Hans Bayer, Automation und Wirtschaftsgestaltung (1956)

Hans Bayer’s article in Arbeit und Wirtschaft concludes a three-part series on automation by asking whether the existing economic order can turn technical innovation into general welfare. Full employment is the decisive test, but the argument extends to market concentration, income distribution, working time, education, and the purposes of economic life. Bayer moves from an analytical examination of employment effects to a teleological assessment of automation’s promised benefits, then proposes institutional reform and mitigating policies. His central claim is that technical advance requires complementary economic and social arrangements: greater productive capacity does not itself guarantee either prosperity or human freedom.

The analytical section challenges the assumption that workers displaced by automation will automatically find employment elsewhere. Examples of redeployment within individual firms cannot establish an economy-wide result. Automatic reabsorption would require a chain linking automation to lower costs, lower prices, and increased sales. Bayer argues that every link is conditional. Firms may automate for reasons other than cost reduction; savings within an enterprise may become burdens on society if displaced workers remain unemployed. Even genuine cost reductions need not produce lower prices where competition is weak:

Die Automation selbst trägt jedoch zur Zerstörung dieser Konkurrenz und zur Verstärkung der Machtbildung bei.

English translation: Automation itself, however, contributes to the destruction of this competition and to the strengthening of concentrations of power.

This contradiction makes concentration integral to Bayer’s analysis, rather than an incidental abuse. Automation weakens the competitive mechanism supposedly responsible for distributing its benefits. Even if prices fall, increased sales depend on appropriate investment, adequate incomes, and income distribution. Entrepreneurial market analysis cannot by itself secure those conditions. Bayer consequently shifts attention from the isolated firm to the economic circuit, where insufficient consumption and excessive saving can obstruct the realization of increased output.

The teleological section tests two promises against their necessary conditions: higher living standards and greater scope for personal development. The first requires employment and more than an increase in consumption manufactured through persuasive advertising or planned obsolescence. The second requires more than replacing manual work with machinery. Bayer argues that only a small group may receive demanding technical tasks while others remain confined to rudimentary work. Automated production can also intensify nervous strain. Shorter working hours therefore become essential, yet an individual employer exposed to competition cannot introduce them independently of others.

Technischer Fortschritt der Automation und sozialer Fortschritt fallen keineswegs zusammen.

English translation: The technical progress of automation and social progress by no means coincide.

Bayer calls these conflicting tendencies automation’s “social tragedy.” It requires stable economic conditions while generating disturbances; promises material improvement while threatening employment; and offers personal liberation while risking depersonalization. His diagnosis is directed at automation under the existing economic constitution, not at machinery in isolation. The remedy must change the institutional setting through which technical possibilities acquire social consequences.

Die Änderung der Wirtschaftsverfassung würde bedeuten, daß an Stelle der Marktmechanik eine Wirtschaftspolitik der Koordination und Integration tritt, die zwar die Marktmechanik beläßt, sie aber nicht als einziges und primäres Ordnungsprinzip anerkennt.

English translation: Changing the economic constitution would mean that an economic policy of coordination and integration takes the place of the market mechanism, retaining that mechanism but not recognizing it as the sole and primary organizing principle.

Coordination thus preserves markets while subordinating them to broader economic objectives. Bayer nevertheless distinguishes comprehensive reform from measures feasible under conditions of social inertia. Better market information, consumer information, statistics, and national economic budgets should improve decisions. Cooperatives can counter concentrated economic power, particularly where competition no longer ensures appropriate prices. Monetary and credit policy should support stability without either obstructing automation through outdated financial doctrines or promoting it indiscriminately through additional credit. Investment requires direction. Public and collectively organized economic activity—the Gemeinwirtschaft—can provide countervailing power and sustain investment during crises, serving as an instrument of active stabilization policy.

Social policy supplies the complementary demand and employment measures. Bayer advocates economy-wide wage policy to raise purchasing power while preventing unequal bargaining strength and sharply different sectoral productivity gains from producing unjustified wage disparities. Working-time reductions should protect employment and convert productivity into freedom rather than endlessly expanding output. He also expects them to diminish pressures toward artificial demand creation and deteriorating product quality. Vocational guidance, retraining, provision for older displaced workers, and unemployment insurance address the costs of transition.

Education completes the argument. Technical training enables automation, but cultural education enables people to use additional leisure for personal development. Bayer invokes Schelsky’s notion of “quaternary production” for the social activity of helping others acquire that capacity. Leisure is therefore not automatically emancipatory: its value depends on institutions and cultivated human purposes.

The conclusion gives this policy argument an explicitly spiritual foundation. Institutional arrangements alone cannot overcome the elevation of power and profit into ends in themselves. Bayer insists on anchoring relative values in absolute ones and associates economic reform with a religious grounding of human conduct. His desired “complementarity effect” means placing technology’s own operating logic at the service of the overall economic objective.

So gesehen muß die Technik als Götze zertrümmert werden und wiedererstehen als Diener des wirtschaftlichen und sozialen Fortschrittes.

English translation: Seen in this light, technology must be smashed as an idol and rise again as a servant of economic and social progress.

The article’s relevance lies in this refusal to equate productivity with welfare. Employment, distribution, leisure, and education are not secondary adjustments after innovation; they determine whether automation fulfills its purpose. Its distinctive contribution joins macroeconomic coordination to a moral critique of technological worship, making human development—not output alone—the measure of progress.