Gottfried Haberler: “Discussions, II”

Published in May 1939, Haberler’s symposium discussion contribution to Achieving Economic Stability in Dictatorial and Democratic Countries examines how economic performance should be compared across political regimes. Responding to Dr. Lehmann and Professor Feiler, he moves from the choice of performance indicators to the durability of German stabilization, then to the relationship between productive efficiency, military purposes, and freedom. His central intervention is methodological: reduced unemployment, resistance to depression, and rapid rearmament do not by themselves establish superior economic welfare. Yet rejecting the German regime’s purposes does not settle the question of its effectiveness in pursuing them.

Haberler begins by endorsing Lehmann’s distinction between the most publicly visible measure of success and measures closer to material welfare:

Dr. Lehmann said, I think quite rightly, that the general public takes the volume of unemployment as an index of the failure or success of economic policy, while in reality one should take the volume of production or, even better, the volume of consumption.

The preference for consumption changes the terms of comparison: putting people to work is not equivalent to improving what they can consume. Haberler also challenges the generalization from Germany’s employment record to totalitarian countries as a group. German unemployment fell sharply between 1929 and 1937, but Italian statistics, taken at face value, indicate a higher unemployment percentage in 1937 than in 1929. He explicitly qualifies this counterexample by acknowledging his limited knowledge of the statistics’ background. The comparison therefore unsettles an easy claim of totalitarian superiority without pretending to provide a definitive assessment of Italy.

His second move adds stability to unemployment, production, and consumption as a distinct criterion. Germany’s escape from the depression of 1937 might suggest that its system offered protection against disturbances abroad, even at substantial costs in political freedom and living standards. Haberler distinguishes this observed resilience from the stronger claim that it would last. Nevertheless, he rejects the proposition that the end of the armaments race must, on purely economic grounds, produce a crisis:

I could easily conceive of a policy which substitutes investment for civil purposes when armaments taper off, but whether, politically, such a policy will be possible, is, of course, more than doubtful.

The distinction between economic possibility and political feasibility is crucial. Haberler neither guarantees lasting German stability nor treats collapse as economically inevitable. He identifies a conceivable substitution of civilian investment for armaments expenditure, while leaving its political realization deeply uncertain. Because he expressly offers this judgment without developing its reasons, the passage should be read as a limited intervention rather than a demonstrated theory of stabilization.

The final section asks whether the apparent efficiency of German mobilization can be separated from its ends. Haberler takes disapproval of those ends as shared, but observes that fear of the German war machine implicitly credits the system with considerable productive effectiveness. He then poses a sequence of questions: is that reputation justified; could the same energies increase peaceful wealth; and could democracies achieve comparable results? The decisive alternative is whether efficiency depends on restricting the purposes and freedoms that economic activity serves:

In other words, is it true that it is comparatively easy to be efficient if the only purpose is to prepare a country for war and to increase its military strength, while if a reasonable degree of freedom of consumers' choice and political freedom is desired this efficiency is either unattainable or illusory?

Haberler explicitly leaves these questions unanswered. The contribution’s significance lies in framing them: military mobilization may demonstrate capacity without demonstrating consumer welfare, and a conceivable economic policy may remain politically unavailable. Comparing regimes therefore requires attention not only to output and stability, but also to the ends pursued and the freedoms preserved.