Hans Bayer, Holzpreisbildung und Wirtschaftsstabilisierung (1955)

Hans Bayer’s journal article examines Austrian timber-price formation as a problem of economic stabilization. Moving from a diagnosis of international and domestic market tensions to a critique of competitive-market assumptions, it proposes a coordinated institutional response. Its central argument is that neither unrestricted price formation nor lasting export restrictions can reconcile forestry’s need for remunerative prices with domestic processors’ requirements and the national benefits of exports. Bayer instead advocates an organized competitive order, negotiated by the affected economic groups under the credible prospect of state intervention.

The opening diagnosis distinguishes worldwide scarcity from Austria’s predominantly price- and credit-related difficulties. Bayer traces the international pressure through a chain of displaced demand: an American strike in 1954 redirected United States purchases toward Canada, British purchases toward Scandinavia, and German demand toward Austria. Austria’s share of western European softwood lumber exports had already risen from approximately 12 percent before the war to 35 percent in 1953, although the earlier importance of roundwood exports qualifies that comparison. Urgent construction demand made foreign buyers comparatively insensitive to price increases. These external pressures reached the Austrian market through expanded exports, rather than originating simply in an imbalance between domestic timber production and consumption.

Domestic conditions nevertheless amplified the disturbance. Excess capacity in sawmilling and paper production intensified competition for timber; sawmills reportedly operated at only about 40 percent of capacity. Price volatility disrupted processors’ calculations and contractual commitments. Bayer resists the convenient explanation that expensive timber alone rendered Austrian manufacturers uncompetitive: foreign producers also faced higher material costs, while Austrian firms suffered from insufficient specialization. Credit constraints created another incentive to export. Weakly capitalized sawmills confronted rising roundwood costs and prolonged payment delays from domestic customers, including public authorities. Price and financing tensions could consequently become actual shortages for particular firms.

Bayer’s theoretical section explains why price movements cannot reliably correct these problems. Competitive models assume market transparency, adaptable supply and demand, mobile capital, and freedom from consequential production delays. Timber production violates these assumptions: its prices respond strongly to economic and political fluctuations, supply cannot readily expand, and processing requires advance provision of material. Supply rigidity also changes its significance with the direction of demand:

Die Starrheit des Angebotes wirkt sich bald als Stärke, bald als Schwäche für den Waldbesitz aus.

English translation: The rigidity of supply operates at times as a strength, at times as a weakness for forest owners.

With rising demand, restricted supply gives forest owners something resembling monopoly power. With falling demand, smaller owners’ dependence on timber income makes supply reductions difficult and can deepen price declines. Bayer thus treats rigidity as a source of instability, not simply as an enduring advantage for producers. High prices chiefly force adjustment through reduced consumption. More seriously, temporarily expensive timber encourages substitution by other materials; because users seldom return to timber, a cyclical disturbance can produce a lasting structural loss of demand. Stabilization therefore serves forestry’s long-term interests as well as those of its immediate customers.

The resulting policy objective combines claims that the contemporary controversy tended to separate:

Unter Berücksichtigung des Versagens des Marktmechanismus ergibt sich als wirtschaftliche Aufgabe: Sicherung kostendeckender Preise für die Forstwirtschaft, ausreichende Versorgung des Inlandsmarktes ohne Beeinträchtigung der Konkurrenzfähigkeit und der Möglichkeit, die Exportchancen im Interesse der Volkswirtschaft auszunützen.

English translation: Taking the failure of the market mechanism into account, the economic task is to secure cost-covering prices for forestry and an adequate supply for the domestic market without impairing competitiveness or the possibility of exploiting export opportunities in the national economy’s interest.

The proposals proceed from this composite objective. Export licensing restrictions imposed from late 1954 had not prevented further price increases. Bayer allows that sharp restrictions might be justified as an emergency measure, but rejects them as a satisfactory permanent solution. Drawing on J. Messner’s proposal for competition-control commissions, he instead recommends a coordination committee representing employers and employees in forestry and processing, together with consumers. Convened through Austria’s economic, agricultural, and labour chambers, it would negotiate domestic supply arrangements and an export levy.

The levy’s intended use connects price regulation directly to the earlier diagnosis of financing difficulties. Rather than treating export receipts merely as revenue to redistribute, Bayer proposes financing a specialized timber-industry bank:

Aufgabe der Holzwirtschaftsbank wäre die Überwindung des kreditmäßigen Spannungsverhältnisses auf dem Holzmarkt, insbesondere durch Gewährung von Krediten an leistungsfähige Gewerbeunternehmungen und für Aufgaben der Forstwirtschaft.

English translation: The task of the timber-industry bank would be to overcome the credit-related tension in the timber market, particularly by granting loans to viable commercial enterprises and for forestry purposes.

Negotiated self-regulation would not depend on goodwill alone. If agreement failed, legislation would impose an export levy; this prospect should encourage cooperation. Existing restrictions would remain during an appropriate transition. A statutory export duty would become necessary if coordination failed, whereas successful agreement could avoid it. In either case, Bayer envisages relaxing quantitative restrictions exceeding those originally adopted by the timber-industry council.

Complementary measures address the sector’s slower physical adjustments: better timber extraction and transport, reforestation, thinning, less wasteful consumption, and industrial use of previously neglected wood types. The federal forests might provide countervailing power against private market concentration, but their limited supply share restricts that possibility. The article’s distinctive contribution is to connect international price transmission, domestic credit weakness, and long production horizons within one stabilization argument. Its institutional conclusion translates that diagnosis into an economic order built through sectoral self-responsibility, supported rather than replaced by public authority.