Hans Bayer, Kann der Mittelbetrieb automatisieren?

Hans Bayer’s 1958 journal article asks whether small and medium-sized enterprises can participate in automation without surrendering their economic independence. Its four sections move from automation’s historical character to its economic purposes, assess smaller firms’ practical opportunities, and conclude with the institutional changes needed to support them. Bayer’s answer is conditional: adaptable machinery makes automation technically possible, but financing, dependable demand, and coordinated specialization determine whether it is economically viable. The question therefore concerns the organization of the economy as much as the equipment of individual factories.

Bayer first distinguishes technical continuity from social rupture. Machine self-regulation, integrated production, and electronic data processing extend earlier mechanization and rationalization. Their consequences can nevertheless be revolutionary: automation increases productive capacity, displaces repetitive intellectual work, and strengthens economic concentration. It promises liberation from machine-paced routines while threatening greater alienation and isolation. Rather than resolve this tension through technological optimism, Bayer supplies a normative criterion:

Nehmen wir als Grundaufgabe der Volkswirtschaft Sicherung dauernder materieller Grundlagen zur Entfaltung der Persönlichkeit an, dann wird offensichtlich die Automatisierung ihrer wirtschaftlichen Aufgabe nur gerecht, wenn sie sich diesem wirtschaftlichen Gesamtziel einordnet.

English translation: If we take the basic task of the economy to be securing lasting material foundations for the development of personality, then automation evidently fulfils its economic task only if it subordinates itself to this overall economic objective.

The second section develops this criterion through four effects: production, distribution, social welfare, and education. Production means profitability at enterprise level and balanced expansion across the economy. Distribution requires that productivity gains benefit the population generally, through lower prices and continued full employment. These objectives can conflict: agreements securing the large production runs needed for automation may also create market power that keeps prices above costs. Bayer consequently questions whether profit-sharing within successful firms constitutes an adequate distribution of benefits when those benefits may depend on monopoly positions maintained at others’ expense.

Nor does he assume that displaced workers will automatically find new employment. Compensation would require a sequence from reduced costs through lower prices and increased demand to additional jobs—conditions he argues the existing market economy does not ensure. The social effect thus includes retraining, preservation of occupational standing, and shorter working hours, rather than productivity alone. Automation can create monotonous, attention-intensive jobs as well as more demanding ones. Education must both supply technical expertise and broaden general intellectual capacities, establishing a counterweight to concentrated economic power.

The third section makes an important conceptual adjustment: employment figures no longer adequately distinguish small from large establishments, because automated production can combine few workers with substantial capital and output. Bayer therefore specifies his working definition:

Wenn wir hier von mittleren und kleineren Unternehmen sprechen, dann meinen wir ein Unternehmen mit verhältnismäßig geringem Realkapital und mittlerem Umsatz.

English translation: When we speak here of medium-sized and smaller enterprises, we mean an enterprise with relatively little real capital and a medium level of turnover.

This definition prevents a highly capitalized automated plant from appearing “small” merely because it employs few people. Drawing on contemporary technical reports and evidence of concentration in German crafts, Bayer acknowledges that mechanization generally raises the optimal scale of operation. Yet flexible production chains offer alternatives to rigid transfer lines. Their machines can operate independently, intermediate stocks can interrupt the flow, and manual operations can coexist with automated ones. Modular construction and standardized components reduce equipment costs. Renting computers or using computing centres likewise offers access without outright ownership; cooperative acquisition remains a possibility for which Bayer reports no known examples.

Technical accessibility, however, does not secure sustained utilization. Smaller firms need standardized products, specialization, and agreements with both producers and distributors to obtain sufficiently large orders. Bayer’s cookware example shows why retailers must adapt their purchasing to a division of production among specialized suppliers. Unlike diversified large enterprises, such suppliers remain acutely exposed to market changes. Subcontracting can bring credit and access to a large customer’s office machinery, but at the cost of practical independence.

Es bleibt also zu einem Teil gesamtwirtschaftliche Aufgabe, den Produktionseffekt für das mittlere Unternehmen sicherzustellen.

English translation: It therefore remains partly a task for the economy as a whole to secure the production effect for the medium-sized enterprise.

The final section translates this conclusion into investment and credit policy. Assessing a borrower’s balance sheet is insufficient: lenders and public institutions must also consider whether standardization and coordinated production can sustain long-term sales. Bayer proposes coordinating existing financing channels and encouraging interfirm agreements through credit direction. He explicitly recognizes that this introduces planning into market mechanisms. State countervailing power, active employment policy, public education, and trade-union participation are needed to prevent cooperation from becoming unchecked concentration. Expanding energy requirements further make public infrastructure and international coordination integral to automation.

The argument culminates in a comparison of economic systems. Market economies increasingly require planning to stabilize investment and preserve smaller firms; centrally planned economies possess initial advantages in finance, research, and assured demand, but advancing specialization requires flexibility, supplier agreements, and some market-based pricing.

So bringt die Automatisierung eine institutionelle Annäherung der Systeme der Marktwirtschaft und der Planwirtschaft mit sich.

English translation: Automation thus brings about an institutional convergence of the systems of the market economy and the planned economy.

This convergence is Bayer’s concluding claim, not simply an incidental policy recommendation. The article’s distinctive contribution is to connect adaptable production technology with the institutional conditions of enterprise autonomy. Smaller firms can automate, but their survival depends on arrangements that qualify market independence in order to preserve it—and on public safeguards ensuring that increased productivity serves human development rather than economic power alone.