(1/4) (by /u/flesh_eating_turtle)

Introduction

Throughout its 41 year existence, the German Democratic Republic (GDR) found itself constantly at the center of the Cold War. The Berlin Wall, set up to divide East Berlin from FRG-controlled West Berlin, quickly became the most famous symbol of the conflict. Despite this, most people (including most socialists) know relatively little about this nation; how its economy functioned, what kind of life did it give its people, etc. However, in the light of recent studies finding that 57% of East Germans feel that life was better under socialism (see sources below), many people have grown more curious about this particular country. As such, in this post we will go over various aspects of the GDR in detail.

All sources are listed at the bottom. I will indicate which source I am using whenever I quote from one.

Historical Background and Starting Conditions (WWII and Pre-War Era)

World War II left Germany a shadow of its former self. Cities had been leveled, and the economy had been utterly devastated. East Germany in particular was at a serious disadvantage; it had always been far less industrialized than Western Germany, and as such, it had depended largely upon the West for its economic needs. According the US Federal Research Division’s study of East Germany:

Before World War II, the area that later became East Germany was not well developed industrially. Because this area lacked raw materials, heavy industry was generally located in other parts of the German state. Compounding the problems for the newly created East German state in 1949 was the massive destruction during World War II of the industrial plant that had existed there and the subsequent Soviet dismantling and removal of factories and equipment that had survived the war. […] During the interwar years, the territory that is now East Germany was profoundly dependent on external economic ties. In the mid-1930’s, it shipped almost half of its total production to the other parts of Germany… This domestic trade featured sales of agricultural products; textiles; products of light industry, such as cameras, typewriters, and optical equipment; and purchases of industrial goods and equipment.

In other words, East Germany depended totally on the West for its heavy industrial needs, and paid for these needs by selling its agricultural and light industrial products. However, after the war, this balance between East and West was thrown off. According to the US Federal Research Division:

Major dislocations occurred after World War II, when Germany was divided into two sections, one part dominated by the Soviet Union, and the other by the Western Allies.

Because it could no longer rely on its former system of internal and external trading, the Soviet Zone of Occupation had to be restructured and made more self-sufficient through the construction of basic industry.

This was no small feat for the fledgling GDR, especially seeing as it received virtually no large-scale economic aid from the USSR (which was too busy rebuilding itself after WWII to worry about pumping money into East Germany). In addition, the GDR had to pay heavy reparations to the USSR for the damage caused during WWII. This acted as a major obstacle to development. According to The East German Economy, 1945-2010, published by the German Historical Institute, direct and indirect reparations paid by East Germany between 1946 and 1953 amounted to $14 billion in 1938 prices. Another statement on this is found in the US Federal Research Division’s study:

The reorientation and restructuring of the East German economy would have been difficult in any case. The substantial reparations costs that the Soviet Union imposed on its occupied zone, and later on East Germany, made the process even more difficult. Payments continued into the early 1950’s, ending only with the death of Stalin. According to Western estimates, these payments amounted to about 25 percent of total East German production through 1953.

This is in direct contrast to the West, which received large aid investments from the United States as part of the Marshall Plan, as well as lucrative trade relationships with the developed nations. Now, let us examine how the GDR developed in spite of these factors.

Economic Growth and Industrial Development

Despite all of the aforementioned significant disadvantages, the East German economy managed to overcome its difficulties and develop at an impressively rapid rate. This is especially true in terms of heavy industry. According to the US Federal Research Division:

During the 1950’s, East Germany made significant economic progress, at least as indicated by the gross figures. By 1960 investment had grown by a factor of about 4.5, while gross industrial production had increased by a factor of about 2.9. Within that broad category of industrial production, the basic sectors, such as machinery and transport equipment, grew especially rapidly, while the consumer sectors such as textiles lagged behind.

Despite the priority given to heavy industry, consumption also increased steadily during this period:

Consumption grew significantly in the first years, although from a very low base, and showed respectable growth rates over the entire decade.

At the end of the 1950’s, some analysts feared an economic crisis in the East, spurred by the “brain drain” from East to West; however, this did not occur, and the East German economy continued to grow impressively in the 1960’s. The US Federal Research Division reports:

As the 1950’s ended, pessimism about the future seemed rather appropriate. Surprisingly, however, after the construction of the Berlin Wall and several years of consolidation and realignment, East Germany entered a period of impressive economic growth that produced clear benefits for the people. For the years 1966-1970, GDP and national income grew at average annual rates of 6.3 and 5.2 percent, respectively. Simultaneously, investment grew at an average annual rate of 10.7 percent, retail trade at 4.6 percent, and real per capita income at 4.2 percent.

This growth continued on through the next decade:

As of 1970, growth rates in the various sectors of the economy did not differ greatly from those of a decade earlier… Production reached about 140 to 150 percent of the levels of a decade earlier… The growth rates in production resulted in substantial increases in personal consumption… throughout the 1970’s the East German economy as a whole enjoyed relatively strong and stable growth. In 1971, First Secretary Honecker declared the “raising of the material and cultural living standard” of the population to be a “principal task” of the economy; private consumption grew at an average annual rate of 4.8 percent from 1971 to 1975 and 4.0 percent from 1976 to 1980… The 1976-1980 Five Year Plan achieved an average annual growth rate of 4.1 percent.

The 1980’s saw some economic difficulties for the GDR as Western banks clamped down on credit for the East and the USSR reduced oil deliveries by ten percent. This led to a period of slow growth as the GDR rushed to step up exports; despite this, the economy did manage to pull through and deliver impressive growth results during this period (though it did fall short of the plan). The US Federal Research Division reports:

The 1981-1985 plan period proved to be a difficult time for the East German economy… However, by the end of the period the economy had chalked up a respectable overall performance, with an average annual growth rate of 4.5 percent (the plan target had been 5.1 percent).

The overall impacts of the industrialization strategy of the GDR were extremely positive. As the US Federal Research Division reported in 1988:

Industry is the dominant sector of the East German economy, and is the principal basis for the relatively high standard of living. East Germany ranks among the world’s top industrial nations, and in the Comecon it ranks second only to the Soviet Union.

Overall, the socialist system in the GDR managed to industrialize the nation at a rapid rate, enabling the country to sustain itself without constant infusions from the West. It did this despite numerous aforementioned disadvantages, a feat which should be celebrated.

Increases in Living Standards

The socialist system in the GDR did not only succeed in rapidly developing the nation; it also provided a steadily increasing quality of life for the people. The US Federal Research Division reports:

The East German standard of living has improved greatly since 1949 [when the GDR was established]. Most observers, both East and West, agree that in the 1980’s East Germans enjoyed the highest standard of living in Eastern Europe. Major improvements occurred, especially after 1971, when the Honecker regime announced its commitment to fulfilling the “principal task” of the economy, which was defined as the enhancement of the material and cultural well-being of all citizens.

This focus on increasing quality of life for all citizens, rather than providing profit for the capitalist class, is a unique feature of the socialist system, which provided steadily improving living standards. The US Federal Research Division states:

Since the inception of the regime, the monthly earned income of the average East German has increased steadily in terms of effective purchasing power. According to the 1986 East German statistical yearbook, the average monthly income for workers in the socialized sector of the economy increased from 311 GDR marks in 1950 to 555 GDR marks in 1960, 755 GDR marks in 1970, and 1,130 GDR marks in 1985. Because most consumer prices had been stable during this time, the 1985 figure represented a better-than-threefold increase over the past thirty-five years.

  • @ComradeCorvOPM
    link
    35 years ago

    (3/4)

    The university system was also of remarkably high-quality, and attendance was extremely inexpensive (though entrance requirements were very competitive):

    In 1985 East Germany had 54 universities and colleges, with a total enrollment of 129,628 students. Women made up about 50 percent of the student population. Courses in engineering and technology headed the list of popular subjects. Medicine, economics, and education were also popular choices. There were 239 technical institutions, with a total student population of 162,221. About 61 percent of the students studied full time, while the remainder enrolled in correspondence study or took evening classes. The three most popular fields of study at the institutes were medicine and health, engineering and technology, and economics. Courses at the university and technical institutes consisted primarily of lectures and examinations. Completion of the program led to a diploma or license, depending on the field of study.

    As of the mid-1980’s, higher education was very inexpensive, and many of the textbooks were provided free of charge. Full or partial financial assistance in the form of scholarships was available for most students, and living expenses were generally minimal because most students continued to live at home during their courses of study. Germans have a high regard for education, and the regime has generally supported young people who have wanted to upgrade their level of skills through further training or education.

    Overall, the educational system in the German Democratic Republic was high-quality and widely accessible to all.

    Women’s Rights in East Germany

    The GDR had a remarkably strong record in protecting women’s rights, far stronger than the capitalist West. According to the US Federal Research Division:

    The East German record in the area of women’s rights has been good. Women have been well-represented in the work force, comprising about half of the economically active population. As of 1984, approx. 80 percent of women of working age (between eighteen and sixty) were employed. The state has encouraged women to seek work and pursue careers and has provided aid to working mothers in the form of day-care centers generous maternity benefits.

    Women’s access to education was very strong in the GDR, again much stronger than in the capitalist West:

    The state also has made a concerted effort to provide educational opportunities for women. The number of women with a university or technical school education has increased over the years. Of the students enrolled in universities and colleges in 1985, about 50 percent were women.

    Birth control was widely-available and free of cost, and abortion was available upon the woman’s request. The US Federal Research Division reports:

    A liberal abortion law, promulgated in 1972 amid protests from religious circles, permits abortion upon request of the mother… As of the mid 1980’s, information on contraceptive methods was available to the public, and women could obtain birth control pills at no cost.

    In addition, the state sought to provide assistance to working mothers through a highly-developed child-care system:

    An elaborate network of daycare centers provides care for the child while the mother is at work. In 1984 there were 6,605 year-round nurseries with room for 296,653 children. These nurseries provided care for 63 percent of eligible children.

    Overall, the situation for women in East Germany was far better than it was in West Germany, and the GDR’s women’s rights record was quite impressive.

    Buyer’s Remorse - The Disaster of 1989

    Most people in the West imagine the fall of the GDR as a time of widespread euphoria and freedom; however, for millions of people in East Germany this was far from the case. One excellent account of this time was written for the Guardian by Bruni de la Motte, an East German woman who has since become a British trade union negotiator. She reports that widespread unemployment and misery occurred after the fall of communism:

    Little is known here [the West] about what happened to the GDR economy when the wall fell. Once the border was open the government decided to set up a trusteeship to ensure that “publicly owned enterprises” (the majority of businesses) would be transferred to the citizens who’d created the wealth. However, a few months before unification, the then newly elected conservative government handed over the trusteeship to west German appointees, many representing big business interests. The idea of “publicly owned” assets being transferred to citizens was quietly dropped. Instead all assets were privatized at breakneck speed. More then 85% were bought by West Germans and many were closed soon after. In the countryside 1.7 million hectares of agricultural and forest land were sold off and 80% of agricultural workers lost their job.

    Another article from the Guardian reports on the long-term impact this has had on the economy in Eastern Germany, noting that there has been virtually no advancement in the East-to-West productivity ratio since 1991:

    Productivity in the former east was 70% of that in the west in 1991 and rose to just 73% in 2012, in part a legacy of the number of factories that were bought by West German industrialists and deliberately run into the ground to scotch competition… Experts say the fact that most of the large industry and production bases are in the west and that those in the east are far smaller – with most employers in agriculture or service industries like meat-processing and call centres – will have a long-term effect of increasingly holding back the economy in the east and ensuring that the wage discrepancy remains and likely worsens.

    Bruni de la Motte notes that a mass-purging of academia and professional life took place after the fall of communism:

    Large numbers of ordinary workers lost their jobs, but so too did thousands of research workers and academics. As a result of the purging of academia, research and scientific establishments in a process of political vetting, more than a million individuals with degrees lost their jobs. This constituted about 50% of that group, creating in East Germany the highest percentage of professional unemployment in the world; all university chancellors and directors of state enterprises as well as 75,000 teachers lost their jobs and many were blacklisted. This process was in stark contrast to what happened in West Germany after the war, when few ex-Nazis were treated in this manner.

    A housing crisis, as well as the mass seizure of workers’ homes, also took place:

    In the GDR everyone had a legally guaranteed security of tenure and ownership to the properties where they lived. After unification, 2.2m claims by non-GDR citizens were made on their homes. Many lost houses they’d lived in for decades; a number committed suicide rather than give them up. Ironically, claims for restitution the other way around, by East Germans on properties in the West, were rejected as “out of time”.

    She remarks that since the fall of communism, many people have come to appreciate the benefits that socialism offered:

    Since the demise of the GDR, many have come to recognize and regret that the genuine “social achievements” they enjoyed were dismantled: social and gender equality, full employment and lack of existential fears, as well as subsidized rents, public transport, culture and sports facilities. Unfortunately, the collapse of the GDR and “state socialism” came shortly before the collapse of the “free market” system in the west.

    This is supported by the fact that (as mentioned above) 57% of former East Germans say that life was better under communism (see sources below). For further writing by Bruni de la Motte, I recommend her book Stasi Hell or Workers’ Paradise? Socialism in the GDR - What Can We Learn From It? This book presents an honest appraisal of the successes and failures of the German Democratic Republic from the perspective of somebody who actually grew up, went to school, worked, and raised a family there. I will link it in the sources below.

    Conclusion

    The German Democratic Republic was not a perfect society, and it is unwise to pretend that is was; however, it did provide a high standard of living to its people, coupled with strong economic and social security. Guaranteed employment, housing, healthcare, and education, as well as subsidies on basic necessities; strong protections for the rights of women and children; widely available and inexpensive cultural activities such as theaters and concerts; these are benefits which many millions of people have come to sorely miss in the years since the GDR’s fall.

    Perhaps the best summation of this complex topic is given by Bruni de la Motte, in the conclusion to her book Stasi Hell or Workers’ Paradise:

    The GDR experience of socialism stands in marked contrast to the dismantling of the welfare state and the concomitant rampant privatization of every aspect of life now taking place in Western Europe, from culture to healthcare and other essential services, as well as to the denial of social values and the extreme individualization of life. We live in an atomized society, rapidly falling apart, with little social ethos and no long-term goals. Many today, especially young people, are living without hope or sense of a secure future. Socialism can still offer an antidote and an alternative. And the experience of socialist countries like the GDR can provide pointers for a way forward and help renew one’s hope.

    In our age of late capitalism, climate change, and resurgent fascism, this message is more relevant than ever before.