On Wednesday 20th January 2016 ifs University College was proud to welcome Dr. Alexander Ljunqvist to give the inaugural Henry Grunfeld Lecture. We were honoured that Mr. Grunfeld's grandson James Lewisohn was able to say a few words before-hand to give us an insight into his grandfather's eventful life and unique world view. The text of his address is below.
Good evening. I’d like to thank Alex Fraser and IFS University College for inviting me to introduce Henry Grunfeld to you. The first thing you need to know is he would have no interest in the current debate on the appropriate State pension age: he started working in Germany aged just 17 and stopped in London over seven decades later when he was 95. I’ve promised Alex not to speak for more than 5 minutes – which gives me three seconds for each year of his life. So please excuse my sins of compression – these are going to be considerable.
As a timesaving ruse I’m going to use the Warburg’s abbreviation of his name: HG.
I am sure HG would be thrilled to know this event is taking place tonight. Alexander Ljungqvist is going to speak to us about contemporary threats to shareholder capitalism. HG would feel right at home with this theme, since as we will see, he felt his character was formed by the series of economic and political crises – and momentous changes – he worked through. To give just one emblematic example of the extent of these changes: the city of his birth, Breslau in the Eastern German Province of Silesia, now has a completely different name, speaks a different language and is in a different country. Ryanair passengers among you will
know it as Wroclaw, the largest town in Western Poland.
HG, born into a secular Jewish extended family group which had become wealthy thanks to its efforts industrialising the steel and chemicals sector, came of age in 1920s Berlin, the city of Marlene Dietrich and Albert Einstein. He loved cabaret, theatre and opera. He planned a career in the exciting new science of psychiatry, or possibly chemistry. But family illness changed all that: he started working in his father’s steel business aged, as I said, just 17 - a special application had to be made to the Court of Berlin to allow him to execute documents. By the time he was 22, he had already been involved in a daring attack on two of the oligopolists in the German Steel Industry, Mannesman and Thyssen.
Then he had to deal with the economic crises of the Weimar Republic: during the hyperinflation he really did pay workers with wheelbarrows of cash. But he made it through that. Then the General Strike of 1923 threatened to destroy his business, as did the Depression of 1929 and the Banking Crisis of 1931. By his late twenties, HG knew more about restructuring companies than most bankers will ever know in a lifetime.
However, there turned out to be one thing that HG’s business could not survive: the Nazis. In April 1934, shortly after Hitler came to power, he was arrested without warrant by the Gestapo and jailed for 54 hours – for the first 24 hours without either food or water. His liberty was saved by the fact that he had somehow managed to find time to be the Spanish Consul in Breslau. The Spanish Ambassador bravely intervened and HG fled to London with his young family. Shortly afterwards, his business and his wealth was expropriated. He was left with about £40,000 in today’s money.
By the time he arrived in London aged 30 – basically broke – HG had experienced arguably enough challenges and changes for one lifetime. He had seen what extreme monetary policies can achieve for all stakeholders in capitalism. He had seen what can happen in law when habeas corpus isn’t there to protect you. He had seen how easy it is for a State to help itself to the assets of an individual.
But as you know, the most exciting of his times was yet to come. I am not going to attempt to pot the history of his extraordinary partnership with Siegmund Warburg here. Suffice it to say that they started with four employees in 1936 and that by the 1990s S.G. Warburg had over 6,000. HG had become known as the most brilliant, innovative – and ethical - banker in London. For Siegmund and Henry, the client came first, profit a distant second. Whole countries were rejected on an ethical basis – Warburgs was one of the very
few British firms to refuse to do business in Apartheid South Africa.
In 1974 Siegmund Warburg wrote HG a birthday letter praising his exceptional personal characteristics, which Siegmund viewed as being innate. HG rejected this idea – instead, he firmly credited his early experiences in Germany. He replied:
""You mention my sense of justice or fairness. I would have thought anyone who for no just or fair reason has been taken to prison – as happened to me in 1934 – is bound to feel particularly strongly about injustice and unfairness. Then there is the fighting spirit. When one had to fight for economic survival in 1923 and then all over again from 1933 onwards – not to speak of the fight for physical survival in Nazi Germany – it becomes an instinctive part of oneself not to give in without a fight…. I am convinced that the way I think and act is or should be the norm and that the shortcomings of others are no excuse for lowering this norm.""
Let me leave you with two thoughts. The first is that great futures are rarely planned. Here’s HG again, to a trainee who asked whether he and Siegmund had planned their enormous success when they started out. He replied:
“You must have been at Harvard Business School. There was absolutely no planning. We had totally empty desks. All we were concerned for was to earn our expenses.”
My second thought is that Professor Ljundqvist is about to discuss some contemporary problems of capitalism. Markets – and politics – are telling us there is trouble ahead for capitalism. We are unlikely to live through what HG did (I hope). But some of us will surely find that the experiences ahead – and the way we react to them – will help us forge our successes in the future. Just as HG’s did his.
I hope you enjoy the rest of the evening. Thank you all very much.