Emil Lederer, Technik (1932)

Emil Lederer’s encyclopedia article examines technology through its consequences for economic development, social organization, and unemployment. Its scope is explicitly economic: technical inventions matter here as changes in productive capacity and in the conditions under which people earn their livelihoods. Four substantive sections move from the historical relationship between technology and society to economic growth, the additional work required by technological systems, and, most extensively, technological unemployment; a short bibliography concludes the article. Its central argument is that increased productivity does not automatically produce greater employment or general prosperity. Whether technical progress benefits society depends on the kind of innovation, the expansion of production, and the distribution of its gains and losses.

Lederer first connects successive productive systems with forms of social organization: coercive agricultural labor with feudal domination, differentiated urban crafts with civic freedom, and mechanized industry with expanding markets and international specialization. These correspondences do not establish technology as an independent historical cause:

Ist doch die technische Entwicklung, wie die Untersuchungen zur Entstehung des Kapitalismus gezeigt haben, nicht eine isolierte Erscheinung, sondern hängt aufs engste von den konkreten Bedingungen der einzelnen Volkswirtschaften, besonders aber auch von den geistigen Strömungen und den Wertungen ab, in denen die Völker leben.

English translation: For technological development, as investigations into the emergence of capitalism have shown, is not an isolated phenomenon, but depends very closely on the concrete conditions of individual national economies, and especially also on the intellectual currents and valuations within which peoples live.

Technology helps constitute social possibilities while itself developing within economic and cultural conditions. This qualification prevents the historical sketch from becoming a technological determinism. Likewise, the enlargement of an economy’s capacity to sustain population establishes a potential, not a guaranteed improvement in welfare. Agricultural advances increase the food supply, while industrial productivity transforms consumption possibilities; neither achievement settles who obtains work or income.

Die Struktur der kapitalistischen Wirtschaft erklärt es aber, daß sich die steigende Produktionsfähigkeit nicht ohne weiteres in wachsenden Arbeitsbedarf und erhöhtes Wohlleben der gesamten Bevölkerung umsetzt.

English translation: The structure of the capitalist economy, however, explains why rising productive capacity does not automatically translate into growing demand for labor and increased well-being for the population as a whole.

Lederer rejects the exaggerated claim that machinery has never reduced anyone’s toil, but retains its critical question: why can productive improvement coexist with persistent poverty? Part of the answer concerns costs obscured by measurements of direct productivity. Concentrated settlement, transport to workplaces, roads, lighting, administration, and elaborate commerce require labor that simpler economic arrangements would not require on the same scale. He estimates that roughly 25–30 percent of employed people enable production rather than participate directly in it. Yet he explicitly refuses to conclude that this supporting apparatus consumes the principal gains of technical development.

The decisive problem is displacement. Lederer challenges the compensation theory according to which lower prices or higher profits preserve purchasing power and therefore necessarily restore employment. He accepts that aggregate purchasing power need not shrink. What fails is the inference from unchanged purchasing power to continued demand for every worker. The same output can be produced and consumed by a smaller income-receiving population:

Die entlassenen Arbeitskräfte stehen außerhalb dieses neuen Gleichgewichts von Produktion und Konsum.

English translation: The dismissed workers stand outside this new equilibrium of production and consumption.

This is the article’s central conceptual move: equilibrium between production and consumption can coexist with unemployment. Reemployment requires an expansion of the productive system, and, where capacity is already fully utilized, new capital formation and enterprises. Neither compensation through expenditure nor wage reductions automatically accomplish this. Employment outcomes consequently depend on the intensity of labor saving, the capital required, population growth, and the pace of accumulation. Favorable nineteenth-century experience cannot establish an unconditional economic law.

Lederer then distinguishes innovations that reorganize existing production from those that establish genuinely new production. More efficient looms displace workers and can render older firms unprofitable; substitute products likewise destroy established employment and income. New profits therefore cannot simply be counted as additions to national income without accounting for losses elsewhere.

Insofern ist die technische Entwicklung innerwirtschaftlich immer mit Rückschlägen, mit Arbeitslosigkeit und Minderung von Kapitalwerten verbunden.

English translation: To this extent, technological development within the economy is always associated with setbacks, unemployment, and reductions in capital values.

By contrast, genuinely new products can create employment and purchasing power, although consumers redirect some expenditure away from existing goods. Their effects are more favorable when unused capacity permits adjustment without fresh investment. The contrast between railways, which opened new needs and productive possibilities, and automobiles, which also undermine railway demand and invested capital, illustrates why inventions cannot be evaluated uniformly.

Writing during the world economic crisis, Lederer does not attribute mass unemployment to technology alone. He nevertheless tentatively estimates Germany’s longer-lasting technologically induced unemployment at one to one and a half million, and includes agricultural mechanization in the explanation. His conclusion is a case for social scrutiny and regulation of technical development, not an indiscriminate rejection of invention. The article’s enduring significance lies in separating productive efficiency from social benefit: displaced livelihoods, devalued capital, and public unemployment expenditure belong in the assessment of progress, rather than being treated as incidental disturbances that markets must automatically repair.