Hans Bayer’s journal article examines the transformation of the market economy by corporate concentration and organized cooperation. Its central claim is that economic freedom can no longer be secured simply by trusting anonymous competition: modern enterprises actively shape markets, and economic policy must recognize this reality without surrendering to centralized direction. Addressing the implications for workers, Bayer treats the economic constitution—the institutional ordering of economic relationships—as foundational to society. The article moves from comparative evidence of economic power to a constructive account of a gestaltete Marktwirtschaft: a market economy consciously shaped from below.
The first section, “Die Tatsache der Wirtschaftsmacht,” challenges the liberal contention that even the largest corporations remain as powerless before market forces as a small retailer. Bayer assembles evidence from the United States, Britain, France, and Italy, distinguishing concentration of sales and profits from ownership ties and interlocking management. American figures demonstrate the dominance of a small number of firms in major industries; the British discussion traces consolidation across several decades. French evidence makes especially clear that economic power need not appear as growth in individual factories: shareholdings and overlapping directorships can coordinate formally distinct enterprises. The international comparison supports an explanation that goes beyond individual ambition:
Die Konzentration ist im wesentlichen nicht auf das Bestreben einzelner zurückzuführen, sondern bedingt durch innere Gesetzmäßigkeiten⁷).
English translation: Concentration is essentially not attributable to the striving of individuals, but is conditioned by inherent regularities⁷).
These regularities are technological, organizational, and financial. Large enterprises can sustain research laboratories, automation, specialized administration, market analysis, and financing arrangements unavailable to many smaller competitors. Diversification allows them to combine specialization with reduced dependence on any single market. Advertising increasingly displaces competition through price and quality, strengthening firms with extensive promotional resources. Bayer qualifies these advantages as arising under particular conditions; his argument is not that every large enterprise is necessarily superior, but that modern production repeatedly creates structural incentives toward concentration.
The decisive consequence concerns price formation. Coordination among firms can organize competition without formal cartel agreements, while research, advertising, and assistance to customers permit large enterprises to influence demand itself. Prices therefore cease to function solely as impersonal signals to which every producer must submit:
Das große Unternehmen ist nicht dem „anonymen Prozeß“ unterworfen, sondern es kann von sich aus innerhalb gewisser Grenzen den Absatz bestimmen und einen „Markt machen“.
English translation: The large enterprise is not subject to the “anonymous process”; rather, it can itself, within certain limits, determine sales and “make a market.”
The qualification “within certain limits” matters: Bayer argues for an altered distribution of economic agency, not unlimited corporate command. He also refuses to make the abolition of modern price-shaping practices the goal of policy. Such practices may be economically necessary or desirable; what is required is an institutional framework appropriate to their existence.
The second section, “Gestaltete Marktwirtschaft,” develops this alternative through changes in enterprise objectives and organization. Growth and the maintenance of market share become central means of securing the enterprise’s position. Scientific management can combine centralization with decentralization, while diversified production enables adaptation to changing demand. Even substitution competition does not restore the classical model: the development of replacement products often depends on research expenditures that only large firms can afford.
Bayer’s constructive argument gives particular importance to medium-sized, personally led enterprises. Their independence may depend on federative cooperation rather than competitive isolation. The Vereinigte Drehbankfabriken and Vereinigte Armaturen-Gesellschaft illustrate how trusted partnerships can simplify production programmes while preserving specialized manufacture. Unionmatex offers a more extensive example: eight textile-machinery producers combine complementary specializations to supply complete installations abroad, while retaining separate business activities. Purchasing associations provide a comparable strategy for retailers. These cases connect cooperation to the survival of economically distinct participants, rather than treating it merely as another route to monopoly.
Die gestaltete Marktwirtschaft unterscheidet sich grundsätzlich von einer zentralistisch geführten Wirtschaft dadurch, daß es eben die Unternehmungen sind, von denen die Wirtschaftsgestaltung ausgeht.
English translation: The consciously shaped market economy differs fundamentally from a centrally directed economy in that it is precisely the enterprises from which the shaping of the economy proceeds.
This distinction grounds Bayer’s criticism of dogmatic liberal policy. Forcing medium-sized firms to compete in isolation could destroy the cooperative arrangements that allow them to remain effective competitors. Preserving freedom consequently requires conscious institution-building from below, including within the European Economic Community.
Workers must participate in this process rather than confining their demands to opposition to concentration. Bayer’s Swedish example gives this proposal institutional substance: a competition commission includes representatives of employers alongside consumer and worker interests. Union and cooperative delegates help monitor and support the implementation of negotiated arrangements. The article thus moves from enterprise-led coordination toward a broader, participatory ordering of economic power.
Zusammenarbeit auf allen Gebieten müßte Grundzug der modernen freiheitlich gestalteten Volkswirtschaft sein.
English translation: Cooperation in all fields would have to be a fundamental feature of the modern national economy shaped in accordance with freedom.
Bayer closes by endorsing E. Fletcher’s argument that cooperation must be organized rather than expected to arise spontaneously. The article’s relevance lies in its refusal to equate market freedom with the absence of deliberate coordination. Its core conceptual move is to distinguish cooperation that sustains plural economic actors from centralized command, while insisting that workers and consumers help shape the institutions governing concentrated power.
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