Emil Lederer: Cooperatives and the Competence of the Reich Government (1921)

This official commission discussion intervention addresses two questions in a debate over municipalization: whether cooperatives should be exempted, and whether requiring a decision by the Reich government would effectively constrain municipal action. Lederer’s contribution proceeds through a comparison of practical risks rather than a general defense or rejection of municipal ownership. Its central concern is how institutional arrangements would work: protecting cooperatives from uncertainty while recognizing that municipalities could pursue municipalization through another administrative route.

On cooperatives, Lederer acknowledges the argument against complete exemption. Numerous small consumer cooperatives serving civil servants and particular occupational groups can compete with commerce in inefficient and fragmenting ways. Yet this objection must be weighed against the position of large cooperatives, whose established operations would remain vulnerable if their exemption were unresolved:

Andererseits ist es zu verstehen, daß die großen Genossenschaften sich nicht einer politischen Situation aussetzen wollen, die ihre Betriebe evtl. mit der Kommunalisierung bedroht.

English translation: On the other hand, it is understandable that the large cooperatives do not wish to expose themselves to a political situation that might threaten their enterprises with municipalization.

Lederer therefore favors exemption as the lesser harm. He does not deny the competitive problems associated with smaller cooperatives; he judges them less serious than leaving cooperatives exposed to possible municipalization. The argument turns on the consequences of legal uncertainty, not on treating every cooperative as economically beneficial.

He then proposes a provision allowing municipalities to delegate the operation of a monopoly to designated bodies. Recalling the Socialization Commission’s previous-year draft, he explains that cooperatives had been envisaged as principal operators under such an arrangement. This would make exemption more acceptable by allowing cooperative enterprise to participate in municipal monopoly provision. Lederer doubts whether section 4, item 2 already authorizes this clearly enough: language permitting transfer into municipal ownership does not unambiguously establish the proposed delegation mechanism.

The second part endorses Lindemann’s position on the Reich government’s competence, without restating it fully. Lederer adds a practical objection: a municipality could bypass the Reich government’s decision by establishing enterprises itself and municipalizing existing private businesses.

Jede Gemeinde kann eine Brotbäckerei errichten und die anderen privaten Bäckereien kommunalisieren. Man kann auf diese Weise eine Kommunalisierung mit sehr schwerer Belastung der Volkswirtschaft in einer Gemeinde, die eine sozialistische Mehrheit hat, erzwingen.

English translation: Any municipality can establish a bread bakery and municipalize the other private bakeries. In this way, municipalization imposing a very heavy burden on the national economy can be forced through in a municipality with a socialist majority.

An interjection specifies that support from the central authority of the constituent state would be required; Lederer accepts this qualification and describes that authority as providing guidance. His conclusion remains that the arrangement would not restrain the development in question. The intervention’s significance lies in this distinction between formal control and practical administrative capacity: central competence cannot reliably limit municipalization if another route remains available, just as ambiguous ownership provisions cannot securely define cooperatives’ position.