell, Origins of Christian Democracy, 143–147. Hans-Jürgen Grabbe, Unionsparteien, Sozialdemokratei und Vereinigte Staaten von Amerika 1945–1966 (Düsseldorf, 1983), 49–50; Rudolf Uertz, Christentum und Sozialismus in der frühen CDU: Grundlagen und Wirkungen der christlich-sozialen Ideen in der Union 1945-1949 (Stuttgart, 1981), 97–111, 185–204; Hüttenberger, Nordrhein-Westfalen, 75; Antonius John, Ahlener Programm und Bonner Republik: vor 50 Jahren Ideenwettlauf und Rivalitäten (Bonn, 1997); Mitchell, Origins of Christian Democracy, 162–163; text of “Düsseldorfer Leitsätze,” July 15, 1949, in Flechtheim, Dokumente, vol. 2, 58–76. Speech at the Arbeitstagung der Vereinigung der Zentralfachverbande des deutschen Handwerks in Wiesbaden, January 22–23, 1953, HWK-Düss., folder 72. For the nineteenth century origins of these changes, and especially the growing class separation of master and journeyman, see Volkov, Rise of Popular Antimodernism, chapter 3. While handwerk had for the most part been left behind during the first phases of the industrial revolution—the machinery being too large and expensive to be appropriate to handwerk production—with the introduction of the electric motor in the early twentieth century shops began to mechanize. For the varied effects these developments had on the different trades, see Lenger, Handwerker seit 1800, 171–182. In fact, in court and elsewhere handwerk resisted any set of criteria for the definition based on firm size, mode of production, role of firm owner, and so on, preferring to leave itself room for expansion and change. See, for example, Johann Richter, “Die Abgrenzung von Handwerk und Industrie,” in DHWB (2:7), April 10, 1950, 101. Advice on how to produce for export, and the strong urging of handwerker to do so, were a staple of its press. For one of innumerable examples, see “Wie mittlere und kleinere Betriebe erfolgreich exportieren können,” Handwerkerpost (2:1), January 16, 1951, 5. This was a decrease from the prewar level of 40.7 percent. See “Größenordnungen des westdeutschen Handwerks,” DHWB (3:10), May 25, 1951, 149. The percentage of one-man-shops tended to vary enormously by trade. In trades like brush-making, dress-making, basket-weaving/caning, and shoe-making—precisely those low capitalized trades most vulnerable to an influx of new members—60 to 70 percent of the shops were one-man. At the other extreme, in many of the building trades, mechanics, optician, and so on, less than 20 percent were one-man-shops. See the series “Die Betriebsgrößenstruktur der einzelnen Handwerkszweige,” DHWB (3:23/24), December 20, 1951, 376; DHWB (4:4), February 25, 1952, 8; DHWB (3:5), March 10, 1952, 10; and DHWB (3:7), April 10, 1952, 115. On the moral role as promoter of social peace that social Catholic thinkers assigned to the

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52. 53.

54.

55. 56. 57.

58.

59.

60.

61.

petite bourgeoisie in the late nineteenth century (with a focus on France and Belgium) and how reality fell short of their idealized picture, see Crossick, “The Discovery of the Petite Bourgeoisie.” On early social Catholic ideas on artisans and their implications for party politics, see Volkov, Rise of Popular Antimodernism, 203–206, 226–229. See “Um den sozialen Frieden,” DHWB (2:3), February 10, 1950, 33–34; and “Der Beitrag des Handwerks zur Lösung der sozialen Frage,” (2:20), October 1951, 311. The family firm was, however, becoming less frequent as measured by the decreasing numbers of family members (mostly wives and daughters) working in shops. This is partly accounted for by the drop in one-man-shops that typically used family help. “Gesunde Beschäftigtenstruktur des Handwerks,” DHWB (4:4), February 25, 1952, 7. As implied in the article’s title, leaders viewed this as a healthy development. Opinion on the role of women in handwerk varied. Some took the traditional view that there were certain trades and shop functions for which women were “naturally” suited. See “HWK Frankfurt/M 3rd Quarter Economic Report 1948”, in BA Z13/194. Yet a later article noted the great imbalance within firms: While women constituted 53.4 percent of all family helpers, they were only 12 percent of owners and 5.7 percent of all journeymen. In the view of the report’s author this pointed to a major structural fault that could only be remedied by a basic change in mentality. “Struktur des hessischen Handwerks,” Handwerkerpost, February 16, 1951. Robert G. Moeller, Protecting Motherhood: Women and the Family in the Politics of Postwar West Germany (Berkeley, Calif., 1993). “Gesicherte Familienexistenz: Kernstück einer organischen Sozialpolitik,” Soziale Ordnung (6:4), April 1952, 3–4. See, for example, the speech of Pope Pius XII to the International Congress of Social Studies, June 3, 1950, in Osservatore Romano, June 4, 1950 where he stressed the “worth and welfare of the family as a moral and economic unit.” Translation to German in ACDP, I-200-016/1. Karl Zimmermann, “Probleme der Sozialpolitik,” in Soziale Ordnung, September 1951 (5:10), 5. Social Catholics had traditionally celebrated the special moral qualities that wives and daughters who helped brought to the family shop; see Crossick, “The Discovery of the Petite Bourgeoisie,” 263. “Wir Fordern!,” Hessisches Handwerk (2:10), October 15, 1949, 1–2. Leaders also explained handwerk patriarchy as a historical outcome of the living/training arrangement whereby journeymen and apprentices were brought under one roof with the master’s family. See “DGB auf berufsständischen Wegen,” Handwerks-Zeitung (1:22), October 22, 1949, 1. Ralph H. Bowen, German Theories of the Corporative State with Special Reference to the Period 1870–1919 (New York, 1947); Ulrich Nocken, “Korporatistische Theorien und Strukturen in der deutschen Geschichte des 19 und frühen 20. Jahrhunderts” in Neokorporatismus, ed. Ulrich von Alemann (Frankfurt and New York, 1981): 17–39. For an overview of these postwar proposals as well as a discussion of what they tell us about corporate tendencies in Germany generally, see Diethelm Prowe, “Economic Democracy in Post-World War II Germany: Corporatist Crisis Response, 1945–1948,” Journal of Modern History 57 (September 1985): 451– 482. For a discussion of what Abelshauser characterizes as societal corporatism of the 1950s (as opposed to the authoritarian state corporatism of the Third Reich), the roots of which he sees in the Bismarckian period, see Werner Abelshauser, “The First Post-Liberal Nation: Stages in the Development of Modern Corporatism in Germany,” European History Quarterly 14 (1984): 285–318. For the proposal, see RWHB (Schulhoff and Schild) to all Handwerkskammern, Fachverbände, and Kreishandwerkerschaften in North Rhine-Westphalia, August 17, 1949, which included the essay, “Die berufsständische Friedensordnung,” by Egon Edgar Nawroth of the Walberberg cloister HWK-Düss., folder 1000–1006, file 1000. See also “Wünsche des Handwerks an die Parteien—vornehmlich CDU,” Düsseldorf, March 24, 1949, HStAD, RWN 130/50, Item 21–24.

204 | From Craftsmen to Capitalists 62. The German names for the associations are: ZDH, Deutscher Bauernverband, Zentralverband der Haus- und Grundbesitzer, Deutscher Hotel- und Gaststättenverband, Deutscher Beamtenbund, Hauptgemeinschaft des Deutschen Einzelhandels. 63. Minutes of the entire executive committee of the RWHB meeting of October 30, 1951, HWK-Düss., loose folder. 64. DHWB (3:17), September 10, 1951. 65. The CDU/CSU formed a Mittelstand working group (Bundesarbeitskreis) in 1956, which assumed most of the same functions as the Block had but at the party level; Abdolreza Scheybani, Handwerk und Kleinhandel in der Bundesrepublik Deutschland: Sozialökonomischer Wandel und Mittelstandspolitik 1949–1961 (Munich, 1996), 227. 66. See Ronald F. Bunn, “The Federation of German Employers’ Associations: A Political Interest Group,” Western Political Quarterly 13, 3 (September 1960): 652–669; and Bunn, “The Ideology of the Federation of German Employers’ Associations,” The American Journal of Economics and Sociology 18, 4 (July 1959): 369–379. 67. Minutes of the meeting of the Arbeitsgemeinschaft Nordrhein-Westfälischer Unternehmerverbände; the Land-level association in North Rhine-Westphalia of the BdA, of September 25, 1951, HWK-Düss., folder 25, file 2500. 68. See RWHB to Vereinigung der Zentralfachverbände des Deutschen Handwerks, August 30, 1952; HWK-Düss., folder 25, file 2500. 69. Walter Eucken, “The Social Question” (1948) and Wilhelm Röpke, “The Guiding Principles of the Liberal Programme” (1948), both in Standard Texts on the Social Market Economy: Two Centuries of Discussion, ed. Horst Friedrich Wünsche (Stuttgart and New York, 1988), 267–275, 187–191. 70. Leonhard Miksch, “Competition and Economic Constitution” (1937) and Franz Böhm, “The Non-State (‘Natural’) Laws Inherent in a Competitive Economy” (1933); both in Wünsche, Standard Texts, 147–151, 107–112. 71. For some of the problems of this classification and the validity of the distinction between nineteenth-century liberalism and neoliberalism, see Reinhard Blum, Soziale Marktwirtschaft: Wirtschaftspolitik zwischen Neoliberalismus und Ordoliberalismus (Tübingen, 1969), 116–122. For a more recent review of this debate, see Dietrich Schönwitz and Horst Friedrich Wünsche, “Was ist ‘sozial’ an den Sozialen Markwirtschaft,” in Währungsreform und Soziale Markwirtschaft: Erfahrungen und Perspektiven nach 40 Jahren, ed. Wolfram Fischer (Berlin, 1989): 181–195. 72. Nicholls, Freedom with Responsibility, 12. 73. Handwerk leaders found it far easier to reconcile neoliberalism and Catholic social teaching than did many social Catholics, who considered that the new liberalism had retained the essence of the old: a mechanistic automatism that left out the moral essence of economic life. See Egon Edgar Nawroth, Die Sozial- und Wirtschaftsphilosophie des Neoliberalismus (Heidelberg, 1961); Hans Schmid, Neoliberalismus und Katholische Soziallehre: Eine Konfrontierung (intro. by Oswald von Nell-Breuning) (Cologne-Duetz, 1954), 9, 64–65. 74. The most prominent ordoliberals were Walter Eucken (1891–1950), one of the founders of the Freiburg School; Franz Böhm (1895–1977), jurist and later CDU politician; Wilhelm Röpke (1899–1966); and Alexander Rüstow (1885–1963). On the varieties of ordoliberal thinking, see Manfred E. Streit and Michael Wohlgemuth, “The Market Economy and the State: Hayekian and Ordoliberal Conceptions,” in Koslowski, The Theory of Capitalism, 224–269. 75. This is not to say that German liberal theory before 1945 had been completely dominated by laissez-faire economists. Even at the very beginnings of industrialization in Germany a number of figures argued for a greater degree of state involvement to correct the social injustices of capitalism. See Donald G. Rohr, The Origins of Social Liberalism in Germany (Chicago, 1963). 76. Wenzel, “Wirtschafts- und Sozialordnung,” 302–303. 77. Ernst-Wolfram Friedrich Dürr, Ordoliberalismus und Sozialpolitik (Winterthur, 1954), 104– 108.

The Integration of Handwerk Organizations into the Political Fabric of the Federal Republic | 205 78. The ordoliberals criticized both the Marxist and Catholic viewpoints because both, they said, elevated absolute moral principles—what ordoliberals called Moralismus—and ignored economic realities. Thus Marx never analyzed the advantages and disadvantages of a centrally directed economy, and Christian socialists favored corporations but with too little discussion of how such a group economy would actually function. See Geoffrey Denton, Murray Forsyth, and Malcolm MacLennan, Economic Planning and Policies in Britain, France and Germany (London, 1968), 46–47. 79. Röpke used the analogy of traffic control to illustrate the level of state regulation of the economy that the ordoliberals recommended: without any rules traffic would degenerate into chaos, while overregulation would inhibit the free flow of traffic. See Anthony Nicholls, “The Other Germany—The ‘Neo-Liberals,’” 169. 80. Röpke, for example, drew from Thomas Aquinas and Quadragesimo anno in formulating a social policy to correct the social and moral damage done by laissez-faire capitalism; Wilhelm Röpke, Civitas Humana: Grundfragen der Gesellschafts- und Wirtschaftsreform, 3rd ed. (Erlenbach-Zürich, 1949), 18. See also Dürr, Ordoliberalismus und Sozialpolitik, 113. 81. Wilhelm Röpke, “Klein- und Mittelbetrieb in der Volkswirtschaft,” in ORDO—Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft 1 (1948): 155–174. 82. For a more recent analysis of this issue, see Charles F. Sabel and Jonathan Zeitlin, “Historical Alternatives to Mass Production: Politics, Markets, and Technology in Nineteenth-Century Industrialization,” Past and Present 108 (1985): 133–176. 83. Röpke, “Klein- und Mittelbetrieb,” 160. Röpke did not select these examples arbitrarily, for he believed that war accelerated the dangerous trend toward mass production and bigness which throttled the beneficial workings of a competitive market. It should be noted that Röpke’s view that war necessarily operates to exclude and eliminate the small firm is contradicted by this study. See chapters 2 and 3, this volume. 84. Wilhelm Röpke, Mass und Mitte (Erlenbach-Zürich, 1950), 180–184. 85. Röpke, “Klein- und Mittelbetrieb,” 158. 86. Röpke, “Klein- und Mittelbetrieb,” 169. 87. In discussing concentrations of economic and political power, Röpke remarked that it was no mere linguistic coincidence that the most horrible symbol of modern tyranny, the concentration camp, was one and the same word. “Klein- und Mittelbetrieb,” 170. 88. Röpke, Civitas Humana, 284–287. Strong support of a traditional, male-headed household and pronatalism were present in many strands of CDU/CSU thought and were later transformed into government policy under Adenauer. See Moeller, Protecting Motherhood. 89. Nicholls, “The Other Germany,” 166; Nicholls, Freedom with Responsibility, 71–73, 103–110; Daniel Dietzfelbinger, Soziale Marktwirtschaft als Wirtschaftsstil: Alfred Müller-Armacks Lebenswerk (Gütersloh, 1998), 36–52. 90. Christopher Watrin, “Alfred Müller-Armack: Economic Policy Maker and Sociologist of Religion,” in Koslowski, The Theory of Capitalism, 192–220. 91. Ludwig Erhard, “Herrn Schachts ‘Grundsätze,’” text in Karl Hohmann, Ludwig Erhard: Gedanken aus fünf Jahrzehnten. Reden und Schriften (Düsseldorf, Vienna, New York, 1988), 30– 36; Mierzejewski, Ludwig Erhard, 14. 92. J. M. Lukomski, Ludwig Erhard. Der Mensch und der Politiker, 2nd ed., Düsseldorf/Vienna, 45, cited in Nicholls, “The Other Germany,” 167. 93. Berghahn, “Ideas into Politics,” 181–182; Mierzejewski, Ludwig Erhard, 19. 94. Alfred Müller-Armack, Wirtschaftslenkung und Marktwirtschaft (Hamburg, 1947), 59ff. 95. For example, Leonhard Miksch worked with Erhard, then director of the VfW, to abolish economic controls in June 1948; and Franz Böhm and Bernhard Pfister helped prepare the Düsseldorf Guidelines of July 15, 1949 that enshrined social market economy as the official economic program of the CDU. See Wenzel, “Wirtschafts- und Sozialordnung,” 308. Böhm also helped prepare the anti-cartel legislation eventually passed in 1957. 96. Müller-Armack, Wirtschaftslenkung und Markwirtschaft, 82–83, 63–64.

206 | From Craftsmen to Capitalists 97. Blum, Soziale Marktwirtschaft, 123; Berghahn, “Ideas into Politics”; also Berghahn, Americanisation of German Industry, 155–181; Mierzejewski, Ludwig Erhard, 34. 98. Wenzel, “Wirtschafts- und Sozialordnung,” 310. For a review of the literature comparing ordoliberals and social market liberals, see Friedrun Quaas, Soziale Marktwirtschaft: Wirklichkeit un Verfremdung eines Konzepts (Bern, Stuttgart, Vienna, 2000), 254–266. 99. Wenzel, “Wirtschafts- und Sozialordnung,” 311. 100. Blum, Soziale Marktwirtschaft, 123. See also Mitchell, Origins of Christian Democracy, 152– 156. 101. SPD political economist Alfred Weber frankly expressed the regret that socialists had not first coined the term social market economy; see Blum, Soziale Marktwirtschaft, 38. 102. “Klein- und Mittelbetriebe in der sozialen Marktwirtschaft,” DHWB (1:10), May 20, 1949, 183. This article is a discussion of Müller-Armack’s book, Wirtschaftslenkung und Marktwirtschaft (1947). 103. “Um die ‘Soziale Marktwirtschaft,’” DHWB (1:12), June 25, 1949, 214. 104. Press release on Wilhelm Röpke’s speech to the Deutscher Genossenschaftstag, August 27, 1950, “Die natürlich Ordnung,” in HWK-Düss., folder 1000–1006, file 1000 (emphasis in original). 105. “Um die ‘Soziale Marktwirtschaft,’” DHWB (1:12), June 25, 1949, 214. 106. This is not to say that reactionary (in the economic sense of the word) sentiments among both individual handwerker and some of their leaders were not still strong. See chapters 7 and 10, this volume. 107. See “Für eine gesunde Ordnung des Wettbewerbs,” DHWB (4:14), July 25, 1952, 223; and “Zum Wettbewerbs- und Kartellrecht,” DHWB (4:20), October 25, 1952, 321. 108. Kurt Schmücker (Bundestag member, CDU), “Mittelstand als soziale Aufgabe,” Deutsches Monatsblatt (1:8), August 1954 (CDU/CSU publication). 109. Discussion paper, “Grundsätze der CDU für eine Mittelstandspolitik,” (n.d. but probably March 1953) ACDP, I-020-004/3. Retailers, white-collar workers, farmers, civil servants, and members of the professions were the other Mittelstand groups mentioned as sharing this worldview.

Chapter 10

CHANGES IN THE STRUCTURE AND OUTLOOK OF HANDWERK

 Even as handwerk leaders worked to deepen their ideological and organizational

ties to the political parties, especially the CDU/CSU, and to augment these ties by developing alliances with other political groups, they felt the strength and integrity of their institutions threatened by the American freedom of trade that they argued undermined their ability to operate successfully in a political culture in which effective social representation and interest mediation took place at the level of coherent organizations. The U.S. freedom of trade, however, did not in practice operate simply to undermine the efforts of progressive leaders to kick their membership into the twentieth century. Nor was it merely yet another attempt on the part of naïve American idealists to impose the cherished values of free trade on a culture for which it was unsuited. Even though American insistence on the abolition of these restrictions as well as cartels may have have had only a limited success, the effort as least helped force a discourse of competition and openness on German public life that formed the context for the debate. The social alliances handwerk built were framed in these terms, and the process of constructing a coalition to overturn the American system was to prove instrumental in integrating it into the political fabric of the Federal Republic. Before examining their success, let us examine its foundation—namely, handwerk’s new position in the German economy and its new outlook—more closely.

Notes for this section begin on page 221.

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The New Structural Position of Handwerk in the Postwar Economy In the years following the currency reform of 1948, as West Germany began its period of spectacular economic growth, commentators, social scientists, economists, historians, government officials, and perhaps most importantly, handwerk officials themselves all argued that handwerk had undergone a major structural transformation over the course of the preceding fifty years. Handwerk now stood in a new relation to other groups in German society. This was illustrated on the one hand by the absence of the dire predictions, made by observers of all political persuasions from the late nineteenth century into the 1920s, of handwerk’s inevitable disappearance. But by the postwar period such pessimism had given way to the realization that handwerk had secured for itself a permanent economic position alongside that of industry.1 In the late 1970s, 15.5 percent of all gainfully employed persons in the Federal Republic still worked in handwerk, as opposed to 29 percent in industry and 8 percent in retail. The contribution of all trades to the gross national product (Bruttosozialprodukt) remained at about 11 percent from the late 1950s through the 1970s, up from 8.3 percent in 1936, making it after industry the second-largest sector of the West German economy.2 Handwerk’s adaptation to an industrial economy of mass consumption has taken place in a number of different ways. The most striking, perhaps, is the change in the nature of the various trades themselves, many of which have tended to move away from production altogether and toward repair, installation, and maintenance. At the root of this process is, of course, the displacement of many handwerk products or production methods by industry. While the fall of the spinning and weaving trades had formed perhaps the best-known example of the disruption and immiseration in the early phase of industrialization, trades that in the twentieth century were either made redundant or absorbed by industry also included cart- and wheelwright, cooper, wood lathe turning, and the makers of nails, buttons, and combs.3 Yet although industrialization has been responsible for the disappearance of many trades, many more have either grown up around industry or shifted their focus as a result. Many new twentieth-century trades have developed for the assembly, installation, and maintenance of industrially manufactured equipment. Electronic, radio, television, gas, water, heating, cooling, and ventilation are all examples of new trades that have grown up around industry and that coexist with it in a position of mutual dependency. Other older trades have continued to thrive, but only after shifting to the repair of products now produced by industry. Shoemakers and watchmakers, for example, are now oriented overwhelmingly toward repair. Newer repair trades of great economic significance that have grown up around industry are auto, office machine, and agricultural machinery mechanics.4 This ability to respond to economic change has in large part been made possible by the flexible interpretation of the definition of handwerk adopted by the German courts. Since the early twentieth century, courts have continuously allowed the criteria of what constitutes a handwerk firm to adapt to developments

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in production and the marketplace. Important areas of adaptation include size (handwerk firms of two hundred employees are not uncommon), work methods (firms often employ advanced division of labor techniques, even assembly-line production), and function (shops may sell industrially manufactured articles as well as their own products). Thus “it was this evolving legal doctrine that helped prevent the disappearance of handwerk as a socioeconomic category in the course of industrialization.”5 Central to this process of adaptation, however, is the profound transformation in the relationship between industry and those trades that have remained in or returned to production. Whereas in the late nineteenth century many trades had been driven out of manufacture by more-efficient industry, by the 1920s this process had begun to reverse itself. Spurred in no small part by the extensive incorporation of handwerk into war production during the Third Reich,6 many trades underwent a process of reorientation back toward production, but production of a different kind. As we saw in chapters 1–3 in this volume, Nazi technocrats both accelerated this process and determined its character by directing handwerk toward a subcontractual relation to industry, where it furnished spare parts, standardized products, and specially made tools. After the war this trend continued as the interpenetration of industry and handwerk became ever more articulated.7 In order to grasp the extent of this new relation it would be useful to divide affected trades into three subcategories: (1) trades where industry acts as a supplier to handwerk, (2) trades where industry and handwerk produce in a parallel way, and (3) trades where handwerk is a supplier to industry.8 In the first group it is primarily machines, tools, and other equipment used in handwerk shops as well as raw materials or half-finished goods that industry supplies to handwerk. The volume of this trade amounted to approximately 22 billion DM annually in the late 1950s. The second group consists of the many trades where both modes of production are appropriate either because their production methods are similar and economies of scale are not a factor, or because each has a particular market niche. Examples in the consumer goods sector include food, clothing and leather, furniture, musical instruments, fine optical and precision equipment, and surgical instruments and other hospital equipment. Handwerk also produces capital goods alongside industry. Among these goods are specialized machines, tools and their parts, metal goods, small agricultural machinery and tools, rubber goods, and electrotechnical equipment such as switching mechanisms for telephones. A special case within this second category is the building and construction trades. This trade group—encompassing all facets of construction, including masonry, carpentry, roofing, road building and paving, tile laying, plastering, painting, plumbing, and electricity—is not only the strongest of the seven groups in both numbers employed and total sales,9 but also is strong compared to industrially organized construction. While construction as a whole accounted for 6 to 7 percent of the gross domestic product (Nettosozialprodukt) in West Germany in the 1950s—growing during these years of economic boom and reconstruc-

210 | From Craftsmen to Capitalists

tion from 7–8 billion DM in 1949 to 26–27 billion DM in 1958—fully threequarters of that amount was taken by handwerk. In fact, handwerk performed the greatest proportion of the work in housing and agriculture building (88.7% and 95.6%, respectively), while most of the public and transportation construction went to industrial firms (57.1% and 53.6%).10 The third category of industry-handwerk interpenetration includes those sectors where handwerk acts as a supplier to industry. Handwerk has been able to maintain and even increase its presence in this area of production for several reasons having to do with the complexity of modern manufacture. The development of modern technology has made available to handwerker sophisticated and affordable tools and machinery that have enabled them to participate fully in the most advanced processes of industry. And indeed in the postwar period handwerk has invested in technical equipment, including electronics, at a faster pace than most other economic sectors.11 But in addition, the demands made on industry itself to alter the goods, especially consumer goods, it manufactures according to changes in fashion and otherwise to adapt to rapid changes in the marketplace requires enormous flexibility. Handwerk, whose productive orientation is generally not as bound by costly, highly specialized machinery as industry, can provide this. It can supply tools, machinery, or parts according to individual specification, which enables industry to switch production types quickly. Thus it is precisely the complex, varied, and rapidly changing character of modern industrial manufacture that has increased its reliance on handwerk.12 Or put another way, instead of maintaining that this new relation puts handwerk in a state of dependency on industry, one could argue with equal validity that industry is now dependent on handwerk.13 The trades in this third group cover a wide spectrum. Tools, machinery, or parts produced by handwerk by special order include the areas of metal and woodworking; textile, shoe, and upholstery; papermaking, printing, and binding; baking and meat production; dry cleaning; and haircutting. Handwerker supply highly customized apparatus for drying wood or meat, specialized transportation equipment, precision measuring apparatus for the petrochemical industry, and switching equipment and other parts for the electronic and telephone industries.14 Handwerk’s integration with industrial production and its conformation to the modern marketplace have taken place in other ways. Many trades no longer produce custom articles according to the specifications of a particular industry or customer but rather in greater quantity for the industrial market. Because such production normally requires a more in-depth knowledge of market requirements, handwerk firms so oriented have generally developed marketing and managerial expertise to anticipate trends. Surgical and hospital equipment, fine optics, and precision tools and instruments are examples of highly skilled handwerk production for the market that have customers in industry as well as in the general public.15 In addition to supplying individual components of an industrial product or the tools or machinery used in manufacture, still other trades perform the final, finishing stage in the process. Production requiring great refinement in its final stage relies on a number of specialized handwerk trades. Gem-cutting and

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-polishing; engraving of metals, wood, and jewelry; and galvanizing and metal plating are some examples.16 Similarly, a number of trades developed for the service of industrially produced equipment. Heating and cooling equipment, office machinery, large musical instruments such as pianos and organs, and electronic equipment all have corresponding handwerk trades whose principal expertise is installation, repair, and maintenance. Far and away the most important of these are mechanics for automobiles, motorcycles, and trucks. Handwerk has also kept pace with the enormous changes that have taken place in the countryside with the mechanization of agriculture. Already in 1941 a number of rural trades combined into one agricultural machinery mechanic trade in response to this trend, and with the great movement to motorization in the late 1950s, its volume of business more than doubled from 1949 to 1956.17 This new relation between industry and handwerk has meant that the fundamental competition between these economic sectors as it existed in Germany at the time of the industrial revolution has become a thing of the past. This obviously does not mean that competition has disappeared: on the contrary, competitive market relations exist between industry and handwerk just as they do among individual firms within each of the two sectors. The point is that the competition is no longer of a sort in which the existence of an entire mode of production appears at stake. Instead, interpenetration and a division of labor of industry and handwerk have taken place so that the two are now mutually dependent.18 To be sure, this mutual dependency is in a state of continuous flux as new technologies develop and as firms or even entire trades show varying abilities to adapt to them.19 But the role of handwerk in the German industrial economy is no longer questioned.20 At the same time that handwerk has undergone a reorientation in its relation to industry, it has also experienced a long-term internal transformation, the outcome of which has been a more rationalized firm structure and a greater market adaptability. One notable manifestation of these changes has been the ineluctable decline in the one-man-shop, as illustrated in table 10.1. Table 10.1. One-Man Shops as a Percentage of Total Handwerk Shops German Reich

Year Percent

1875 75%

1926 63%

Federal Republic

1939 40%

1949 36%

1956 33%

1963 29.5%

1968 24.6%

1977 17.7%

Sources: “Die Auswirkungen einer uneingeschränkten Gewerbefreiheit im Handwerk,” BMWi report, September 1950; BA, B102/9144-b-2, p. 15. Beckermann, Auslese, Wachstum und Differenzierung, 16–17. Lenger, Handwerker seit 1800, 211. “Größenordnungen des westdeutschen Handwerks” in DHWB (3:10), May 25, 1951, 149.

The reduction in the proportion of single masters has been of enormous significance for the character of handwerk as a whole. Typically, the master of a oneman-shop has less technical craft skill and less capital investment than the owners of larger shops, and only the basics of business knowledge. Their productivity is

212 | From Craftsmen to Capitalists

on average one-half that of all other firms. The political center of gravity in the organizations has shifted to the more productive and adaptive of their members.21 The profound structural transformation of handwerk in the past hundred years should be seen in the context of the population developments as a whole in (West) Germany. Table 10.2 illustrates the consolidation in the number of firms and in average firm size. Table 10.2. Handwerk Firms and Employees Year

Number of firms

Number of firms per 1,000 of population

Total no. employed

Employees per firm

Area of the German Reich

1895 1926 1931 1936 1939

1,300,000 1,308,000 1,383,000 1,653,000 1,314,000

1939 1949 1953 1956 1960 1965 1970 1975 1980 1985 1990 1995a 1995b 2000b

791,000 902,800 823,100 786,300 734,600 655,890 585,100 519,000 496,200 494,600 489,200 485,100 597,800 607,600

25.0 21.0 21.0 24.5 22.5

2,500,000 3,714,000 3,725,000 4,562,000 5,240,000

1.9 2.8 2.7 2.8 3.3

Area of the Federal Republic

20.1 18.4 16.1 14.8 13.3 11.2 9.7 8.4 8.1 8.1 7.7 7.3 7.3 7.4

2,607,000 3,227,000 3,510,000 3,824,000 3,918,000 4,166,400 4,153,700 3,853,200 4,116,200 3,846,800 3,932,600 5,099,100 6,409,100 5,523,000

3.3 3.6 4.3 4.9 5.3 6.4 7.1 7.4 8.3 7.8 8.0 10.5 10.7 9.1

a. Figures after 1994 were calculated on a different basis, so are not directly comparable to those of previous years. b. Area of the reunited Germany. Source: Tuchtfeldt, “Strukturwandlung,” 475 (through 1939); ZDH, Handwerk 1971 (Bad Wörishofen, n.d.), 50; ZDH, Handwerk 1987 (Bonn, n.d.), 30; ZDH, Handwerk 1990 (Bonn, n.d.), 35; ZDH, Handwerk 1997 (Bonn, n.d.), 17; ZDH, Handwerk 2001 (Berlin, 2002), 22. And my own calculations.

Several features of tables 10.1 and 10.2 should be noted. Apart from the interruptions of the Great Depression and the crisis of the immediate post–World War II years, when persons unable to find gainful employment elsewhere rushed to set up their own shops, the trend of the twentieth century has been toward a concentration. This has meant an otherwise continuous drop in the absolute number of shops and their numbers as a percentage of the population, at the same time that

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the average firm size has steadily increased. By the late 1970s the average firm size had risen to eight employees, where it has remained. And as the average firm size has increased, likewise has the proportion of business taken by firms with ten or more employees increased at a faster rate than those with nine or fewer employees.22 In order more fully to grasp the significance of these trends one must understand them as part of broader economic developments. The movement toward larger firms has taken place in the context of their increased investment in machinery and application of technology. To be able to afford such equipment and to profitably use these capital resources requires larger economic units and a more intensive application of labor. In this regard, these changes have been in step with general developments in industrialized economies toward greater concentration and integration.23 It has also meant a general trend toward the substitution of capital for labor, although not to the same extent as in industry. Indeed, the incentive to adopt this course—whether seen as an inspiration to greater profits or as the only way to remain economically viable—has come from the example of industry.24 Nevertheless, organizations have played a considerable role in directing, encouraging, and even forcing these changes.25 But the decline in the number of firms has not meant a decline in handwerk’s overall importance. On the contrary, while the number of firms, both in absolute terms and per capita, has steadily decreased, the number of those employed in handwerk and their proportion of the population has actually increased. Whereas in 1894 the number of persons employed in handwerk stood at 45 per 1,000 of the population, by 1926 it had risen to 60 (in the area of the German Reich) and by 1960 it reached 70 per 1,000 (in the Federal Republic).26 As the number of handwerk employees rose, its total sales in the postwar period increased at a far faster rate, which meant that its productivity steadily improved. Table 10.3 gives an overview of these trends for handwerk as a whole. A comparison of handwerk’s performance with that of industry gives an additional highlighting to these figures. As shown in table 10.3, the rise in total handwerk sales from 1949 to 1956 amounted to about 169 percent. Industry’s sales during this same period grew at a somewhat faster rate: between 170 and 190 percent.27 This disparity in growth, however, is accounted for in part by the fact that wages and salaries in industry rose at a faster rate than those in handwerk (see Table 10.4).28 Yet after 1955 the growth in handwerk sales was at least as strong as that of industry. In 1956 handwerk’s sales had risen 12.4 percent from the previous year, while industry’s sales had risen only 11.2 percent; the figures for 1957 were 7.8 percent and 8.2 percent, respectively.29 Over the period 1949 to 1961 handwerk sales rose 330 percent, which exceeded that of industry by 15 percent.30 Within North Rhine-Westphalia, the most heavily industrialized Land in the Federal Republic, the relative gains made by handwerk as compared with those of industry are even more impressive. From 1949 to 1967 the average annual growth in sales was 10.6 percent for handwerk and 9.3 percent for industry. During the same period handwerk productivity, measured in total sales per employee, increased by 408 percent while that of industry increased by 336 percent.31 In terms of economic growth and productivity gains, then, handwerk

214 | From Craftsmen to Capitalists

Table 10.3. Concentration and Productivity Trends in Handwerk from 1949 Year

1949 1953 1956 1960 1965 1970 1975 1980 1985 1990 1995a 1995b 2000b

Total employees

Total employees per 1,000 of population

Total sales (1,000 DM)c

Productivity sales per employee (DM)c

3,227,000 3,510,000 3,824,000 3,918,000 4,166,400 4,153,700 3,853,200 4,116,200 3,846,800 3,932,600 5,099,100 6,409,100 5,523,000

65.6 68.4 72.1 70.7 71.1 68.5 62.3 66.9 63.1 62.2 77.1 78.5 67.27

21,000,000 38,000,000 56,400,000 80,700,000 137,800,000 189,100,000 258,500,000 373,400,000 383,700,000 518,500,000 810,000,000 992,000,000 1,009,530,000

6,508 10,826 14,749 20,597 33,074 45,526 67,087 90,715 99,745 131,846 158,852 154,780 182,787

a. Figures after 1994 were calculated on a different basis, so are not directly comparable to those of previous years. b. Area of the reunited Germany. c. DM figures are in contemporary prices, and are not adjusted for inflation. Source: Through 1970: ZDH, Handwerk 1971 (Bad Wörishofen, n.d.), 50. Through 1990: ZDH, Handwerk 1990 (Bonn, n.d.), 35. Through 2000: ZDH, Handwerk 2001 (Berlin, 2002), 22. And my own calculations.

Table 10.4. Proportion of Economic Value Created by Handwerk and Industry, 1936–1951 Industry Handwerk

1936

1948/49

1949/50

1950/51

41.2% 10.3%

39.3% 11.4%

42.9% 10.0%

47.2% 9.5%

Source: “Der Mittelstand in der deutschen Wirtschaft,” 17.

has kept pace with industry in the postwar period.32 Moreover, these gains are all the more impressive when one considers that, because of Germany’s regional system of labor contracts, small firms generally are subject to the same wage and benefit costs as large firms are. This lack of protectionism for small business has imposed an additional incentive on handwerk to continuously modernize and improve productivity.33 In order to arrive at a more differentiated picture of how these long-term trends, which up until now have been generalized for handwerk as a whole, have affected the enormous variety of trades, it is necessary to examine some sectors in greater detail. To this end it is useful to employ a different scheme of classification and divide the trades in three groups according to the nature of their growth.34 The first group may be described as expansion handwerk—that is, trades where

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both the number of firms and the number of persons employed in them have increased in the postwar period. The second is concentration handwerk, where the number of firms has fallen but that of employees has grown. The third is contraction, where numbers of both firms and employees have fallen. To the first group, the expansion group, belong some of the most dynamic trades. Some of these are entirely new trades that have developed from technological innovation, like sewing machine and office machine technicians; sound proofing, heat, and cold insulation installers; and electricians. Other new trades, like vulcanization, auto mechanic, and truck mechanic, benefited from the great expansion of motor vehicles in the 1950s, especially in agriculture. Still others, like tile laying, gas and water pipe installation, central heating and ventilation installation, and plastering, profited from the tremendous postwar building boom. Overall, economic expansion has in turn spurred growth in the service sector in trades like hair cutting, dry cleaning, and photography. While the numbers of their firms have expanded in response to the extraordinary growth in demand for their services, virtually every trade in this category has also increased its average firm size; thus the process of concentration is at work here as well.35 The trades that have undergone a process of concentration are, as we saw in table 10.2, typical of handwerk as a whole. In 1956 nine of these trades alone accounted for 34 percent of all handwerk firms and 48.9 percent of all employees.36 As illustrations, many construction trades may be cited, especially masonry, building and underground construction, carpentry, and painting, as well as certain metal trades such as machine and tool making. For example, in masonry the number of firms fell by 14.6 percent from 1949 to 1956, while the number employed increased by 59 percent. Here, too, average firm size has increased and productivity has more than doubled.37 Finally, trades in the third, contraction, category are those least typical of handwerk as a whole. They include trades made redundant by technical progress, such as blacksmith, saddle making, and cartwright; trades like wooden wine barrel making whose products have been replaced by other materials; and still others, most notably tailoring, dressmaking, and shoemaking which have fallen victim to industrialization. Yet while these trades have contracted in the number of firms and employees, many of them have remained economically viable by increasing productivity and by shifting the focus of their activity. Shoemaker firms, for example, decreased 30 percent from 1949 to 1956, and the number of employees fell 38 percent; average firm size remained small, however, with an average of about 1.5 employees per firm. But sales during that same period rose 24 percent and productivity doubled, and, like tailors and dressmakers, shoemaker firms’ focus shifted almost exclusively to alteration and repair. Meanwhile, many masters in other trades like wooden wine barrel making have survived by turning to wine sales, schnapps brewing, or cider making. Yet other trades are truly contracting in every way, including sales, with only slight gains in productivity. These are trades that were dying out or becoming marginal; they include tanners, wooden shoe makers, and cartwrights.38

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Generally speaking, the contracting trades consist almost exclusively of traditional handwerk with a preindustrial orientation. Individual masters may have adapted, but the trades themselves are shrinking or disappearing. Expanding handwerk, on the other hand, is mostly concentrated in the building, service, and modern technical trades. Put another way, the healthiest trades—and this in the postwar period has characterized handwerk as a whole—have been those that have somehow adapted to industry and to economic trends generally. These new trades exist in a symbiotic relationship to industry rather than in a competitive and antagonistic one. As part of this process, handwerk responded to the changing economic environment in the same ways industry did: by an increased application of technology and capital investment and a tendency to rationalize firm structure by, for example, achieving economics of scale by increasing firm size—albeit on a scale that was entirely different from that of industry.39 The key to handwerk’s continued success has been, in the words of one historian, its ability “to adapt [itself ] to the conditions of an industrial economy—to industrialize itself.”40 There were losers in this process to be sure—individuals unable to adapt and trades unable to break their ties to a preindustrial past—but by the 1950s it could be said that handwerk and “the commercial Mittelstand as a whole is in a far more favorable economic position today than it was in the Weimar Republic.”41 But handwerk has adapted to its environment, an environment that may be described as modern capitalism, in other ways as well, the effect of which has been not only to strengthen its economic viability, but also to blur the distinction between itself and other professional groups. Given the nature of the changing market structure, in order to run a successful enterprise, the masters, as well as anyone else doing business, had to possess a range of skills well beyond that of technical competency in their craft. For example, to purchase or rent the equipment to open up shop and the technology necessary to remain competitive required capital and credit; to market goods required access to transport, insurance, and legal and tax advice. In addition, the increasing specialization of many firms during that period forced them to acquire a far more sophisticated knowledge of their markets and subjected them to a far greater range of costs (all of which had to carefully balanced) in 1950 than had been the case in 1910.42 To be successful now, firms had to be managed according to commercial principles, which accordingly had become required subjects in the training of every handwerker as supervised by the chambers. Whereas a firm of the old school typically consisted of a master-owner, a journeyman, and perhaps an apprentice, now white-collar technical or business support staff occupied an increasingly important role in the structure of the firm. By the early 1950s these accounted for between 5 and 6 percent of all handwerk employees, representing a one-third increase in their numbers from 1939. Their presence was especially strong in the metal trades where the interpenetration with industry was particularly advanced.43 The ability to adapt to these new economic realities was facilitated by a change in German law in 1953 that permitted handwerk firms to register as commercial or trading enterprises (Handelsgesellschaften) or limited partnerships (Kommanditgesellschaften).44 This enabled firms to expand the focus of their activities into

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sales, confirmed considerable tax advantages, and helped the chambers to retain some of their most successful members.45

Changing Perceptions in Handwerk The changes in the structure of handwerk and its adaptation to the modern competitive marketplace, as summarized here, were in one sense long-term trends coinciding with the development of industrialism in Germany. These developments were also, however, greatly accelerated during the course of the war and were given a very definite shape under the self-conscious direction of the Nazi state. But as these structural realities changed over time (some periods more rapidly than others), the perception of them among handwerker and their leadership lagged behind. As has been repeatedly emphasized here, the general assumption, among social scientists and the public alike, from the beginnings of industrialization into the 1920s had been that this mode of production was fated to be made redundant by the greater economies of scale and capital resources of industry. That this conviction had penetrated so deeply into the handwerker rank and file, despite the efforts of a small band of optimistic rationalizers and despite the impressive adaptation to industrialization already made, was at the root of the “panic”46 in handwerk during Weimar and of many casting in their lot with Hitler. By the 1950s, however, these perceptions had dramatically changed. In the minds of the leadership, and in the view of many though not all handwerker themselves, a reconciliation had taken place between industry and handwerk. This new outlook was to have tremendous implications for handwerk’s ability to form political alliances with other social groups and for the role played by its institutions in structuring its economic life. That these perceptions became widespread only after the war is to be explained in part by a natural human lag in the recognition of reality (assuming it is recognized at all) and the fact that, given the tremendous changes concentrated in the Nazi period, the structure of handwerk, and the individuals practicing it, had changed dramtically between 1920 and 1950. In 1949 the director of the German Handwerk Institute (Deutsches Handwerksinstitut), Karl Rößle, could tell a gathering of leaders of the Cologne Chamber what they already knew: “handwerk and industry are no longer enemy brothers, but rather know full well that they are dependent on each other.” The reason for this mutual dependency lay, Rößle explained, precisely in handwerk’s new role both as a supplier and as a subcontractor to industry and as one of its most important customers. Industry, given the overlapping of skills if not of productive functions, also relied on handwerk-trained labor for a considerable part of its workforce. In addition, both shared an opposition to the American-imposed freedom of trade.47 The development of industry, as Rößle wrote elsewhere, had not only opened up new markets, but also had spawned such entirely new trades as auto repair, electricity, and medicine. Thus, “The markets for handwerk and industry have more and more clearly separated from each other, so that competition between the two can still be seen in only a very few areas.”48

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Handwerk officials consistently referred to this theme of handwerk-industry cooperation both as a reflection of new realities and as part of a general emphasis in the postwar period on the part of many leaders from all classes on social partnership.49 Leaders could also be clear in saying that this had not always been so. At the celebrations of the fiftieth anniversary of the founding of the Wiesbaden Chamber, its president, Karl Schöppler, declared, “Today industry is in no way the enemy of handwerk. Handwerk is not the enemy of industry.” In this important speech, Schöppler admitted that this had not always been true: “The slogan up until 20 or 25 years ago was: ‘Industry is the enemy of handwerk; industry is crushing handwerk; industry will soon be the sole factor capable of satisfying consumer demand in every area. Handwerk will become meaningless.’ It was then still believed that the economic-theoretical conclusions of the nineteenth century experts who had prophesied handwerk’s downfall were still valid.”50 This crisis, amounting indeed to class war, Schöppler in effect conceded, had been almost universally accepted in the 1920s. But now these economic-structural changes had been accomplished, and perhaps just as important, were being recognized as such. Yet despite this progress conservatism among masters remained a significant issue for leaders. Directly addressing the lingering reactionary or nostalgic sentiment in his audience, Schöppler declared that it would be utopia to entertain fantasies of returning to the idyll of the medieval guilds.51 The chamber president was also clear as to what he considered to be the role of the institutions both in their current function and in their original intent. Their establishment had been in response to the challenge of industry and in conscious imitation of the industry and trade chambers, then already in existence for more than a hundred years. Looking back, Schöppler said, it can now be determined that 1900, the year many chambers were founded, “was the year of the beginning of the consolidation of the handwerk economy in the context of a modern German, highly industrialized economy.” And, making it clear that he linked progressivism and handwerk corporatism, Schöppler added, “It was also the year of turning away from absolute freedom of trade.” Anniversary hyperbole aside, it is clear that the role of the chambers was seen to be, and was so advocated, the institutional framework for accomplishing the rationalization of individual firms, the coordination of activities to enable them to achieve the economies of scale available to industry, the increase of handwerk’s political weight, and the cultivation and reshaping of a sense of its tradition even while marginalizing the backward-looking elements most attached to it.52 Handwerk organizations had a new clarity of purpose in the postwar period born of this reconciliation with industry. Given that their antagonisms with other social groups, primarily industry, were no longer fundamental, and having seen the consequences of middle-class disunity in the shape of fascism and war, leaders confidently pursued political alliances in several institutional forms. In addition, the changed structure of handwerk by the early 1950s meant that the functions performed by its organizations had also shifted. The decline of the one-man-shop; the growing size of the average firm; the interpenetration of handwerk and indus-

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try, their mutual dependence, and their need to coordinate production; the growing reliance on technical and marketing personnel; and the decline in economic importance of traditional trades coupled with the new importance of trades related to industry—all were indications that handwerk as an economic sector now had a need continuously to rationalize its production, and that more handwerker recognized this fact. Thus a greater part of the role of handwerk organizations became the promotion of techniques of rationalization and modernization to an audience more ready than before to receive them. In the postwar period the primary function of the chambers as stipulated in law was “to promote in cooperation with the guild associations the further technical and business management training of masters and journeymen for the purpose of maintaining and improving of productivity in handwerk.” This was true of the 1946 Handwerk Ordinance in the British zone, the language of which was to be repeated in the Federal Handwerk Ordinance of 1953.53 To get an idea of the shift in focus over the past twenty years, one need only turn to the Nazi-era laws granting handwerk organizations their corporate authority. In these laws the guilds and chambers were primarily charged with representing the interests of handwerk to the state and with the cultivation of the “public spirit and Stand honor” of handwerk. Although further training was also listed as part of the tasks of the organizations, the laws neither stipulated this role as being among the most important nor included the technical and managerial emphasis of the 1946 and 1953 laws.54 The means by which technical help and managerial advice were disseminated was the local business support bureaus (Gewerbeförderungsstellen) run by the chambers. These bureaus had been founded already in the 1920s,55 but developments in the postwar period resulted in an enormous expansion of these centers and a multiplication of their numbers. Both the rapid technical progress that increased pressure to rationalize and the tremendous opportunities to expand profits during the boom of the 1950s acted as incentives to masters to seek out expert advice on technological innovation, marketing methods, export possibilities, and firm management. From the point of view of the chambers, the goal of the bureaus was quite explicitly the qualitative adaptation of old-fashioned masters to modern capitalism—“to make a handwerk ‘enterprise’ out of a handwerk ‘shop.’”56 The expansion of the bureaus, as a result both of their popularity among handwerker and the increased sophistication of the research they undertake, has in turn made necessary the foundation of business support institutes in order to coordinate the improved training of new handwerker. At the level of theoretical and applied research, the network of institutes founded after World War I was reestablished after 1949 in Munich, Göttingen, Frankfurt, Hanover, Cologne, Münster, and Karlsruhe. Their numbers and scope of activities expanded to include economics (especially the role of handwerk in industrial economies), business management, as well as a range of technical, sociological, legal, energy, and cultural issues. The numbers of their publications increased exponentially in the 1950s.57

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Such advisory centers and research institutions have successfully addressed a series of problems faced especially by small business. While a large industrial firm might have the resources to invest in research and development itself, this is beyond the means of small shops, especially in an age when the costs of research were so much higher. But this has not meant that handwerk has been excluded from the advantage—indeed the necessity—of such investment.58 Handwerk has responded by removing this function to the suprafirm level where combined resources, coordinated by their institutions, have made available to masters the same innovations that industry takes for granted. The resolve to devote more resources to scientific, technological, and economic research was formulated by the Düsseldorf Chamber president, Georg Schulhoff, in the late 1940s in recognition of the need to keep pace with industry and agriculture. Moreover, a leadership determined to increase the political influence of handwerk assigned these institutions the additional functions of preparing material to brief them on political questions in order to give themselves the same advantages in debate enjoyed by leaders in industry and the unions.59 Other advantages naturally enjoyed by industry in the way of economies of scale have also become accessible to handwerk at a new level in the postwar period in the form of cooperatives.60 These are of several kinds. Purchasing cooperatives (Einkaufsgenossenschaften) for the various trades buy raw materials, tools, or other needed equipment in bulk, thereby enabling small shops to acquire these goods at competitive prices otherwise unavailable to a firm without the large amounts of capital or inventory space needed to purchase in such quantity.61 Marketing cooperatives (Lieferungsgenossenschaften), using similar principles of economies of scale, vastly broaden the markets available to the small producer, including those for exports. Productive cooperatives (Produktengenossenschaften), which are used in Germany mainly in the building trades, organize the coming together of small shops from many different construction trades enabling them to bid on and carry out projects otherwise available only to larger, industrial firms. Finally, credit cooperatives (Kreditgenossenschaften) give small entrepreneurs access to investment capital at favorable rates of interest.62 These self-help organizations, which originated during the period of industrialization but became truly widespread only after World War II, have played an important role in enabling small businesses, especially handwerk and retail, to stay competitive. In addition to the tasks enumerated above, cooperatives in the postwar period have greatly expanded their functions to include business and tax advice, market research, and the organization of trade fairs.63 During the occupation, the state acted to promote cooperatives by removing restrictions on their formation, by helping them to obtain credit, and by taking measures to prevent discrimination against them on the part of industry and large wholesalers.64 Representatives of the cooperative associations sat on all subcommittees of the Bizonal Economic Council and administratively worked to ensure that the American policies opposing concentration in the German economy did not restrict the operation of this system.65

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While the business support bureaus as well as the cooperative system became increasingly popular with masters conscious of the necessity for continuous rationalization and market adaptation, others, still bound to a conservative economic outlook, required constant reminders and cajoling from officials. For many who customarily restricted their vision to the firm itself or who, neglecting considerations of costs and prices, measured their success strictly in terms of the amount of work they had,66 a steady stream of articles in the handwerk press pointed out the various links that bound them to the market. The need—indeed the absolute necessity given the modern market environment—to employ proper methods of calculation, to take advantage of better prices through cooperatives, or to seize the chance to exploit a market opening to offer a specialized product were all patiently and repeatedly explained in the handwerk press.67

Notes 1. See BMWi report, “Der Mittelstand in der deutschen Wirtschaft,” March 18, 1952, 10, in BA, B102/14652. See also Wernet, Handwerkspolitik, 23; Beckermann, Auslese, Wachstum und Differenzierung, 18. 2. ZDH, Handwerk 1968 (Bad Wörishofen, 1968), 55; Heinrich August Winkler, “Stabilisierung durch Schrumpfung: Der gewerbliche Mittelstand in der Bundesrepublik,” in Sozialgeschichte der Bundesrepublik Deutschland, ed. Werner Conze and M. Rainer Lepsius (Stuttgart, 1983), 188; Theo Beckermann, Das Handwerk im Wachstum der Wirtschaft (Berlin, 1974), 111. 3. Egon Tuchtfeldt, “Strukturwandlung im Handwerk,” in Wandlungen der Wirtschaftsstruktur in der Bundesrepublik Deutschland, ed. Heinz König (Berlin, 1962): 469–491, here 493. 4. For an overview, see Egon Tuchtfeldt, “Handwerk,” in Staatslexikon: Recht-Wissenschaft-Gesellschaft (Freiburg, Basel, Vienna, 1986), vol. 2, 1201–1213. 5. Streeck, Social Institutions and Economic Performance, 110–111. 6. See Beckermann, Das Handwerk—Gestern und Heute, 25. 7. See “Gewerbeförderung im Handwerk unter besonderer Berücksichtigung handwerkstechnischer Fragen,” report written by the Federal Ministry of Economics, April 1952, HWK-K library. 8. This schema is taken from Beckermann, Das Handwerk—Gestern und Heute, 32–33. 9. In 1949 of the seven groups, building and construction employed about one-third of all handwerker and accounted for the same percentage of total sales. As far as sales per employee (productivity) is concerned, construction was about average among the groups, with the food trades having by far the highest productivity and textiles the lowest. See “Das Handwerk im Bundesgebiet,” DHWB (2:21), November 10, 1950. It is also along with the wood trades group the most male-dominated of all handwerk groups. See “Wie steht es mit der Meisterlehre des Handwerks?” in DHWB (2:23–24), December 20, 1950, 359. It should be noted that the high rate of productivity in the food trades (almost double that of the next-highest trade group) is deceptive, because many such shops (butchers, confectioners, bakers) tend more to be firms that rely heavily on unpaid family labor that remains unrecorded in the statistics. See Wernet, Handwerkspolitik, 24. 10. Beckermann, Das Handwerk—Gestern und Heute, 14–16. See also the following articles: “Bauhandwerk führend in der Bauwirtschaft,” DHWB (4:21), November 10, 1952, 338; and “Getrennte Ausschreibungen für Bauindustrie und Bauhandwerk,” DHWB (5:3), February 10, 1953, 44.

222 | From Craftsmen to Capitalists 11. For example, the value of machinery and other equipment for producing handwerk trades in North Rhine-Westphalia rose 152 percent for the period 1957 to 1963, as opposed to only 76 percent in the economy as a whole. See Gerss, Struktur und Entwicklung des Handwerks, 104–106, 182–183. 12. Beckermann, Das Handwerk—Gestern und Heute, 31–35. 13. This is the point Samuel Karres makes: “But as a rule it is industry that is dependent upon the technical expertise of the handwerk firm.” Moreover, this dependency of industry on handwerk subcontractors has increased dramatically with time. For example, in 1950 the automaker Daimler-Benz had 12,600 small and medium-size firms (including handwerk) as suppliers; in 1958 this number had increased to 15,400. During the same period the electrical giant Siemens reported similar increase to 30,000 supplier firms. See “Die selbständigen Mittelschichten in der modernen Wirtschaft,” in Zur Lage der Mittelschichten in der Industriegesellschaft, ed. Friedrich-Ebert-Stiftung (Bonn, 1960), 12–13. See also Peter Breidenbach, Kooperation im Zulieferwesen Handwerk—Industrie (Munich, 1969), 36. 14. Beckermann, Das Handwerk—Gestern und Heute, 26–27. 15. Beckermann, Das Handwerk—Gestern und Heute, 25–26. 16. Beckermann, Das Handwerk—Gestern und Heute, 35–36. 17. Beckermann, Das Handwerk—Gestern und Heute, 38–39. In was one of the important functions of handwerk organizations during this period to facilitate this transition for the affected trades. For example, cart- and wheelwrights rendered redundant were offered training in related but modern trades, like woodwork or autobody work. Based on my in-person interview with Wiesbaden Chamber (Handwerkskammer Wiesbaden, HWK-Wiesbaden) president, Dr. Wolff, June 1990. 18. According to Breidenbach, “The increasing tendency of large industrial firms to diminish their productive depth underscores the recognition that a partnership in the form of interfirm division of labor corresponds to the natural difference between small and large firms rather than a relation of competition”; Kooperation im Zulieferwesen, 37. 19. For an analysis of trends in this area and the argument that trades oriented to supplying industry are among the most prosperous, see Norbert Marahrens, “Entwicklungschancen und Wachstumsgrenzen in produzierenden Handwerk ” Internationales Gewerbeaarchiv, 28 Heft 1/2 (1980): 35–44, 92–107. 20. Wernet, Handwerkspolitik, 281–282. 21. In 1954 only 41.1 percent of one-man-shops used an electric motor, while 87.8 percent of firms of twenty-five or more employees did. Tuchtfeldt, “Strukturwandlung,” 477. In 1962 average productivity for all handwerker (as measured in total sales per employee) was 24,600 DM; for the one-man firm it was only 11,400 DM. Interestingly, the difference in productivity between the two- to four-person shop and the shop with fifty or more employees is not that significant: 23,900 DM and 25,400 DM, respectively. Statistisches Bundesamt, Fachserie O, Industrie und Handwerk, Handwerkszählung 1963, Vol. 4, Textliche Auswertung der Ergebnisse (Stuttgart and Mainz, 1967), 21. 22. Beckermann, Auslese, Wachstum und Differenzierung, 17. 23. Wernet, Handwerkspolitik, 22–23. 24. Wolfgang Siewert, Strukturwandlungen des Handwerks Handwerks im Rahmen der Wirtschaftsentwicklung (Berlin, 1954), 9. 25. See Wernet, Handwerkspolitik, 23. 26. Beckermann, Auslese, Wachstum und Differenzierung, 18. Wernet’s figures differ only slightly, but both see this concentration process has been economically healthy; see Wilhelm Wernet, “Strukturbild und Strukturwandel der modernen Handwerkswirtschaft,” DHWB (2:11), June 15, 1950, 165. 27. Beckermann, Das Handwerk—Gestern und Heute, 12. 28. This difference in wage growth also partially explains the increasing disparity between industry and handwerk during the immediate postwar years in the proportional creation of value

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29. 30. 31.

32.

33.

34.

35.

36.

37.

38. 39. 40. 41. 42. 43.

44. 45.

in the total economy (volkswirtschaftliche Wertschöpfung) created by each as illustrated in table 10.4. Beckermann, Das Handwerk—Gestern und Heute, 12. Winkler, “Stabilisierung durch Schrumpfung,” 189. The number of total employees in handwerk during the same period grew at a slightly lower annual rate than for industry (1.9% and 2%, respectively). Meanwhile, the number for handwerk firms fell 1.7 percent annually, while the number of industrial firms grew 1.0 percent. Gerss, Struktur und Entwicklung des Handwerks, 62–64. Handwerk total sales have consistently been about one-quarter those of industry, while handwerk employs about half as many employees as industry. See Beckermann, Das Handwerk—Gestern und Heute, 12; and 1960 Bundestag Report, 12 and 20. See also “Der Mittelstand in der deutschen Wirtschaft,” 19, in BA, B102/14652. Stefanie Weiner, “The Development and Structure of Small-Scale Firms,” in Technology and Work in German Industry, ed. Norbert Altmann, Christoph Köhler, and Pamela Meil (London and New York, 1992), 314–315. This scheme is presented by Karl-Heinz Schmidt in “Bestimmungsgründe und Formen des Unternehmenswachstums im Handwerk seit der Mitte des 19. Jahrhunderts,” in Handwerksgeschichte in neuer Sicht, ed. Wilhelm Abel (Göttingen, 1978). For example, from 1939 to 1956 the number of tile-layer firms grew 124 percent and the number of employees by 285 percent, for an average firm size increase from 5.2 to 9. Central heating and ventilation systems installers grew 94 percent in firm numbers, 278 percent in employees, and from 6.2 to 12 in firm size. Tuchtfeldt, “Strukturwandlung,” 483–486. In many of these trades productivity (measured in annual sales per employee) more than doubled. See Beckermann, Das Handwerk—Gestern und Heute, 27. Tuchtfeldt, “Strukturwandlung,” 483. These nine trades are building and underground construction, cabinet maker, baker and confectioner, painter, carpenter, laundry and ironing, stone mason and stone carvers, and glazier. Tuchtfeldt, “Strukturwandlung,” 482–483; Beckermann, Das Handwerk—Gestern und Heute, 27. Especially after currency reform, butchers were among the first to become prosperous, the visible, if not ostentatious, displays of which often excited the bitter envy of fellow townsmen who were then still scrounging to make ends meet. Tuchtfeldt, “Strukturwandlung,” 481–482; Gerss, Struktur und Entwicklung des Handwerks, 145. For example, from 1955 to 1972 the average annual rate of increase in capital investment for handwerk as a whole was 7.4 percent. Beckermann, Handwerk im Wachstum, 86. Lenger, Handwerker seit 1800, 212 (emphasis mine). Winkler, “Stabilisierung durch Schrumpfung,” 193. Karl Rößle, “Der steigende Einfluß der Beschaffungstätigkeit auf die Aufwands- und Erfolgsgrößen der Betriebe,” Handwerkerpost (3:6), June 18, 1952, 62. Siewert, Strukturwandlungen des Handwerks, 10. The proportion of white-collar business and technical staff in handwerk has continued to grow. In North Rhine-Westphalia it increased from 2.8 percent in 1928, to 4.5 percent in 1956, and to 7.4 percent in 1963. Of these, a growing proportion was women; white-collar staff was the only category of handwerk employee besides helping family members where women were in the majority. See Gerss, Struktur und Entwicklung des Handwerks, 92–94. “Gesetz über die Kaufmanneigenschaft von Handwerkern,” March 31, 1953, BGBl.I, 106. “Handwerksbetriebe in Handelsregister,” Hessisches Handwerk (2:4), April 15, 1948, 4. See also “Report of the Handwerk Chamber Aachen for the 4th Quarter 1950,” January 4, 1951, HStAD, D II b 2. ZDH, memo 7/53, February 27, 1953, German Handwerk Institute (Deutsches Handwerksinstitut), Munich; Gerss, Struktur und Entwicklung des Handwerks, 51–52; Udo Kornblum, “Vom Handwerker zum Kaufmann: Zum Wandel der privatrechtlichen Stellung des Handwerkers in Deutschland vom 18. Jahrhundert bis zur Gegenwart,” in Das Andere

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46. 47. 48.

49.

50. 51.

52. 53. 54. 55. 56. 57.

58.

59. 60.

Wahrnehmen: Beiträge zur europäischen Geschichte, ed. Martin Kintzinger, Wolfgang Stürner, and Johannes Zahlten (Cologne, Weimar, Vienna, 1991), 561–575. The contrast with France is useful here: According to French commercial law and organizational regulations, artisanal firms with more than ten employees automatically cease to be members of the chambers of trades (chambres des métiers) and must register as industrial firms. This necessarily weakens the organizational muscle and political clout of the chambres. See Steven Zdatny, The Politics of Survival: Artisans in Twentieth-Century France (New York and Oxford, 1990). Geiger, “Panik im Mittelstand.” Speech by Karl Rößle, director of the German Handwerk Institute Munich, to the general meeting of HWK-K, February 19, 1949, HStAD, RW 218/6, 8. Rößle, “Handwerk und Markt” in Handwerkerpost (3:5), May 16, 1952, 51–52. Wernet echoes this view; see his article “Handwerkspolitik,” in Handwörterbuch der Sozialwissenschaften, vol. 5 (Tübingen, 1965), 52–57. On the importance of social partnership ideas in the early CDU (through the 1980s) and its role in some of the most important social legislation of the period—codetermination (Mitbestimmung) and the Industrial Democracy Act (Betriebsverfassungsgesetz), see Wolf Schmidt, Sozialer Frieden und Sozialpartnerschaft: Kapital und Arbeit in der Gesellschaftspolitik der westdeutschen Christdemodraten 1945 bis 1953 (Frankfurt, Bern, New York, 1985), esp. 339–352. Text in Handwerkerpost (1:5), August 15, 1950, 34–35 (emphasis in original). Handwerkerpost (1:5), August 15, 1950, 34–35. The slogan “Handwerk—Partner der Industrie” and the principle of increasing cooperation with industry continues to be celebrated in the handwerk literature. Heinrich Kolbenschlag and Hans Günther Patzig, Die Deutsche Handwerksorganisation (Frankfurt and Bonn, 1968), 59. For example, Kursbestimmung im Handwerk (Aachen), 88, pointed out that over 30 percent of handwerk firms worked closely with industry and the public sector, post office, railroad, and armed forces. The job of bringing conservative, isolated handwerker into this process has likewise remained a theme as the chamber president urged them to “keep up with the times.” Handwerkerpost (1:5), August 15, 1950, 34–35. The British 1946 law is discussed chapter 5, this volume. The quote here is from the 1953 law; BGBl. I, 1411, § 84.7. See Chesi, Struktur und Funktionen, 52 and 61. For a historical overview of the role of their organizations in promoting handwerk, see Wernet, Handwerkspolitik, 153–178. Wernet, Handwerkspolitik, 164. Jahresbericht des Deutschen Handwerkskammertages, 1962, 161; cited in Chesi, Struktur und Funktion, 202. On these institutes, their history, scope of activities, affiliates, and publications, see Brodmeier, Das Deutsche Handwerksinstitut, 11. The first handwerk research institute, the Research Institute for Rational Firm Management in Handwerk (Forschungsinstitut für rationelle Betriebsführung im Handwerk), was founded by Walter Bucerius in Karlsruhe in 1919; he had been inspired by the rationalization efforts of Fredrick Taylor in industry. For his ideas, see Bucerius, Über rationale Betriebsführung im Handwerk: Die Anwendung der Methoden wissenschaftlicher Betriebsführung (Taylorsystem) im Handwerk (Karlsruhe, 1919). “Technische Beratungsstelle,” Handwerkerpost (1:1), April 18, 1950, 6. On the crucial role of investment in market innovation and research and development in modern capitalism, see Alfred D. Chandler Jr., Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, Mass., 1990), 8. For a helpful discussion and summation of Chandler’s work, see David J. Teece, “The Dynamics of Industrial Capitalism: Perspectives on Alfred Chandler’s Scale and Scope,” Journal of Economic Literature 31 (March 1993): 199–225. Georg Schulhoff, Die Rede von Boppard (speech to the founding meeting of the ZDH, November 29, 1949, in Boppard) (Düsseldorf, 1973), 14–15. For a brief overview of the cooperative system in West Germany, including its historical development and the social purposes envisaged by mid-nineteenth century theorists, see the

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61.

62.

63.

64.

65. 66.

67.

following articles in the Handwörterbuch der Sozialwissenschaft, vol. 4: “Genossenschaften I-Überblick und Entwicklung” by Georg Draheim, 350–373; and “Gewerbliche Genossenschaften” by Eberhard Dülfer, 537–541. Two features of the German handwerk cooperative system deserve special note. First, in the 1950s cooperatives were far more developed in virtually every artisanal branch, and therefore were able to offer members far more help as well as a more extensive range of services than in any other country of the then–Common Market. Second, while the cooperative system for handwerk began in the last third of the nineteenth century, its great expansion, including active membership and the range of services it was able to offer its members, occurred in the immediate post–World War II period. The explanation for this must include the broader legal definition of an artisanal firm in Germany as well as handwerk’s extensive organizational network. See Alfred Hanel, Die Einkaufsgenossenschaften des Handwerks in den Ländern der Europäschen Wirtschaftsgemeinschaft (Düsseldorf, 1962), 116, 141, 155, 157, 185, 204, 216, 224, 236. Important, too, has been the change in the character of the cooperatives, which have developed into sophisticated business organizations whose relationship to their members is based less on an emotional feeling of community, as had earlier been the case, than on rational economic principles. See Hans-Jürgen Brink, Die Einkaufsgenossenschaften des Handwerks in der Bundesrepublik Deutschland: Entwicklung, Organisation, Arbeitsweise und wirtschaftspollitische Bedeutung (Cologne and Opladen, 1967), 164. See also Martin Straaten, Entwicklung und Aufgaben der Einkaufsgenossenschaften des Bäcker- und Konditorenhandwerks in Deutschland (Berlin, 1989), 242. Handwerk’s short-, medium-, and long-term credit needs have expanded greatly in the postwar period due to a number of factors, including the rising application of capital-intensive technology, the need to adapt as suppliers to industry, a shortage of qualified labor, and the increased costs of outfitting each workspace as average firm size has grown. Short-term credit needs multiplied five times from 1950 to 1964, while mid- and long-term credit needs multiplied seven times. At the same time, Mittelstand credit institutes and cooperatives have grown to meet this need. Karl Friedrich Hagenmüller and Wilhelm Weber, Der Handwerkskredit der Kreditgenossenschaften in Hessen (Frankfurt, 1965), 28, 32, 40, 131. As with other forms of cooperatives, the advisory function of credit cooperatives to handwerk firms assumed increased importance in the 1950s. Theo Voßschmidt, Die westdeutschen Kreditgenossen: Ihre Stellung auf dem Kreditmarkt (Karlsruhe, 1958), 24. “Der Mittelstand in der deutschen Wirtschaft,” March 18, 1952, 18-19, in BA, B102/14652. Indeed, it has been this advisory function that played such an important role in enabling the small and medium-size firm to stay competitive to industry. See Brink, Die Einkaufsgenossenschaften des Handwerks, 164. For how a similar system of cooperatives functions in Italy, see Paul L. Robertson and Richard N. Langlois, “Innovation, Networks, and Vertical Integration,” paper presented to the workshop “Comparative Corporate Governance, Industrial Organization, and Competitive Performance,” Columbia University, November 22, 1993; Michael H. Best, The New Competition: Institutions of Industrial Restructuring (Cambridge, UK, 1990), chapter 7. For a provocative historical argument that communities of skilled craftsmen so organized are as capable of the same standards of efficiency and producing similar standards of living as are giant industrial firms, see Sabel and Zeitlin, “Historical Alternatives to Mass Production.” VfW memo, “Mittelstandspolitik auf dem Gebiet des Genossenschaftswesens,” October 7, 1949, in BA, B102/39073. On the persistance into the 1960s of handwerker conservatism, especially a disregard of the importance of profit and the factoring of costs, as a factor limiting the effectiveness of cooperatives, see Dieter Keutmann and Margret Dieck, Auswirkungen der Kontrationstendenzen auf das Handwerk (Göttingen, 1971), 50–51, 240–243. For one of numerous examples, see Karl Rößle, “Die Marktverflochtenheit des Handwerksbetriebes,” Handwerkerpost (1:1), April 18, 1950, 3.

Chapter 11

THE HANDWERK ACT OF 1953

 S

o far in part III we have noted a number of changes that made handwerk very different in the postwar years from what it had been before 1933 in its relation with other socioeconomic groups and in its ideological outlook. In chapter 10 we saw that handwerk emerged after the war in a very different structural position in the German economy, and perhaps just as important, that the the war with industry was perceived as as being over, and as such was celebrated among handwerker and their leadership. Accordingly, the other dimension of the postwar reality for handwerk was its changed relation to politics, characterized by a determination of its officials to assert their interests but at the same time by a conviction that the most effective way to do this was from a position of organizational strength working in cooperation with other interest groups, including the unions. Handwerk officials, impressed both with the stability of the system they were building in the first years of the Federal Republic and with the increased recognition and political leverage they had already gained from it, were well aware that its continued success from their point of view depended on the support of their membership and, given its diversity, the cohesion of their Stand. But this cohesion, which was the foundation of the institutions’ ability to represent their members’ interests and to embody their world view, derived from corporate authority gained under the Third Reich. The legal status of corporation of public law for the chambers and their ability to ensure a high level of skill as a prerequisite for entrance into a trade provided that cohesion. Handwerker were absolutely united in the conviction that the certificate of competency maintained a level of quality work that prevented a debasement of their skill and their consequent proletarianization, and that tied them to an ancient tradition conferring identity, Notes for this section begin on page 242.

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social status, and self-respect. It was this authority that, while maintained in the British and French zones, had been abolished by the Americans in their zone in 1948 and that handwerk wanted to restore and secure for the entire Federal Republic. Thus the overriding political goal after 1948 had to be the restoration of their corporate powers by means of a comprehensive handwerk law. Without it, organizations risked losing the loyalty of their membership, a sound financial base from which to operate, and the ability to define handwerk as a Stand by offering a clear sense of self-identity. So weakened, they would be less able to assert themselves within the power structure of the new state. But in addition, given that the strategy of integration necessitated the marginalization of conservative, even reactionary, elements among them—those who wanted a separate party, who still feared industry and market competition, and who thus demanded a politics of protectionism—the passage of this law was necessary to achieve stability within handwerk itself. The restoration of its corporate authority would enable its progressive-minded leadership to continue its encouragement of modernization and rationalization, concentration, and penetration of the marketplace. The impulse toward progressivism did not, however, come entirely from within the leadership. The terms of the debate around the handwerk law were framed in part by the Americans. Their objections to the handwerk system—that it protected the inefficient and throttled innovation—and the resonance these objections had within much of the German public had to be addressed. Thus while a restoration of corporate powers was necessary if leaders were to carry out a policy of modernization and political integration, the threat of not getting such a law gave them the incentive to go farther in political and social compromise than they might have done otherwise.

Handwerk Resistance and Disagreement among the Allies The directive issued by OMGUS on November 29, 1948, ordering the Länder in the American zone to introduce freedom of trade had abolished both the certificate of competency as a prerequisite for establishing a shop and the corporation of public law status for the chambers and guilds. Henceforth, the sole determinant of the skills and qualifications of handwerker was to be the marketplace. Only in certain trades affecting public health, safety, or welfare would an examination still be required, but it would be administered and a license issued by a state agency and not by the private corporate body of the chambers. The new rules affected only handwerker in the Länder of Bavaria, Hesse, the city-state of Bremen, and the American-occupied sections of the future Baden-Württemberg. This state of affairs was not stable, however. On the German side, there was tremendous resistance to the new rules, not only on the part of handwerker but also among their sympathizers in government and elsewhere. Handwerk organizations in the British and French zones, which as we have seen were hard at work

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building up a strong presence within the political parties and forging alliances with employer and other Mittelstand groups, rightly perceived the American-imposed rules as a threat to their own position and power, and were determined to overturn them. For their part, the Americans had come to view freedom of trade as an important part of their program to liberalize the German economy and to eliminate the vestiges of authoritarianism in German society. Thus they hoped to extend freedom of trade to the rest of the Federal Republic. Their position, however, was not helped by the lack of any real enthusiasm from the British and the French. After the Americans finally succeeded in pushing through freedom of trade in the Länder of their zone, accomplished only after considerable foot-dragging on the part of the Land parliaments, German state legislators lost no time in attempting to roll back the American initiative.1 On September 21, 1949, Baden passed a law restoring handwerk’s corporate authority. On the same day, at least nine other ordinances restricting the licensing of businesses were passed by Länder; the United States considered all these ordinances to be violations of its policy. While the U.S. High Commissioner, John J. McCloy, succeeded in convincing his British and French counterparts on the ACC to disapprove provisionally the Baden law, the latter, despite McCloy’s persistent efforts over the first half of 1950, refused to accept as a tripartite policy the American position that all German legislation restricting entrance to trades be annulled.2 The Allied disagreement on this issue reflected different views on the regulation of economic life and the role of corporate bodies therein, the degree to which German society should be reformed, and the extent to which the Allies under the terms of the Occupation Statute could properly interfere with the German legislative process. According to the American view, the ability of either state or private authorities to place what it considered to be arbitrary restrictions on the free conduct of economic life went to the heart of the problem with pre-1945 German society: the boundary between individual freedom and state or quasi-state power. Handwerk corporate authority represented just such a boundary. The prevention of someone freely entering a trade of his or her choice, subject only to reasonable standards to protect public health or safety, especially when the marketplace could make such judgments far more efficiently, seemed to the American mind a clear imposition of arbitrary state authority on the freedom of the individual. In addition, that the qualifications were decided by the applicant’s future competitors seemed clearly to be an exercise of exclusionary self-interest. Beyond the matter of discrimination in trade matters lay a broader pattern of authoritarianism in German life. The system, McCloy stated, “tends to make the individual too subservient and too dependent for his livelihood and for his very life upon the actions of administrative authorities.” The same principle here applied on a larger scale to industry that had used, in the American view, analogous restrictions on the operation of the free market to concentrate enormous power into its hands, both undermining Weimar democracy and propelling the nation toward war. The dissolution of such concentrations of power, and with them

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the roots of Nazism, was central to the project of Allied occupation. “[I]t goes to the root of the whole liberation of the German scheme of things,” McCloy concluded, “and we are not trying merely to eliminate Nazism as such as much as we are in this case trying to remove the whole fundament of authoritarianism of the German State.”3 The British and the French did not agree. Both expressed reservations as to the wisdom of an over-interference of the ACC in the German legislative process. This would “strain the Occupation Statute,” General Robertson, the British High Commissioner argued, and weaken the very democratic institutions the Allies were trying to cultivate. While McCloy could cite surveys conducted by the Americans showing German support for the freedom of trade policy,4 Robertson nevertheless stated, “The fact is that this law [the Baden law restoring handwerk corporate authority referred to above] has been passed by the democratically elected representatives of the state, and, as far as we’re concerned, it is probably correct to say that the Germans want it.” As to the discrimination of trade provisions of the Occupation Statute, Robertson explained that it had been the understanding of his government in agreeing to this clause that it referred to exclusive or discriminatory arrangements in foreign trade, and thought it a “pity” that if the United States had attached such importance to this matter, it had not spelled it all out explicitly beforehand. The French commissioner went even farther, saying “In the Occupation Statute this had not really been stated, that we have to see to the democratization of Germany.”5 Aside from the question of the legal competency or appropriateness under the Occupation Statute of an ACC veto of legislation of the kind passed by the Baden Landtag, neither the British nor the French showed sympathy for the American view that at the core of these types of economic restrictions lay a very German authoritarianism. While Robertson seemed disinclined to be very analytical in his disagreement (“It may be because of the country I come from, I don’t know; but I have never been entirely in agreement with the American point of view on the merits of this question.”), the French commissioner, André François-Poncet, went forcefully to the heart of the matter. The corporate authority of the chambers, he maintained, was neither antidemocratic nor a discriminatory trade practice. The state had a perfect right, and to the consumer an obligation, to ensure a level of professional competency. Just as no nation allows the marketplace to decide who can call himself a doctor, a pharmacist, or a lawyer, so, too, should the state act to set standards of workmanship. Professional ability should thus be added to public health, safety, and welfare as legitimate areas of state oversight. (McCloy’s response to that was that a doctor of medicine could hardly be placed in the same category as a carver of wooden figurines for tourists.) Finally, François-Poncet argued that by no stretch of the imagination could the handwerk system be considered a cartel or concentration of economic power of the sort the Allies had in mind when they set out to root out the preconditions of Nazism.6 In the end, unable to agree on a final policy on their own, the Allies referred the question to their respective governments, and the British and French only agreed to a provi-

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sional veto of the Baden law because they conceded the American point, though with no great enthusiasm, that the judges of professional competence should be independent and not drawn from handwerk competitors.7 While the Americans thus eventually succeeded in abrogating the Baden law, their policy was being undermined on other fronts. OMGUS continued to receive widespread reports that German officials were ignoring its directives on freedom of trade, either by “requiring a vocational standard in examinations which is beyond any reasonable level,” or by pressuring those who had been granted a provisional exemption to the chamber requirements before 1949 to take the master’s examination.8 Meanwhile, the movement of handwerk organizations and their allies to overturn the freedom of trade policy and to establish uniform requirements for the entire Federal Republic was gaining momentum. On October 26, 1950, the Bundestag passed a new handwerk law in the first of its three required readings.9 Introduced by deputies of the CDU/CSU, the FDP, and the German Party (Deutsche Partei), the law provided for the restoration of the corporation of public law status for handwerk organizations and the certificate of competency as a prerequisite for opening a shop.10 While the bill was then sent to committee for hearings (held over the course of the next three years), the United States had to recognize that little organized opposition to the proposed law existed.11 In their protests to German authorities over the legislative efforts to overturn freedom of trade, the Americans attempted to adduce a historical argument that “the freedom of individuals to engage in occupations of their choice is deeply embedded in the liberal-democratic tradition of Germany,” of which the Nazi era laws were an aberration.12 In other more-detailed memoranda, the United States attempted to convince the Germans both that Germany had a liberal-democratic tradition in the first place, and that freedom of trade was consistent with it. One such American effort, for example, cited the example of the far-sighted princes of Hesse who in the late seventeenth century invited the Huguenots fleeing Louis XIV to settle in their lands and allowed them to establish businesses—thus affording them more advantages than those offered to present-day refugees from the East—all against the strenuous opposition of the entrenched and restrictive guilds. These industrious peoples breathed new life into the moribund and overregulated German economy and made possible a relatively rapid recovery from the Thirty Years’ War. Progressive forces gradually chipped away at the guilds, these accounts continue, until 1869, when their powers were entirely stripped away in the North German Confederation (extended to the united German Reich in 1871), ushering in “Germany’s Golden Age” in which “this land reached the highest cultural and economic position in its entire history.” Only Hitler brought this happy era to a close.13 However one may judge this historical account as a whole, the American assertion that from 1869 to 1934 “the principle of freedom of trade was in the ascendancy in Germany”14 is quite fanciful, as the review in chapter 1 of the series of laws, starting in the 1880s and culminating in 1935 that elevated the legal

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status of the guilds and attempted to revive the apprentice system, clearly shows. Liberalism in handwerk had a very short heyday indeed. The historical arguments adduced by handwerk in reply were only slightly less tendentious. Like the Americans, handwerk officials, too, saw a long tradition of democracy in German history. They, however, located it in the guild system. There, a corporate body regulating its own affairs for the benefit of all its members was the medieval germ of democracy. What better proof of the democratic character of the certificate of competency could there be than to point out that at the birthplace of modern German democracy, the Frankfurt Parliament of 1848, a handwerk congress had convened to call for its reintroduction?15 These historical arguments locating the origins of German democracy in the medieval guild had a double function. One, of course, was to counter the American contention that freedom lay in the absence of economic restrictions. This to the German mind was the Wild West, appropriate perhaps for American conditions but not for the more-regulated traditions of the old world. But, in addition, the exhibiting of these proven roots by the congress was meant for the consumption of its own membership, because it placed handwerk squarely at the origins of a democratic Germany both traditional and renewed, which came to constitute a key part of handwerk’s selfidentity in the postwar period.16 The mists of time aside, however, German officials countered that licensing restrictions were neither illiberal nor protectionist. Handwerk, too, they said, supported the fundamental premises of freedom of trade but merely took a broader view of public welfare (as did the French) and of the restrictions that could thereby be legitimately permitted. They called for “freedom of trade of experts” (Gewerbefreiheit der Fachleute). Beyond serving the public interest as protection against amateurs and fraud, the restrictions had a crucial social function as well in an overpopulated land without the “unlimited possibilities” of America. By training handwerker not only in modern methods of production but also in the commercial skills necessary in the capitalist marketplace, the system ensured the continued existence of this vital economic sector. It not only provided an enormous range of quality services in its own right, but also supplied industry with great numbers of its skilled workers. This, they argued, had been in retrospect the true function of the legislation after 1881 (not the restoration of privilege)—the maintenance of a skilled, stable independent middle class, which (not incidentally) offered the opportunity of social advancement to the working class and acted as a buffer between capital and labor.17 However, while the United States was becoming more and more isolated in its position on freedom of trade, it had nonetheless already succeeded in shifting the terms of the debate. A greater openness in economic life and a more critical view of the (arbitrary) authority of public and private bodies were taken more for granted as virtues to which participants in public discussion had to pay homage. To respond, handwerk officials were compelled to meet this challenge with some internal reforms of their own.

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The Marginalization of Handwerk Conservatism and the Development of a Modern Berufsstand Ethos Insofar as any blanket statement can be made about approximately 3.5 million individuals, it may be said that everyone within handwerk in the early 1950s wanted the authority to issue the certificate of competency returned to the chambers. True, there was the occasional letter to the editor or to the American authorities complaining of the arbitrary exercise of authority by chamber officials, and the challenge to the constitutionality of the handwerk law when it was finally passed in 1953 was brought before the Constitutional Court (Bundesverfassungsgericht) by a disgruntled journeyman.18 But no examination of handwerk documents, either public or private, at any level of organization in the agencies of German government and the American occupation authorities, has disclosed anything more than the rare, isolated expression of individual opposition.19 There was an all-but unanimous agreement on this question within handwerk and apparently within the German government bureaucracy as well.20 As to the reasons why the certificate of competency was a desideratum and on the uses to which it should be put, however, there was not agreement. One segment of handwerk wanted the certificate of competency primarily for protectionist reasons. These individuals were especially fearful that their precarious socioeconomic status was being steadily eroded, and they expected that the restrictions on entrance to the trades be employed to exclude outsiders and to shield themselves from competition. Masters in this group tended to be clustered in certain trades—the low-skilled or low-capitalized trades operating on the margins, where the smallest shops predominated. As we saw in chapter 8, it was these trades that were most directly affected by the great influxes and subsequent closings that followed the introduction of freedom of trade in 1948. On the other side were the progressives who dominated the leadership. These were individuals, many of whom came from the newer trades that had grown up around industry, who were committed to a course that represented a radical departure from the course followed in the Weimar Republic. Having absorbed the lessons of the collapse of Germany’s first democracy, they pursued a course of political integration with the mainstream parties and alliances with other social groups, the broader aim being that of securing the stability of the West German state, especially as a counterweight to the threat of Communism in the East. Within their own Stand, postwar leaders were likewise determined to consolidate the economic changes brought about over the long term by the growth of industrialization in Germany and culminating in the state-directed transformation during the war. This included the integration of the handwerk and industrial sectors of the German economy—and the elimination of the Marxian contradiction between them—and the application of industrial methods of rationalization and modernization of both production and management. The vehicles of these policies were to be handwerk institutions.

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While leaders were confronted with a conflict of purpose within their own ranks, they also faced a public relations problem. The same unanimity of opinion within handwerk as to the desirability of the certificate of competency did not exist within the public at large. Many Germans had long been disgusted by what they saw as an exclusivist mentality of the local guilds and were quite happy to see their power broken.21 Handwerk officials had to convince the public that the restoration of their corporate authority benefited the German economy and them as consumers, and would not be used as an old fashioned instrument of protectionism. These two problems were related. To convince the public of the progressive purpose of corporate authority, leaders had to marginalize the conservative elements among them. To silence these elements, the leaders had to convince them that without a policy of progressivism and integration, the certificate of competency would never be achieved at all. Leaders confronted two basic kinds conservatism among their membership.22 The first was purely economic, an inability or unwillingness to adapt to new methods, especially those that concerned management and capital. To be sure, a good part of this conservatism lay not in an outright or principled resistance to new ways of doing business, but rather in simple ignorance. Many handwerker, especially those working in small shops or in rural trades, had spent their careers producing for a limited market that for much of the time after the mid-1930s had been subject to economic controls. They knew only the simplest forms of bookkeeping if they knew any at all, price calculation and cost factoring were rudimentary, and advertising and public relations were unknown. By means of an extensive and continuous series of articles in the handwerk press, local and regional consultation centers, workshops, and trade fairs, organizations successfully introduced established masters to the new production and managerial techniques in a rapidly changing marketplace. In the schools where apprentices received the theoretical part of their training, these skills were introduced to the next generation. But resistance remained. Lecturing the general meeting of the Cologne Chamber on the importance of bookkeeping and price calculation in modern firm management, the head of the German Handwerk Institute for business research in Munich, Karl Rößle, remarked, “[F]or his part [the handwerk master] has the obligation to develop the structural condition of his firm to the highest level possible. Structural condition means that the master as well as the equipment he has in his firm must precisely correspond to the demands, the technology, etc. of the modern market economy. We are still very far from being able to say that the greater part of handwerk firms and also partially their organizations have this point of view.”23 The remarks of some, albeit a small minority, confirmed Rößle’s view. During a discussion of modern managerial methods and craft training, one master opposed the introduction of bookkeeping into the apprentice curriculum. “We are obligated,” he said, “as handwerk masters to make skilled workers out of them [the apprentices]. To burden them with matters of bookkeeping would be going too far.”24

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The trades where such methods were least applied even in their most elementary form were in the smallest, one-man-shops with the narrowest profit margins. These were often the “women’s trades.” One dressmaker called on district guild leaders to make sure apprentices learned these managerial skills, because “precisely in dressmaking the percentage of firms that keep books is very low.”25 The patterns of disadvantage within the clothing trades, which were overwhelmingly female except for men’s tailors, and which were among the least profitable, began at the lowest level. Many firm owners preferred to take on female apprentices, and in substantial numbers, because they could pay them less than they paid men. Officials deplored this as an exploitation of cheap labor because there was not enough work to guarantee them a living when they finished. In addition, many parents sought out apprenticeships for their daughters, not so they could learn a trade in order to support themselves, but rather so the family could have the free services of a seamstress in the house.26 While adherence to old patterns of this sort was something that zealous officials ceaselessly struggled against in their determination to move handwerk to the competitive forefront of modern capitalism, it was clearly on the wane as a new generation educated in these methods replaced the old. But in addition, such conservatism in adapting to new methods was not now politically dangerous as it had been in the 1920s. Its effects generally extended no farther than the particular trades or individuals who put themselves at a competitive disadvantage. Far more threatening were the manifestations of old-fashioned guild exclusivism or protectionism. This was the view that entrance to the trades must be restricted in order to ensure their established practitioners a prosperous existence. It was necessarily anticompetitive. Because it was precisely this mentality that the Americans saw as the root evil of the system they were trying to abolish, and because it undermined handwerk’s reputation with the German public at large, pragmatic leaders were especially determined to marginalize it. Many of the proponents of guild exclusivism came from trades considered to be overfilled or saturated, and so they attempted to employ various mechanisms in order to stem the flow of outsiders. A leader of the haircutters’ guild complained of the desperate situation of many in that trade. Haircutting is a trade, as noted earlier, having low start-up costs and a skill level relatively easily attained, making it vulnerable to influxes of new practitioners. It is also a trade whose established shop owners can be easily undermined by journeymen or others setting up shop at home off the books (Schwarzarbeit). The course and examinations for the mastership, this leader claimed, had been made entirely too easy, and the examination committees had become lax in upholding standards. Thus many with poor qualifications had been slipping through and setting up shop.27 Alternatively, he charged that the government review committee had allowed an excessive number of exceptions and granted mastership to some who were too young (under twenty-five years old) or to “double earners,”—that is, women whose husbands also had an income.28

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A representative from a construction trade made another sort of hardship argument. Unlike the example of haircutters where start-up costs were low, the construction trades, that of plumber in this instance, did require a more substantial investment in tools before anyone could begin a business. Because so many had passed the master exam yet lacked the requisite capital to buy their own tools, they had resorted to stealing them. But beyond the immediate crisis of thievery in this trade, the speaker also found it a debasement of the title of master that the entrance of underfunded members could be tolerated. To shouts of approval, he pleaded that every industry or medium-size firm that started up must have a certain amount of capital at its disposal in order to be able at least to equip it—unfortunately not the case for all masters who wanted to make themselves independent. The speaker therefore proposed that in addition to the successful completion of the master course and exam, a minimum capital requirement also be established before a candidate could receive the master title. In a similar vein, a wagon builder (a trade on its way to extinction) opposed a proposal that a fund be established to help poor journeymen take the master exam with an argument that combined moralism with exclusivism: The master exam must entail sacrifice. Without suffering one would lack the moral qualities necessary to become a true master.29 In these and other cases the speakers were soundly rebuked by the chamber president and others who criticized both the contentions of hardship and the remedies proposed. The counterarguments not only upheld the validity of the market as a mechanism of selection (among certified masters, of course), but also cautioned that the appearance of such reactionary thinking could undermine handwerk’s case with both the Americans and the German public. In the minimum capital requirement example just cited, President Günther shot back, “Herr ____, that is a dangerous game! We must realize that there exists a process of natural selection which also comes out in bankruptcy.” Yes, Günther continued, many new masters fail in business, including even those with adequate start-up capital and skill. Thus capital is hardly a sufficient condition for success. But also many with no capital of their own, like Günther himself, could borrow and build up a thriving business nonetheless. Only the individual himself could make that decision. “That is just what is wonderful about handwerk—that a journeyman who is a worker’s son or who comes from a poor background, can, by working with his own hands, make himself independent.”30 This commitment to individual initiative and in particular to the notion (real or myth) that handwerk offered a bridge of social mobility between labor and capital clearly played an important role in the self-identity of handwerk for postwar figures like Günther and the majority among the leadership who supported him.31 But there were also more practical and immediate reasons, Günther continued, for taking a pro-market position. With the first sign of the old exclusivism, those on the other side would turn and say, “That’s the old (medieval) guildsmen for you,” thus undermining all assertions that its corporate powers would be used only for progressive ends.32

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Again and again Günther pleaded for moderation from the conservatives and for liberality in the granting of master titles for the very pragmatic reason that the American intention was to extend freedom of trade to the British and French zones. Every attempt to restrict access to handwerk reaches the ears of the military government, he warned, and “can only help make our present legal situation worse.” Such artificial, antimarket mechanisms suggested by conservatives for the purpose of excluding competition—which recalled the certificate of need of the Nazi era, a barrier that the top leadership had explicitly disavowed—weaken handwerk in other ways by making it less competitive. “Only by means of a healthy competition can we bring forth true handwerk achievement.”33 By using the word healthy, however, Günther excluded not only the market restrictionist measures outlined above but also that which all handwerker regarded as Americanstyle Wild West competition—a free-for-all that resulted in lower prices but along with them lower quality, lower wages, and proletarianization.

Journeymen and Codetermination The most decisive movement away from conservative isolationism and toward the integration of handwerk in the Federal Republic was the inclusion of journeymen representatives on the executive committees of the chambers. Referred to as suprafirm codetermination (überbetriebliche Mitbestimmung), this form of employee representation differed from its industrial counterpart in that labor sat on the boards of the chambers and their peak organizations, not on those of individual firms, and therefore took no formal part in the day-to-day operations of the shop.34 As we saw in chapter 5, journeyman representation was an innovation of the postwar period and had already been incorporated into law in the British zone in 1946. But as leaders worked to formulate a law that would determine the structure of their institutions for the entire Federal Republic, the issue assumed renewed importance. It offered them the opportunity to incorporate, at the institutional and political level, principles that would confirm handwerk’s Stand character yet ensure it an influential place in the political mainstream and at the same time display its progressive side to the Americans. In a famous speech at the founding meeting of the federal handwerk peak organization (Zentralverband des Deutschen Handwerks; ZDH) held at Boppard on November 29/30, 1949, Düsseldorf Chamber president Schulhoff pleaded for the adoption of this course.35 His argument was constructed to accommodate several conflicting tendencies within handwerk in a way that made journeyman representation a clear necessity. The problem ultimately rested, Schulhoff said, on the functionality of the parallel structure of handwerk institutions and the challenge of preserving it. The two kinds of organizations were established according to different principles. The various guilds (Innungen) each included members of one particular trade, while the chambers (Kammern) included all handwerker within a district. Both chambers and guilds of all trades had their respective Land

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peak organizations, all of which came under the umbrella of the federal ZDH. As interest or employer organizations, the guilds had among their responsibilities the conducting of wage negotiations with the unions. In this capacity the guilds did not and could not have union representation on their boards. The chambers, on the other hand, were organized along Stand or solidarist lines including all handwerker at the regional or Land levels.36 The ability of the chambers to claim that they represented handwerk as a whole was crucial. First, it formed an important part of the self-identity of all handwerker that master, journeyman, and apprentice worked in a relation of organic reciprocity, unlike the necessarily antagonistic relation of capitalist and worker. Second, it enabled the chambers to represent handwerk to the public agencies and even carry out certain sovereign functions of government, most importantly the authority to control the training system and administer the certificate of competency.37 The securing of this latter function was, of course, the main goal of all handwerk politics after 1945. The authority to carry out such quasi-governmental functions required under German law that the chambers have the legal status of corporation of public law.38 There was also another reason why this corporate law status was vital to the strength of all handwerk organizations. Such a status meant that an organization represented all within that professional group—that is, all practitioners had to be members and to pay dues. From 1897 to 1945 guild membership had been obligatory. Before 1934 individual membership in guilds could become obligatory by majority vote only, and they did not have public law status. Under Nazi law, guild membership was obligatory for all, and both guilds and chambers were corporations of public law.39 After 1945, however, none of the Western Allies was willing to perpetuate obligatory guild membership. It was too clearly an authoritarian holdover. Even as all the Western Allies quickly restored other corporate powers to handwerk organizations after capitulation, they immediately abolished obligatory guild membership along with the leadership principle, and both provisions became part of the 1946 law in the British zone. While many in the leadership would have wanted obligatory guild membership reestablished (all, on the other hand, welcomed the end of the leadership principle), they recognized that this was completely unrealistic and no one was prepared to make it a sticking point. Given, then, that obligatory guild membership was out of the question, only corporate law status for the chambers could ensure them a healthy financial base. Handwerker were not joiners, Schulhoff explained; “their naturally freedom-loving and independent character” precluded that.40 Thus an institution financially strong enough to carry on its research and managerial functions and to be politically effective meant that corporate law status was essential. This much was clear. All agreed with Schulhoff that “at all costs the legal competency of the handwerk chambers is the most important bastion which we cannot give up and which we must get back again in the U.S. zone.”41 But then Schulhoff hammered in to his listeners what indeed most of them already knew: neither the Americans nor the German public would consent to the restoration of handwerk’s corporate legal status without a clear commitment to the principles

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of social partnership—that is, without some sort of “coparticipation” on the part of journeymen.42 Schulhoff finally appealed to the Stand pride and patriotism of his listeners in calling for his version of social peace. Germans, he declared, cannot go back to the interest-dominated class-struggle politics of Weimar. Current industry-union relations, it seemed to him, were indeed heading in that direction. Handwerk must refuse to do likewise. Instead it must go the “new path of solidarism” in order to overcome class consciousness and class conflict. Already at the turn of the century, Schulhoff claimed, handwerk had led the way in negotiating wage contracts with journeymen at the suprafirm level while industry, still holding onto a Herr im Haus world view, built itself up with syndicates, cartels, trusts, and monopolies and provoked endless cycles of strikes and lockouts in order to keep the unions at bay. Handwerk, with a firm structure based on cooperation, could go beyond this. “We have, therefore, the historical mission to show ourselves open to all ideas and practical measures towards the reformation of the social life between entrepreneur and employee, between master and journeyman.”43 Schulhoff’s speech, which formulated what turned out to be the strategy followed by the organizations in the postwar years,44 was a combination of cleareyed pragmatism, deeply held principles, and shrewd labor politics. His strategy paid off. As we shall see below in this chapter, the willingness of the chambers to admit journeymen to their boards was crucial in winning the support of unions and the general public and the eventual consent of the Americans for the handwerk law of 1953. Ideologically, his speech reflected the central essence of the postwar Christian socialist thinking that, while sympathetic to the material and spiritual oppression of the working class, sought to overcome class struggle in the context of corporate structures that preserved traditional patterns of authority. The inclusion of journeymen in both guilds and chambers had been a goal of certain leaders since the 1920s. According to Schild, who at that time was general secretary of the Reich Estate of German Handwerk, the 1934 handwerk law originally provided for journeyman representation in both the guilds and chambers, but when DAF leader Robert Ley got wind of these provisions, he succeeded in abrogating them.45 Only, therefore, in the postwar period could journeyman representation on the chambers be realized as a solidarist principle. In any case, this principle entailed no risk or loss of control for the organizations. While acknowledging the legitimacy of concerns about “the remote control of our journeymen by the unions,” Schulhoff assured his listeners that the “co-participation of the employee, in our opinion, in no way means the participation of the unions as a right in itself.”46 Most leaders indeed clearly recognized that unionism among the journeymen represented no threat to master control.47 Furthermore, any sort of codetermination at the firm level was resolutely opposed by handwerk. The argument they used was that the age-old cooperation between master and journeyman and the fact that they shared an identical social outlook constituted a de facto codetermination that made a legal one at best superfluous and at worst an intrusion.48

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Indeed, a good part of the handwerk educational system was specifically directed toward socializing apprentices and journeymen toward this end, and apparently with great success. The Aachen Chamber provides a good illustration of how it was carried out. Chamber leaders there were clear, as they were everywhere, that the preparation of journeymen for the master exam of the old style, where most information was taught by the master himself, was no longer sufficient, especially given the generally poor education of so many young people coming out of the schools.49 A planned, more-systematic, formal schooling period was required to teach business management—bookkeeping, the legal and tax systems, and cost accounting. But in their view, their mission went farther: “The goal of the journeyman education program is the development of a true handwerk personality.”50 To this end the chamber began to experiment with a five-year preparation period that, contrary to expectations, met with an enthusiastic response from journeymen who flocked to enroll.51 The goal was to create an elite with a strong and developed “handwerk Stand consciousness” and sense of “professional Stand worth” (“so much less in evidence among the young handwerk generation today”) that, like theoretical training, would be the same for all trades.52 In addition to the regular curriculum in business and trade theory, journeymen in this program debated current questions of handwerk politics on the basis of reading articles in the press. Teachers considered the program a success, based not just on the vigorous discussion such classes provoked, or on the impressive examination results, but also on the clear sense of community solidarity they developed not only among themselves as journeymen but with all handwerker.53 These same goals of developing a common spirit among journeymen and masters were carried on not only in special training programs like the one developed by the Aachen chamber but also in the local journeymen committees organized by the chambers. Among the goals of these committees were “closer ties between handwerk chambers and journeymen,” “an exhaustive knowledge [on the part of the journeymen] of the entire handwerk organization and its tasks,” and “a view of general handwerk interests in the economic-social-cultural and political questions of the day.” In addition, the “cultivation of a community life” and, more specifically, “the cultivation and deepening of a professional Stand way of thinking; the creation of a professional Stand home [Heimat] feeling, the loosening of social tensions, and the formation of a professional Stand order” were all goals of a clearly thought-out program to inculcate journeymen with a nonclass antagonist attitude of Stand.54

The Passage of the Handwerk Act The strategy for the integration of handwerk into the political, economic, and social fabric of the Federal Republic that Schulhoff outlined at the founding meeting of the ZDH in 1949, and that the leadership spent the following years putting into practice, gradually paid off. While the central legislative point of fo-

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cus may have been the passage of a law that would restore the corporate authority of their institutions for the entire nation, leaders had the broader ambition of achieving a position of strong political influence. In 1950 this goal still seemed far off. As Schild expressed it, “It would be pointless if, on the one hand, we held onto the certificate of competency but, on the other, remained economically and socio-politically fully ignored. At the moment we are in both areas on the defensive.”55 Indeed, as the handwerk law passed its first reading on October 6, 1950, and was sent to committee for hearings, there still existed important opposition. For example, the Länder ministers for Refugee Affairs to the Bundesrat went on record as favoring the U.S. freedom of trade.56 Press opinion was still mixed, and, as leaders recognized in retrospect, even if the law had gone into effect in 1950, the Allies would in all likelihood have vetoed it.57 Important pockets of dissent notwithstanding, the principle of corporate authority evoked a deep sympathy within German political culture. Within handwerk, support was solid even among those groups—journeymen and refugees— who might be expected to harbor resentment against established insiders. The Kolping Society (Koplingwerk), a mutual aid association for Catholic journeymen,58 expressed its support for the certificate of competency to the Allied High Commission in a particularly forceful way. Against the American concept of pure freedom for the individual, the Kolping Society posed an ethical freedom with content. The American view, it said, created a freedom “only for gangsters and dictators,” a freedom to exploit. The handwerk training process, on the other hand (especially the “school for life” in the years of wandering, which it hoped to revive), created a freedom with responsibility, a sort of modern “patent of nobility” (Adelsbrief ) stressing reciprocal duty. Handwerk did not oppose competition, the Society insisted, nor did it support privilege and the conservation of old, outmoded methods. Quite the contrary: It supported a “competition among the qualified” that elevated quality rather than driving it down to the atomized level of the “mass man.” This, the Kolping Society concluded, formed the surest path for German spiritual renewal and the strongest bulwark against Bolshevism.59 While one of the important arguments the Americans used to support freedom of trade was that the old regulations acted to exclude refugees who often arrived in the West without proof of their qualifications, refugee groups in fact opposed the American policy.60 Expressing regret that the Länder Ministers for Refugee Affairs had taken a pro-American position,61 the groups argued that freedom of trade had combined with currency reform to put refugee firms at a disadvantage. Refugees were rich in skills but poor in capital. Currency reform, they said, had taken from them most of the Reichmarks they had managed to save (not having been able to bring property, tools, or equipment with them to the West), thus ending for many the hope of establishing an independent existence. On top of that, freedom of trade had opened up the trades to those with few or no qualifications but who were well funded (rich in capital, poor in skills), thereby eliminating any competitive edge refugees may once have had.62 They even conceded that expellees from the East were at the moment underrepresented

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in handwerk, but argued that the remedy should be a refugee representative in each handwerk organization, not freedom of trade.63 Support for handwerk’s corporate authority extended to industry circles. The success of the organizations’ program of building alliances with the industries of the second industrial revolution (those with a more accommodating position toward labor) through their affiliations with the ASU and the BdA has already been discussed in chapter 9.64 Not surprisingly, the BDI, which represented the more conservative heavy industry, also supported the certificate of competency. In response to a request from Erhard for a position on this issue, the BDI affirmed its commitment to freedom of trade in the sense of opposing a planned economy65 and therefore opposed any reintroduction of the certificates of need or personal reliability as preconditions for opening a shop. They remained, however, strongly committed to maintaining high levels of skill in industry and handwerk (where industry derived much of its skilled labor) and thus favored the certificate of competency.66 Retail associations, even more backward-looking than the BDI in their own way, not only supported the certificate of competency (and an equivalent for themselves) but continued to favor what all others had long abandoned—the certificates of need and personal reliability as prerequisites for the opening of a retail shop.67 The SPD and the trade unions also gave their support to the handwerk law. By the postwar period the SPD had fully abandoned the classical Marxist view of the inevitable disappearance of small independent proprietors. At the party convention in 1946, Victor Agartz declared that handwerk had moved out of its “precapitalist” phase and that now “its high political-economic significance is undisputed.” Handwerker as owners of their own tools and labor, he continued, have “a secure place in the socialist economy” and have “no relation to monopoly capitalism.”68 At the beginnings of its postwar effort to expand its base beyond that of a workers’ party—a transformation that was to culminate at the party’s Bad Godesberg conference of 1959—the party reached out to those classes that it believed stood closest to the proletariat.69 The SPD, therefore, backed the certificate of competency as a legitimate mechanism to support handwerk, as well as the more general principle of self-administration, as long as its application remained subject to government review.70 The Confederation of German Trade Unions (Deutscher Gewerkschaftsbund; DGB) also favored the certificate of competency as a means of upholding standards of training for apprentices,71 but both made their support contingent on the inclusion of journeymen representatives on the boards of those organizations receiving corporate law status. An additional matter of dispute with the DGB, which was resolved in favor of handwerk, was that, while the unions argued that the apprenticeship was a work relation entitling the young person to a wage, handwerk insisted that master and apprentice stood in an educational relation and thus the latter would receive only a stipend as compensation.72 Thus by 1952 the handwerk law had broad and deep support among the various interest groups in German society, all the political parties except the commu-

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nists, and even throughout the press.73 During the fifty-two committee hearings held on the bill after its first reading on October 6, 1950, the main battle was fought within handwerk itself between the guilds and the chambers.74 Although handwerk organizations were careful to present a united front in public, behind the scenes the guilds fought against the increasingly dominant position of the chambers. The guilds, more conservative and locally oriented, opposed the chamber peak organizations being granted corporation of public law status that would have given them a strong, centralized character.75 The guilds preferred a looser federal structure; they also feared the increased presence of the unions since journeyman representation was a precondition for corporate status in the chambers. They also wanted membership in the guilds to be obligatory, which would have strengthened their financial position. Although the guilds in the American zone at one point even threatened to walk out of the ZDH, a compromise was reached whereby the guilds relinquished obligatory membership, and the unions and SPD dropped its demand for a journeyman presence in the guilds.76 With this broad backing, the Handwerk Act passed its second and third readings in the Bundestag after six hours of debate on March 26, 1953. The vote was unanimous with only the communists dissenting. To demonstrate his support for the measure, Adenauer came in for the vote and sat beside Deputy Bernard Günther (who was also president of the Cologne Chamber).77 The SPD and the unions swallowed their objections and conceded that the guilds could receive corporation of public law status (but not obligatory membership) even without a journeyman presence. (Journeymen representatives were included in the chambers.78) Only the American feathers remained to be smoothed, which Chancellor Adenauer accomplished in a letter to Secretary of State John Foster Dulles, asking for the law’s speedy approval as vital to “the endeavors of the Federal Government toward a consolidation of Germany’s economic and political life.”79 In the face of these arguments, Adenauer’s strong personal intervention, and the united German backing of the measure, the United States at last withdrew its objections and handwerk corporatism became instituted into law.

Notes 1. On this period of German obstructionism, see Boyer, Zwischen Zwangswirtschaft und Gewerbefreiheit, 209–219; and Scheybani, Handwerk und Kleinhandel, 248–262. 2. “U.S. High Commissioner’s Position on Issues Raised by Appeal to Governments from Refusal of Allied Council to Agree to Annul German Restrictive Licensing Legislation” (n.d., mid 1950), NA, RG 466, 6/28/52/1-5, box 33, folder “Handicraft Law (in Baden) 1949/51” (hereafter “U.S. High Commissioner’s Position”). 3. “Excerpt from Verbatim of the 13th Meeting of Council of Allied High Commission held at Berlin on 18 January 1950,” NA, RG 466, 6/28/52/1-5, box 33, folder “Handicraft Law (in Baden) 1949/51” (hereafter “13th AHC Meeting, January 18, 1950”) 1–2, 6–7.

The Handwerk Act of 1953 | 243 4. For a sample of U.S. surveys on freedom of trade conducted by OMG-Bavaria, see NA, RG 260, 7/55/54/2, box 65. Most people who answered the questions in the surveys on freedom of trade approved of it. Typical opinions were that it would help refugees, allow the unfolding of personal initiative, make handwerk more open and competitive, and finally banish formal bureaucratic strictures as well as the exclusivist Stand spirit of the guilds. In March 1951 an OMGUS survey reported that 59.5 percent of people in the Federal Republic and Western Berlin who had formed an opinion on freedom of trade were “completely in favor of it.” See “Brief on Gewerbefreiheit,” October 26, 1951, NA, RG 266, 6/28/52/5-6, box 7, folder “Freedom of Trade 1950/52.” 5. “13th AHC Meeting, January 18, 1950,” 3–5. The French government only gradually abandoned the view that national security depended on a weak Germany. For French occupation policy and its development, see F. Roy Willis, The French in Germany 1945–1949 (Stanford, Calif., 1962); Claus Scharf and Hans-Jürgen Schröder, eds., Die Deutschalndpolitik Frankreichs und die Französische Zone 1945–1949 (Wiesbaden, 1983); and Stefan Martens, ed., Vom “Erbfeind” zum “Erneuerer”: Aspekt und Motive der französischen Deutschlandpolitik nach dem zweiten Weltkrieg (Sigmaringen, 1993). 6. “13th AHC Meeting, January 18, 1950,” 3, 6. 7. “U.S. High Commissioner’s Position.” 8. OMGUS report, “General Trend Observed by German Competent Officials with Respect to U.S. Principles on Freedom of Trade,” June 11, 1951, NA, RG 266, 6/28/52/5-6, box 7, folder “Freedom of Trade 1950/52.” On this period of German obstructionism, see Boyer, Zwischen Zwangswirtschaft und Gewerbefreiheit, 209–219; Scheybani, Handwerk und Kleinhandel, 248– 262. 9. According to the complex Bundestag regulations, a bill must pass three votes, or readings, and be sent to the Bundesrat for consultation before it becomes law. After the first reading the bill is sent to committee, where hearings may be held on the measure. When the committee’s report is submitted, the Bundestag holds a second reading where the bill is subject to general debate and where amendments may be introduced. If there are no amendments, the third reading (which, like the first, is often a formality) may take place immediately. See Grosser, Germany in Our Time, 130. 10. “Entwurf eines Gesetzes über die Handwerksordnung,“ Bundestag-Drucksache, October 6, 1950, 1428-1/1949, 1. 11. See the OMGUS analysis, “Proposed Federal Law for the Control of Handicraft Industries,” HICOG Frankfurt to Department of State, November 10, 1950, NA, RG 466, 6/28/52/5-6, box 33, folder “Handicraft Law (in Baden) 1949/51.” 12. McCloy to Adenauer (AGSEC (50) 1048), May 20, 1950, in BA, B102/9144-b-2. McCloy was writing to protest a series of laws passed by the Länder undermining the U.S. freedom of trade. 13. See report “Gewerbefreiheit,” prepared by HICOG, Decartelization Branch, July 1951, in BA, B102/9143. These versions contradict, of course, the historical accounts referred to above that interpret Nazism precisely as an outcome of the restrictions on the free market in the form of cartels established from the late nineteenth century. 14. “U.S. High Commissioner’s Position.” 15. On handwerk and democracy in the Revolution of 1848–1849, see Friedrich Lenger, Zwischen Kleinbürgertum und Proletariat: Studien zur Sozialgeschichte der Düsseldorfer Handwerker 1816–1878 (Göttingen, 1986), 150–187. 16. See the discussion of this question of the modern version of handwerk self-identity and its reformulated medieval roots in chapter 5, this volume. 17. ZDH to BMWi, July 26, 1950, in BA, B102/9144-b-2. 18. Pressure to test the law before the Federal Constitutional Court (Bundesverfassungsgericht) was brought to bear on Adenauer by American officials in Germany who wanted to be assured of its constitutionality before it came into force. Scheybani, Handwerk und Kleinhandel, 257–258. See also Ernst Rudolf Huber, Wirtschaftsverfassungsrecht, vol. 2 (Tübingen, 1954).

244 | From Craftsmen to Capitalists 19. Even the Americans were forced to admit this. See McCloy to State Department, December 29, 1950, cable no. CN-9363, NA, RG 466, 6/28/52/1-5, box 33, folder “Handicraft Law (in Baden) 1949/51.” 20. The sole indication of some handwerk support for freedom of trade that I have seen was a comment by the Cologne Chamber president Bernard Günther that American radio “propaganda” in Hesse was starting to have an effect even among masters. Günther attributed this to the bad counter-example set by pedantic and conservative masters who gave the entire Stand a bad name, which, he concluded, was yet another reason to work to isolate the reactionaries. Transcript of the general meeting of HWK-K, December 6, 1952, HStAD, RW 218/41. 21. See public opinion polls taken by U.S. authorities in OMG-Bavaria, NA, RG 260, 7/55/54/2, box 65. 22. The following argument is derived for the most part from the full general meetings of HWK-K, one of the few chambers of this period whose proceedings were transcribed verbatim, offering an unusually detailed view of discussion and debate on these questions. 23. Transcript of the general meeting of HWK-K, February 19, 1949 (second day), 8, HStAD, RW 218/6. 24. HWK-K transcript, February18, 1949, 15, HStAD, RW 218/6. The speaker’s trade was not identified. 25. HWK-K transcript, October 2, 1950, 76, HStAD, RG 218/42. 26. HWK-K transcript, December 6, 1952, 33, 36–37, HStAD, RW 218/41. See also Brodmeier, Die Frau im Handwerk, 74. The marginalization of women in handwerk was especially clear at the very top of its organizational structure, which apart from the guilds representing women’s trades was almost exclusively male. A seamstress was admitted to the executive committee of HWK-K after protesting that it included not one female member, but she was granted no voting rights. HWK-K transcript, February 19, 1949, 20, HStAD, RW 218/6. 27. HWK-K transcript, February 19, 1949, 25–26, HStAD, RW 218/6. 28. HWK-K tanscript, February 21, 1953, 90–92, HStAD, RW 218/26. On the persistence of prejudice against working married women in the early 1950s, see Moeller, Protecting Motherhood, 90–92. 29. HWK-K transcript, March 25, 1950, 39–40, HStAD, RW 218/42. 30. HWK-K transcript, March 25, 1950, 41–42, HStAD, RW 218/42. Emphasis in original. 31. On the nineteenth-century origins of this idea in Europe, its importance as an ideology of justification for the petite bourgeoisie, and the extent to which it reflected the realities of social mobility, see Crossick and Haupt, Petite Bourgeoisie in Europe, chapter 4. 32. HWK-K transcript, March 25, 1950, 41–42, HStAD, RW 218/42. 33. HWK-K transcript, February 19, 1949, 21–22, HStAD, RW 218/6. These same sentiments were echoed in a speech by ZDH president Uhlemeyer to the Deutscher Handwerkstag in Düsseldorf where he spoke out “against outmoded forms of ‘handwerk protectionism’” and said that the primary focus must be on raising its productivity. Report of speech in memo, German Handwerk Institute, Munich, file “Rundschreiben.” 34. For an introduction to the literature on codetermination in industry in the early Federal Republic, see Andrei S. Markovits, The Politics of the West German Trade Unions: Strategies of Class and Interest Representation in Growth and Crises (Cambridge, UK and New York, 1986), 53–60, 76–83. 35. Schulhoff, Die Rede von Boppard. 36. Schulhoff, Die Rede von Boppard, 6. On the respective functions and limitations of authority of Innungen and Kammern under the 1953 Handwerk Law, see Karl Hartmann and Franz Philipp, Handwerksrecht: Handwerksordnung: Gesetz zur Ordnung des Handwerks (Handwerksordnung) vom 17. September 1953 (Darmstadt and Berlin, 1954), 188–218, 226–260. 37. An interesting example of the assumption by a handwerk trade of quasi-state functions and its conflict with the American point of view is the case of the chimney sweeps. Since the promulgation of an order in Prussia in 1849 (later expanded to the entire Reich), chimney sweeps

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38.

39. 40. 41. 42.

43. 44.

45.

46. 47.

48.

functioned not only as private tradesmen, but also as official fire-safety inspectors. In this latter capacity they had the authority, subject to review of the fire and building police, to rule on the safety of the heating systems and equipment they serviced. Like public officials of other types, they were assigned to districts, but this meant that as private handwerker they (along with the few other chimney sweeps assigned to the same area) had an effective monopoly in their trade. The reasoning was that if an open market in chimney sweeps existed, hard-pressed homeowners would tend to choose the cheapest sweep who was also the least particular about enforcing standards that might entail costly repairs. In 1949 the United States attempted to abolish this monopoly in Hesse, which it viewed as a restraint of trade and as an effective discrimination against refugees. German public officials as well as handwerker were united in opposing the American initiative. Having no such principled objection to the mixing of public and private functions, they regarded the system as effective and one that, if abolished, would necessitate an expensive expansion of the government inspectorate. Officials argued that especially in the prevailing conditions of overcrowded housing, the government could not hope to guarantee proper standards of safety and assured the Americans besides that all refugee chimney sweeps had been absorbed into the present system. See Landes-Innungsmeister, Schornsteinfegerhandwerk, Hesse (State Guild Master of Chimney Sweep Handwerk, Hesse) to Military Government Hesse, Trades Division, March 16, 1949 (English translation); and VfW to Bipartite Control Office, Commerce and Industry Group, April 28, 1949; both in BA, Z13/221. On corporations of public law as a legal status, its history and public functions, see Ludwig Fröhler and Peter Oberndorfer, Körperschaften des öffentlichen Rechts und Interessenvertretung (Munich, 1974); Ernst Rudolf Huber, Wirtschaftsverfasungsrecht, vol. 1 (Tübingen, 1953), 104– 114, 182–204. For a review of the history of obligatory guild membership (Zwangs- or Pflichtinnungen), see chapters 1 and 5, this volume. Schulhoff, Die Rede von Boppard, 9. Schulhoff, Die Rede von Boppard, 10. Schulhoff avoided the use of the term Mitbestimmung (co-determination), associated with the labor movement, and used instead Mitbeteiligung (co-participation) or Mitwirkung (co-operation). Schulhoff, Die Rede von Boppard, 12–13. For an example of opposition to journeymen representation originating in the guilds, which was a small minority position that was quickly overruled by the chambers, see minutes of the meeting of the executive committee of the HWK-Düss., July 6, 1949, HWK-Düss., folder “Vorstandssitzung 1949.” For Schild’s version of the confrontation with Robert Ley and the solidarist principles behind the funding of the ZDH, see “Auszug aus der Niederschrift über die Sitzung des Hauptausschusses für Organisation und Recht,” October 13–14, 1949; and “Gutachten über den Neuaufbau der Spitzenvertretung des Handwerks im Bundesgebiet,” 1949; both in HWK-Düss., folder ZDH 0420-0431, file 0420-0. The conflict of interest discussed above of the guilds having journeymen representation yet also being responsible for contract wage negotiations was not the legal problem during the Third Reich that it was to become post-1945; see Chesi, Struktur und Funktionen, 105–110. Schulhoff, Die Rede von Boppard, 10. In 1954, for example, a handwerk committee report could state flatly, “Union tendencies exist nowhere within the young handwerker movement.” See minutes of “Main Committee for the Coordination of Handwerk politics in the Länder,” ZDH, January 27, 1954, HWK-Düss., folder 0460-0462, file 0460-0370. “Stellungnahme des Bayerischen Handwerkstages zum Entwurf eines bayerischen Betriebsrätegesetzes,” July 1, 1950, DHWI, Munich, folder “Rundschreiben: ZDH und Mittelstandsblock.” Also see “Der Handwerksrat tagte,” Handwerkerpost (1:2), May 16, 1950, 11.

246 | From Craftsmen to Capitalists 49. The poor quality of education of many apprentices was the subject of much complaint among handwerk leaders in North Rhine-Westphalia and was a prime motivation in their efforts to reform the state schools as well as their own training system. Besides the Aachen reports cited later in this chapter, see report on the school conference of North Rhine-Westphalia in minutes of the general meeting of the HWK-Düss., January 17, 1950, HWK-Düss., folder “Vollversammlung 1946–1950.” Also see “Tätigkeitsbericht 1949/50 der Handwerkskammer Köln,” 6; HStAD, RW 218/42. For a statistical overview of handwerk training in the 1950s and 1960s, see ZDH, Die Berufsbildung im Handwerk (Bonn, 1969). 50. HWK-Aachen, report of third quarter 1950, October 2, 1950, 4–5, HStAD, D-II-b-2. 51. HWK-Aachen, report of first quarter 1950, April 6, 1950, 4, HStAD, D-II-b-2. 52. HWK-Aachen, report of fourth quarter 1950, January 4, 1951, 4–5, HStAD, D-II-b-2. 53. HWK-Aachen, reeport of 1st Quarter 1951, April 5, 1951, 3–4, HStAD, D-II-b-2. 54. Minutes of the executive committee of HWK-Düss., February 18, 1949, 6, HWK-Düss., folder “Vorstandssitzungen 1949.” The twin goals of the journeyman’s time of training were also made explicit in a speech by Managing Director Cierpinsky—first training in trade and management and second the socialization into organizational life. See minutes of general meeting of HWK-Düss., January 17, 1950, HWK-Düss., folder “Vollversammlung 1949–1950.” 55. Minutes of the executive committee of the RWHB meeting, October 4, 1950, 4, HWK-Düss., loose folder. 56. See Interest Association of Refugee Handwerker in Bavaria (Interessengemeinschaft Heimatvertriebener Handwerker in Bayern) to BMWi, September 30, 1950, in BA, B102/9143. 57. “Generalvertrag und Großer Befähigungsnachweis,” Handwerkerpost (3:6), June 18, 1952, 61. 58. The Kolping Society was founded by Adolf Kolping (1813–1865), a shoemaker journeyman and later Dominican priest, to help Catholic journeymen (and later all young Catholic trainees) in family, professional, and public life. A parallel Association for Protestant Journeymen (Evangelische Gesellenverein), was also begun in the mid-nineteenth century. 59. See exchange of letters between the Association of Kolping Familiies in Hesse (Arbeitsgemeinschaft der Hessischen Kolpingsfamilien) and the Allied High Commission, July 17, 1950, August 10, 1950, and undated response, in BA, B102/9143. 60. McCloy expressed surprise at the position of the refugee organizations, which he attributed to the “fallacious” view “that freedom of trade has worked against [the] expellees.” He regarded their decision as the product of a leadership made up of former (Nazi-era) government officials still accustomed to strict controls and who, “having successfully exploited refugee constituencies to achieve power, are now interested primarily in ‘getting along’ rather than taking risks incidental to unpopular actions on behalf of refugees.” McCloy to State Department, December 29, 1950, cable no. CN-9363, NA, RG 466, 6/28/52/1-5, box 33, folder “Handicraft Law (in Baden) 1949/51.” 61. See Interest Association of Refugee Handwerker in Bavaria to BMWi, September 30, 1950, in BA, B102/9143. 62. See “Heimatvertriebenes Handwerk und Gewerbefreiheit,” 9; “Vertriebene und die Handwerksordnung,” 5; “Neue Handwerksordnung in Kraft” in Vertriebenen Anzieger 5 Jhrg. no. 29 (October 10, 1953), 5. 63. See Interest Association of Refugee Handwerker in Bavaria; “Befähigungsnachweis im Handwerk,” Main Committee for Refugees and Expellees (Hauptausschuß der Flüchtlinge und Ausgewiesenen) in Bayern, October 30, 1950; and “Entschließung no. 3,” Landesvertriebenenbeirat, November 16, 1950; all in BA, B102/9143. 64. A good part of the support from industry was grounded in the parallel structure of both their apprentice training systems and their interest institutions, and the benefits of a regulated apprentice system and one organized by the private organs of self-administration (i.e., the chambers of handwerk and of industry and trade) were recognized and supported by both industry and handwerk as a matter of fundamental principle. See report of HWK-Münster to ZDH, May 7, 1951, HStAD, RW 235/42.

The Handwerk Act of 1953 | 247 65. Federal Association of German Industry (Bundesverband der Deutschen Industrie; BDI) support for a free market economy did not extend to support for an anticartel law, however, especially among those of the older generation. For Erhard’s difficulties in pushing through an anticartel law, which he did not accomplish until 1957, see Berghahn, Americanisation of West German Industry, 155–181. 66. “Gewerbefreiheit in der Industrie,” Frankfurter Neue Presse, August 21, 1950. 67. “Einzelhandel für vorbeugende Ordnung,” Frankfurter Neue Presse, August 21, 1950. 68. Protokoll der Verhandlungen des Parteitages der SPD 1946 in Hannover (Hamburg, 1947, 69. 69. Minutes of the SPD Working Group of Independent Producers (Arbeitsgemeinschaft der selbständig Schaffenden), SPD-Bezirk Niederrhein, January 19, 1950, Archive of Social Democracy (Archiv der Sozialen Demokratie; AdsD), SPD-UB-Düsseldorf-536. See also Kurt Klotzbach, Der Weg zur Staatspartei: Programmatik, praktische Politik und Organisation der deutschen Sozialdemokratie 1945 bis 1965 (Bonn, 1982), 138–139. 70. Jahrbuch der SPD, 1950/51 (Bonn, 1951), 34–35. 71. DGB to BMWi, August 1, 1950, in BA, B102/9143. 72. See report of HWK-Münster to ZDH, May 7, 1951; HStAD, RW 235/42. 73. “Generalvertrag und Großer Befähigungsnachweis,” 61. The certificate of competency and corporate law status of the chambers also received strong support from small business groups elsewhere in Europe. The International Association of Independent Enterprises, Trades and Crafts (Union Internationale de l’Artisanat et des Petites et Moyennes Entreprises Industrielles et Commerciales; IAIETC), which represented small entrepreneurs in thirteen European nations, after meeting in early May 1949 wrote to the U.S. military government strongly condemning the introduction of freedom of trade in its zone in Germany. While none of the represented nations except Luxembourg had such a developed system of artisanal corporatism, they nonetheless feared that the American measures could have undesirable effects in other lands. While averring, “Without doubt absolute freedom of commerce and industry is a beautiful thing,” IAIETC called the American application of the principle to handwerk a “brutal suppression” and “a regrettable return to economic anarchy,” which posed a serious threat to artisanal productivity and skills sorely needed in the rebuilding of Europe. Statement of the IAIETC, May 20, 1949, in BA, B102/9142. 74. “Handwerksordnung wird Gesetz,” DUD (7:59), March 25, 1953, 3–5. 75. Minutes of executive committee of the RWHB, January 25, 1951, HWK-Düss., loose folder. 76. Chesi, Struktur und Funktionen, 188–195. 77. ZDH memo 12/53, March 28, 1953; DHWI, folder: “Z.D.H. 1949, Jan. 1953–Dez. 1953, Rundschreiben.” 78. For text of the Bundestag debate and committee report, see Deliberations of the German Bundestag (Verhandlungen des deutschen Bundestags; VDBT), 1 Wahlperiode 1949, Stenographische Bericht, 258 Sitzung, vol. 15, 12531–12558 and 12563–12572. The Bundesrat unanimously confirmed the law on April 24, 1953. 79. Adenauer to Dulles, August 21, 1953 (English translation), NA, RG 266, 6/28/52/5-6, box 7, folder “Freedom of Trade 1953.”

Conclusion

REVOLUTION IN HANDWERK?

 I

t has been the argument of this study that the economic-social stabilization and political integration of the handwerk component of the (West) German Mittelstand after World War II had its roots in the Third Reich. The twin threats that had driven handwerk toward Hitler in the first place—big capitalism and the socialism of the organized working class, as well as the anxiety that without protection their Stand would eventually become superfluous—were by and large eliminated during the twelve years of Nazi rule. Thus this important social class, whose links to a still recent precapitalist past epitomized the contradictions and unevenness of Germany’s path to industrialization and whose alienation from the political order of Weimar was typical of the instability of that system, became one of the key pillars of the Federal Republic.1 This transformation, which with its profound implications for Germany’s modernization must be termed revolutionary, was accomplished in two general ways. The first was structural and economic. Under the pressure of war, and overseen and coordinated by the Nazi state, the position of handwerk in the German economy, in particular its relation to industry, was transformed. In general, it was steered away from direct competition with industry in sectors where it could only lose. In certain trades it moved away from production altogether and concentrated on the installation, maintenance, or repair of industrial products. In others it focused on producing specialized parts for industry or on taking over certain stages of the manufacturing process on a subcontractual basis. While many of these changes were also occurring as part of the long-term process of industrialization, during the Third Reich they were focused and accelerated under the self-conscious direction of the Nazi state. Moreover, even accounting for Notes for this section begin on page 251.

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some conflict of purpose between technocrats and pockets of reactionary Party protectionism, these changes took place under well-thought-out principles of rationalization and efficiency, together with a clear recognition of the economic advantages offered by the handwerk sector. The Nazi outlook with regard to handwerk was thoroughly modern. Inefficient shops were closed with the same callousness as the market itself, while the others, with their huge reservoirs of skill and the incentive arising from private ownership, were coordinated with industry. The emphasis on modernization and rationalization also encouraged or compelled many tradition-bound masters to adopt new techniques of production. But perhaps even more profoundly, Nazi policy focused not just on production but on modern managerial practices as well. That bookkeeping was made a compulsory part of the classroom curriculum in 1938 is an indication of the new state-directed focus on adaptation to the capitalist marketplace. In this way old-world craftsmen were transformed into modern capitalists. The second aspect of this transformation was that it took place in the context of corporate institutions whose authority had been granted by the Nazis. The legal status of corporation of public law of the chambers and the authority that this conferred, most importantly to oversee the apprentice system and issue the certificate of competency, has had an importance that can scarcely be overestimated. Originally demanded by anxious masters as a mechanism of protection and exclusionism, and granted as part of the coordination of all aspects of public life under the Third Reich, it became in the hands of Nazi technocrats and progressives within handwerk itself an instrument of modernization.2 These corporate institutions, both during the Third Reich and after the war, acted to integrate handwerk in two ways. First, they functioned in a quasimanagerial capacity to give small shops the same advantages of economies of scale enjoyed by larger firms. They organized work, supply, and marketing cooperatives; founded research institutes in production and management; encouraged exports; and established consultation centers to disseminate the latest findings in rationalization and marketing techniques. This enabled shops to find their market niches and compete successfully. Second, these corporate bodies supplied a coherent Stand identity to handwerker, tying them to a proud and ancient tradition and providing a worldview that emphasized their own enduring moral uniqueness, precisely at the time when handwerk was being transformed into a modern economic sector. The institutional legacy left by Nazism enabled a progressive leadership to continue this process of modernization and integration into the postwar era. In the face of the American challenge to their corporate authority on the basis of free trade principles, officials worked to marginalize the still important conservative elements within their Stand at the same time that they continued to work for its modernization. In addition, ever mindful of the disastrous consequences of the Weimar system of narrow interest and splinter parties and handwerk’s isolation therefrom, the leadership worked to establish a strong integrated presence for itself within the mainstream parties and the institutions of government and to

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build political alliances with other social groups. Basing their strategy on a worldview of Christian socialism and neoliberalism, they sought integration into a system of political pluralism and “social partnership.” As Simon Reich has pointed out, questions of continuity and change from the Third Reich to the Federal Republic have been by and large neglected in postwar historiography. Historians have tended either to regard 1945 as a complete break (Stunde Null ) or to reach back to the pre-fascist era for the origins of the postwar economy, while others have seen fascism as the culmination of a process of modernization.3 Because the effects of twelve years of brutal dictatorship and a catastrophic war were so destructive and Nazi rhetoric so nihilistic, the effects of Nazi policy on future stabilization has been by and large neglected, especially on those groups whose antimodern outlook helped originally bring Hitler to power. Similarly, while there exists a large literature on the corporatist character of postwar European institutions, the Nazi origins of some of them and their function in postwar stability has been overlooked. It is true that ultimately the success of democracy in West Germany depended on the success of Erhard’s economic policies. In Charles Maier’s words in reference to the stability of the European working class, after World War II the bourgeoisie delivered “the goods.”4 Indeed Erhard’s slogan, “Prosperity for All,” meant precisely that the social antagonisms of the past were to be subsumed, and made finally irrelevant, by a program of economic expansion and a policy of inclusion of all social groups by means of growth and the social net.5 Handwerker have certainly shared in the postwar boom, even to the extent that their incomes have risen proportionally faster than those of the working class.6 However, given Germany’s history of class conflict and the persistence of profession as a major component of individual self-identity, prosperity had to have more than a temporary, palliative effect, as had been the case, for example, between 1924 and 1928. In order to develop democratic roots and to be truly stable, postwar prosperity had to take place within an institutional context of inclusion. The number of losers had to be minimized and marginalized, and formerly disaffected or isolated groups had to be integrated into political and economic life. Other problematic classes in German history had been more definitely eliminated from the political stage: the Junkers by the purges following the July 20, 1944, attempt on Hitler’s life and then by the Soviet expropriations; and the officer corps by the temporary abolition of the armed forces. Handwerk along with other Mittelstand groups continued to play an important role in economic and social life, and their successful integration into the new republic consequently required not just economic prosperity but also a context of institutional inclusion.7 The Nazi legacy of corporatism8—corporatism with the goal of modernization—was what provided this for handwerk. To a certain extent the success of this process can be measured by a generalized depoliticization of the class conflicts that made handwerk and other Mittelstand groups so unstable in the 1920s. Class lines have become blurred to the extent that Ralf Dahrendorf could write in the mid-1960s that “in contemporary Ger-

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man society, there are no social strata whose boundaries are so clearly defined that any observer can identify them.”9 A culture of consumerism has successfully displaced the consciousness of social antagonism. This is perhaps best illustrated by the changing meaning of the word Mittelstand in contemporary German usage. The word has lost much of the connotations of “estate” (Stand) it once had, and now evokes more the idea of middle than of anything else.10 The term Mittelstand industry, for example, today means simply middle-sized enterprises, with no implications either of mode of production or of social relations. The postwar tendency has been to use instead the more class-neutral Mittelschicht (middle level) to describe all social groups falling in the middle income range. The word Mittelstand has come to denote no longer a defined social group, but rather a set of shared values of thrift and hard work that epitomize and bind together West Germany’s achievement-oriented society (Leistungsgesellschaft).11

Notes 1. While the firm commitment of the leadership to the mainstream parties has been dealt with at length in chapters 9, 10, and 11, the ability of handwerk voters to resist postwar reactionary appeals may be illustrated by their lack of interest in the Loritz Party (Loritz-Partei), a rightist splinter party whose popularity peaked in 1946. See Hans Woller, Die Loritz-Partei: Geschichte, Struktur und Politik der Wirtschaftlichen Aufbau-Vereinigung (WAV) 1945–1955 (Stuttgart, 1980). 2. This apparently paradoxical mixture of technological modernization and social reactionary outlook has been explored in the case of German engineers by Jeffrey Herf, Reactionary Modernism: Technology, Culture, and Politics in Weimar and the Third Reich (Cambridge and New York, 1984). 3. Simon Reich, The Fruits of Fascism: Postwar Prosperity in Historical Perspective (Ithaca, N.Y.; London, 1990), 5. 4. Charles Maier, “The Two Postwar Eras and the Conditions for Stability in Twentieth-Century Western Europe,” in In Search of Stability: Explorations in Historical Political Economy, by Charles Maier (Cambridge, 1987). 5. Ludwig Erhard, Wohlstand für Alle (Düsseldorf, 1957). 6. In 1950 the average income of all self-employed persons was 71 percent higher than that of the average wage or salaried employee. By 1970 the differential had increased to 116 percent, and in 1978 it was 266 percent. See Angi Rutter, “Élites, Estate and Strata: Class in West Germany Since 1945,” in Class in the Twentieth Century, ed. Arthur Marwick (Brighton, Sussex, 1986), 150. 7. The continuing importance of such institutional controls is indicated by surveys in West Germany that still show a considerable “lack of sympathy” for big capitalism despite the gains in integration made in the postwar period. See Peter Schöber, Die Wirtschaftsmentalität der Westdeutschen Handwerker (Cologne and Opladen: 1968), 192. 8. Philippe Schmitter offers the following definition: “Corporatism can be defined as a system of interest representation in which the constituent units are organized into a limited number of singular, compulsory, noncompetitive, hierarchically ordered and functionally differentiated categories, recognized or licensed (if not created) by the state and granted a deliberate represen-

252 | From Craftsmen to Capitalists tational monopoly within their respective categories in exchange for observing certain controls on their selection of leaders and articulation of demands and supports.” Schmitter, “Still the Century of Corporatism?,” Review of Politics 36 (January 1974): 85–131 (here 93–94). This certainly accurately describes handwerk institutions and their functions. For a historical view of corporatism in Germany, see Abelshauser, “The First Post-Liberal Nation,” 285–318. 9. Ralf Dahrendorf, Society and Democracy in Germany (Garden City, N.Y., 1967), 89. The BMWi report of March 18, 1952, “Der Mittelstand in der deutschen Wirtschaft,” reflected long-term changes by observing that, unlike the World War I period, the Mittelstand was no longer a unified political-social group; in BA, B102/14652. 10. Actually, entomologically the word Mittelstand originally meant Mittlere Zustand or middle condition and only later took on connotations of estate. For the changing meaning of this term, see Werner Conze, “Mittelstand,” in Conze, Gesellschaft-Staat-Nation: Gesammelte Aufsätze (Stuttgart: 1992), 106–154. 11. See Rutter, “Élites, Estate, and Strata,” 143. See also items in the folder BA, B102/14924 “Abgrenzungsfragen des Mittelstandes, Konkretisierung des Mittelstandesbegriffs 1958–1961.”

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INDEX

A

Aachen Chamber, 239 achievement-oriented society, 251 adaptation, areas of, 209, 215 Adenauer, Konrad, 88, 144, 159, 160, 161, 182, 189, 195, 196, 212 Agartz, Viktor, 110, 144, 241 Ahlener Program, 188 airplane production, 67 Allen, William S., 11 Allied Control Council (ACC), 86, 90, 228, 229 Allied High Commission, 160, 161, 240 Allies, 160, 237 denazification policies, 108 disagreements among (Handwerk Act of 1953), 227–31 policing powers, 112 American zone, 123–36, 162–66, 179 development of the US position, 126–29 freedom of trade, 129–36, 207 Handwerk Act of 1953, 227 Office of Military Government, US (OMGUS), 86, 126–135, 162, 227, 230 opposition to handwerk systems, 123, 135 protectionism in, 124–26 anti-capitalism, 72 antisemitism, 8 apprentices, training of, 5, 16, 45, 117, 233, 241 Arbeitseinsatzgesellschaften (work-task cooperatives), 51 Arbeitsgemeinschaften (work cooperatives), 39, 51 arms contracts, 67 Arms Supply Office, 68

Arnhold, Carl (Karl), 44 artisan socialism, 18 Association of Independent Entrepreneurs (ASU), 192, 241 associations, regional (Kreishandwerkerschaften), 114 Austria, 45 authoritarianism, 8

B

Baden law, 228, 229, 230 Bad Godesberg conference of 1959, 241 bakers, 34, 36 baking, 4 Balzar, Detlef, 97 bankruptcies, 11 barbers, 4 barrel making, 215 Basic Law (1949), 159 Bavaria (U.S. zone), 98 Bavarian guild association, 168 Bavarian licensing law (Law no. 42), 124, 125, 126 bedroom communities, 37 Behemoth, 130 Belgium, 46, 159 Berlin, Germany, 34, 146 City President of Berlin, 39 Truman’s tour of, 83 Bizonal Economic Administration (VfW), 112, 149 Bizonal Economic Council, 134, 144, 182, 220 black markets, 112 blitzkrieg thesis, 34 Bohemia, 53 bomb damage, repairing, 47 bookkeeping, 239 Bormann, Martin, 31, 32

Index | 277 Boyer, Christoph, 96, 97 Braunschweig Chamber, 182 British zones, 163, 166, 179, 227, 237 continuity, 115–19 corporatism in, 107–09 deconcentration and decartelization, 108–09 guild memberships, 111 Handwerk Ordinance (1946), 109–12, 219 rationalization as function of handwerk, 112–15 brotherhoods, 117 Brüning government (1930–1932), 11 Bücher, Karl, 4 budgets, 33 Bundesverfassungsgericht (Constitutional Court), 232 bunglers, 171 Business Party (Wirtschaftspartei), 11 butchers, 4, 34, 52

C

capitalism, 4, 6, 11, 14, 32, 55, 66, 72, 75, 77, 84, 118, 119, 136, 141, 144, 147, 148, 150, 152, 186, 187, 188, 189, 192, 193, 196, 216, 219, 234. 241, 248 carpenters, 34 cartels, 5, 39, 108, 130, 131, 135, 161, 193, 194, 196, 207, 238. See also decartelization Catholic Center Party, 5, 10, 181, 183, 185 Catholic Church, 93 Social Catholicism, 186, 190 social thinking of, 187 CDU-Handwerk Advisory Council (CDUHandwerkerbeirat), 184, 185 certificate of competency (Große Befähigungsnachweis), 16, 17, 47, 97, 98, 99, 108, 110–12, 116, 124, 125, 126, 128, 129, 131, 134, 143, 148, 150, 151, 152, 161, 162, 163, 166, 167, 169, 179– 75, 180, 184, 216, 226, 227, 229–33, 231, 232, 233, 240, 241, 249 chambers (Kammern), 5, 7, 15, 16, 19, 43, 46, 67, 69, 88, 89, 90, 91, 92, 93, 95, 96, 97, 98, 99, 109, 110, 112, 113, 114, 115, 118, 125, 126, 127, 128, 129, 131, 134, 135, 142, 145, 146, 148, 150, 162, 166, 167, 170, 173, 174, 199, 216, 218, 219, 224, 226, 227, 229, 232, 236, 237, 238, 239, 242 Aachen Chamber, 239 Braunschweig Chamber, 182

Cologne Chamber, 94, 145, 146, 183, 217, 233, 242 Darmstadt Chamber, 94 Düsseldorf Chamber, 77, 91, 94, 97, 145, 220, 236 on freedom of trade, 173 Handwerk Ordinance (1946), 113 Koblenz Chamber, 93 Passau Chamber, 165, 168, 174 status, stripping of, 127 Stuttgart Chamber, 173 Unterfranken Chamber, 163 Wiesbaden Chamber, 217 Würzburg Chamber, 166, 167 Chesi, Valentin, 111, 115 Childers, Thomas, 12, 13 Christian Democratic Union (CDU), 134, 144, 148, 149, 159, 207, 230 handwerk and, 181–85 ideological affinity of handwerk and, 185–192 liberalism of, 192–99 Christian principles, 181 Christian socialism, 192, 198, 199, 250 Christian Social Union (CSU), 134, 144, 148, 149, 159, 207, 230 handwerk and, 181–85 ideological affinity of handwerk and, 185–92 liberalism of, 192–99 Churchill, Winston, 85 City President of Berlin, 39 Civil Affairs Handbook, 130 Clay, General Lucius D., 86, 127, 135, 152 codetermination, 110, 128, 144, 185 journeymen and, 236–39 suprafirm, 236 Cold War, 87, 94, 131, 159, 161 Cologne Chamber, 94, 145, 146, 183, 217, 233, 242 Cologne Program of September 1945, 188 commercialization, 11 commercial regulations, Nazism, 107 Commonwealth system, 87 communism, 170, 185, 199, 232 Communists, 10 competition, 135, 136, 145, 149, 150, 151, 152, 163, 168, 170, 171, 172, 180, 181, 186, 187, 188, 193, 194, 196, 197, 198, 199, 207, 211, 217, 227, 232. 236, 240, 248 productive, 194 competitiveness, 48

278 | Index Confederation of German Trade Unions (DGB), 241 conservatism, marginization of, 232–236 conservatives, appeal to nostalgia, 6 Constitutional Court (Bundesverfassungsgericht), 232 construction trades, 4, 17, 33, 38, 39, 40, 44, 49, 51, 55, 74, 85, 113, 209, 215, 220, 235 continuity, 115–19 contracts arms, 67 labor, 214 model, 65, 66 cooperatives, 7, 9, 12, 15, 38, 39, 40, 47, 48, 50, 51, 52, 70, 71, 74, 113, 114, 148, 199, 220, 221, 249 credit, 220 marketing, 113, 220 productive, 220 purchasing, 113, 220 workshops, 38 coordination of all institutions (Gleichschaltung), 15–17, 41, 75 corporate authority, dismantling of, 141, 228 corporate powers, restoration of, 227 corporation status, stripping of, 127 corporatism in British zones, 107–09 corporatist economic councils, 191 courts of honor (Ehrengerichte), 111 credit, 7, 9, 10, 17, 43, 66, 92, 98, 99, 127, 150, 164, 216, 220 cooperatives, 220 masters protest of, 10 currency, 43, 107, 112, 126, 133, 142, 144, 145, 149, 152, 163, 164, 208, 240 Deutsche Mark, 159 Germany (1945), 83 reform, 144–48 Czechoslovakia, 95

D

Dahrendorf, Ralf, 250 Darmstadt Chamber, 94 decartelization, 108–09, 130, 131 deconcentration, 108–09 Deconcentration and Decartelization Department (Decartelization Branch), 126, 131, 162 deindustrialization of Germany, 85 democracy, 9, 13, 84, 85, 89, 95, 109, 116, 117, 118, 119, 129, 131, 132, 135, 141,

161, 184, 185, 186, 193, 196, 228, 231, 232, 250 disillusionment with, 9 denazification, 84, 108 in handwerk, 92–95 depersonalization (Vermassung), 189, 191 Depression, 10, 11, 13, 42, 212 in Schleswig-Holstein, 13 Deutsche Arbeitsfront (DAF), 15, 18, 19, 36, 37, 53, 162 Deutsche Mark (DM), 133, 159. See also currency Deutsches Handwerksinstitut (German Handwerk Institute), 146, 217, 233 Deutsches Institut für technische Arbeitsschulung (German Institute for Technical Education, DINTA), 44 Deutschnationale Volkspartei (German Nationalist People’s Party, DNVP), 9, 10 Dienstpflicht (labor service), 34, 73 Dominican Walberberg Cloister, 187 double earners, 234 dressmakers, 167, 169, 234 dry cleaning trades, 48 Dulles, John Foster, 242 Düsseldorf Chamber, 77, 91, 94, 97, 145, 220, 236 Düsseldorf City Council (Stadtrat), 36 Düsseldorf Program, 189 dyeing trades, 48

E

economic activities, controls on, 125 Economic and Industrial Planning Staff (EIPS), 87 economic controls, end of, 144–48 economic liberalism, 3 economies, war, 7 “The Effects of the Shortage of Handwerker,” 35 Ehrengerichte (courts of honor), 111 elections, 9, 12, 88, 160, 182, 183 of 1920, 8 Handwerk Ordinance (1946), 111 North Rhine-Westphalia Landtag (1947), 182 electronics, 210 emergency economic controls, 126 Engels, Friedrich, 4 engraving, 211 Enlightenment, 186, 189 Erbgesundheit (genetic health), 54

Index | 279 Erhard, Ludwig, 124, 133, 135, 144, 148, 172, 180, 189, 192, 195, 196, 198, 241, 250 neoliberalism, 149–53 estate of handwerk, 117 European Coal and Steel Community (ECSC), 109, 159 examination system, role of, 41–46 exclusivism, 234, 235 expellees, 95 Extended workbench, 65

F

factories, 9, 34, 36, 46, 64, 65, 70, 74, 164, 191, 195 bombing of, 74 impact of technology, 4 introduction of masters to, 70 specialized production, 68 fascism, 13, 130, 159, 170, 195, 218, 250 Federal Handwerk Ordinance of 1953, 219 federal handwerk peak organization (ZDH), 236, 237, 239, 242 Federal Republic of Germany, 152, 159, 160, 161, 173, 248 alliance of nations, incorporating into, 160 economic controls in, 123 freedom of trade, 228 handwerk and the CDU/CSU, 181–85 integration of handwerk, 14, 179–99, 207 overturning freedom of trade, 230 passage of Handwerk Act of 1953, 239 powers, restricting of, 160 restricting the sovereignty of, 160 Federation of German Employers’ Associations (BdA), 192, 241 female labor, handwerk, 64 Fighting League of the Commercial Middle Class (Kampfbund des Gewerblichen Mittelstands), 15 First Decree for the Provisional Reconstruction of German Handwerk of June 15, 1934, 16 Four Year Plan, 17, 32, 36, 43, 73 France, 67, 130, 159, 160 Frankfurt, Germany, 53, 89, 130, 152, 161, 182, 189, 195, 231 Frankfurt Economic Council, 188 Frankfurter Hefte, 161 Frankfurt Parliament (1848), 231

freedom of trade (Gewerbefreiheit), 3, 7, 19, 31, 44, 87, 125, 132, 134, 141, 143, 146, 148, 152, 153, 161, 162, 163, 164, 166, 167, 168, 169, 171, 172, 173, 174, 179, 180, 207, 217, 218, 227, 228, 229, 230, 231, 232, 236, 240, 241 American zone, 129–36, 207 effect of on handwerk, 159–75, 179 effect of unrestrained American trade, 161–169 of experts, 231 Federal Republic of Germany, 228 overturning, 230 reaction of handwerk organizations to, 170–75 women and, 169–70 free market liberalism, 118, 144 Freiburg School, 196 French Revolution, 187 French zones, 109, 179, 227 Fromm, Erich, 12 full employment (1936–1937), 33

G

galvinizing, 211 Gau Economic Chambers, 67, 77, 93 Geiger, Theodor, 12 gem-cutting, 211 General Prussian Commercial Ordinance of 1845, 118 genetic health (Erbgesundheit), 54 German Democratic Party (DDP), 8, 10 German Democratic Republic, 159, 160 German Economic Advisory Board (ZAW), 109–112, 116 German Handwerk Institute (Deutsches Handwerksinstitut), 217, 233 German Institute for Technical Education (Deutsches Institut für technische Arbeitsschulung, DINTA), 44 German Labor Front (DAF), 15, 18, 19, 36, 37 German Nationalist People’s Party (Deutschnationale Volkspartei; DNVP), 9, 10 German People’s Party (DVP), 8, 10 Germany, 3, 4, 5, 13, 17, 36, 40, 46, 52, 54, 77, 83, 84, 85, 86, 87, 88, 89, 90, 94, 95, 105, 110, 118, 119, 123, 129, 130, 131, 132, 144, 149, 150, 151, 152, 159, 160, 161, 162, 172, 180, 181, 186, 191, 192, 193, 194, 195, 196, 197, 208, 209, 211,

280 | Index 212, 213, 214, 217, 220, 229, 230, 231, 232, 242, 248, 250, 251 Allied occupation of, 84–87 deindustrialization of, 85 devastation of (in 1945), 83 Golden Age of, 230 steel production, 87 Gewerbeförderungsstellen (local business support bureaus), 219 Gewerbefreiheit (freedom of trade), 3, 7, 19, 31, 44, 87, 123–136, 125, 132, 134, 141, 143, 146, 148, 152, 153, 161, 162, 163, 164, 166, 167, 168, 169, 171, 172, 173, 174, 179, 180, 207, 217, 218, 227, 228, 229, 230, 231, 232, 236, 240, 241 American zone, 129–36, 207 effect of on handwerk, 159–75, 179 effect of unrestrained American trade on, 161–69 Federal Republic of Germany, 228 overturning, 230 reaction of handwerk organizations to, 170–75 women and, 169–70 Gimbel, John, 89 Gleichschaltung (coordination of all institutions), 15–17, 41, 75 Göring, Hermann, 32 government policies, shift in, 37–41 government-sponsored firms, 171 Great Britain, 159, 160 British zones. See British zones planning for occupation, 84–87 gross domestic product (GDP), 209 Große Befähigungsnachweis (certificate of competency), 16, 17, 47, 97, 98, 99, 108, 110–12, 116, 124, 125, 126, 128, 129, 131, 134, 143, 148, 150, 151, 152, 161, 162, 163, 166, 167, 169, 179–75, 180, 184, 216, 226, 227, 229–33, 231, 232, 233, 240, 241, 249 gross national product (GNP), 208 Guelph Party, 11 guild officials (Obermeister), 168 guilds, 3, 5, 7, 15, 16, 17, 19, 40, 53, 68, 71, 72, 88, 89, 90, 91, 93, 96, 111, 112, 113, 114, 115, 116, 117, 118, 125, 127, 128, 129, 132, 173, 180, 199, 218, 219, 227, 230, 231, 233, 235, 236, 237, 238, 242 Bavarian guild association, 168 effect of Gewerbefreiheit on, 180 formation of, 117

functions of, 116 Handwerk Ordinance (1946), 113 legal status of, 5 local, 114 memberships, 7, 16, 111, 128, 242 mill builders, 53 Günther, Bernard, 94, 145, 183, 235, 236, 242

H

hairdressers, 4, 234 Handelsgesellschaften (trading enterprises), 216 handwerk, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 31–56, 63–77, 83–92, 94–99, 107–19, 123–36, 141–53, 161–74, 179–99, 207–21, 226–42 Allied occupation Germany, 84–87 American zone opposition to, 123, 135 betrayal of by Nazis, 76 and the CDU/CSU, 181–85 changes in structure of, 207–21 changing perceptions in, 217–21 Christian ideological affinity of, 185–92 closings, 36 coordination of industry and, 63–77 currency reform, 144–48 decline in, 213 denazification in, 92–95 early neglect of, 33–37 economic controls, end of, 144–48 economic functions of organizations, 90–92 economic-social contribution of, 170 economic value created by, 214 effect of Gewerbefreiheit on, 159–75, 180 at end of Third Reich, 83, 84 Erhard, Ludwig, 149–53 estate of, 117 female labor, 64 under Hitler (1933–1939), 14–20 independence of, 65 integration of, 14, 179–99 in the Kaiserreich, 3–7 legal consolidation of, 107–19 liberal advocacy in marketplaces, 142–44 marginization of conservatism, 232–36 modernization of, 141–53 and Nazism, 12–14 path to Nazism, 7–12 performance comparisons, 214 promise of the east, 53–55 rationalization as function of, 112–15

Index | 281 rationalization initiatives from, 69–71 reestablishment of institutions, 87–90 resistance, 227–31 resistance to rationalization, 71–73 responsibilities of organizations, 46–49 revival of in the west, 83–99 revolution in, 248–51 role of examination system, 41–46 shift in government policies, 37–41 shops, 190 solidarity, 174 specialized production, 67 structural change, 49–53 structural position in postwar economy, 208–16 structure of, 5 in the war economy (1939–1941), 31–55 weakened by American policies, 180 Handwerk Act of 1953, 226–42 disagreements among Allies, 227–31 handwerk resistance, 227–31 journeymen and codetermination, 236–39 marginization of conservatism, 232–36 passage of, 239–42 Handwerker Innungen, 5, 84, 236 Handwerker Zeitung (Handwerker Times), 115 Handwerk Ordinance (1946), 109–12, 113, 114, 115, 123, 125, 219 Handwerk Production Headquarters, 73 Handwerk Rolle, 127 Hanoverian dynasty, 11 hardships, Handwerk Act of 1953, 235 healthy social/political integration of communities, 37 Herf, Jeffery, 95 Hermann Göring Werke, 36 Herr im Haus world view, 238 hierarchies, 117 Himmler, Heinrich, 54, 55 Hitler, Adolf, 31, 34, 47, 85, 217, 230, 248 appointment of Albert Speer, 63 handwerk under (1933–1939), 14–20 Huguenots, 230 Hungary, 95

I

incompetents, 171 independence, 38, 95–99 of handwerk, 65 industrialization, 4, 11, 63, 171, 208, 216

industrial self-responsibility, 67 industry, relationship with handwerk, 211 inflation, 9 Institute for Social Research (Institut für Sozialforschung), 130 institutions, 3, 5, 7, 13, 19, 42, 70, 75, 76, 84, 86, 88, 89, 90, 91, 92, 93, 96, 98, 107, 108, 109, 110, 111, 112, 113, 116, 117, 119, 125, 132, 136, 147, 148, 151, 152, 161, 169 174, 174, 180, 181, 187, 188, 207, 249, 250 coordination of, 110, 111 need for plurality of, 117 integration, strategy of, 227 isolationism, United States of America and, 231

J

jewelry, 211 Jewish property owners, 15 Joint Chiefs of Staff (JCS) Directive 1067, 85, 86, 93 Jones, Larry E., 8 journeymen, 5, 6, 15, 21, 33, 36, 42, 43, 54, 94, 110, 117, 118, 127, 128, 134, 166, 168, 169, 172, 189, 192, 216, 219, 234, 235, 236, 238, 239, 240, 241 and codetermination, 236–39 Handwerk Act of 1953, 232

K

Kaiserreich, handwerk in the, 3–7 Kammern (chambers), 5, 7, 15, 16, 19, 43, 46, 67, 69, 84, 88, 89, 90, 91, 92, 93, 95, 96, 97, 98, 99, 109, 110, 112, 113, 114, 115, 118, 125, 126, 127, 128, 129, 131, 134, 135, 142, 145, 146, 148, 150, 162, 166, 167, 170, 173, 174, 199, 216, 218, 219, 224, 226, 227, 229, 232, 236, 237, 238, 239, 242 Aachen Chamber, 239 Braunschweig Chamber, 182 Cologne Chamber, 94, 145, 146, 183, 217, 233, 242 Darmstadt Chamber, 94 Düsseldorf Chamber, 77, 91, 94, 97, 145, 220, 236 on freedom of trade, 173 Handwerk Ordinance (1946), 113 Koblenz Chamber, 93 Passau Chamber, 165, 168, 174 status, stripping of, 127

282 | Index Stuttgart Chamber, 173 Unterfranken Chamber, 163 Wiesbaden Chamber, 217 Würzburg Chamber, 166, 167 Kampfbund des Gewerblichen Mittelstands (Fighting League of the Commercial Middle Class), 15 Keynes, John Maynard, 86–87 kleine Befäigungsnachweis (minor certificate of competency), 5, 118 Koblenz Chamber, 93 Kolping Society, 240 Kommanditgesellschaften (limited partnerships), 216 Korean War, 152 Kreishandwerkerschaften (regional associations), 114

L

labor, 8, 12, 18, 33, 34, 36, 37, 38, 39, 44, 47, 48, 49, 64, 66, 67, 68, 72, 73, 74, 75, 76, 84, 88, 90, 132, 147, 151, 152, 167, 174, 181, 183, 185, 187, 188, 190, 191, 192, 194, 196, 197, 199, 209, 211, 213, 214, 217, 231, 234, 235, 236, 238, 241 allocation, 90 contracts, 214 exploitation of, 234 unskilled, 44 Labor Bureau, 34 Labor Ministry, 34, 50 labor service (Dienstpflicht), 34, 73 Labour government, 130 Land district, 192 Länder governments, 127, 128, 129, 132, 133, 134, 161, 165, 167 Land level, 182 laws, 5, 16, 17, 41, 84, 111, 118, 119, 124, 133, 135, 162, 187, 193, 219, 230, 243 Baden, 228, 229, 230 Bavarian licensing law (Law no. 42), 124, 125, 126 Handwerk Act of 1953, 226–242 Nazism, 124, 237 Prohibition of Excessive Concentration of German Economic Power law, 131 leadership, 43 postwar, 113 principles, 110 role of, 141–53 selection of, 16 leather, 34

legal consolidation of handwerk, 107–19 continuity, 115–119 deconcentration and decartelization, 108–109 Handwerk Ordinance (1946), 109–112 rationalization as function of handwerk institutions, 112–15 legislation. See also laws freedom of trade (Gewerbefreiheit), 3 kleine Befäigungsnachweis (minor certificate of competency), 5 legal status of guilds, 5 Leo XIII, 187 Ley, Robert, 18, 19, 238 liberalism, 171 of CDU/CSU, 192–99 free market, 118, 144 Manchester, 197 Liberal Party, 134 liberals advocacy in marketplaces, 142–44 handwerks as allies of, 6 interventionism, 193 in Weimar, 7 Lieferungsgenossenschaften (supply cooperatives), 38 limited partnerships (Kommanditgesellschaften), 216 Lipset, Seymour Martin, 12, 13 local business support bureaus (Gewerbeförderungsstellen), 219 local guilds, 114 Louis XIV, 230 Lutherans, 195 Luxembourg, 159

M

machinery, 210, 211 Maier, Charles, 250 Maier, Reinhold, 161, 162 Malkin Committee (1943), 86 management, scientific, 113 Manchester liberalism, 118, 171, 197 Mannheim general meeting, 145 manufacturing equipment, 210 marginization of conservatism, 232–36 marketing cooperatives, 113, 220 marketplaces, liberal advocacy in, 142–44 markets, 19, 54, 76, 131, 144, 148, 172, 180, 207, 216, 217, 220 black, 112 free market liberalism, 118

Index | 283 Marx, Karl, 4, 118 Marxism, 186 Marxists, 118, 129 mass consumption, 208 mass production, 194 master of the house, 8 masters, 5, 117, 216 Handwerk Act of 1953, 232 introductions to factories, 70 protest of credit policies, 10 materials, 33 shortages, 36 in World War I, 7 McCloy, John J., 228, 229 medieval guilds (Zünfte), 3, 5, 7, 9, 11, 13, 15, 17, 19. See also guilds memberships, guilds, 7, 16, 111, 128, 242 metal trades, 49 mill builders guild (Mühlenbauer Innungen), 53 Minister of Economics for Bavaria, 124 minor certificate of competency (kleine Befäigungsnachweis), 5, 118 Mittelstand, 9, 10, 11, 12, 13, 17, 182, 183, 192, 216, 249, 250, 251 groups, 181 Handwerk Act of 1953, 228 support for, 31 Mittelstand, Demokratie und Nationalsozialismus, 13 mobilization guidelines, 34, 37, 130 model contracts, 65, 66 modernization, 32, 119, 219, 227, 248 currency reform, 144–48 economic controls, end of, 144–48 of handwerk, 141–53 liberal advocacy in marketplaces, 142–44 Nazism as instrument of, 73–77 monopolies, ban of, 161 morale, 45 Morgenthau, Henry, 85, 87 Morgenthau Plan, 85 motor vehicles depots, 40 repair, 40 Mühlenbauer Innungen (mill builders guild), 53 Munich, Germany, 149, 233

N

National Socialism, 12, 32, 37, 44, 51, 64, 94, 119, 183, 193

National Socialist Artisan, Trade, and Commerce Organization (NS-Hago), 15 natural selection, 235 Nazi Minister of Economics, 196 Nazi New Economic Order for Europe, 46 Nazism, 119, 229, 248 anti-capitalism, 72 appeal of to lower-middle class, 12 commercial regulations, 107 denazification, 84 former members of, 124 handwerk and, 12–14, 66 ideologies, 195 industrial capitalism policies, 32 as instrument of modernization, 73–77 laws, 237 legacy of, 249 legal operation of shops, 110 membership, 41 path to, 7–12 preconditions of, 132 removal of from public office, 93 shift in policies, 37–41 neoliberalism, 172, 198 Erhard, Ludwig, 149–53 the Netherlands, 46, 159 Neumann, Franz, 130 New Europe, 46 New York Times, 162 Nölting, Erik, 145 North Atlantic Treaty Organization (NATO), 159 North German Confederation, 3, 230 North Rhine-Westphalia chambers, 98 Landtag elections (1947), 182 NSDAP (National Socialist German Workers’ Party), 12. See also Nazism

O

Obermeister (guild official), 94, 168 obstructionism, 126 occupation, first stages of, 83–99 Occupation Statute, 228, 229 Office of Military Government, U.S. (OMGUS), 86, 126–29, 132, 133, 227, 230 off -the-books work, 171 OMGUS Directive (1948), 161 Decartelization Branch of, 162 one-man shops, 6, 14, 18, 40, 41, 51, 174, 181, 189, 190, 211, 218, 234

284 | Index Oppenheimer, Franz, 195, 196 ordoliberalism, 193 organization, role of, 141–53 Organization Speer, 68

P

Parliamentary Council, 159 partnerships, limited (Kommanditgesellschaften), 216 Party Chancery, 51 Passau Chamber, 165, 168, 173, 174 past political activities, 94 patent of nobility (Adelsbrief), 240 Pius XI, 187 Poland, 45, 53, 95 policies, 8, 9, 34, 42, 45, 71, 72, 89, 90, 137, 144, 149, 189, 191, 193, 196, 197, 220, 232, 250 denazification, 108 government, shift in, 37–41 Speer policies toward handwerk, 73 postwar economy, 208–16 postwar leadership, 113 Potsdam Agreement, 95, 108, 131 Potsdam Conference (July, 1945), 83, 89 pottery, impact of technology on, 4 precapitalist mentalities, 147 price controls, 142 price-fixing, 109 prisoners of war (POWs), 47, 49, 50 production, 4, 5, 34, 39, 190 controls on, 144 Handwerk Production Headquarters, 73 mass, 194 in the postwar economy, 209 specialized, 67, 68 switching types of, 210 productive competition (Leistungswettbewerb), 194 productive cooperatives, 220 productivity, 32, 34, 38, 45, 51, 213, 214 progressivism, 227, 233 Prohibition of Excessive Concentration of German Economic Power law, 131 proof of reliability, 124 protectionism, 5, 8, 18, 150, 233, 234 in the American zone, 124–26 politics of, 227 Protestant social conservatism, 5 Prussia, 11 public health, 135

public law, 41 purchasing cooperatives, 113, 220

Q

Quadragesimo anno of 1931, 187 Quebec Conference (September, 1944), 85

R

Rathenau, Walther, 67 rationalization, 69–73, 75, 95, 219 as function of handwerk, 112–15 raw materials, 7, 18, 31, 33, 43, 50, 66, 72, 73, 87, 88, 90, 91, 92, 96, 114, 209, 220 shortages, 36 in World War I, 7 Red Army, 95 refugees, 95, 99, 133, 167, 168, 240 regional associations (Kreishandwerkerschaften), 114 regional councils, 110 Regulations 13/120, 133 Reich, Simon, 250 Reich Commercial Code of 1897, 111, 118 Reichsmark (RM), 90 Reichsstand des Handwerks, 32 Reichswirtschaftsministerium (Reich Economics Ministry, RWM), 16, 34, 36, 37, 39, 41, 43, 44, 52, 67, 69, 70, 71, 98 reinvention of tradition, 115–119 repair trades, 208 Rerum novarum of 1891, 187 Research and Analysis Branch of the Office of Strategic Services, 130 Research Institute for Rational Firm Management, 113 restrictions, types of economic, 126 Rhineland Westphalian Handwerker Bund, 183 rise of the princely state, 117 Robert Bosch Corporation, 65 Rößle, Karl, 146, 147, 217, 233

S

safety, 135 Schacht, Hjalmar, 19, 196 Schleswig-Holstein, 13, 99 Schmoller, Gustav, 4 Schöppler, Karl, 218 Schramm, Ferdinand, 51, 55, 68, 69, 72 Schulhoff, Georg, 220, 236–239 Schumacher, Kurt, 181 Schumacher, Martin, 13

Index | 285 scientific management, 113 Second Handwerk Decree (1935), 16 Second World War. See World War II Selbstverantwortung (self-responsibility), 67 self-administration, 108 self-responsibility (Selbstverantwortung), 67 shoemaking, 34, 168, 173 impact of technology on, 4 shops, 6, 7, 11, 14, 18, 19, 31, 33, 35, 36, 38, 39, 40, 41, 42, 43, 50, 51, 53, 55, 62, 64, 66, 70, 71, 72, 83, 84, 88, 91, 92, 95, 98, 114, 124, 125, 163, 174, 179, 181, 189, 190, 209, 211, 212, 220, 232, 233, 234, 249 handwerk, 190 legal operation of, 110 limiting of openings, 124 shortages of raw materials, 36 Sieber, Robert, 145 Siemens & Halske, 39 Six-Power Conference, 159 skilled trades (outside of handwerk), 44 soap-making, impact of technology on, 4 Social Catholicism, 5, 186, 190 Social Democratic Party (SPD), 6, 10 Social Democrats, 185 socialism, 186, 198 Socialist Unity Party (SED), 160 social market economy, 149, 188, 189, 192–194, 196, 197 social order, 193 social welfare, 11 solidarism, 187 solidarity, 174 Sombart, Werner, 4 Soviet Union, 47, 55, 95, 119 specialized production, 67, 68 Speer, Albert, 34, 43, 45, 47 accelerated integration into war economies, 64–69 appointment as Reich Minister of Armaments and Munitions, 63 handwerk resistance to rationalization, 71–73 ministry (1942–1945), 63–77 Nazism as instrument of modernization, 73–77 rationalization initiatives from handwerk, 69–71 Spruchkammern (tribunals), 94 SS reports, 72 stabilization, 9, 10

Stand, 19, 20, 42, 43 steel production, 87 Stinnes-Legien Pact of November 15, 1918, 8 storm troopers, 15 Stuttgart Chamber, 173 suppliers, handwerk as, 210 supply cooperatives (Lieferungsgenossenschaften), 38 suprafirm codetermination, 236

T

tailors, 34 tank production, 67 taxes, 11, 239 technical equipment, 210 technology, impact of, 4 textiles, impact of technology on, 4 theologies, 195 Third Handwerk Decree (1935), 16 Third Reich, 14, 15, 17, 18, 20, 90, 248, 249. See also Nazism handwerk at end of, 83, 84 incorporation of handwerk during, 209 independence of handwerk organizations, 108 security, 37 Thirty Years’ War, 230 Todt, Fritz, 40, 63, 67 tools, 210 trade freedom of. See freedom of trade state determination of ability to, 31 trade unions, 12, 127 Confederation of German Trade Unions (DGB), 241 trading enterprises (Handelsgesellschaften), 216 tradition, reinvention of, 115–19 training, 45 tribunals (Spruchkammern), 94 truck production, 67 Truman, Harry S., 83 Tuchtfeldt, Egon, 172

U

unions, 8, 12, 15, 19, 41, 84, 126, 127, 128, 134, 184, 187, 192, 220, 226, 237, 238, 241, 242 Confederation of German Trade Unions (DGB), 241 United States of America, 152, 160 corporate authority, dismantling of, 141

286 | Index effect of unrestrained American trade, 161–169 idealization of marketplaces, 84 isolationism, 231 Justice Department, 85 objections to the handwerk system, 227 Office of Military Government, US (OMGUS), 126–29, 132, 133 planning for occupation, 84–87 State Department, 85 zones. See American zone University of Frankfurt, 195 unskilled labor, 44 Unterfranken Chamber, 163 U.S. High Commissioner, 228, 229

V

Vermassung (depersonalization), 189 vocational schools, 75 Völkische Beobachter, 32

W

wage controls, 142 war economies, 7 accelerated integration into, 64–69 handwerk in (1939–1941), 31–55 Handwerk Ordinance (1946), 114 Wehrmacht, 34, 36, 40, 41, 44, 45, 73, 74 Weimar law, 124 Weimar Republic, 7–12, 13, 193, 232

Weimar system, 249 welfare, 135 Western Allies, 84, 108, 116, 130, 160, 181, 237. See also Allies denazification policies, 108 West Germany, 123. See also Germany achievement-oriented society, 251 economic growth in, 208 zones, 182 Wiesbaden Chamber, 217 Wilhelmine period, 14 Winkler, Heinrich August, 13 Wirtschaftspartei (Business Party), 11 women and freedom of trade, 169–70 woodworker trades, 49 work cooperatives (Arbeitsgemeinschaften), 39, 51 work-task cooperatives (Arbeitseinsatzgesellschaften), 51 World War I, 67, 87 handwerk in the, 3–7 World War II, 12, 31, 74, 115, 248 Wulf, Peter, 13 Würzburg Chamber, 166, 167

Z

zero hour, 115 Zünfte (medieval guilds), 3, 5, 7, 9, 11, 13, 15, 17, 19. See also guilds

Monographs in German History Volume 1

Osthandel and Ostpolitik: German Foreign Trade Policies in Eastern Europe from Bismarck to Adenauer Robert Mark Spaulding Volume 2

A Question of Priorities: Democratic Reform and Economic Recovery in Postwar Germany Rebecca Boehling Volume 3

From Recovery to Catastrophe: Municipal Stabilization and Political Crisis in Weimar Germany Ben Lieberman Volume 4

Nazism in Central Germany: The Brownshirts in ‘Red’ Saxony Claus-Christian W. Szejnmann Volume 5

Citizens and Aliens: Foreigners and the Law in Britain and the German States, 1789–1870 Andreas Fahrmeir Volume 6

Poems in Steel: National Socialism and the Politics of Inventing from Weimar to Bonn Kees Gispen Volume 7

“Aryanisation” in Hamburg: The Economic Exclusion of Jews and the Confiscation of their Property in Nazi Germany Frank Bajohr Volume 8

The Politics of Education: Teachers and School Reform in Weimar Germany Marjorie Lamberti Volume 9

The Ambivalent Alliance: Konrad Adenauer, the CDU/CSU, and the West, 1949–1966 Ronald J. Granieri Volume 10

The Price of Exclusion: Ethnicity, National Identity, and the Decline of German Liberalism, 1898–1933 Eric Kurlander

Volume 11

Recasting West German Elites: Higher Civil Servants, Business Leaders, and Physicians in Hesse between Nazism and Democracy, 1945–1955 Michael R. Hayse Volume 12

The Creation of the Modern German Army: General Walther Reinhardt and the Weimar Republic, 1914–1930 William Mulligan Volume 13

The Crisis of the German Left: The PDS, Stalinism and the Global Economy Peter Thompson Volume 14

“Conservative Revolutionaries”: Protestant and Catholic Churches in Germany After Radical Political Change in the 1990s Barbara Thériault Volume 15

Modernizing Bavaria: The Politics of Franz Josef Strauss and the CSU, 1949–1969 Mark Milosch Volume 16

Sex,Thugs and Rock ‘N’ Roll: Teenage Rebels in Cold-War East Germany Mark Fenemore Volume 17

Cultures of Abortion in Weimar Germany Cornelie Usborne Volume 18

Selling the Economic Miracle: Economic Reconstruction and Politics in West Germany, 1949–1957 Mark E. Spicka Volume 19

Beyond Tradition and Modernity: Aby Warburg and the Public Policies of Art in Hamburg Mark A. Russell

Volume 20

A Single Communal Faith? The German Right from Conservatism to National Socialism Thomas Rohkrämer Volume 21

Volume 29

The Political Economy of Germany under Chancellors Kohl and Schröder: Decline of the German Model? Jeremy Leaman

Environmental Organizations in Modern Germany: Hardy Survivors in the Twentieth Century and Beyond William T. Markham

Volume 30

Volume 22

Volume 31

Crime Stories: Criminalistic Fantasy and the Culture of Crisis in Weimar Germany Todd Herzog Volume 23

The Surplus Woman: Unmarried in Imperial Germany, 1871–1918 Catherine L. Dollard Optimizing the German Workforce: Labor Administration from Bismarck to the Economic Miracle David Meskill

Liberal Imperialism in Germany: Expantionism and Nationalism, 1848–1884 Matthew P. Fitzpatrick

Volume 32

Volume 24

Volume 33

Volume 25

Volume 34

Bringing Culture to the Masses: Control, Compromise and Participation in the GDR Esther von Richthofen Banned in Berlin: Literary Censorship in Imperial Germany, 1871–1918 Gary D. Stark Volume 26

The Masculine Woman in Weimar Germany Katie Sutton State and Minorities in Communist East Germany Mike Dennis and Norman LaPorte Fragmented Fatherland: Immigration and Cold War Conflict in the Federal Republic of Germany, 1945–1980 Alexander Clarkson

After the ‘Socialist Spring’: Collectivisation and Economic Transformation in the GDR George Last

Volume 35

Volume 27

Volume 36

Learning Democracy: Education Reform in West Germany, 1945–1965 Brian M. Puaca Volume 28

Weimar Radicals: Nazis and Communists between Authenticity and Performance Timothy S. Brown

Death in East Germany, 1945–1990 Felix Robin Schulz Sex and Control: Venereal Disease, Colonial Physicians, and Indigenous Agency in German Colonialism, 1884–1914 Daniel J. Walther Volume 37

From Craftsmen to Capitalists: German Artisans from the Third Reich to the Federal Republic, 1939–1953 Frederick L. McKitrick