Hans Bayer, Wirtschaftsrecht gegen Wirtschaftsmacht (1949)

Hans Bayer’s journal article examines American antitrust policy as a struggle between economic law and concentrated economic power. Its three sections trace the development of antitrust legislation, assess the inadequacy of its instruments, and consider collective and individual self-help. Bayer’s central concern is not legal doctrine in isolation but the difficulty of reconciling economic efficiency with protection against domination. Legislation continually adapts to changing business structures, yet powerful economic groups also secure exemptions that weaken its reach. Ultimately, he argues, concentration cannot simply be reversed: policy must distinguish productive coordination from abuses of economic power.

The opening legislative history establishes the distance between statutory prohibitions and effective enforcement. The Sherman Act addresses restraints on trade; the Clayton Act extends intervention to share acquisitions and overlapping directorships. Yet its dependence on demonstrating a substantial reduction of competition or a tendency toward monopoly makes application uncertain. The Federal Trade Commission adds investigative capacity and administrative supervision, but lacks punitive authority of its own. Even its governing categories remain unsettled:

Die Arbeiten der Federal Trade Commission sind, abgesehen von anderen Umständen, auch deswegen so schwierig, weil der Begriff unfaire Konkurrenz völlig unklar ist.

English translation: The work of the Federal Trade Commission is so difficult, quite apart from other circumstances, because the concept of unfair competition is completely unclear.

This uncertainty is compounded by exemptions. Bayer discusses export agreements, agricultural cooperatives and marketing arrangements, resale-price maintenance, insurance, and restrictive patent licences. These provisions sometimes answer recognizable economic needs, such as agricultural stabilization or competition with foreign cartels. Nevertheless, they also perforate the antitrust framework: export arrangements, for example, can become instruments for regulating domestic prices. Legal protection of competition thus coexists with authorization of practices that restrict it.

Labor organization introduces an important distinction. Bayer rejects treating trade unions as straightforward equivalents of industrial monopolies, emphasizing the compatibility of their objectives with a healthy economy. He nevertheless recognizes that workers may obtain higher wages through employers’ monopoly profits and price increases, shifting the burden onto the public. His discussion of Walter Reuther’s opposition to that strategy preserves the distinction between collective bargaining and collaboration in exploiting consumers. The question is not simply whether actors organize collectively, but whose interests their coordination serves.

The second section grounds concentration in technical and financial conditions. Even where inventions permit decentralized production, concentrated enterprises retain advantages in advertising and research. This changes the appropriate aim of regulation:

Die Frage ist nur, inwieweit besonders ungünstige Auswirkungen dieser Entwicklung im Interesse der Gesamtheit verhindert oder abgeschwächt werden können.

English translation: The only question is to what extent particularly adverse effects of this development can be prevented or mitigated in the interest of the community as a whole.

Bayer tests proposals from Corwin D. Edwards’s Maintaining Competition against this problem. Restrictions on excessive enterprise size require a defensible threshold; prohibiting reinvestment might obstruct technical progress and cheaper production. Subsidizing small firms invites abuse unless their economic rationality can be assessed rather than assumed from their size. Bayer accepts the case against patent accumulation that excludes competitors, but regards patent reform as a remedy for abuses, not a means of stopping concentration itself.

His decisive conceptual move is to treat competition as an instrument rather than an unconditional good. Enterprise combinations may use resources more effectively than unrestricted rivalry. Neither ideal firm size nor “workable competition” supplies a readily enforceable standard. Market control can be economically useful while remaining susceptible to exploitation:

Daraus folgt aber, daß die Antitrustgesetzgebung sich nicht gegen die Zusammenschlüsse in der Wirtschaft als solche richten darf, sondern nur gegen deren Mißbrauch.

English translation: It follows, however, that antitrust legislation must not be directed against combinations in the economy as such, but only against their abuse.

The basing-point system makes this difficulty concrete. Delivered prices are calculated from a designated production center even when goods originate elsewhere, potentially charging buyers freight unrelated to actual transport. Bayer’s account of steel-industry “Pittsburgh Plus” shows how such arrangements suppress price undercutting and reshape market territories. He states that agreements existed in the cases discussed, while acknowledging the theoretical possibility of similar pricing without explicit coordination. Consequently, identical prices do not themselves prove a prohibited agreement. The dispute also reveals disagreement among courts, industry, and economists over whether particular restrictions sustain workable competition or undermine the public interest.

The final section turns from prohibition toward organized counteraction:

Gegen eine Ausnützung der Übermacht der verschiedenen Monopole und Firmen mit monopolistischer Stellung ist die Selbsthilfe, und zwar sowohl die Selbsthilfe der Gesamtheit als der einzelnen, notwendig.

English translation: Self-help—both that of the community as a whole and that of individuals—is necessary against exploitation of the superior power of the various monopolies and firms occupying a monopolistic position.

Bayer presents coordinated governmental supervision and planning as necessary even within a policy committed to preserving competition. Drawing on K. E. Boulding, he considers nationalization where an industry’s efficient scale naturally produces a single dominant firm, conditional on a sound political system. Regulated public utilities offer another possibility, but guaranteed profits may weaken incentives to improve productivity. The article closes by endorsing cooperatives as effective self-help, including in the United States. Its significance lies in relocating the problem from concentration alone to the institutional means of directing concentrated power toward the common good.