Combine water and barley in a large Dutch oven; cover and let stand 2 hours. Add potatoes, and bring to a boil. Reduce heat; simmer, uncovered, 15 minutes. Set aside.
Sauté onion in bacon drippings until tender; stir in sauerkraut. Cook over medium heat 15 minutes, stirring frequently. Stir sauerkraut mixture into reserved potato mixture, and set aside.
Melt butter in a small skillet over low heat; add flour, stirring until smooth. Cook over low heat, stirring constantly, until lightly browned. Add to sauerkraut mixture, mixing well. Stir in salt and pepper. Cook over medium heat, stirring frequently, until slightly thickened and thoroughly heated.
Serve soup immediately in warm soup bowls.