TAMING POWERFUL CORPORATE INTERESTS: Lessons from the early years of European integration

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Date:
06 Apr 2018

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New research to be presented at the Economic History Society's 2018 annual conference explores the Ruhr's mining industry and its power struggle with the High Authority (HA) of the European Coal and Steel Community (ECSC) in the 1950s. The HA is usually seen as a failure by historians and political scientists because it did not succeed in enforcing the ECSC’s treaty against the member states’ national interests.

But according to a study by Juliane Czierpka of the HA’s dispute with the Ruhr’s mining industry over the organisation of their coal sales, the HA managed to break up traditional industrial structures in the Ruhr area, even though the mining industry fought fiercely for their cartel and was supported by the German government – which had initially sold the mining industry out for membership in the ECSC.

The research sheds light on the relationship between businesses and national governments and shows how this relationship was changed by the emergence of a new player – the supranational HA. It also shows that there would have been a very early Gerxit, which only was prevented by the pressure of the Allies, which forced the German government to be part of the ECSC regardless of domestic protests.

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Since the beginning of the Ruhr area’s industrialisation in the second half of the nineteenth century, the local mining industry has always been a powerful player. Controlling vast amounts of coal, the Ruhr’s mining companies held a huge share of the European coal market and were usually able to influence political decisions made by German governments.

One reason for the power of the Ruhr’s mining industry was of course the importance of the energy sector and the country’s dependence on its coal. But the local mining companies also used to present themselves as a unity, speaking with one voice and – even more importantly – selling their coals collectively.

In other words, the mining companies of the Ruhr had built a huge coal cartel, even though it wasn’t called a cartel or syndicate after 1945 – at least within the Ruhr area, everyone was quite keen on finding new names for the sales.

In the early 1950s, the newly constituted German government was desperately trying to reduce the Allies’ control. While Britain and the United States were willing to give the Germans back parts of their sovereignty and started to loosen the regulations on the production of steel and other goods, the French did not like this approach.

Naturally, after 1945 the French government not only felt threatened by the German heavy industry, which was seen as having made the war possible by quickly adapting to the production of arms in order to support Hitler and its troops, but also by the German mining industry’s market power, because the energy sector was closely linked to questions of national autonomy and security. Furthermore, the French steel industry depended on specific qualities of coal from the Ruhr area.

The specific combination of interests in Europe in the aftermath of the war – a French government trying to keep control over the German coal and steel sector and a German government that was trying hard to win back at least parts of its sovereignty from the Allies – led to the foundation of the European Coal and Steel Community (ECSC).

The ECSC’s principal goal was to merge the coal and steel markets of Germany, France, Belgium, Luxembourg and the Netherlands, thereby leading to a high degree of economic and political cooperation, and peace between the member states. These words were of course mainly tinsel and glitter, as every member state pursued its own national interests.

The High Authority, the ECSC’s supranational executive institution, is usually seen as a failure by historians and political scientists, because it did not succeed in enforcing the ECSC’s treaty against the member states’ national interests.

The new research shows that the hypothesis of a weak HA is not generally true. Looking into the HA’s dispute with the Ruhr’s mining industry over the organisation of their coal sales, the author shows how the HA managed to break up the traditional structures in the Ruhr area, even though the mining industry fought fiercely for their cartel and was supported by the German government – which had initially sold the mining industry out for membership in the ECSC.

The research also sheds light on the relationship between businesses and national governments and shows how this relationship was changed by the emergence of a new player – the supranational HA. The research also shows that there would have been a very early Gerxit, which only was prevented by the pressure of the Allies, which forced the German government to be part of the ECSC regardless of domestic protests.

ENDS

Dr. Juliane Czierpka
Assistant Professor in Montan History
Ruhr-University Bochum (Germany)

juliane.czierpka@rub.de
Office: +49-234-32 24 664

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