Emil Lederer, Schlußwort (1927)

Emil Lederer’s Schlußwort is a published closing contribution to a conference discussion about productivity, wages, accumulation, and Germany’s position in the world economy. Its argument develops through replies to individual speakers, especially Löwe, Tarnow, Lemmer, and Teßmar. Lederer identifies an emerging agreement that wages and productivity must be considered together, but challenges the assumption that productive expansion necessarily generates the market needed to sustain it. Rationalization can defeat its own purpose when pricing and income distribution prevent the consumption of increased output. His conclusion combines this diagnosis with a call for empirical investigation capable of giving theoretical disagreement a shared factual basis.

The opening response to Tarnow’s proposed economic “tableau” establishes that methodological concern. Estimating actual or possible consumption requires systematic knowledge of changes in productive forces, rather than speculation about aggregate economic capacity. Population growth complicates the calculation: additional people consume goods, but also require machinery for their workplaces, absorbing part of the increased productive resources. Lederer therefore welcomes the discussion’s attention to developments in the world economy since 1913. He describes their historical significance emphatically:

Ich stehe nicht an, diese Veränderungen als eine entscheidende technische Revolution zu bezeichnen, etwa ebenso weittragend wie die Ersteinführung der Maschinen, jedenfalls schneller zu entscheidenden Resultaten führend.

English translation: I do not hesitate to describe these changes as a decisive technological revolution, approximately as far-reaching as the first introduction of machines, and in any case leading more rapidly to decisive results.

This comparison supplies the scale of the problem without substituting historical analogy for measurement. The expansion of productive power makes a reassessment of consumption and distribution urgent, but its extent and effects still require investigation. Lederer also addresses an omission raised during the discussion: reparations. He explains that he had not treated them as a major recent deduction from Germany’s social product because payments had largely been financed through borrowing. This is a limited judgment about the preceding years, not a denial of future burdens; he expressly notes that the reparations obligation had not yet reached its peak.

The central analytical move follows Löwe’s account of how an accumulation rate can become excessive. The problem is not simply that investment increases capacity, but that the economic arrangements accompanying investment can obstruct its use:

Wir haben zunächst den widerspruchsvollen Zustand, daß ich auf der einen Seite die Produktionsmöglichkeit steigere, auf der anderen Seite diese Produktionsmöglichkeit nicht ausnutzen kann, weil ich den Markt durch die Preis- und Lohnpolitik versperre.

English translation: We initially have the contradictory situation in which, on the one hand, I increase the possibility of production, while, on the other, I cannot make use of this possibility because I close off the market through price and wage policy.

Lederer draws on Siemens’s warning that rationalized industries need to utilize their full capacity. When they fail to do so, overhead costs weigh more heavily, undermining the gains rationalization was intended to deliver. Higher production costs consequently cannot settle the dispute: they may themselves reflect unused capacity. His criticism of Lemmer is that repeated accumulation cannot be assessed independently of whether income distribution enables consumption to grow correspondingly. The relevant unit of analysis is thus the relationship between investment, market access, and purchasing power, rather than production costs considered alone.

Cartels sharpen this contradiction. Their higher profits permit further accumulation and create the conditions for additional production, while a policy of restricting output prevents those conditions from being realized. Lederer treats this as a structural tension extending beyond particular enterprises. He then assigns wage increases a corrective function:

Das ist ein Widerspruch unserer ganzen Wirtschaftsstruktur, den man nicht ohne weiteres aus der Welt schaffen kann, sondern da muß letzten Endes die Steigerung des Lohnes erzwungenermaßen die Korrektur bringen, die bei der Rationalisierung an sich durch Senkung des Preises hätte erfolgen müssen.

English translation: This is a contradiction of our entire economic structure that cannot simply be eliminated; rather, in the end, an increase in wages must necessarily bring about the correction that rationalization itself should have produced through a reduction in prices.

The distinction between these two routes matters. Rationalization ought to make goods cheaper; where price policy blocks that adjustment, higher wages must restore the relation between productive capacity and consumption. Lederer therefore accepts the connection between wages and productivity while refusing to make wages merely a passive consequence of technical advance.

The final substantive section answers the contention that export dependence determines Germany’s room for maneuver in wages, prices, and consumption. Teßmar’s assertion that additional consumption requires additional imports seems to Lederer to confuse the discussion, especially if it implies imports without corresponding exports. Obtaining goods through exchange can instead be understood as an indirect route of production. His target is the presumption that imports should be minimized irrespective of the costs:

Wir müssen uns von der merkantilistischen Vorstellung befreien, als ob der Import möglichst niedrig gehalten werden müsse — ohne Rücksicht auf die Kosten, welche eine solche Politik mit sich bringt.

English translation: We must free ourselves from the mercantilist notion that imports must be kept as low as possible—without regard to the costs that such a policy entails.

His argument is conditional: Germany must permit imports and encourage other countries not to obstruct its exports. Under those conditions, he places the emphasis on the domestic price level and its susceptibility to monetary and credit policy. He attributes a substantial part of Germany’s export difficulties to an excessively high price level associated with stabilization of the mark. External constraints should therefore be investigated through these mechanisms, not invoked as a blanket objection to expanding consumption.

Lederer closes by recognizing both persistent disagreement and an unexpected convergence between opposing sides. Personal discussion has advanced an argument previously conducted through publications, but practical results require better knowledge of economic facts and cooperation from economic practitioners. The contribution’s relevance lies in its concise account of why technical efficiency, accumulation, and consumption cannot be analyzed separately: productive gains depend on distributive and pricing arrangements that allow increased capacity to become usable output.