Emil Lederer, National Economic Planning

Emil Lederer’s encyclopedia article, originally published in 1933 and republished in the supplied 1937 version, examines planning as an economic project whose possibilities depend on social power. Moving from definitions and the causes of capitalist crisis through socialist calculation, wartime controls, and contemporary planning proposals, it concludes with the institutional requirements and political obstacles to comprehensive coordination. Its central distinction is between organizing particular economic interests and directing production in the interests of society.

Lederer begins by distinguishing the broad English expression “national economic planning” from Planwirtschaft, which implies control of the economy as a whole. Planning proposals range from capitalist reforms to socialist reconstruction, but share a diagnosis: crises leave workers and machines idle because production depends on profitability rather than need. Monopoly sharpens the problem. Its control of prices and investment undermines the competitive adjustment on which capitalism’s defenders rely, without establishing an alternative coordination of the whole.

A complete scheme of organization can never be achieved through the piecemeal regulation of individual parts of the economic structure.

This proposition supplies the article’s organizing criterion. Stabilizing profits in one industry can aggravate imbalances elsewhere; more organization does not necessarily mean better social coordination. Comprehensive planning requires control of basic industries under a general production plan, or direction through money and credit. Credit alone, however, cannot integrate every aspect of a developed economy. Lederer distinguishes capitalist from socialist plans, then differentiates socialism retaining market prices from comprehensive administrative control.

His treatment of economic calculation rejects both technical utopianism and the claim that socialism cannot calculate. A moneyless economy mistakes production for an engineering problem, neglecting social relations, consumer freedom, and the need for a common standard of valuation.

So long as it is impossible physically to add cows and spindles, a purely technical construction of the economic system is out of the question.

Yet this objection does not establish the necessity of private capital markets. Against arguments associated with Max Weber and Ludwig von Mises, Lederer maintains that planned enterprises could compare productive efficiency, correct mistaken valuations, and use statistical information to monitor accumulation and depreciation. Central coordination need not eliminate comparisons within industries. Following Marschak, he also turns the criticism against monopoly capitalism, where market power can protect inefficient producers. He presents Soviet experience as evidence that calculation can coexist with consumer choice, while locating practical difficulties in labor discipline and the relative valuation of different kinds of work. Accumulation remains possible, though his account explicitly recognizes compulsory savings, taxation, and political coercion.

The historical survey distinguishes wartime mobilization from lasting social planning. War controls protected capitalist institutions while securing military supplies; their exceptional authority and temporary purpose limited their relevance to peacetime reconstruction. German postwar proposals exposed the difficulty of directing production while leaving capitalists in possession of their capital. More promising socialization schemes envisaged publicly accountable but operationally independent management, joining social ownership to market exchange. British guild socialism and nationalization proposals similarly raised, without fully resolving, the passage from control of key sectors to economy-wide coordination.

Lederer then traces the displacement of planning by prosperity-era reformism and its revival after 1929. In the United States, he separates industrialists seeking coordinated trusts from progressive intellectuals seeking production for consumption needs and popular participation. These projects have opposed political implications. Organized capitalism might make socialization more intelligible to workers, but concentrated economic authority could also develop into fascist domination.

For the characteristic stamp of every economic order is derived from the distribution of political power and from the social framework in which it operates.

The article’s institutional discussion gives this argument practical substance. A central credit bureau could coordinate investment, restrain excessive industrial expansion, and finance activities absorbing technologically displaced workers. Retained profits would remain difficult to control. Credit planning within capitalism would also begin from existing incomes and market demand, not automatically from unmet social needs. Taxation could redistribute purchasing power, but coordination alone would not abolish these limits. Likewise, a foreign-trade monopoly would provide little command over production while producers remained privately controlled.

Socialist planning need not prescribe every enterprise’s output. Control of basic industries and credit could coexist with smaller private or cooperative producers, allowing the flexibility required by consumer choice. Technological progress could become an opportunity to shorten working hours rather than a cause of unemployment; socially useful production could continue without yielding profits. Lederer nevertheless treats the prospect of broadly satisfied needs and expanded non-economic activity as distant, not immediately attainable.

The conclusion refuses to derive political transformation from an economically persuasive design.

The construction of a new economic system depends more upon the distribution of power than upon the elaboration of concepts, and common sense fails to reveal the path on which all social forces will unite.

Entrenched owners, politically mobilized middle classes, and limited working-class power could prolong an unstable mixture of competition and partial organization. Crisis might force socialization and investment control; renewed world expansion might instead stabilize that mixed order. Lederer identifies a direction toward planning without predicting its route. The article’s enduring relevance lies in separating technical coordination from social purpose: planning’s meaning depends on who commands production, whose needs govern it, and how economic power is constrained.