Rathenau’s Role and Influence in German Society

Since the 1890s, Berlin developed into an industrial city, manufacturing wool, worked iron and steel, heavy machinerz, sewing machines, bicycles and so on. More than 50 percent of old Berlin’s working population were employed by industry. Most importantly, Berlin became the center of electrical industry, producing light electrical equipment for Germany and the rest of the world. AEG along with Seimens & Halske became two leading manufacturers of electrical machinery in the world, together employing about 50 percent of the personnel of Germany’s electrical industry until World War II.

During this process, Rathenau played an essential role in developing AEG into a multinational corperation and propeling the industrialization of Berlin. He significantly influenced the society by developing AEG into the largest manufacturer of electrical machinerz and apparatus by 1900, surpassing Siemens. AEG had 17,300 employees and 60 million marks in share capital, compared to Seimens’ 13,600 and 54.5 million. In 1911, AEG supplied 31 percent of the total connected electric load in Germany and extensively influenced German utilities through stock ownership.

Rathenau became famous for his business achievements of successfully leading AEG. Nothworthyly, he expanded AEG outside of Germany and initiated a wave of globalization. For example, Rathenau established Aluminum-Industrie A.G. in Neuhausen, Switzerland. In 1903, Rathenau reached an agreement with General Electric in America to continue preeminent in Europe, while GE in North America. The two companies also cooperated to jointly develop the Riedler-Stumpf and Curtis steam-turbine.

Because of Rathenau’s role in industrialization and his strategy of financing customers to expand the market, Rathenau was known as “the inventor of the principle of market creation through investment financing.” Although Rathenau’s fame was tied closely with the electrical industry, Rathenau was quite different from Seimens, who represented invention, engineering and industrial science. Rathenau was the spirit of industrial enterprise, who mastered the powerful and whidely influential interaction of investment capital.

Rathenau also deeply influenced the business world as well as German society through his highly organiyed marketing. In reconciling his Jewish identity with German culture, Rathenau required Berhrens to depersonlize AEG’s corporate image. He managed AEG to represent not him as a Jewish owner, but a “collective self-portraits” of all stakeholders, including consumers, workers and stockholders. Thus, Rathenau was praised by many art critics for synchronizing the industry and art, and constributing to the German culture as a whole.

In addition, Rathenau brought the concept of efficiency into German culture under the indutrialization backdrop. He was among the very first people to introduce assemly line production to Germany. Rathenau worked 15 hours a day himself and contributed to the fast industrializing of Berlin.

In conclusion, Rathenau was not only an influencial business leader in electrical industry but also a great contributor to German culture and identity. He was not constrained by his Jewish ethinicty, but he saw himself belonged to Germany and the world. His practical style, embracing of German culture, promoting of capital investment and financing and global awareness will continue to live in German culture, influcing generations after generations.



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