The Entrepreneur of Fritz Redlich
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22nd Annual ESHET Conference 7-9 June 2018 – Universidad Complutense de Madrid, Spain AN ACTOR OF CHANGE: THE ENTREPRENEUR OF FRITZ REDLICH Monika Poettinger (Bocconi University, Milan) ABSTRACT Fritz L. Redlich (1892–1978), completed his degree in economics in Berlin in 1914 when the historical school still dominated the field in the person of Gustav Schmoller. His PhD research was already dedicated to a business history study: the German tar industry, while his attempt at obtaining a teaching qualification based on a research on the historical and economic significance of advertisement. Redlich himself withdrew his dissertation after the Nazis seized power in 1933 and three years later left Germany for the United States. He taught in several universities and also served in the public administration, all the while writing on the American Steel and banking industries, supported and sponsored by Frank Taussig. A major breakthrough in his career was the call to participate in the work of Harvard’s Research Center in Entrepreneurial History. There, in continuous confrontation with Schumpeter, Cole and many other researchers in matters of entrepreneurship, Redlich developed an interesting epistemological foundation for the newly-born business history. He distinguished between research on the actor and on the action. Entrepreneurs could be studied as an ideal type, in theory, as a real type, in analytical empirical research, and as simple businessman in case-studies and biographical reconstructions. The action of entrepreneurs could be researched in regard to the goals and meaning of their enterprises, to the economy as a whole and to the community at large. Entrepreneurs could interact with all of the three aforementioned spheres of action, influencing not only the profitability of their ventures but also the development of an economy or the well-being of a community. As such, researching entrepreneurship only from the theoretical point of view would be limitative for Redlich. Business history should also attempt to ‘verstehen’, becoming part of the social sciences. The paper will analyse the methodological works of Fritz Redlich and his participation to the lively debate on the scientific statute of business history along with A. D. Chandler, but also his researches on aristocratic entrepreneurship, a topic on which he coordinated an international research effort, and his historiographic recounts on the emergence and diffusion of business history in Germany and in the United States. An Actor of Change: the Entrepreneur of Fritz Redlich A scholar steeped in two cultures “To this author it is an alluring idea that the significance of history may lie in the historical process as such, in that eternal flowering, maturing, decaying, and dying of human institutions. Thus mankind remains always young; it must always struggle with new difficulties and new problems, and death and destruction have meaning because they serve a valuable end. As a result of this constant building, destroying, and rebuilding of human civilizations, sub specie aeternitatis, the almost inexhaustible cultural possibilities, of which the human race has been made capable by its creator, may come into flower and bear fruit during thousands of years of human history”1. Fritz Redlich (1892–1978)2, German scholar who migrated to the United States in 1936, experienced a life full of contrasts and an ungrateful academic career. His intellectual achievements, though, cannot be understood without recollecting the circumstances of his life. As he himself admitted, looking back at his studies and researches, the dramatic necessity to adjust to the American culture and fit in into an academic ambiance drenched by a methodology alien to the Berlin historicism he was brought up into made him the scholar he was. The reverse also was true. After long struggles, Redlich became one of the most enthusiastic and committed researchers at the Center in Entrepreneurial History of Harvard University, influencing its methodology, determining many international research projects and leaving a lasting impression on young scholars of the calibre of Alfred Chandler Jr. Through Redlich’s contribution the Harvard Center became unique in studying the entrepreneur as a pivotal point in economic development and Chandler himself extensively thanked the German scholar “for dragooning me into his campaign against empiricism in the writing of business history and his invaluable assistance in developing useful concepts”3. Edgar Salin4 would instead underline how the transition of American economic history from mere descriptivism toward conceptualisation and theorization was also due to Redlich who had introduced it to German theory and methodology, in particular that of Arthur Spiethoff-5. The road toward this achievement, though, was difficult and at times tinged with tragedy. Erik S. Reinert, who personally came to know Fritz Redlich during his stay in Harvard, defines him as “a last member of an otherwise extinct economic species of German grossbürgerliche - high bourgeoisie - pre-war 1 Redlich, Fritz (1944), Essays in American Economic History: Eric Bollmann and Studies in Banking, E. G. Stechert and Company, New York: 199. 2 For synthetical recollections of Redlich’s life and career, see: Herrmann, Walther (1962), ‚Fritz Leonhard Redlich‘, Zeitschrift für Unternehmensgeschichte, 7, 2-3, 51–54; Herrmann, Walther (1979), ‚Fritz Redlich‘, Zeitschrift für Unternehmensgeschichte, 24, 1, 1-9: 1. A complete bibliography of Redlich’s work up to 1964 is to be found in: Redlich, Fritz Der Unternehmer, Vandenhoeck & Ruprecht, Göttingen, 385-389. Another partial bibliography is in: Stourzh, Gerald (1965), ‚Bibliographie der deutschsprachigen Emigration in den Vereinigten Staaten, 1933-1963.: Geschichte und Politische Wissenschaft Teil II und Nachtrag‘, Jahrbuch für Amerikastudien, 11, 260-317: 294-298. 3 Chandler, Alfred D. (1962), Strategy and Structure, MIT Press, Cambridge, vii. 4 Salin E. (1964), ‘Nachwort‘, in Redlich, Fritz Der Unternehmer, Vandenhoeck & Ruprecht, Göttingen, 381-384: 381. 5 Redlich translated the work of Spiethoff into English for the first time in a series of articles: Spiethoff, Arthur (1952), ‘The “Historical” Character of Economic Theories’, The Journal of Economic History, 12, 2, 131-139; Spiethoff, Arthur (1953), ‘Pure Theory and Gestalt Theory: Ideal Types and Real Types’ in Lane, Frederic C., and Riemersma, Jelle C. (eds.), Enterprise and Secular Change: Readings in Economic History, Allen and Unwin, London, 431-463; Redlich, Fritz (1970), ‘Arthur Spiethoff on Economic Styles’, The Journal of Economic History, 30, 3, 640-652. 2 Monika Poettinger academic tradition as Schumpeter represented”6. Redlich himself confirmed Reinert’s portrayal in the brief description preceding his short curriculum for the thesis he wrote to obtain the Doktor title in 19147 and in his autobiographical essay ‘A life for research’ written in 19148. “I - affirmed Redlich when a newly declared Doktor - Fritz Leonhard Redlich, Evangelical Christian, was born the 7th April 1892 in Berlin, son of the international merchant Moritz Silvius Redlich and his wife Emma, born Mühsam”. In the short intellectual autobiography written fifty years later, the education in a family of the haute bourgeoisie is reiterated while the identity of the parents vanishes. The reasons are sadly apparent. The death of both parents held a measure of tragedy for Redlich. Little is known about Moritz and Emma Redlich except their Jewish origin9. While the father died in 1920 leaving the son with the obligation to pursue the family business for a decade, a decision he deeply regretted, the mother died in consequence of deportation at the beginning of 194310, when Fritz Redlich had already fled to the United States. The silence that from then on Redlich dedicated to his family of origin, not only towards colleagues but also friends, probably derived from the antisemitism diffused in American universities11, but also from the typical reaction of survivors of the Holocaust: guilt and suppression12. How much the experience of persecution influenced the bumpy career road of Fritz Redlich cannot be underestimated. Despite the various imaginative recounts to be found in Redlich’s obituaries and biographical sketches13, there is no doubt that Redlich had to live Germany in 1936 6 Reinert, Erik S. (2003), 'Steeped in Two Mind-Sets: Schumpeter in the Context of the Two Canons of Economics', in Jürgen Backhaus (ed.) Joseph Alois Schumpeter: Entrepreneurship, Style and Vision, Kluwer, Boston, 261-292: 285. 7 Redlich, Fritz L. (1914), Die volkswirtschaftliche Bedeutung der deutschen Teerfarbenindustrie, Friedrich-Wilhelms Universität, Berlin, 103. 8 Redlich, Fritz (1964), ‘Ein Leben für die Forschung‘, in Id. Der Unternehmer, Vandenhoeck & Ruprecht, Göttingen, 11- 42. 9 The Mühsam family was particularly well known for the battle fought in favour of the integration of Jewish citizens in Prussia after the Seven Years War, hence the family name attributed by Frederick the Great. After 1933 the family was persecuted, and many members killed in the Holocaust. See: Hamann, Christoph (2005), Die Mühsams: Geschichte einer Familie, Hentrich und Hentrich Verlag, Berlin. 10 Sources are divided over the death of Emma Mühsam Redlich. She is alternatively believed to have died in Auschwitz in March 1943 or having committed suicide to avoid deportation to the camp of Theresienstadt the 14th February 1943. 11 See: Karabel, Jerome (2006), Chosen: The Hidden