Hans Bayer’s journal article examines the concentration of American economic power in large corporations and asks whether this development results from external interventions or from tendencies inherent in economic organization. Its three sections move from the contested meaning of competition, through evidence of corporate concentration, to an explanation of its cumulative momentum. Bayer’s central claim is that financial strength gives large enterprises advantages that technical efficiency alone cannot offset. Legislation can restrain abuses and slow concentration, but cannot restore an earlier competitive order.
The opening distinguishes corporate consolidation from agreements among otherwise independent firms:
Gerade die Fusionsbewegung, der völlige Zusammenschluß mehrerer Unternehmungen, hat in den letzten Jahren besondere Bedeutung gewonnen.
English translation: The merger movement in particular, the complete amalgamation of several enterprises, has gained special importance in recent years.
This distinction establishes the article’s object: economic giants whose organizational unity and accumulated resources allow them to dominate other enterprises within their industries. Public hostility to monopoly has not stopped their growth. Bayer therefore treats concentration as a problem of structural power, rather than simply of illicit coordination.
The first section, “Zwischen Monopol und Konkurrenz,” complicates the apparent opposition between monopoly and free competition. Drawing on Kenneth E. Boulding, Bayer emphasizes prestige, personal relationships, group pressure, and fear of public opinion. Business opinion is divided, while legislation itself protects agricultural incomes, restricts retail price competition, and removes wages from unrestricted competition. Edward Mason’s observations expose the distance between professed competitive ideals and the arrangements Americans actually support.
Economic theory also changes the terms of regulation. Chamberlin’s monopolistic competition explains how identical prices can emerge without explicit agreements, weakening one basis for intervention. J. M. Clark’s “workable competition” accommodates conditions already remote from perfect competition. Bayer presents these concepts critically as adjustments to economic realities that can also legitimate restrictive arrangements. Yet monopolization threatens entrepreneurs themselves: sufficiently dominant industries may invite nationalization or extensive public control. The section thus frames competition as a selective political commitment, not a universally applied principle.
The second section, “Die Konzentrationsbewegung in den USA,” assembles evidence from studies of corporations, ownership, employment, and small business. Following A. R. Burns, Bayer treats price leadership and restrictive agreements as symptoms of declining competition, rather than its fundamental causes. Improved transport may dismantle local monopolies while enabling national ones. The historical movement from informal agreements through trusts and holding companies to integrated corporate giants therefore changes the form and reach of domination without eliminating it.
His key distinction concerns the relationship between production and ownership:
Tatsächlich gehen technische und finanzielle Konzentration Hand in Hand.
English translation: In fact, technical and financial concentration go hand in hand.
Bayer reports that the share of total share capital held by 200 giants rose from 33 percent in 1909 to 55 percent in 1935. Evidence of concentrated employment is supplemented by unequal share ownership, overlapping directorships, and the influence of a few financial groups. These connections matter because counting separate corporations understates the concentration of effective control. Wartime expansion intensified this process: firms with fewer than 500 employees accounted for 52 percent of employment in 1939 but only 38 percent in 1944.
Small firms’ numerical prevalence consequently offers little assurance of economic independence. Drawing on A. D. H. Kaplan, Bayer distinguishes their survival and absolute prosperity from their relative position within the economy:
Auch jene Betriebe, die ihre Existenz erhalten konnten, gerieten immer mehr und mehr in Abhängigkeit von den Großbetrieben.
English translation: Even those enterprises that managed to survive became increasingly dependent on large enterprises.
Prosperous large firms can sustain demand and opportunities for smaller businesses even as those businesses receive a declining share of total output. Growth and dependence are therefore compatible. This is an important conceptual move: Bayer does not equate the persistence of small enterprises with the persistence of competitive power.
The final section, “Fatalistische Evolution?”, explains why concentration tends to reproduce itself. Bayer acknowledges that large enterprises can finance laboratories and technical advances unavailable to smaller firms, while stressing that profit considerations may prevent them from realizing optimal production. His argument is neither an uncomplicated condemnation of scale nor an assumption that corporate success guarantees public benefit.
The decisive mechanism is financial superiority. Even a technically well-organized small producer cannot match a giant’s advertising expenditure, research capacity, or service network at comparable relative cost. In automobiles, extensive repair and refuelling facilities reinforce the advantage. Accumulated capital also enables entry into other industries: an automobile producer identifying opportunities in locomotive construction can fund experiments and facilities capable of displacing specialists. Technical decentralization is thus compatible with increasing financial domination.
Bayer concludes:
Man wird aber nicht imstande sein, das Rad der Entwicklung zurückzudrehen, sondern vermag nur den Gang der Entwicklung zu verlangsamen und Auswüchse zu verhindern.
English translation: But it will not be possible to turn back the wheel of development; one can only slow the course of development and prevent excesses.
The conclusion gives the American evidence its European policy relevance. State measures have supported concentration and can modify it, but Bayer regards its underlying momentum as endogenous. His illustrative mechanisms support a strong directional tendency, although they do not independently establish inevitability. The article’s lasting analytical contribution is to locate market power beyond production scale alone—in finance, research, distribution, intercorporate connections, and the growing dependence of formally separate firms.
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