Abstract: Business, Fascism, War: Electricity in Germany and Japan, 1931-1945

Chenxiao Xia

Abstract

This paper addresses the relationship between business and political regimes through the case of electricity industry in Germany and Japan in WW2. The relation between business and political regimes is a contentious topic. Is Fascism a variety of capitalism? Can business flourish under dictatorship? Under what constraints is government more entrepreneurial than private firm? To what extent can business contribute to evil, for example war? Bearing these questions in mind, this paper takes up two fascist regimes, Germany and Japan, and looks at the case of electricity, an industry which usually involves complex business-government relations for its cost structure and its nature as basic infrastructure for modern economy. This paper finds out that, first, during war preparation, governments of both countries ensured state-control over electricity industry, but during that process, businessmen divided over to what extent the electricity business should be controlled by the government. Second, during the war, electricity industry in both countries failed to satisfactorily increase capacity and meet surging energy demand. This was either through misplaced coordination or resource constraints. Third, despite the above similarities business in the two countries showed difference in organization. Japan nationalized electricity following British model and created a mammoth power production firm, while in Germany the industry was more decentralized. Finally, before the majority of power facilities in both countries were destroyed by the air raid of the Allied Force, electricity industry in both countries was approaching collapse caused by power curtailment and overwork.