Emil Lederer, Der Staat als Retter der Wirtschaft (1932)

Emil Lederer’s newspaper article, preserved here as a reprint, argues that the economic crisis has overturned the conventional hierarchy between private enterprise and public administration. Supposedly dynamic private businesses depend on rescue by the supposedly inefficient state, while public enterprises have demonstrated resilience and economic leadership. Moving from Ivar Kreuger’s collapse to the performance of public institutions, then to Prussia’s postwar economic organization, Lederer turns a defense of state enterprise into a demand for economic democracy. His central question is who should control the concentrated power exercised over collective savings and productive resources.

The opening contrasts the initial interpretation of Kreuger’s suicide as an honorable man’s excessive sensitivity with the subsequent revelation of large-scale fraud. Lederer treats this reversal as more than an individual scandal. A leading capitalist, entrusted with ordinary investors’ savings, violated the private property that supposedly grounded his economic authority. Kreuger’s conduct exposes the distance between the prestige of business leadership and its actual trustworthiness. The losses suffered by small shareholders might therefore undermine their faith in the bourgeoisie’s competence and encourage them to recognize an interest in economic democracy. Lederer presents that political consequence as a possibility, not an accomplished conversion.

The article next broadens its evidence from spectacular private failure to the comparative durability of public enterprises and credit institutions. Familiar objections held that public businesses were bureaucratic, costly, unenterprising, and incapable of adapting to markets without monopolies or sovereign privileges. Crisis experience, Lederer argues, has turned those accusations against private industry:

Gerade die Privatbetriebe, die sich stärkster Monopolstellungen erfreuen, die von den Subventionen der Allgemeinheit (in Form von Zöllen oder direkten Zuwendungen) leben, geraten in die größten Schwierigkeiten.

English translation: Precisely those private enterprises that enjoy the strongest monopoly positions and live on subsidies from the public (in the form of tariffs or direct payments) are getting into the greatest difficulties.

This reversal challenges the claim that private success demonstrates superior entrepreneurial ability while public success merely reflects protection. Private monopolies already benefit from collectively supplied support, yet prove unable to withstand the crisis unaided. Lederer sharpens the argument through a counterfactual: genuinely unrestricted competition would drive asset values lower, destroy the foundations of credit, and dispossess savers as rapidly as a Bolshevik revolution. It would also eliminate remaining opportunities for work. The comparison makes a polemical point about capitalism’s own destructive mechanisms: private property is endangered not only by revolutionary opponents but by the uncontrolled operation of the system itself.

Heute ist es der vielgelästerte Staat, der mit seinem Kredit und seiner von ihm bereitgestellten Kaufkraft den stark eingeschrumpften privaten Wirtschaftsprozeß noch in Gang erhält.

English translation: Today it is the much-maligned state that, with its credit and the purchasing power it provides, still keeps the severely contracted private economic process going.

State intervention is thus not external interference with an otherwise functioning economy. Public credit and purchasing power have become conditions of its continued operation. Lederer asks what Germany’s situation would be if the state had not developed institutions capable of providing such assistance. His argument concerns accumulated organizational capacity as much as emergency action: rescue is possible because public economic structures already exist.

The Prussian example gives this claim institutional substance. Drawing on State Secretary Staudinger’s Der Staat als Unternehmer, Lederer describes the reconstruction of public enterprise after the war had impoverished and disorganized it. Railways had previously connected the state closely to the wider economy; a comparable organization subsequently emerged in electricity, without monopoly protection. The failure of Stinnes’s railway privatization plans preserved a broad public-economic framework capable of holding the economy together. Yet Lederer’s defense is qualified: he criticizes the continuing influence of large supplier industries over Reichsbahn management. Public ownership matters, but it does not automatically free administration from powerful private interests.

Against the image of a state staffed only by passive bureaucrats, Lederer emphasizes its capacity to recruit fresh personnel and lead economic development. He connects this renewed entrepreneurial role with an eighteenth-century precedent, while redefining entrepreneurship itself:

Unternehmer sein soll heißen, nach einem vorbedachten und realistischen Plan, in Erkenntnis der wirklichen Möglichkeiten und ohne Wunderglauben, mit richtiger Einschätzung seiner eigenen Kraft und mit einer gewissen Vorsicht zugleich aufzubauen.

English translation: Being an entrepreneur should mean building according to a considered and realistic plan, recognizing the actual possibilities and without belief in miracles, correctly assessing one’s own strength and exercising a certain caution at the same time.

Prudent construction replaces speculation as the measure of enterprise. Initiative cannot be evaluated apart from the danger of losses imposed on others. Even capitalist opinion, Lederer observes, now demands cautious management and restrained lending, rehabilitating banking practices previously dismissed as bureaucratic. The underlying problem is that concentration allows private entrepreneurs to accumulate power and wealth without recognizing the limits of further expansion. Kreuger’s collapse supplies a final test: his concern failed despite operating in supposedly crisis-resistant sectors such as matches and telephones. Favorable industries could not compensate for irresponsible leadership.

Folgt daraus nicht zwingend, daß Schluß gemacht werden muß mit der verantwortungslosen, unkontrollierten Wirtschaft der „Wirtschaftsführer“, und daß die Allgemeinheit mit fester Hand die Kontrolle ergreifen muß in einer wahrhaften Wirtschaftsdemokratie?

English translation: Does it not follow necessarily that an end must be put to the irresponsible, uncontrolled economic conduct of the “economic leaders,” and that the public must take firm control in a genuine economic democracy?

The closing question converts evidence of public competence into a claim to public authority. Lederer offers no detailed institutional blueprint; his contribution is to connect economic stabilization, responsible entrepreneurship, and democratic control. The state’s rescue of private enterprise demonstrates why control over socially consequential economic power cannot safely remain the unchecked prerogative of private leaders.