Hans Bayer’s journal article distinguishes the demand for a “free economy” from the institutional conditions of genuine economic freedom. Its three-part structure moves from the utopians who mistake simplified models for economic reality, through the power politicians who invoke freedom to defend privileged interests, to advocates of economic self-determination compatible with the common good. The distinction is substantive: removing public restraints does not necessarily release competition, and may instead strengthen those already able to dominate markets. Bayer’s positive argument makes regulation, cooperative organization, selective socialization, and coordinated economic policy instruments of freedom rather than its opposites.
The first section challenges the assumptions that make unrestricted competition appear self-sufficient. Modern markets contain large enterprises and business combinations whose strength differs sharply from that of smaller competitors; workers likewise occupy a weaker position than employers. Nonintervention therefore cannot produce the conditions presupposed by the model:
Gerade dann, wenn der Staat nicht eingreift, sind die wesentlichen Voraussetzungen der „freien Wirtschaft“ nicht erfüllbar: ungefähr gleich starke Wettbewerber am Markt und Preise, die durch einzelne nicht beeinflußt werden können.
English translation: Precisely when the state does not intervene, the essential prerequisites of the “free economy” cannot be fulfilled: competitors of approximately equal strength in the market and prices that cannot be influenced by individuals.
Bayer extends this criticism from market power to capital mobility and knowledge. Capital embodied in machinery and installations cannot move freely between productive uses; destructive competition can consequently eliminate economically valuable investments. Nor do entrepreneurs possess the comprehensive market knowledge that the model requires. Their errors cluster rather than cancel out: optimism encourages excessive expansion, pessimism excessive contraction, and both spread to suppliers. The example of shoe manufacturers links mistaken expectations to changes in employment and demand for leather and machinery. Competition alone thus guarantees neither efficient production nor stable adjustment.
The discussion of foreign trade gives this argument a specifically postwar European setting. Industries established partly in connection with the Marshall Plan have capacities exceeding available markets. Abruptly removing trade restrictions could stop production and create unemployment, especially where people cannot freely migrate. Bayer supports progressively freer exchange between states, but distinguishes that objective from its mechanical introduction. Coordinating state policy is necessary to make liberalization economically sustainable. His objection is not to exchange or competition themselves, but to treating their supposed benefits as independent of existing institutions and unequal capacities.
The second section shifts from mistaken theory to interested political conduct. Bayer’s “power politicians” profess economic freedom while delaying the repeal of Austria’s Untersagungsgesetz, obstructing cartel legislation, seeking protective tariffs, and restricting cooperatives. These contradictions reveal a selective freedom: competition is welcomed when it disciplines others, resisted when it threatens established intermediaries. Wholesalers’ financial power, strengthened by wartime developments, allows cartel-imposed minimum prices to replace public maximum prices. Deregulation can therefore transfer control rather than abolish it.
Housing makes the social consequences particularly clear. With supply constrained and wages low, free rent-setting might reconcile supply with effective demand chiefly by forcing poorer households to consume less space, not by substantially increasing construction. Market equilibrium is consequently no proof that a social need has been satisfied. Bayer similarly contrasts the acceptance of unemployment as a spur to workers’ effort with businesses’ demands for state rescue when crisis threatens profits. His reference to bank and industrial failures in 1929–1931 exposes the asymmetry between private claims to independence and reliance on publicly financed protection.
The final section defines the alternative through a criterion that neither idealized competition nor privileged enterprise can meet:
Ihr Grundsatz ist die Sicherung der Selbstbestimmung des einzelnen, soweit diese mit dem Gesamtwohl vereinbar ist.
English translation: Their guiding principle is to safeguard the individual’s self-determination insofar as it is compatible with the common good.
This criterion requires both removing restrictions that protect entrenched power and actively regulating competition. Bayer endorses price-control committees and cartel legislation, while warning that legal safeguards alone cannot dissolve concentrated economic power. Cooperatives supply a complementary, organizational counterweight. They can connect workers and farmers, reduce purchasing costs, and strengthen economically weaker groups. Since pressure on wages increasingly operates through prices rather than direct wage cuts, trade-union action must defend real wages. Cooperative legal reform and closer cooperation between unions and cooperatives accordingly become central to economic freedom.
Selective socialization belongs to the same strategy, rather than constituting an exception to it:
Sozialisierung, richtig durchgeführt, ist nicht eine Waffe gegen die Wirtschaftsfreiheit, sondern neben den anderen erwähnten Maßnahmen ein notwendiges Mittel zu ihrer Sicherung.
English translation: Socialization, properly carried out, is not a weapon against economic freedom but, alongside the other measures mentioned, a necessary means of safeguarding it.
Bayer does not elaborate an administrative blueprint. He instead specifies the relationship among competition, economic self-help, and the socialized sector: coordinated policy must direct their forces toward the common good. The article’s conceptual contribution lies in separating actual freedom from the mere absence of public intervention. Its concluding contrast identifies the standard by which institutions should be judged:
Nicht formale Freiheit, die die wirtschaftlichen Vormachtstellungen weiterhin bestehen läßt, sondern echter Wettbewerb, ähnlich wie im Sport, bei dem die Leistung und nicht das Vermögen ausschlaggebend ist.
English translation: Not formal freedom that allows positions of economic dominance to persist, but genuine competition, as in sport, where performance rather than wealth is decisive.
The closing appeal identifies the working class as an advocate of this coordinated order and warns against delaying its realization. Economic freedom, in Bayer’s account, is an institutional achievement: it depends on counteracting domination so that individual initiative becomes effective rather than merely permissible.
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