Published in the Revue internationale du Travail in July 1933, Lederer’s article answers Mentor Bouniatian’s claim that technical progress helps restore economic equilibrium rather than aggravating unemployment. Across four sections, Lederer moves from a classification of innovations through a critique of automatic compensation to an account of credit cycles and capital-saving investment. His central argument is conditional: technical progress can generate prolonged unemployment, depending on its kind, speed, scale, and place within the capitalist production process. Neither nineteenth-century employment growth nor an abstract equilibrium model establishes that displaced workers will promptly find new work.
Section I makes the differentiation of innovation the prerequisite of explanation:
Les progrès techniques n'agissent pas tous de la même manière.
English translation: Technical advances do not all operate in the same way.
Lederer distinguishes cost-reducing improvements, substitutions of one product for another, and inventions creating new products and needs. Rationalization reduces the labor required for existing output; substitution shifts production and can devalue established investments. Genuinely new industries, by contrast, can create additional employment whose associated consumption offsets the diversion of existing consumers’ expenditure. Categories may overlap, but their mechanisms remain distinct. Nineteenth-century expansion therefore cannot prove that labor-saving innovation is harmless: much of that expansion depended on the creation of new fields of production.
Section II examines the proposed channels of compensation: machine construction, expenditure of increased profits, lower prices, and wage adjustment. Investment financed from existing savings initially maintains employment rather than adding an equivalent number of jobs for workers subsequently displaced. Maintenance work likewise cannot absorb all the labor saved without cancelling the economy that justified mechanization. Under monopoly, reemployment depends on how additional profits are spent, available capacity, and which workers are hired. These contingencies make elapsed time central:
Donc, si nous admettons que les vagues des progrès techniques se succèdent et que la compensation nécessite un certain délai, nous aurons un chômage continu.
English translation: Thus, if we assume that waves of technical progress follow one another and that compensation requires a certain interval, we shall have continuous unemployment.
Continuous unemployment need not mean that any particular displacement is irreversible. Repeated innovations can renew unemployment before earlier losses have been absorbed. Lederer thus replaces the question of eventual equilibrium with that of the actual sequence and duration of adjustment.
His treatment of competitive production distinguishes demand elasticities equal to, above, and below one. Frictionless compensation is conceivable in a simplified, single-stage production process. Capitalist industry, however, must also cover capital charges, depreciation, materials, and energy. With unit elasticity, expanded output may require lower wages to meet increased nonwage costs; with more elastic demand, an innovating industry may preserve employment while drawing expenditure away from other sectors. Wage reductions can themselves contract industrial demand, and neither profits nor consumer savings necessarily return immediately as investment. The compensating movement may therefore intensify the original disturbance.
Section III embeds these mechanisms in the business cycle. Elastic credit allows investment and nominal purchasing power to expand beyond the limits of existing savings, temporarily concealing labor displacement. During depression, falling prices and asset values expose marginal firms and overextended projects:
On peut dire, par conséquent, que le chômage qui se manifeste alors en période de dépression est celui qui n'a été que retardé par l'élargissement du crédit pendant l'essor économique.
English translation: One can therefore say that the unemployment which then appears during depression is that which was merely delayed by the expansion of credit during the economic upswing.
Technological and cyclical unemployment are consequently intertwined rather than empirically separable at a glance. Yet an expansion founded on viable new industries leaves more durable employment than one driven principally by labor-saving investment in established branches.
Section IV adds capital-saving innovation: improved construction and equipment production reduce both labor requirements and demand for borrowed capital. Falling interest rates may redirect savings toward housing and durable consumption goods, but weak population growth and fewer new investment opportunities limit that outlet. Deflation then encourages saving while diminishing profitability; wage cuts deepen the contraction when investment remains blocked. Productivity gains that equilibrium reasoning would translate into higher real wages may instead produce pressure on employment and pay. The article’s enduring contribution is to make technical change a differentiated, monetary, and temporally uneven process—one whose adjustment mechanisms must be explained rather than presumed.
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