Emil Lederer: Discussion Contribution on Coal Mining (1920)

Emil Lederer’s contribution is a recorded speaking turn in an official commission discussion on the organization of coal mining, published in 1920. Addressing proposals associated with Rathenau and Vogelstein, and invoking Weber’s criticism and the previous year’s majority report, Lederer examines what would make a proposed “state trust” substantively different from regulated private enterprise. His central contention is that retaining private ownership undermines both the transparency of production costs and the prospect of authoritative central control over profits. The intervention moves from the institutional meaning of a trust, through the accounting problems of integrated enterprises, to the incentives of owners who do not regard eventual socialization as inevitable.

Lederer begins by acknowledging that Rathenau’s designation of his proposal as a state trust appears to clarify the disagreement. Yet the defining feature of a trust is precisely what Lederer and his allies have found missing: the concentration of productive assets under a single ownership. Some supporters of their report, he suggests, could have accepted a construction based on Rathenau’s principles had it genuinely brought the means of production into one hand. He reads Weber’s objection similarly, as disappointment at the disappearance of the trust principle originally envisaged. The distinction between a state trust and what Lederer calls a social trust might therefore be relatively small, but only if their underlying arrangements actually converged.

An diesem Punkte zeigt sich bereits sehr deutlich, daß es nicht nur ein Spiel um Worte ist, wenn man von der Vereinigung der Produktionsmittel in einer Hand spricht, sondern das schließt sehr wesentliche praktische Unterschiede in sich, vor allem in der Frage der gemischten Werke.

English translation: At this point it already becomes very clear that speaking of the unification of the means of production in one hand is not merely a play on words; rather, it entails very substantial practical differences, above all concerning mixed enterprises.

The crucial test is the treatment of mines belonging to enterprises that combine coal extraction with further processing. Separating those mines from their existing owners would establish a different institutional basis from leaving them within integrated private firms, as Lederer understands Rathenau’s proposal to do. Ownership matters because the allocation of costs within such firms shapes the figures on which central supervision must rely. A stand-alone mine can make its production costs substantially ascertainable through exact bookkeeping. An integrated enterprise presents a harder problem: transport installations, general administration, and productive assets serving more than one activity create uncertain boundaries between costs attributable to the mine and to the processing works.

Lederer’s concern is not simply that bookkeeping may be imperfect. A unified private management controls the allocation of shared expenditures, while the regulatory organization depends on the resulting accounts to set prices and calculate rents or premiums. Given the importance of integrated enterprises, uncertainty within individual firms affects the wider system of price formation. Formal oversight therefore cannot by itself produce the transparency promised by the scheme.

Daraus ergibt sich, daß durch das Weiterbestehen der Privatunternehmung das, was ursprünglich angestrebt wurde, nämlich eine völlige Übersichtlichkeit des ganzen Betriebes, eine völlige Durchsichtigkeit und exakte Möglichkeit, von einer Zentralstelle aus souverän zu entscheiden über die Höhe der Gewinne, Prämien usw., aus diesem Grunde nicht gegeben ist.

English translation: It follows that, because private enterprise continues to exist, what was originally sought—namely, complete comprehensibility of the entire operation, complete transparency, and an exact means of deciding authoritatively from a central office on the level of profits, premiums, and so forth—is not achieved for this reason.

The second part turns from accounting structures to the expectations guiding economic conduct. Lederer frames the dispute as reciprocal accusations of psychological misjudgment. Vogelstein and his associates doubt the socializers’ assessment of workers; Vogelstein interjects that their assessment of entrepreneurs is an even greater concern. Lederer reverses the criticism: the opposing proposal underestimates entrepreneurs’ resistance to socialization. Without expropriation, their position in production remains substantially unchanged, and regulated price-setting differs formally little from the arrangements of the wartime economy.

Er fühlt sich in seinem Innern — und das ist doch auch die Absicht des ganzen Planes, — noch weiter als Besitzer der Produktionsmittel (Vogelstein: Sicher!), als Herr über die Produktionsmittel und als berechtigt, aus diesen Produktionsmitteln je nach der Marktlage Gewinn zu erzielen.

English translation: Inwardly he continues to feel—and that is indeed also the intention of the whole plan—that he is the owner of the means of production (Vogelstein: Certainly!), the master of the means of production, and entitled to derive profit from these means of production according to market conditions.

This continuing proprietary outlook has concrete accounting consequences. Lederer expects owners to calculate costs as though private enterprise would persist. His example is accelerated depreciation: if an owner can write off a new installation within four years through the permitted cost and price calculations, he will retain a fully depreciated private asset should the broader scheme fail. In response to Rathenau’s question about why an entrepreneur would act this way, Lederer thus links accounting choices to uncertainty about the scheme’s durability. Anticipated reversal makes rapid recovery of investment advantageous.

Nur wenn der Unternehmer mit der Durchführung der Sozialisierung rechnet, verschwindet sein Interesse.

English translation: Only if the entrepreneur expects socialization to be carried through does his interest disappear.

The “interest” here is the incentive just described, not an assertion that socialization eliminates every entrepreneurial motivation. Lederer immediately rejects the assumption that owners will accept the proposed outcome as settled. A commission recommendation, or an organizational arrangement contemplating takeover after thirty years, cannot ensure their acquiescence. They will instead seek to reverse even a legislatively established settlement. His closing point is that disputes over the correct definition of production costs cannot be resolved independently of this struggle over the system’s future.

The contribution’s significance lies in connecting ownership, accounting knowledge, and political expectations. Lederer tests institutional labels against the practical conditions needed to exercise control: who holds the assets, who allocates costs, and whether those actors expect the arrangement to endure. He offers a focused criticism of a socialization scheme that preserves private ownership while relying on centrally supervised prices. Its vulnerability, in his account, is that the authority seeking to regulate profits remains dependent on information and decisions shaped by owners whose interests include resisting the intended transformation.