Hans Bayer’s journal article examines how optimization within individual firms changes the organization of the economy as a whole. Its two sections establish a distinction between anonymous market competition and deliberately shaped competition, then explain how electronic data processing strengthens the latter. The central claim is that more rational calculation does not make entrepreneurial discretion less important. By expanding firms’ capacity to plan, coordinate, and influence markets, optimization makes their decisions increasingly consequential for economic development.
Bayer’s first conceptual move is to distinguish competition governed by prices that firms must accept from competition actively shaped by powerful participants. A broad definition embracing both obscures their different operating principles. Nor does the policy concept of workable competition adequately identify this distinction: it asks whether imperfect competition delivers satisfactory results, whereas Bayer asks who determines the competitive process.
Der gestaltete Wettbewerb beruht im Gegensatz dazu gerade auf den Entscheidungen der Unternehmer-Persönlichkeiten.
English translation: Deliberately shaped competition, by contrast, rests precisely on the decisions of individual entrepreneurs.
This distinction organizes the first section’s extensive account of large firms’ advantages over isolated small and medium-sized enterprises. Research, automation, purchasing, advertising, finance, diversification, and managerial specialization reinforce one another. Consequently, optimal enterprise size cannot be derived from production costs alone: commercial advantages may support expansion even where smaller producers manufacture more cheaply. Modern decision-support methods also relax managerial limits on growth by concentrating information and enabling delegation. Enlarged economic areas can strengthen these advantages rather than restore anonymous competition.
The result is an economy organized around durable centers of economic power. Unlike Schumpeter’s temporarily disruptive entrepreneur, these centers continually shape competitive conditions. Powerful firms become mutually dependent and often cooperate, while smaller suppliers and customers remain exposed to pressures they cannot control. Bayer’s counterproposal is cooperation among smaller enterprises through purchasing associations, vertical partnerships, and regional or sectoral groupings. The apparent paradox is essential: reducing anonymous competition among weaker firms may diminish domination and preserve a freer market order. Economic freedom depends here on a balance among organized actors, not simply on their number.
The second section specifies what makes contemporary optimization historically distinctive. Seeking an optimum is ancient, and accounting already employs models. Electronic data processing, however, changes both the speed of calculation and the range of problems that can be addressed.
Wir beschränken im folgenden den Begriff der Optimierung auf jene Überprüfung von Alternativen, die unter Verwendung der modernen Datenverarbeitung zustande kommt.
English translation: In what follows, we restrict the concept of optimization to the examination of alternatives carried out using modern data processing.
Bayer follows this definition through matrix models, strategic interactions, and enterprise-wide planning. Partial calculations must ultimately account for organizational interdependencies: an investment cannot be judged adequately apart from its effects on other departments or subsidiaries. Integrated modeling therefore requires standardized accounting, reporting, and interfirm relationships. Computation is not merely added to an unchanged organization; effective use entails organizational coordination.
The account nevertheless distinguishes ambition from achievement. Bayer acknowledges that simultaneous calculation of an entire corporate group’s optimum has scarcely been accomplished. Enterprise matrices remain static representations, although comparative statics and model experiments can reveal the consequences of changes. Forecasts remain probabilistic because competitors and consumers make decisions that cannot be fully anticipated.
Die Chance der Methode der Prognose ist nicht Ausschaltung von Irrtümern, sondern bloß deren Einschränkung.
English translation: The potential of the forecasting method lies not in eliminating errors, but merely in limiting them.
Judgment and intuition thus remain indispensable. Optimization improves the basis of long-term decisions without automating their final determination. Its applications connect production, investment replacement, scheduling, inventories, sales, and research. Technical and commercial calculations stimulate one another, while increasingly demanding problems encourage further expansion of computing capacity. Optimized production can also prompt firms to organize demand around efficient output levels, although total demand and competitors’ positions constrain such market-making.
These mechanisms return the analysis to economic structure. Expensive equipment and specialist personnel generally favor large firms; improved coordination also pushes outward the limits of viable enterprise size. Yet shared optimization offers smaller firms opportunities if they cooperate. Restricting such cooperation would, Bayer argues, privilege the expansion of large corporate centers. His proposed order “from below” therefore requires organized counterweights, rather than dismantling productive concentrations at the expense of international competitiveness.
Optimierung verstärkt wesentlich die Bildung von Kraftzentren im gestalteten Wettbewerb.
English translation: Optimization substantially strengthens the formation of centers of power within deliberately shaped competition.
The conclusion also links long-term planning to growth, market-share security, and profit as a safety margin against uncertainty. Bayer suggests that these commitments bind enterprise objectives more closely to overall economic development. The article’s enduring relevance lies in its treatment of computation as an institutional force: improved calculation redistributes the capacity to act, changes feasible organizational scale, and intensifies the economy-wide effects of private decisions. Greater objectification of decision-making does not abolish discretion; it enlarges the reach of those equipped to exercise it.
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