Alexander Mahr, Hauptprobleme der Arbeitslosigkeit (1931)

Mahr’s 1931 study is a crisis diagnosis directed against single-cause explanations of unemployment. Its thesis is that unemployment becomes chronic when shocks to profitability interact with monopolistic wage and price policies, monetary disturbances, capital structure, and political insecurity. The preface gives the method: public works, wage cuts, credit policy, and shorter hours are neither inherently saving nor harmful; they work only within delimited conditions.

"Die Wahrheit liegt hier insofern in der Mitte, als öffentliche Arbeiten, deren Vergebung durch den Wunsch, die Lage auf dem Arbeitsmarkte zu bessern, entscheidend mitbedingt ist, nur unter ganz bestimmten, in der vorliegenden Untersuchung aufgezeigten Bedingungen den Arbeitsmarkt günstig beeinflussen können, bei Nichtbeachtung dieser Bedingungen hingegen keine Erleichterung, ja sogar oft eine Verschlechterung der Lage mit sich bringen werden."

English translation: "The truth here lies in the middle, insofar as public works, whose award is decisively co-determined by the wish to improve the situation on the labour market, can favourably influence the labour market only under quite specific conditions set out in the present investigation, whereas if these conditions are disregarded they will bring no relief, indeed often even a worsening of the situation."

The structure follows this conditional logic. The first chapter classifies the causes of unemployment into profitability changes and monopolistic market influence, then distinguishes seasonal movements, credit cycles, broader non-monetary downturns, and structural change. The contemporary crisis is not reduced to a normal monetary cycle; in the present, structural, cyclical, monopolistic, and seasonal forces coincide at once:

"In der Gegenwart wird die allgemeine Lage durch das Zusammenwirken von ungünstigen Strukturwandlungen, Konjunkturrückgang sowie monopolistischer Beeinflussung des Arbeitsmarktes durch die Gewerkschaften und des Warenmarktes durch einen Teil der Unternehmer gekennzeichnet; dazu kommt noch im Winter ein übernormales Ausmaß von Saisonarbeitslosigkeit, so daß sämtliche wichtigen Ursachen vereinigt erscheinen."

English translation: "At present the general situation is characterized by the interaction of unfavourable structural changes, cyclical decline, and monopolistic influence on the labour market by the trade unions and on the goods market by a part of the entrepreneurs; added to this in winter is an above-normal degree of seasonal unemployment, so that all the important causes appear combined."

Chapters 2–5 develop the wage-theoretical core. Mahr accepts wage rises when the money return, not merely the physical productivity, of labor rises; he also concedes that higher living standards can, over long periods, support better performance. But he rejects the union claim that imposed wage increases automatically generate matching productivity gains. In marginal-productivity terms, the decisive danger is excess wage pressure:

"Die Steigerung der Löhne über die Grenzproduktivität hinaus, die Überhöhung der Löhne führt so zur Entstehung von Arbeitslosigkeit."

English translation: "The raising of wages beyond marginal productivity, the excessive level of wages, thus leads to the emergence of unemployment."

This argument is sharpened by Mahr’s account of delayed causality. Wage increases may be granted in good times or absorbed temporarily by capital already fixed in production; unemployment appears later, when demand falls or capital must be replaced. The problem is rigidity:

"Tatsächlich besitzen aber die Löhne nicht die erforderliche Elastizität nach unten, daher kommt es dann zur Alternative der Entlassung von Arbeitern."

English translation: "In fact, however, wages do not possess the necessary downward elasticity, and so one arrives at the alternative of dismissing workers."

Mahr’s treatment of monopoly and rationalization complicates the diagnosis without abandoning it. Wage increases may sometimes reduce monopoly profit rather than employment, and producer monopolies may offset primary restriction if their gains are productively used. But hoarding, speculation, foreign investment, and capital flight eliminate those offsets. Rationalization is likewise ambivalent: technical progress can create temporary displacement while lowering prices and widening output, but mechanization induced mainly by overhigh wages produces no comparable counter-movement:

"Wenn die technische Rationalisierung einzig unter der Einwirkung überhöhter Löhne erfolgt, dann führt sie bei Gleichbleiben aller sonstigen Bedingungen zur dauerhaften Erwerbslosigkeit eines Teiles der Arbeiter, denn die Rationalisierung erzeugt dann aus sich selbst heraus keine Gegenwirkung im Sinne einer nachträglichen Steigerung des Arbeitsbedarfes auf den ursprünglichen Umfang."

English translation: "If technical rationalization occurs solely under the influence of excessive wages, then, all other conditions remaining equal, it leads to the permanent unemployment of a portion of the workers, for rationalization then produces of itself no counter-effect in the sense of a subsequent rise in the demand for labour to its original extent."

The policy chapters apply the same distinctions. Seasonal unemployment calls for production smoothing and better-timed public orders; credit-cycle unemployment calls for stabilizing wholesale prices rather than a broad index of wages, rents, and securities. Emergency works are justified only if they mobilize otherwise idle credit and create real social utility. Their conditions are precise:

"Als eine der wichtigsten Maßnahmen zur Wiederbelebung der inländischen Konjunktur kommen öffentliche Arbeiten in Betracht, vorausgesetzt, daß die bereits im neunten Kapitel eingehend erörterten Vorbedingungen ihres Erfolges, nämlich geeignete Auswahl der durchzuführenden Projekte, Entlohnung nach der Leistung und Finanzierung im Kreditwege, erfüllt sind."

English translation: "Public works come into consideration as one of the most important measures for reviving the domestic economy, provided that the preconditions of their success already discussed in detail in the ninth chapter—namely suitable selection of the projects to be carried out, remuneration according to performance, and financing by way of credit—are fulfilled."

Work-sharing is defended only with unchanged hourly or piece wages, not preserved weekly wages; it distributes available work without raising unit costs. Wage reductions, for Mahr, are not meant to depress mass purchasing power but to restore profitable full employment and thereby raise the real purchasing power of workers as a class.

The final chapter applies the program to Germany: moderate wage reductions, corresponding price reductions, action against monopoly prices, tax relief where possible, loan-financed public works, and work-sharing as a supplement. Yet the domestic program remains constrained by reparations, which drain income without domestic offset, intensify protectionism, damage confidence, raise interest rates, and worsen capital flight.

"Eine dauernde Besserung kann nur von einer neuerlichen Revision der Zahlungsverpflichtungen Deutschlands erhofft werden."

English translation: "A lasting improvement can be hoped for only from a renewed revision of Germany's payment obligations."

The work’s relevance lies in its margin-by-margin crisis theory: unemployment is produced through interacting wages, prices, credit, monopoly, expectations, and international obligations, so remedies must target the specific blocked adjustment rather than rely on abstract slogans.