Technological Unemployment as a Coordination Problem: New Light on Emil Lederer's Work in Exile

Abstract

Technological Unemployment as a Coordination Problem:New Light on Emil Lederer's Work in Exile Arash Molavi Vasséi (bio) INTRODUCTION Emil Lederer was a prominent economist and sociologist in the German Weimar Republic. Born in the Bohemian city of Pilsen in 1882, he died in political exile in New York City in 1939. According to Joseph Schumpeter, his lifelong friend, Lederer "may be described as the leading academic socialist of Germany in the 1920s" (Schumpeter 1954, 884, fn. 10). He was an esteemed colleague and well connected to the Republic's academic and political elites. Just before going into exile, Lederer held a prestigious chair at the University of Berlin, a chair previously held by the historical-school economist Gustav Schmoller. For 12 years (from 1922), he was the managing director of the Archiv für Sozialwissenschaft und Sozialpolitik, the most eminent German journal in the social sciences. However, as a leading social democrat and passionate participant in public affairs, he was exposed in the fight against the Nazis. For instance, in February 1933, only a month before Hitler's Enabling Act, he was engaged with Albert Einstein and Heinrich Mann in the antifascist congress Das freie Wort [Free Speech] (Hagemann 2015, 119). [End Page 897] Unsurprisingly, Lederer was among the first to be dismissed by the Nazis from his academic position in Berlin on the basis of the Civil Service Restoration Act, which came into effect on April 7, 1933. Shortly after, the Archiv became the only leading journal in the field that was forced to cease publication. Anticipating the outcome, Lederer left Germany. In early April, he accepted the invitation of Harold Butler, the director of the International Labour Office in Paris, to prepare for future work on the pressing problem of technological unemployment. From Paris, Lederer traveled to London, where he later met Alvin Johnson, the director of the New School for Social Research in New York. Lederer had contributed work to the Encyclopedia of the Social Sciences, of which Johnson had been a coeditor, and Johnson knew Lederer would be a valuable member of the refuge for outstanding German academics he sought to establish in order to preserve their lives and the rich German tradition in the social sciences they represented. In October 1933, just half a year after his exile, Lederer became full professor at and founding dean of the University in Exile at the New School in New York.1 Lederer cared deeply for the "laboring class" and was one of its most passionate advocates. To contribute to the reduction of involuntary unemployment had always been his most pressing goal, and this commitment continued in the United States. Because he did not change his economic research program after leaving Germany, it is tempting to compare his work before and after emigration. Did exile affect his intellectual work, in particular his theory of capitalist dynamics and technological unemployment? If so, how?2 The confirmation (or rejection) of an "emigration effect" on Lederer's perception of the unemployment problem is a delicate matter, particularly because he had little time to adapt—he died of thrombosis on May 29, 1939, less than six years after emigrating. Lederer's post-emigration work shows refinements and extensions made for purely analytical reasons, based on literature already available before his exile, that leave little for emigration to explain. In particular, I will discuss below how he drew on Allyn Young's celebrated 1928 [End Page 898] article, "Increasing Returns and Economic Progress," in revising Technological Progress and Unemployment (1931, second edition 1938). Rather than having an overt effect, I believe, Lederer's political exile had a limited, unidentifiable impact on his work on technological unemployment. (This conclusion differs from the analysis in Esslinger [1993], who finds that Lederer's forced migration had a significant impact on his thinking.) I find that the major differences between his pre- and post-emigration contributions are not primarily in substance. He adapted his language to address a different audience; he also shifted his focus in reaction to his critics. However, he still maintained the view of David Ricardo, from the 1817 On the Principles of Political Economy and Taxation, that technological unemployment is...