Hans Bayer, Der einzelne und die Gesellschaft (1948)

Hans Bayer’s article, drawn from a lecture in the University of Innsbruck series “Geistige Probleme der Gegenwart,” approaches the relationship between individual and society through social economics. Its central question is how economic institutions can provide the material conditions for everyone’s personal development. Bayer proceeds from a definition of the economic goal to a critique of minimally regulated capitalism, then outlines the principles of an economic order capable of pursuing that goal. His argument connects individual fulfillment with collective organization: economic freedom cannot be judged solely by the independence of enterprises, but must be assessed through production, income distribution, and the opportunities these afford each person.

Bayer begins by distinguishing an economically grounded objective from goals derived partly or wholly from political considerations:

Das „reine Wirtschaftsziel“ (zum Unterschied von Zielsetzungen, die zum Beispiel ganz oder teilweise politisch begründet sind) läßt sich etwa so umreißen: Steigende Erzeugung von Gütern bei möglichst gleichmäßiger Einkommensbildung unter Berücksichtigung der Leistung des einzelnen; materielle Grundlage für Entfaltung der Persönlichkeit.

English translation: The “pure economic goal” (as distinct from objectives that, for example, are wholly or partly politically grounded) can be outlined approximately as follows: increasing production of goods with income formation as equal as possible, taking the individual’s performance into account; a material basis for the development of personality.

The formulation combines productive expansion, distributive equality, and recognition of individual contribution. Production matters because relief from immediate material anxieties makes personal development more attainable. Yet an expanding aggregate product is insufficient unless everyone receives an adequate share. Bayer therefore treats distribution as constitutive of economic success, rather than as a secondary adjustment to it. Equality is a governing principle, not a demand for identical incomes: differences corresponding to individual abilities and performance can encourage both personal development and productive effort.

The relative weight of equality also depends on the resources available:

Je niedriger das Gesamteinkommen der Volkswirtschaft ist, desto stärker muß das Prinzip der gleichmäßigen Einkommensverteilung in den Vordergrund treten.

English translation: The lower the national economy’s total income, the more strongly the principle of equal income distribution must come to the fore.

Scarcity makes disproportionate allocations especially damaging, since concentrating goods among a small stratum can undermine the material existence of others. The individual and society are thus connected through a distributional obligation: the economy must sustain the development of every person, not merely demonstrate prosperity in the aggregate. Bayer nevertheless retains differentiated rewards within this framework, arguing that attention to performance helps elicit each person’s productive capacities.

The section on the necessity of an economic order asks whether the minimal legal framework acknowledged even by liberal economics can accomplish these objectives. Bayer concentrates on two structural obstacles: the concentration of economic power and recurrent crises. His explanation of concentration begins with fixed capital. Larger investments in machinery and plant raise the risks of competition, encouraging entrepreneurs to avoid struggles whose possible losses have become enormous. Banks reinforce combinations, while technical advances make cooperation advantageous. Shared laboratories illustrate how pooled resources permit improvements unavailable to isolated firms; Bayer cites IG-Farben as an example of this technical capacity.

He distinguishes the motives behind different combinations. Cartels seek to reconcile rigid production techniques with fluctuating markets and thereby reduce risk; corporate groups place particular emphasis on exploiting technical possibilities. Both contribute to a broader tendency:

So führt die moderne Wirtschaft, solange sie vom Gewinnstreben des Unternehmers geleitet ist, zu immer steigernder Zentralisierung der Betriebe.

English translation: Thus the modern economy, as long as it is guided by the entrepreneur’s pursuit of profit, leads to ever-increasing centralization of enterprises.

Bayer rejects the number of surviving businesses as sufficient evidence against concentration. Smaller firms may remain formally independent while losing substantive economic importance. Nor does a supposedly optimal enterprise size establish a permanent limit: inventions and organizational advances can continually shift it. His criticism of Röpke’s proposed “social technology,” designed to support medium-sized businesses, exposes a tension in defending decentralized enterprise. Redirecting technology against prevailing tendencies would itself require decisive economic intervention. Concentration matters because monopoly and related positions allow productive resources to be used against the stated economic goal.

Crises provide Bayer’s second objection to reliance on capitalist market coordination. He emphasizes the paradox that breakdown occurs when production is vigorous and goods appear plentiful—precisely when material provision should seem most secure. Against the liberal defense of crises as necessary discipline, he stresses unemployment, lost production, and suffering among people who did not benefit from the preceding expansion. His concern is not simply instability, but the failure to convert productive capacity into dependable provision.

The concluding section qualifies the case for planning. Establishing that an economic order is necessary does not establish that any proposed order is possible. Invoking Böhm-Bawerk’s formula of power versus economic law, Bayer distinguishes regularities of economic-social development from those governing exchange, prices, and incomes. Organization cannot successfully disregard either:

Sie hat vielmehr sowohl die Gesetzmäßigkeiten der Entwicklung als des Tausches zu berücksichtigen und für die Erreichung des Wirtschaftszieles auszunützen.

English translation: Rather, it must take into account the regularities of both development and exchange and use them to achieve the economic goal.

The final analogy is to an engineer who constructs machinery by employing natural laws rather than abolishing them. Bayer offers a rationale for purposeful economic organization, not a detailed institutional blueprint. The article’s significance lies in combining a personal-development criterion with structural criticism of capitalism while refusing to equate planning with unlimited political power. Economic coordination is justified by the conditions it secures for individuals; its effectiveness depends on working through, rather than wishing away, economic constraints.