Emil Lederer, Die deutsche Industrie im Weltkrieg (1916)

Emil Lederer’s essay, published as a contribution to an edited volume, examines the transformation of German industry under wartime mobilization. Its central claim is that military direction does not abolish private enterprise: it strengthens industrial organization, capital concentration, and the coordination of profit-seeking with state purposes. Moving from the initial economic crisis through raw-material administration and factory conversion to the institutional consequences of mobilization, Lederer interprets war as an acceleration of tendencies already present in advanced capitalism.

Jeder moderne Krieg, welcher mit dem Einsatz aller staatlichen Kräfte geführt wird, ist notwendigerweise ein Industriekrieg.

English translation: Every modern war conducted with the commitment of all the state’s resources is necessarily an industrial war.

“Industrial war” initially means the simultaneous withdrawal of workers into military service and an enormous increase in demand for industrial products. Before these forces establish a new balance, war produces unemployment, unsaleable inventories, credit disruption, and transport difficulties. Conscription subsequently reduces unemployment, while army contracts more than compensate for declining private demand. Yet recovery requires transformation rather than a return to normal operations. Whereas agriculture can largely continue producing familiar goods, industry must recruit and train women, reorganize production, and overcome the loss of foreign markets and supplies.

Lederer connects these pressures to Germany’s international economic dependencies. Britain’s commercial warfare obstructs exports, while German export prohibitions initially impose additional restrictions, some subsequently relaxed. Dependence on imported metals, fibres, hides, and other materials compounds the problem: replenishment becomes difficult precisely when military consumption expands and the state requisitions existing stocks. Industry therefore needs continuous contact with military authorities over labour, materials, markets, and production priorities. His concept of industrial militarization encompasses civilian suppliers as well as firms directly fulfilling army contracts.

The first institutional response is raw-material management. Lederer describes the War Raw Materials Department, established in the Prussian War Ministry in August 1914, as coordinating conservation, allocation, and the competing claims of civilian and military consumption. Industry-financed joint-stock companies undertake collection and distribution. Recycling, substitutes, restrictions on peacetime consumption, and maximum prices help prevent panic and sustain production, although at a reduced scale. The inclusion of smaller firms in allocations matters because administrative coordination cannot simply be equated with their immediate exclusion.

The essay next turns from distributing materials to reorganizing production. Military requirements extend far beyond armaments into clothing, equipment, and food. Some firms manufacture related products; others install machinery for entirely different processes, retaining little beyond their buildings and workforce. Lederer distinguishes alternative ways of obtaining necessary materials from the manufacture of substitutes for unavailable products. Technical adaptation can yield innovations with lasting peacetime value, but he also condemns profiteering in food substitutes harmful to public health. Changes in civilian purchasing power and consumption reinforce the upheaval: military demand, suppliers’ luxury expenditure, and food inflation all alter the market.

For Lederer, Germany’s capacity to manage these changes rests principally on its prewar industrial organization. Cartels, employers’ associations, trade associations, and rationalized factory processes make production both adaptable and administratively accessible. He contrasts this capacity with the organizational difficulties of Britain and France, while also noting that conscription indirectly suppresses strikes and labour disputes. Mobilization thus depends on established business institutions and constrained labour conflict, not solely on commands issued by the state.

Die Organisationen der Industrie nahmen diese Aufgabe dem Staat ab, der sich auf die Erlassung von Normen beschränken und zu deren Ausführung er in großem Umfang die Unternehmer selbst heranziehen konnte.

English translation: Industry’s organizations relieved the state of this task; it could confine itself to issuing rules and could draw extensively on the entrepreneurs themselves to implement them.

This delegation provides the hinge of Lederer’s argument. Organized industry allows the state to regulate an entire productive system without separately supervising countless disconnected establishments. Entrepreneurs remain agents of implementation, and private firms retain their institutional form. Administrative reach is therefore not, by itself, evidence of socialist transformation.

So war die deutsche Industriekriegswirtschaft Regelung privater Unternehmerstätigkeit.

English translation: Thus Germany’s industrial war economy was the regulation of private entrepreneurial activity.

Lederer argues that wartime regulation instead sharpens the characteristics of advanced capitalism: growing profits in large enterprises, displacement or destruction of smaller plants, and pressure toward rationalization, cartelization, and merger. The state promotes industrial combinations because organized producers are easier to mobilize, even while attempting, with only partial success, to curb excessive cartel power. The distinction between coordinated production and transformed ownership is the essay’s decisive conceptual move.

The conclusion projects these tendencies beyond the war. Labour shortages, taxation, and difficulties with power supplies may sustain concentration. Strategic raw-material reserves would require continuing cooperation between government and industrial associations, potentially routing much raw-material trade through state agencies. Lederer presents these developments as probable consequences rather than established outcomes.

Hochkapitalistische, organisierte Wirtschaft mit starker Regelung durch die staatliche Gewalt dürfte die Form der Wirtschaft sein, der wir zusteuern.

English translation: An organized economy of advanced capitalism, strongly regulated by state authority, is likely to be the economic form toward which we are heading.

The essay’s relevance lies in its account of regulation as compatible with, and potentially reinforcing, private accumulation. War transforms the conditions of entrepreneurial action without necessarily displacing its governing incentives. Lederer’s anticipated order combines continuing opportunities for profit with a diminished freedom for economic activity to choose its own course.