Máté Rigó. <i>Capitalism in Chaos: How the Business Elites of Europe Prospered in the Era of the Great War</i>

Since their centenaries, academic interest in reinterpreting World War I, the collapse of the Austro-Hungarian Monarchy, and the subsequent transitions of power has grown visibly. In recent years, researchers have focused on social and economic structures rather than on political and diplomatic relations and moved away from the competing nationalist narratives that had dominated earlier approaches. These shifts have also led to important methodological changes. On one hand, the new focus calls for the use of hitherto neglected source materials that reveal information about social experiences. On the other hand, replacing the state-centered approach, these works have attributed a much greater role to humans or nonhuman beings (such as domesticated animals) practicing their agency, making choices and decisions in particular situations.Máté Rigó’s book Capitalism in Chaos: How the Business Elites of Europe Prospered in the Era of the Great War fits this trend, often referred to as New Imperial History. In his ambitious work, the goal of the author is to describe the mechanisms that transformed the hierarchy of society in Transylvania, which was annexed from Hungary by Romania, and in Alsace-Lorraine, annexed from the German Empire by France. He does so by exploring the factors that determined the resilience and adaptability of the industrial bourgeoisie and the processes behind the nationalist narratives of the mentioned states. Both industrializing Transylvania and Alsace-Lorraine were rich in natural resources, and were relative peripheries as well as being multilingual, multireligious, and multiethnic, making them excellent subjects for comparison. Moreover, the author rightly points out that regions that have undergone numerous political changes and are marked by nationalist conflicts are better suited for comparative purposes than less turbulent areas.In his comparison between Alsace-Lorraine and Transylvania, Rigó moves beyond the dichotomy of the “developed West” versus the “under-developed East.” Conscious of the specificities of the regions, he examines how the bourgeoisie that managed industries and corporate conglomerates (i.e., the business elites) handled the power transition affecting their narrow homelands. How were individual industrialists able to influence processes that were unfavorable to them and seize any opportunities that might arise? How could it happen that in the openly antisemitic and anti-Hungarian Greater Romania of the 1920s, a Hungarian Jewish industrialist, Mózes Farkas, became one of the most influential businessmen; while meanwhile in Alsace-Lorraine, which had “returned” to France, not only Germans but also local French industrialists, such as members of the Dietrich family, could not escape harassment by the authorities?Rigó divides his nearly 380 pages–long work, enriched by illustrations and indexes, into four major sections, with nine chapters altogether. He maintains the cohesion of the book by examining how the groups on which he focuses acquired and retained material, political, and social capital; how their businesses earned profits; and what kind of interests they had to navigate. He discusses the rise and integration, as well as the overlapping exclusion and persecution, of business elites. Through his analysis, Rigó shows that it was due to the common interests of various actors that it was possible to bridge linguistic, ethnic, ideological, and political differences even if external circumstances changed. The book closes with a summary and outlook chapter, intended as an epilogue, in which the author outlines the fate of individual families and businesses during and after World War II.To illustrate the ambivalent processes, the book’s first unit (chapters 1–2) presents the “happy times of peace” before World War I. Rigó provides a description of the legal, economic, and social conditions of the regions, first of Alsace-Lorraine, which had belonged to the German Empire since 1871 and was directly under the administration of the German imperial governor; and then of Transylvania, which was part of the Kingdom of Hungary, itself forming one half of the Austro-Hungarian Monarchy. According to Rigó’s thesis, there was a difference in the way the German and Hungarian governments thought about economic protectionism and nationalism. The liberal Hungarian governments, in power between the Compromise of 1867 and World War I, made the modernization of the country a priority, launched a large-scale industrialization program, and sought to create a business bourgeoisie endowed with sufficient capital while being loyal to the state. Consequently, they provided generous support to successful “Israelite” entrepreneurs such as Manfred Weiss and Ferenc Chorin, Jr. The German governments chose a different path, because they distrusted the Alsace-Lorraine entrepreneurs.In the second section (chapters 3–4), the author describes the changes that took place in the two regions during World War I. He deals with the Allied blockade, the expulsion of German financial institutions from colonial markets, the shortage of raw materials essential for the operation of the (mainly textile) factories in Alsace-Lorraine, and the strategic revaluation of the Balkans and Central and Eastern Europe. Rigó’s focus is on the impact of these transformations on business elites. For instance, the factories in Alsace-Lorraine were subordinated to the needs of the German army, and their vulnerability gave rival companies the opportunity to get rid of their competitors. This was the case with the Pagaschuh textile factory, which had to switch to making paper shoes. Even the textile manufacturer Théodore Schlumberger, a member of the National Liberal Party of the German Reichstag, was not spared harassment during the war.Rigó demonstrates that the fate of the Transylvanian industrialists was different because the Austrian and Hungarian governments showed more tolerance and flexibility toward the elite business groups in Transylvania. For instance, their industries came under military control only in exceptional cases, and harassment based on ethnic reasons was also less frequent. The author illustrates this point primarily with the success of the Renner tannery and the wealth accumulation of Mózes Farkas. The growing military necessity forced him to increase production while the favorable tax rates and merely pro forma controls of the Hungarian state allowed him to keep a significant part of the profits and to join the ranks of the war millionaires. The fact that in 1916 the Hungarian government, following the German and French example, eventually taxed war profits did not change this situation in a significant way. On the one hand, the introduced tax rate was not high enough to do so; and, on the other hand, by that time the entrepreneurs concerned had already booked a significant profit.We encounter the main thesis of the book in the third section (chapters 5–7), in which the author discusses the postwar power shifts and the economic consequences of peace. Here Rigó presents the sometimes controversial and counterproductive measures taken by the French government to gain influence in Central and Eastern Europe. These efforts intended to take over regional dominance from the Germans and to squeeze the Russian markets. The measures included the hastily planned routing of the Orient Express, the forcing of French planes to land on German territory on the Paris-Bucharest route due to lack of fuel, and the favorable conversion of the German mark. The latter was an attempt by the French government to win (back) the Alsace-Lorraine industrialists. However, this currency policy, which favored Alsace-Lorraine, irritated the population of France, and the exchange of currencies created such a big budget deficit that it carried the threat of sovereign default.Also in section 3, the author discusses at length the state-sponsored and/or tacitly accepted expropriations of property and the speculation of the wealthy entrepreneurs in Alsace-Lorraine. Using a number of cases, he shows that, although the utility as well as the wealth of individual companies might have counterbalanced ethnic discrimination, mass expulsions and confiscations of assets were not uncommon. Rigó emphasizes that discriminative actions involved not only the French authorities but also the locals and/or individual business competitors. For example, the expropriation of the Adler and Oppenheimer tannery was initiated by a young leather worker, Ulysse Roux, who formed a broad investor alliance in partnership with the rival Francophile Herrenschmidt and Weil families against the original owners—although, as the case of the Adlers shows, the more fortunate German industrialists were given the opportunity to make a fresh start in Weimar Germany in the 1920s.In contrast to Alsace-Lorraine, there is a striking continuity between the pre- and post-1918 business elites in Transylvania, which was annexed by Greater Romania. Rigó explains this situation by pointing to several factors. First is the delayed conversion of the Austro-Hungarian currency—the crown—for the Romanian lei by the Romanian state. This policy inadvertently strengthened the position of the Transylvanian industrialists. Secondly, in Transylvania, a region that was more developed than the rest of Greater Romania, there were hardly any direct, systematic mass expulsions and property confiscations—with the exception of land—ordered from above. In other words, the necessary capital, expertise, and contacts were still mainly held by Hungarian, Jewish, and German entrepreneurs. Therefore, the new local Romanian leadership, aware of its own limitations, was willing to occasionally bypass the Bucharest government and cooperate with the former elite groups in the interests of the economy.In the final part of his work (chapters 8–9), Rigó analyzes the integrationist aspirations and protectionist economic policies of the French, German, and Romanian governments and their consequences. It shows that the annexation of Alsace-Lorraine by France did not in itself determine the region’s decline, as the governments in Paris and Berlin regulated the most important economic issues in detail through their interstate agreements (e.g., the Baden-Baden Convention of 1927). These allowed the two provinces to trade duty-free with both Germany and France, and local entrepreneurs to maintain their links with Germany. Nevertheless, the treaties were no longer sufficient to remedy the economic difficulties of certain industries in Alsace-Lorraine and the financial crisis caused by general inflation, or to prevent the expulsion of Germans and the expropriation of their property. Competition from colonial territories made the outlook even worse for local industrialists. Moreover, although Paris was formally committed to the economic integration of Alsace-Lorraine, it was in fact doing its utmost to keep competing products from these provinces out of its internal territory.As Rigó indicates, peace treaties and other conventions in East Central Europe did not contain specific provisions about particular economic problems, which further exacerbated the hostile relationship between the Hungarian and Romanian governments. At the same time, without denying the anti-Hungarian manifestations of the Romanians, the author points out that until the pogroms committed by the Romanian radical nationalists in 1927, there were plenty of examples of solidarity through formal and informal contacts between individuals. This was clearly evident in the process of “nationalization” of companies and financial institutions, known as “Romanization,” which sometimes took place only in appearance. Indeed, the process may even have benefited the more resourceful and well-connected members of the non-Romanian economic elites in Transylvania. For example, Mózes Farkas, collaborating with his good friend Emil Haţieganu, former leader of the Transylvanian National Peasant Party, was able to acquire the shares of the rival Kobler hat factory in exchange for a few well-paying board positions reserved for Romanians.To sum up, Máté Rigó’s book is a thought-provoking and pioneering work. Applying a comparative analysis, the author draws attention to the similarities and differences between the processes taking place in the Central, Eastern, and Western European regions. He does not treat the phenomena as a matter of course but rather analyzes them in context and with due detachment. He draws conclusions based on a wide range of archival sources, including economic and corporate documents. As a result, he is able to present solid evidence for the statements that seem too bold at first glance. The book contributes significantly to introducing a new perspective on the transitions of power that followed World War I. In view of all this, it is hardly surprising that an expanded Hungarian edition of the book was published in February 2023.1

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