Eugen von Böhm-Bawerk on Heinrich Frommer’s Die Gewinnbetheiligung (1889)

Böhm-Bawerk’s short review assesses Frommer’s empirical investigation of workers’ profit-sharing and its theoretical justification. Its governing distinction is between a sound, narrowly qualified practical conclusion and a conceptual defence that adds nothing to its credibility.

The review follows the book’s three-part structure. Frommer first examines evidence from Böhmert’s private inquiry, published in 1878, and the French ministry’s official inquiry of 1883. Böhm-Bawerk endorses his recognition that defects in the inquiries make much of their material unsuitable for scientific inference. This scrutiny eliminates 73 of 100 cases. The remaining 27 receive the detailed examination that Böhm-Bawerk regards as the book’s principal achievement.

That examination supports profit-sharing only where workers exert an exceptionally strong influence on business returns and technical conditions prevent the use of a more appropriate wage system, such as piece rates or savings premiums. The conclusion is thus conditional: neither experience nor incentive considerations warrant a general recommendation.

The review turns sharply critical when Frommer’s third section seeks to defend this limited justification against both universal assertions and universal denials of workers’ right to business profits:

Dieser Abschnitt wird grösstentheils durch ein unfruchtbares Spiel mit Worten und Begriffen ausgefüllt, wobei bald dem Arbeiter der Charakter eines Produzenten abgesprochen und dieser dem Unternehmer, oder sogar dem „Geiste“ des Unternehmers allein vorbehalten, bald aber wieder jeder Lohnarbeiter als Unternehmer declarirt wird, der das Product „Arbeitsleistung“ erzeugt.

English translation: This section is for the most part filled out with a barren play upon words and concepts, in the course of which now the character of a producer is denied to the worker and reserved to the entrepreneur, or even to the "spirit" of the entrepreneur, alone, and now again every wage labourer is declared an entrepreneur who produces the product "labour performance."

For Böhm-Bawerk, these shifting definitions of producer and entrepreneur do not establish an additional justification. Reserving production for the entrepreneur’s “spirit,” then treating every wage worker as an entrepreneur producing labour services, substitutes verbal classification for the earlier evidential analysis.

Ich glaube nicht, dass durch solche Erläuterungen das wohlverdiente Vertrauen in die solid gewonnenen Ergebnisse der beiden ersten Theile irgendwie erhöht werden kann.

English translation: I do not believe that confidence in the solidly won results of the first two parts, well deserved as it is, can be in any way heightened by such elucidations.

The closing judgment preserves the value of Frommer’s empirical findings while rejecting their theoretical supplement. The review’s methodological significance lies in this separation: a carefully delimited assessment of profit-sharing can stand on critical examination of experience without gaining authority from unstable claims about who counts as a producer.