Hayek: Technischer Fortschritt und Überkapazität

Hayek’s 1936 lecture treats “overcapacity” not as a narrow industrial problem but as a political idea: the belief that technical progress under competition either arrives too slowly or wastes capital by making usable equipment idle. Its thesis is that such apparent waste usually comes from uncertainty and from confusing technical with economic capacity, not from competition as such.

Ich glaube vor allem, daß sich ihm ein wichtigeres Feld öffnet, ja, daß er geradezu die Pflicht hat, sich in erster Linie mit den grundlegenden Ideen unserer Zeit auseinanderzusetzen, die die Tätigkeit der Staatsmänner und Politiker beherrschen und damit auf die Entwicklung der Welt wahrscheinlich einen größeren Einfluß ausüben als die aufsehenerregendsten Ereignisse der Gegenwart.

English translation: Above all I believe that a more important field opens up to him — indeed, that he has, so to speak, the duty to engage first and foremost with the fundamental ideas of our time, which govern the activity of statesmen and politicians and thereby probably exert a greater influence on the development of the world than the most sensational events of the present.

The central question is whether competition adequately uses the welfare gains opened by technical progress, or whether a planned economy could multiply income. Hayek’s answer begins with ignorance. Any system works toward a future it cannot fully foresee; a planning authority may gather information, but it is not endowed with superior judgment. Its apparent advantage often lies only in its power to force consumers to accept its choices.

Aber abgesehen von diesem Fall scheint mir klar, daß keinerlei Grund besteht anzunehmen, daß eine zentrale Planungsbehörde über mehr Wissen oder Voraussicht verfügen würde als der individuelle Unternehmer.

English translation: But apart from this case it seems clear to me that there is no reason whatsoever to assume that a central planning authority would possess more knowledge or foresight than the individual entrepreneur.

The first analytical movement concerns inventions. If competition fails to adopt cost-saving techniques, Hayek attributes this not to competition but to its restriction, especially monopoly and patent power. The sharper accusation is the opposite: that competition introduces innovations too fast, scraps still-serviceable machines, and thereby creates overcapacity. Against this, Hayek distinguishes capital costs from operating costs. Old plant should remain in use so long as the total cost of the new method exceeds the old plant’s mere operating cost. Only when the new method’s full cost falls below that operating cost is scrapping economically justified.

Das neue Kapital wird also nicht verwendet, um das alte und verlorene zu ersetzen, sondern um an anderen Produktionsfaktoren zu sparen.

English translation: The new capital is thus used not to replace the old and lost capital, but to economize on other factors of production.

This is the lecture’s conceptual core. New capital is not a duplicate of the old machine’s service; it economizes on labor, raw materials, or other scarce means and releases them elsewhere. The visible survival of unused equipment is therefore not proof of waste. Hayek’s decisive move is to separate technical capacity from economic capacity: a machine may still be physically able to produce, yet no longer be worth using.

Obwohl technisch die Produktionskapazität noch besteht, ist sie wirtschaftlich verschwunden, und das findet auch darin seinen Ausdruck, daß die Anlagen ihren Wert verloren haben.

English translation: Although technically the productive capacity still exists, it has disappeared economically, and this finds its expression in the fact that the plants have lost their value.

From this follows his attack on “capital preservation” as a policy principle. Capital goods matter because they render useful services, not because past expenditure has been embodied in them. To protect railways against automobiles, or state-owned assets against devaluation, is to turn a means into an end and to make society pay for obsolete arrangements.

Aber die Idee, daß wir als Land unseren Wohlstand irgendwie konservieren können, indem wir der Einführung von Neuerungen Schwierigkeiten in den Weg legen und unsere Mitbürger zwingen, die vorhandenen Anlagen besser auszunützen, ist offenbar eine Absurdität.

English translation: But the idea that we as a country can somehow conserve our prosperity by placing obstacles in the way of introducing innovations and forcing our fellow citizens to make fuller use of existing plant is plainly an absurdity.

Hayek then extends the argument to product differentiation and imperfect competition. Proposals for standardization promise lower costs by forcing consumers toward fewer variants, but Hayek asks who is entitled to decide that brand loyalty, taste, or habit is irrational. If uniformity truly benefited consumers, producers could prove it through lower prices; compulsion reveals a planner’s substitution of his valuation for theirs.

Die Normierungsfanatiker begeben sich da auf ein außerordentlich gefährliches Feld, und ich wenigstens kann mich nicht für die Idee begeistern, daß jemand anderer für mich entscheiden soll, was mir gefallen oder schmecken soll und was nicht.

English translation: The fanatics of standardization are venturing here onto extraordinarily dangerous ground, and I, at least, cannot warm to the idea that someone else should decide for me what I ought to like or find tasty and what not.

The later sections turn from the origin of idle capacity to its effects. Not every unused plant is waste: daily and seasonal fluctuations can make intermittent use rational, and large seasonal capacity may save working capital otherwise tied up in inventories. Hayek’s paradox is that scarcity of capital can itself leave fixed plant idle. This also undermines empirical studies that sum the technical reserves of individual industries and infer a possible national output gain; they ignore that expanded production requires labor, materials, and capital drawn from other uses.

Wir haben es hier mit einem besonders einfachen Fall des scheinbaren Paradoxons zu tun, das in den modernen Erklärungen der Depressionen eine so große Rolle spielt, nämlich daß Kapitalmangel dazu führen kann, daß die vorhandenen Kapitalanlagen nicht voll ausgenützt werden können und es daher aussieht, als ob zu viel Kapital da wäre.

English translation: We are dealing here with a particularly simple instance of the apparent paradox that plays so large a role in the modern explanations of depressions, namely that a shortage of capital can lead to the existing capital investments not being fully utilized, so that it looks as though there were too much capital present.

The conclusion applies the same reasoning to investment after crises and to state-led modernization. Idle old capacity need not block new investment, since much of it may be obsolete, badly located, or unable to cover operating costs. Nor is technical modernity enough: engineers’ preference for the newest plant must be checked by profit-and-loss calculation as a social test of economy. Hayek concedes that this may sound like a utopian laissez-faire standard, yet he defines the academic economist’s role precisely as resisting fashionable technocracy and preserving the distinction between technical possibility and economic reason.

Ich halte es aber für die Aufgabe des akademischen Nationalökonomen, die Vernunft zu vertreten, ohne Rücksicht darauf, ob sie in naher Frist Wirkung haben wird.

English translation: But I hold it to be the task of the academic economist to advocate reason, regardless of whether it will take effect in the near term.