Planwirtschaft

[Title Page and Publication Information]: Title page and publication details for Emil Lederer's 'Planwirtschaft', published in 1932 by J.C.B. Mohr in Tübingen. [Introduction: Economic Evolution vs. Catastrophic Change]: Lederer argues that economic reality never fully realizes abstract principles and that economic systems evolve gradually rather than through sudden dialectical jumps. He distinguishes between political revolutions, which can change laws overnight, and economic revolutions, which require the slow transformation of social habits and actions. He suggests that the world is currently in a transition toward a planned economy (Planwirtschaft) driven by the failures of the capitalist circulation process, such as protectionism and the breakdown of free market automatism. [I. Planned Economy through Evolution or Dialectical Shift?]: The author explores whether a planned economy can coexist with elements of free enterprise. He argues that while planning and total freedom are opposites, a socialized plan can incorporate free enterprises as data points, particularly in consumer goods. Conversely, he suggests that capitalist systems are already adopting planning elements through state intervention and protectionism. He proposes that 'partial planning' is possible through the public provision of essential needs like housing and utilities, which reduces the total volume of private capital without destroying the capitalist mechanism. [II. Eliminating Unemployment through Planning Measures]: Lederer proposes a specific plan to combat unemployment by mobilizing unused production factors (factories and raw materials) without traditional financing. He suggests a 'natural economy' sector where the unemployed produce goods for their own consumption, bypassing the traditional market to avoid displacement effects. This temporary solution aims to increase the social product through self-help and psychological relief, eventually encouraging private entrepreneurs to resume production as confidence returns. [III. Planned Economy through Credit Control]: Lederer examines the central role of the credit system as a lever for economic planning. He discusses how the shift from gold-backed currency to bank-created credit and cashless transactions has moved the power of money creation to private banks, making traditional discount rate policies (interest rate adjustments) less effective. He argues that because the 'automatism' of the market is currently broken, the state must intervene to maintain the necessary credit volume and direct it toward productive uses, effectively turning credit control into a form of production planning. [IV. Bank Policy vs. Production Policy]: This section details how credit control should be applied during different phases of the business cycle. During booms, it should act as a repressive check on over-investment in saturated sectors like coal or iron. In the current depression, Lederer argues that the 'cleaning' process of the crisis is being blocked by subsidies, and he advocates for a 'manipulated' recovery. He suggests prioritizing credit for the consumer goods industry, which has high unused capacity, rather than just funding large-scale public works that might have inflationary risks. [V. Limitations of Individual Industry Planning]: Lederer argues that planning cannot be effectively executed from the level of individual industries or enterprises, as they remain dependent on the total market context and monetary conditions. He uses the example of the US stock market boom to show how individual producers are forced to follow aggregate trends even if they lead to disaster. He distinguishes between 'socialization' (ownership change) and 'planning' (total economic management), asserting that only central organs can truly implement a planned economy. [VI. Capital Accounting in a Fully Socialized Economy]: The author discusses the technical aspects of capital accounting in a fully socialized system, referencing the Soviet model. He argues that a socialized system is more 'crisis-proof' because it can absorb the failure of specific investments without triggering a total collapse of the circulation process or mass unemployment. In a planned economy, the loss of capital does not lead to bankruptcy but merely a slower rate of future growth, as there are no private creditors to demand liquidation. [VII. Economic Calculation and the Role of Money]: Lederer addresses the critique (notably by Ludwig von Mises) that a socialized economy cannot function due to the lack of a price mechanism. He argues that as long as consumers have freedom of choice and a monetary unit is used for accounting, a planned economy can determine costs and adjust production to meet demand. Money remains a necessary tool for quantification and planning, but its use does not make the system capitalist. He concludes by advocating for a rational plan to direct the interventions already occurring in the economy.