Emil Lederer’s newspaper article proposes an organized system of production by unemployed people for unemployed people. Its starting point is the coexistence of unused productive capacity and unmet material needs during the depression. Idle factories, unemployed workers and salaried employees, and available resources cannot be brought together because effective demand is contracting. Falling prices do not resolve the problem when aggregate income falls faster, capital formation stalls, and credit is restricted.
Der einfachste Menschenverstand kann es nicht fassen, was die Paradoxie jeder Wirtschaftskrise ist: dass Produktionselemente aller Art, wie durch magische Kräfte voneinander getrennt, nicht zu produktiver Leistung verknüpft werden können.
English translation: The simplest common sense cannot comprehend what constitutes the paradox of every economic crisis: that productive elements of every kind, as though separated from one another by magical forces, cannot be combined into productive activity.
The apparent irrationality has an economic explanation: additional output ordinarily needs buyers, and expanding production under depressed demand can undermine enterprises still operating. Lederer therefore proposes a distinct route to increased output. Closed establishments would resume production with unemployed personnel, but their goods would be distributed without payment to the unemployed rather than offered on the market. The central conceptual move is to distinguish an increase in production from an increase in market supply. Material provision could improve without requiring a corresponding expansion of monetary purchasing power.
The article develops this proposal through practical sections on production, administration, costs, product selection, distribution, market effects, and scale. Owners would receive compensation only for actual depreciation of their equipment, in government or municipal debt instruments beginning to bear interest after three years. Domestic raw materials and fuels would, where possible, be supplied through the same arrangement; imported materials would require purchases, potentially financed partly through credit. No return would be paid on invested capital, since closed enterprises were already unable to service it. Utility and freight charges would be waived, and empty shops would become distribution premises staffed by unemployed commercial employees.
Arbeiter und Angestellte arbeiten — gegen Weiterbezug der Arbeitslosenunterstützung — ohne Lohnanspruch in diesen Betrieben. Sie erhalten ein Aequivalent ihrer Leistung in Produkten.
English translation: Workers and salaried employees work in these enterprises—while continuing to receive unemployment benefits—without entitlement to wages. They receive an equivalent of their work in products.
Continued unemployment support is essential: the scheme supplements existing monetary provision rather than replacing it. Participants would receive certificates recording the value of hours worked at established wage rates, exchangeable for goods of their choice. Although cash wages disappear within this sector, tariff wages remain the accounting measure of labor. Goods would likewise be calculated normally, including both cash expenses and services supplied free of charge. Lederer thus separates the valuation of production from the monetary payments needed to organize it.
A commissariat for industrial mobilization would appoint managers and supervise operations and accounts with worker and employee committees. Every product would go to designated distribution points. Unused capacity in functioning enterprises could also be enlisted, provided separate accounting maintained the boundary between the two forms of production. Linking successive production stages would reduce cash requirements; Lederer estimates these at roughly 20–30 percent of output value. This figure rests on excluding profits, wages, capital interest, taxes, most social contributions, and utility charges from cash expenditure—not on claiming that production consumes no resources.
The intended products address shortages in unemployed households: coal, shoes, clothing, linen, stockings, furniture, and household utensils. Food production might be included where practicable. Participating workers would take only part of the output; a substantial surplus would be distributed free to other unemployed people. The scheme consequently combines compensation for work with wider collective provision. The assortment remaining after participants exercised their choices would indicate whether production had been organized in suitable proportions and where adjustments were needed.
An dem Vorschlag ist wesentlich, dass die Produkte nicht auf den Markt kommen.
English translation: It is essential to the proposal that the products do not enter the market.
Lederer qualifies this strict organizational rule with an argument about demand. Unemployed households largely cannot purchase the proposed goods already; supplying them therefore need not displace existing sales. Where substitution occurred, released purchasing power would move toward other goods. Even recipients’ resale of distributed products would, he argues, generate demand elsewhere, while the quantities involved would be too small to disturb prices. The proposal’s insulation from market disruption thus depends both on controlled distribution and on assumptions about the scale and redirection of household expenditure.
Lederer explicitly denies that the scheme would reduce the financial burden of unemployment benefits. Its immediate gain would be higher real incomes. High productivity also limits how many people could be employed producing the required goods, so rotating participation would spread the work. He envisages initially engaging 250,000–350,000 unemployed people. For each 100,000 working three days weekly, he estimates annual output at 140 million marks after allowing for current prices and lower efficiency, with cash costs of 42 million. Psychological benefits and greater confidence abroad might partly offset these costs indirectly.
Existing unemployment kitchens and repair workshops provide precedents for extending organized self-help into industrial production. The concluding claim gives the arrangement a transitional character:
Wird der Plan durchgeführt, so wird sich ein Sektor organisierter naturalwirtschaftlicher Produktion und Verteilung bilden, der späterhin — nach Aufsaugung der Arbeitslosen — wieder in die erwerbswirtschaftliche Erzeugung übergehen kann.
English translation: If the plan is implemented, a sector of organized production and distribution in kind will emerge, which can later—after the unemployed have been absorbed—return to production for monetary gain.
The article’s significance lies in treating unemployment as a failure to connect productive resources rather than as evidence that useful work is exhausted. State-supported self-help would temporarily reconnect those resources outside ordinary market exchange while preserving benefits and established valuation standards. Lederer’s closing urgency is social as well as economic: visible productive activity could restore confidence, whereas passive acceptance of idleness threatens attachment to the productive system itself.
This work was divided into 1 sections when it entered the library's research corpus—an apparatus for search and citation, not necessarily the author's own table of contents. Each title opens its summary.
Put a question to this work; the Librarian answers from its 1 sections and cites the passage.
Ask the Librarian