Emil Lederer, Rezension: Mentor Bouniatian, Les crises économiques, Paris 1922 (1922)

Emil Lederer’s review evaluates Bouniatian’s theory of periodic economic crises through two connected questions: how credit shapes the expansion of production, and how income distribution limits consumption. Praising the book’s clarity, organization, and statistical evidence, Lederer nevertheless argues that its production-centered explanation needs both a monetary and a social extension. The review proceeds in two numbered sections, moving from the mechanisms of the cycle to the conditions under which general overproduction becomes possible.

Bouniatian attributes crises to overcapitalization during prosperity, which creates a discrepancy between production and consumption and renders commodities generally unsaleable. Lederer endorses his rejection of disproportionality as a sufficient explanation. Excess output in particular branches should coincide with shortages, rising prices, and favorable conditions elsewhere; under normal private-market conditions, productive flexibility should help correct these imbalances.

Demnach kann Disproportionalität ein Moment der Unruhe, nicht aber Ursache für die periodisch wiederkehrenden schweren wirtschaftlichen Störungen sein.

English translation: Accordingly, disproportionality can be an element of disturbance, but not the cause of the periodically recurring severe economic disruptions.

The distinction is between local disturbances and recurrent general crises. Yet Lederer finds Bouniatian’s alternative incomplete because it derives productive expansion solely from savings, neglecting additional credit. Invoking Schumpeter, he argues that credit can accelerate the boom by mobilizing reserves and redirecting productive forces from finished goods toward expanded production. This does not overturn the theory’s basic picture, but it changes the tempo of expansion and the subsequent crisis and liquidation.

The omission also obscures the role of discount policy and interest rates, including Wicksell’s account of their relation to price movements. Lederer sees modern banking as a potential means of influencing the cycle, though one operating through producers’ interests rather than for consumers’ benefit. Plans for stable-value money seek, in his reading, to replace alternating boom and crisis with steadier production and profit. Bouniatian considers whether cartels can overcome crises—and rightly concludes that they cannot—but leaves monetary intervention unexplored.

Und doch ist offenbar jede Geldpolitik zugleich Konjunkturpolitik, und davon ist in dem Buche leider nicht die Rede.

English translation: And yet every monetary policy is evidently at the same time business-cycle policy, and of this there is unfortunately no mention in the book.

This judgment makes the missing monetary analysis consequential for policy, not merely for theoretical completeness. The review’s second section then draws out a distributive implication that Lederer finds present but insufficiently developed in Bouniatian’s argument. Rejecting disproportionality requires explaining how general overproduction can occur despite the interdependence of production, income, and consumption.

Eine solche allgemeine Ueberproduktion ist in der Tat nur möglich, wenn die Einkommen der Produzenten schneller wachsen als die der Konsumenten und wenn sie überdies nicht wieder in den Konsum übergeführt, sondern kapitalisiert werden.

English translation: Such a general overproduction is in fact possible only if the incomes of the producers grow faster than those of the consumers and if, moreover, they are not converted back into consumption but are capitalized.

The decisive move is to connect excessive accumulation with unequal income growth. Rising profits become a source of crisis when they are capitalized while consumers’ purchasing power fails to keep pace with production. Lederer identifies the converse condition for smoother development: consumers—including recipients of capital income, salaried employees, civil servants, and workers—must be able to buy back the same or an increasing share of output during expansion. Bouniatian’s statistical material supports the importance of this mechanism, but the book gives insufficient attention to its social implications and offers little policy guidance.

Lederer’s final assessment remains appreciative but qualified. The book supplies a lucid foundation for crisis theory, yet its confinement to the production sphere leaves modern credit mechanisms and possible remedies underdeveloped. The review’s significance lies in this double extension: an explanation of overcapitalization must account both for the financial means that accelerate accumulation and for the distribution of purchasing power that could sustain consumption.