Walther Rathenau

German-Jewish statesman, industrialist, and philosopher who organized Germany’s economy on a war footing during World War I and, after the war, as minister of reconstruction and foreign minister, was instrumental in beginning reparations payments under the Treaty of Versailles obligations and in breaking Germany’s diplomatic isolation.

Rathenau held a number of executive positions in German industry and, at the outbreak of World War I, headed the AEG. One of the few German industrialists who realized that governmental direction of the nation’s economic resources would be necessary for victory, Rathenau convinced the government of the need for a War Raw Materials Department in the War Ministry. As its head from August 1914 to the spring of 1915, he ensured the conservation and distribution of raw materials essential to the war effort. He thus played a crucial part in Germany’s efforts to maintain its economic production in the face of the tightening British naval blockade. He then returned to business and writing, but, when the collapse of the Western front became imminent in the autumn of 1918, he proposed a desperate levée en masse (“call to arms”) to turn defeat into victory.

After the war, Rathenau helped found the middle-class German Democratic Party and advocated a policy of cooperation with the Social Democratic Party of Germany. Convinced that the days of unrestricted capitalism were over, he advocated in his Die neue Wirtschaft (1918; “The New Economy”) industrial self-government combined with employee participation and effective state control rather than the wholesale nationalization of industry by the state.

Rathenau combined democratic convictions and a strong belief in international cooperation with economic experience and a knowledge of foreign countries.