Emil Lederer, Das Danaidenfaß der Kapitalwirtschaft (1932)

Emil Lederer’s journal article attacks the belief that capitalist accumulation reliably creates and preserves private wealth. Its governing image—the bottomless vessel of the Danaids—presents saving as a continuously renewed effort whose results repeatedly disappear. Moving from a critique of capitalist security to historical evidence on company survival and share values, Lederer argues that capital destruction is an ordinary feature of the system, not merely an exceptional consequence of the current crisis. Legal protection, entrepreneurial competence, and the automatic adjustment of markets cannot guarantee the endurance of accumulated savings. The belief that they can nevertheless sustains investment:

Es ist dies eine haltlose Einbildung, eine Suggestion, die immer wieder neue Milliarden in den Akkumulationsprozeß hineinpumpt.

English translation: This is an untenable illusion, a suggestion that continually pumps new billions into the process of accumulation.

The claim concerns both economic organization and the memory of investors. People forget losses sufficiently readily to treat saving as the foundation of lasting wealth. Yet law may give devaluation the appearance of formal legitimacy, competent entrepreneurs remain vulnerable to economic fluctuations, and market adjustment destroys misallocated capital as often as it directs savings toward profitable uses. Lederer acknowledges capitalism’s expansion of society’s capacity to sustain its population, but measures this achievement against capital losses and unemployment. Distribution compounds the problem: an informed oligarchy captures exceptional gains, while small investors absorb losses and subsidies to distressed enterprises transfer burdens to the wider population, especially workers.

Lederer rejects the defence that crises arise only because politics obstructs spontaneous economic forces. War and its consequences belong to the historical development of capitalist power, rather than constituting disturbances that can simply be removed from the analysis. More fundamentally, an economy organized through uncertain signals discovers mistaken decisions only after resources have been committed. Bankruptcy and restructuring therefore express its normal corrective mechanism. His opening footnote also challenges an account centred on technically superior firms displacing older competitors: booms encourage a multitude of ventures whose vulnerability becomes apparent when conditions reverse.

The decisive conceptual move is from the investor’s loss to the social cost of repeated accumulation. Failed investment, premature obsolescence, unequal profits, speculative waste, and credit-supported expansion intensify subsequent crises. Replacing destroyed capital then places fresh demands on the social product:

Sie schmälern die Konsumbreite und legen der Gesamtheit Einschränkungen des Konsums auf, die bei einigermaßen planmäßiger Gestaltung der Gesamtproduktion nicht erforderlich wären.

English translation: They reduce the scope of consumption and impose restrictions on consumption upon society as a whole that would not be necessary with a reasonably planned organization of total production.

Planning functions here as a comparative standard, not as a developed institutional programme. Lederer’s argument is that retrospective correction through devaluation exacts sacrifices that more deliberate coordination could avoid. Nor does incorporation solve the problem of capital’s fragility. Companies may retain their legal existence while losing their capital base; survival through subsidies can conceal economic death. Even during expansion, managerial errors, changing demand, competition, technical progress, and bureaucratization undermine investments. Uncertainty makes both action and inaction consequential.

Daher ist es wohl nicht zu kühn zu behaupten, daß ein erheblicher Teil der Sparkapitalien immer wieder verloren geht.

English translation: It is therefore probably not too bold to assert that a substantial part of savings capital is repeatedly lost.

Two empirical discussions support this proposition. H. A. Shannon’s study of early British limited companies follows formations under the 1856 legislation. Of 4,839 companies registered in London during the first decade, only 3,104 actually commenced operations. Excluding 528 enterprises with a monopoly character left 2,576, of which only 206 survived in 1929. Lederer distinguishes insolvency from voluntary liquidation and absorption into other firms: disappearance did not invariably entail capital loss. Nevertheless, the evidence reveals extensive failure, opportunities for promoters to enrich themselves, and liquidation procedures that could conceal fraud. Shannon’s judgement that losses probably exceeded running profits reinforces the challenge to durable accumulation, although Lederer contests any confident expectation that later periods became safer.

Oskar Morgenstern’s study of approximately 200 Austrian joint-stock companies supplies the contemporary counterpart. Against roughly 5.8 billion schillings represented by their 1913 market value and subsequent effective capital increases, their average market value in 1930 was only 1.126 billion—19.31 percent. By October 1931 it had fallen to 784 million. Lederer disputes attributing this collapse principally to inflation: reduced real wages and depreciated debts had also enabled substantial real-capital formation. Austria’s diminished economic territory mattered greatly, but he expects other stock exchanges likewise to reveal severe losses.

Importantly, Lederer does not equate every shareholder loss with destruction of national wealth. Forced sales can transfer prospective gains to buyers rather than eliminate productive assets. His broader claim is that substantial losses nevertheless occur socially as well as privately. The article’s relevance lies in this conjunction of uncertain investment, unequal exposure to loss, and the consumption sacrifices required to rebuild capital. Its closing attack on capitalist “rationality” treats bankruptcies, ruined livelihoods, and wasted human capacities as evidence against both the security of accumulation and the supposed harmony of interests:

So ist auch die Statistik der Aktienwerte durch die Enthüllung der periodisch auftretenden Vernichtung großer Kapitalteile die beste Kritik an der „Rationalität“ der kapitalistischen Produktion.

English translation: Thus the statistics of share values, by revealing the periodically recurring destruction of large portions of capital, also provide the best critique of the “rationality” of capitalist production.