Hans Mayer, Produktion (1925)

Hans Mayer’s encyclopedia entry develops a general theory of production through three stages: conceptual definition, the laws governing allocation, timing, and productivity, and their operation in an exchange economy. Its central claim is that production combines economic purposes with natural and technical constraints. Institutions determine ownership, decision-making power, and the form of calculation, but do not abolish these underlying laws. Mayer’s distinctive task is to connect technically possible transformations with the allocation of scarce resources toward competing wants.

Produktion ist demnach: Schaffung von Nutzen durch Disponieren mit Wirtschaftsmitteln im Wege der Umwandlung oder Lageveränderung von Stoffen und Kräften.

English translation: Production is therefore: the creation of utility by disposing of economic means through the transformation or spatial relocation of materials and forces.

Neither physical transformation nor utility creation alone constitutes production. A technical process must serve an economic purpose; conversely, useful activities need not transform materials or forces. Trade changes rights of disposal and creates utility, but transport counts as production because it changes goods’ physical location. Intellectual discovery and artistic conception can be highly productive without being production in Mayer’s restricted sense; their material embodiment, such as printing or sculpture, qualifies. The distinction separates analytical categories without denying the economic importance of services or knowledge.

Mayer likewise distinguishes participation in production from authority over it. The producer is the person or association deciding the production plan and its execution, not everyone contributing manual or intellectual labour.

Wer Produzent ist, ist demnach nicht durch technische Momente (Mitwirkung im Produktionsprozeß), sondern durch wirtschaftliche und soziale — Machtverhältnisse und Rechtsordnung, welche die Verfügung über die Produktionsmittel geben — bestimmt.

English translation: Who is a producer is therefore determined not by technical considerations (participation in the production process), but by economic and social ones—relations of power and the legal order that confer control over the means of production.

Private ownership thus separates entrepreneurial direction from workers’ execution. Collective control would, in Mayer’s account, remove this division if society itself determined and implemented the plan. His supposedly general theory therefore begins by distinguishing technical functions from their institutional allocation.

The substantial second section initially abstracts from exchange by considering an economy producing for its own needs. Wants supply production’s ends; available resources, natural laws, and technical knowledge delimit its possibilities. Allocation seeks the greatest total satisfaction, selecting combinations whose use sacrifices the least valuable alternative satisfactions. Complementarity and substitution complicate this process without, Mayer argues, destroying its theoretical determinacy. He stresses variable combinations rather than universally fixed production coefficients: specialized machinery constrains adjustment, whereas recurring supplies of labour and natural resources permit changes in the production plan.

The practical difficulty is knowing enough to realize this allocation. Prices furnish entrepreneurs with numerical guides, but Mayer rejects the conclusion that their absence makes rational collective production intrinsically impossible.

Dennoch ist diese Unmöglichkeit keine absolute, die Schwierigkeiten sind vorhanden, aber nicht unüberwindlich, sie liegen grundsätzlich in jeder Wirtschaft vor, der Unterschied ist nur gradueller Art¹).

English translation: Nevertheless, this impossibility is not absolute; the difficulties exist, but are not insurmountable; they are fundamentally present in every economy, and the difference is only one of degree.¹)

His answer rests on accumulated experience rather than an exhaustive calculation from scratch. Repeated trials disclose physical yields and value relations; inherited combinations and valuations guide subsequent adjustments. Production goods derive their values from the utility of products dependent on their marginal employment. These values become costs, enabling comparison and control without requiring market prices. Mayer separates this formal calculability from whether collective authorities identify wants correctly or possess the personal capacities for rational management. His argument works most readily under stable or gradually changing conditions; major unforeseen disruptions require renewed experimentation.

Temporal coordination extends the same account. Continuous consumption requires simultaneous occupation of successive production stages, with intermediate goods supplied in appropriate quantities. Capital reproduction replaces circulating inputs and worn fixed equipment, sustaining an uninterrupted flow despite lengthy individual processes. Expansion requires resources beyond replacement to be committed to capital formation.

Mayer then distinguishes absolute utility, value productivity measured through net utility surplus, and physical productivity as an input–output relation. Technical improvements economize scarce resources through machinery, division of labour, intermediate products, and large-scale operation. Increasing and diminishing physical returns depend on movement toward or beyond optimal factor proportions; neither should be confused with diminishing marginal utility. Production expands only while an additional resource yields more utility there than in alternative uses. Direct satisfaction from retaining a resource, notably human labour power, can impose a further limit.

The final section explains how decentralized exchange coordinates production without a unified directing subject.

Die Ziele werden der Produktion in der Verkehrswirtschaft durch die Nachfrage der Konsumenten der Endprodukte gestellt, wie diese Nachfrage auf dem Markte in den Preisgeboten für die einzelnen Produktarten zum Ausdruck kommt.

English translation: The goals of production in the exchange economy are set by consumers’ demand for final products, as this demand finds expression on the market in the price bids for the individual kinds of products.

Demand here means wants backed by purchasing power, not urgency alone. Product prices govern producers’ bids for resources; competition distributes inputs among branches and establishes marginal employments and costs. Profit-seeking and technical economies operate within limits imposed by physical returns and falling product prices. Mayer concludes that marginal net-return increments tend toward equality across competing uses, while directing readers elsewhere for monopoly qualifications. The entry’s significance lies in this attempted integration of technical production, marginal valuation, and institutional variation: market and collective organization differ in their mechanisms and objectives, yet both confront scarcity, interdependent production processes, and the need for continuous adjustment.