Managing Resources. Water and Wood in the German Pulp and Paper Industry, 1870-1930

Referent/in: Mathias Mutz, Göttingen

Utilising natural resources demands for an effective management of knowledge, transport facilities, and resource supply within a firm. Therefore, the process of integrating the environment with its spatial and material aspects into the ‘network of the firm’ must be seen as a central part of business development. This is especially true if you follow Alfred D. Chandler’s view of business history as a process of firm growth and organisational differentiation. Although Chandler was never concerned with environmental issues his approach can be a useful starting point to describe the trend towards a ‘vertical integration’ of environmental aspects into the firm. Mass production created new technical and organisational requirements for dealing with natural resources. Enterprises had to develop strategies and institutions for communicating with contractors, state bureaucracy, or competing users of natural resources. Arrangements to secure supply and waste disposal as well as the regulation of conflicts became essential for business growth and success. 
The pulp and paper industry is a good example to illustrate this co-evolution of business and environment. It has long been notorious for its intensive resource use and energy consumption. The relevance of natural factors for the evolution of paper producing firms is especially evident in the use of wood as the industry’s main resource. The invention of the groundwood process in 1843 became the initial start of a ‘wooden revolution’ in paper production which gained momentum through new chemical processes to produce cellulose. Pulpwood demand strongly changed the paper industries’ spatial structure and supply strategies when a new trade system evolved. At the same time the new demand for wood altered the utilisation strategies of forest administrations. But industrial mass production did not only change the environment, it also required new technical and managerial capacities to deal with the natural context of the production processes.
The paper will look at the industry’s use of water as a second example for this inter-connectedness. Water was needed for energy generation and production purposes and extensive hydraulic engineering ventures were everyday business for paper mills. Increasing through an intensified use of harmful chemicals and organic components waste water was a major concern on the output side. River pollution was disputed since the 1870s and public ordinances forced entrepreneurs to respond to the problem. Despite insufficient technical solutions compliance with state regulations became inevitable. Evolving conflicts demanded for new political and economic strategies and made environmental issues a decisive part of firms’ operations.