Emil Lederer: Discussion Contribution on Coal Mining (1920)

This resumed speaking turn from the official commission proceedings examines competing plans for reorganizing coal mining. Lederer defends the majority report and the previous year’s socialization commission proposals against Wissell’s objections, then develops a sustained critique of Rathenau’s alternative. His central contention is that public control of privately owned enterprises cannot accomplish what transferring the means of production to a collectively governed economic body would achieve. Ownership changes the balance of power, the meaning of administrative institutions, and the psychological conditions of production; transparency and adjusted incentives cannot substitute for that transformation.

Lederer first insists that the majority’s provisions must be assessed together. Reich authority over coal prices does not necessarily reproduce the bureaucratic intervention criticized under existing arrangements. Where private interests remain opposed, the minister intervenes to settle recurrent conflicts. Following expropriation, however, pricing authority would extend the work of a self-governing body in which different social interests already have to reach accommodation.

Die Tarifhoheit ist nur dasselbe Wort, bedeutet aber in diesem System naturgemäß etwas anderes.

English translation: Authority over tariffs is merely the same word, but naturally means something different within this system.

The conceptual move is to distinguish an institution’s formal designation from its function within a particular ownership structure. Workplace democracy likewise means something different after expropriation than under mere supervision of capital. Lederer separates economic feasibility from immediate political circumstances: the commission should formulate what it considers economically possible and practicable, rather than restrict itself to what current conditions permit.

Compensation, he argues, does not abandon the principle of socialization. Payment to former owners need not preserve their economic position unchanged, especially amid monetary depreciation. Nor should the cost fall arbitrarily upon the owners of the particular industry selected for transformation. Tax legislation should distribute the compensation burden across capital generally. His defense therefore joins the removal of private command over production to a broader fiscal allocation of its costs, rather than equating socialization with uncompensated confiscation.

Turning to Rathenau, Lederer recognizes an important departure from earlier planning proposals. Rathenau seeks not merely to redistribute goods to present consumers but to influence production itself. A narrowly consumer-oriented policy risks reducing entrepreneurial consumption only marginally or benefiting today’s consumers at tomorrow’s expense. Rathenau instead proposes to make enterprises transparent and direct their incentives through profit allocation. Lederer treats this as a serious innovation, but asks whether motives operating upon the capitalist entrepreneur can produce a genuinely collective economic result.

His examination distinguishes ongoing monetary depreciation from a hypothetical situation in which coal prices have reached world-market levels. Under depreciation, the decisive issue is not insufficient information. Wages and different material inputs move toward world-market prices at unequal speeds. The dispute concerns whether entrepreneurs may retain the resulting price margins to finance private investment, or whether those margins should become resources for the community. Transparency cannot determine who is entitled to this capital formation.

Es ist dem Unternehmer, wenn ich ihn bloß kontrolliere, durch die Tatsache des Besitzes an den Produktionsmitteln, durch die Tatsache, daß er den Betrieb führt, immer noch die Stelle des überlegenen Kontrahenten gegeben.

English translation: If I merely supervise the entrepreneur, the fact that he owns the means of production and the fact that he runs the enterprise still give him the position of the stronger party to the negotiation.

Ownership and operational command allow the entrepreneur to invoke risk and investment requirements against public demands. The conflict therefore remains a political question of power, renewed whenever prices are fixed. Lederer uses Rathenau’s own earlier emphasis on entrepreneurial strength to expose the limits of a scheme that leaves that strength intact.

Under normalized market conditions, Lederer’s objection changes. Centrally distributing a guaranteed aggregate return would chiefly benefit shareholders, not reward the personal achievement of enterprise directors. Allowing individual firms to enlarge their share resembles the prewar syndicate’s competition for an established total output. Bonuses for lower costs or greater production do not distinguish the proposal from ordinary capitalist incentives.

Das ist doch einer der wichtigsten Vorteile des Kapitalismus, daß er die Steigerung der Produktion und die Verbilligung der Produktion prämliert; darin liegt der Schlüssel dafür, daß das auf dem Privatinteresse ruhende System zugleich auch in der Richtung der Allgemeinheit wirken kann.

English translation: It is, after all, one of capitalism’s most important advantages that it rewards increased production and cheaper production; therein lies the key to how a system resting on private interest can also operate in the interests of the community.

This concession sharpens rather than weakens his criticism: incentives already supplied by capitalism do not justify an elaborate new apparatus as a distinctively collective economy. In neither monetary situation does Rathenau’s mechanism overcome the underlying problem.

Lederer concludes by connecting institutional uncertainty with the psychology of entrepreneurs and workers. Leaving the date of transfer, amortization rate, and compensation basis open to future governments encourages entrepreneurs to leave coal mining. Yet postponement also fails workers who no longer accept working for private capital.

Dieser Vorschlag liegt dann also in der Mitte; er ist, wenn ich mir ein triviales Bild gestatten darf, nicht ein goldener Mittelweg, sondern er ist ein Sitzen zwischen zwei Stühlen; eine Garantie ist nach keiner Richtung hin gegeben.

English translation: This proposal thus occupies the middle; if I may permit myself a commonplace image, it is not a golden middle way but a sitting between two stools; no guarantee is given in either direction.

The contribution’s significance lies in its linked tests of reform: ownership, economic power, productive incentives, and psychological credibility. Lederer prefers the previous commission’s plan because its construction and anticipated psychological effects are clearer. His argument makes socialization a transformation of the relationships governing production, not simply a more transparent administration of private enterprise.