Economic developments, 1949-61

Question 1

The GDR operated a ___________ system of economic planning based on the ______ model

Answer 1

centralised
Soviet

Question 2

What was the main organisation responsible for economic planning in the GDR?

Answer 2

The State Planning Commission (SPC) was the central authority in charge of formulating and implementing the national economic plan

Question 3

The SPC drew up a series of…

Answer 3

Five-Year Plans in which targets were set and labour and resources to meet them

Question 4

Centralised economic planning

Answer 4

Centralised economic planning is a system in which the government exercises significant control over resource allocation, production decisions, and distribution of goods and services within an economy

Question 5

What were the advantages to the centralised system of economic planning in the GDR?

Answer 5

• The Government could harness the economy to the perceived needs of the state and desired outcomes - for example a concentration on public transport rather than private cars
• Social rather than personal needs were emphasised — items were produced for the good of the community such as housing rather than consumer goods which may have been unnecessary

Question 6

What were the disadvantages to the centralised system of economic planning in the GDR?

Answer 6

• Emphasis tended to be on quantity over quality
• Too centralised a system stifled innovation and creativity
• The system was inefficient, it was difficult to plan needs five years hence and often goods were produced which were not required at the expense of those that were
• As all production was planned and resources provided, there was no profit motive. The goods would still be produced whether they were cost effective or not

Question 7

Economic rules of ______ and ______ were not always considered

Answer 7

supply and demand

Question 8

Supply and demand

Answer 8

The rule of supply and demand states that the price and quantity of a product or service in a market are determined by the balance (equilibrium) between the availability (supply) and desire (demand) for that product or service

Question 9

Why were the economic rules of supply and demand were not always considered by the GDR?

Answer 9

The central planning authorities controlled production and distribution according to their own priorities and goals

Question 10

The aim of the First Five-Year Plan

Answer 10

• To develop heavy industry in key industries such as iron and steel, energy and chemicals
• To increase living standards significantly above pre-war levels
• To overtake the living standards in the FRG to make the GDR more appealing to all German workers

Question 11

The SED had overestimated the economic capacity of the GDR and their calculations for the First Five-Year Plan had failed to account for…

Answer 11

the development of the armed forces or the continuing reparation payments to the USSR

Question 12

What is a trade deficit?

Answer 12

A trade deficit occurs when a country or entity imports more goods and services than it exports, resulting in a negative balance of trade

Question 13

Trade deficit in the GDR — example

Answer 13

The GDR bought goods to the value of 600 million Ostmarks in excess of what it sold to its Eastern European partners

Question 14

The GDR bought goods to the value of 600 million Ostmarks in excess of what it sold to its Eastern European partners — what does this suggest?

Answer 14

This implies that the GDR had a trade deficit with its Eastern European partners

The GDR bought more goods from its Eastern European partners than it sold to them

This led to a net outflow of Ostmarks from the GDR to the Eastern European countries.

Question 15

What is a net outflow?

Answer 15

A net outflow refers to the overall movement of money or assets leaving a particular entity or country, exceeding the inflow

Question 16

What did the GDR do in their attempt to reduce the deficit?

Answer 16

• Cuts in cheap transport — although it was still heavily subsidised (supported financially)
• Cancellation of working mothers’ monthly day off work to catch up on domestic chores
• Price rises in subsidised foodstuffs including jam, bread and confectionary

Question 17

Further cuts to the welfare budget had been made in order to reduce the deficit — what was the result of these cuts?

Answer 17

The cuts were not enough to reduce the deficit and by 1953 shortages were beginning to appear, not only in agriculture but in industry too

Question 18

Agricultural collectivisation

Answer 18

Agricultural collectivisation involves the consolidation of individual farms into larger, collectively managed units (often under state control) with the aim of promoting efficiency and productivity in agricultural production

Question 19

What did Grotewohl announce at the Central Committee in December 1959?

Answer 19

Grotewohl announced that collectives were superior to private farming and initiated a hurried campaign to bring all private farmers into collectives

Question 20

The Socialist Spring

Answer 20

The process of collectivisation soared between 1959 and 1960, giving rise to the term “The Socialist Spring”

Question 21

What were the goals of agricultural collectivisation?

Answer 21

• To make the GDR self-sufficient in food production
• To overtake the FRG in terms of agricultural production

Question 22

What did the process of agricultural collectivisation lead to?

Answer 22

Disruption and resentment — and often farmers leaving for the West

Question 23

Provide an example showcasing that there was considerable opposition to socialist economics

Answer 23

Many farmers resented collectivisation and left the GDR: by mid-1953 750,000 hectares were unused as landowners fled

Question 24

What did the removal of the profit motive in industry lead to?

Answer 24

• Disincentives to innovate and take risks
• Many managers did not try very hard to improve production while their workers grumbled and did as little as possible

Question 25

The New Course

Answer 25

A policy shift implemented by the SED aimed at promoting economic reform, consumer satisfaction, and political stability within the framework of socialism

Question 26

What effects did the New Course have?

Answer 26

• Discontinuation of the collectivisation process
• Production of more consumer goods
• Withdrawal of the April price rises
• End to discrimination against Christians

Question 27

The retraction under the New Course was to some extent a…

Answer 27

self-criticism

Question 28

What was the June 1953 uprising?

Answer 28

The June 1953 uprising refers to a widespread revolt that took place in the GDR in June 1953 against work norms and government demands to increase productivity

Question 29

What were the main causes of the June 1953 uprising?

Answer 29

• Increased work quotas
• Poor living conditions
• Lack of political freedom
• Discontent with the SED and its Soviet-backed government

Question 30

How did the June 1953 uprising start?

Answer 30

It began with a strike action by construction workers in East Berlin on 16 June against work quotas during the Sovietization process

They were initially demonstrating against increased work norms but were soon joined by thousands of other workers and citizens

Question 31

How did the Soviet-backed government respond to the uprising?

Answer 31

The Soviet occupation forces declared martial law and used massive military force to suppress the rioting and support the East German regime — leading to clashes and casualties

Question 32

What were the various reasons for the ultimate failure of the June 1953 revolt?

Answer 32

• Role of the USSR
• Motives of demonstrators
• Attitude of the West

Question 33

Role of the USSR

Answer 33

The swift Russian response ended the protests before they got out of hand

(officially this resulted in the deaths of 50 East Germans, although it may have been considerably more)

Question 34

Motives of demonstrators

Answer 34

• The protesters themselves were disunited: some showed their support for Nazism by displaying swastikas while others simply wanted the work norms reduced
• There was no co-ordinated leadership of blueprint for regime change

Question 35

Attitude of the West

Answer 35

The West did nothing to support the rebellion

The FRG may have preferred to see a stable GDR to dissuade the growing influx of penniless refugees who might destabilise their own recovery

Question 36

Historian Mike Dennis on the June 1953 rebellion

Answer 36

Historian Mike Dennis has explained how the Government was ill equipped to deal with protests:
They were reluctant to call out the KVP as they could not be sure of their loyalty; some members of SED organisations such as the FDJ had already joined the protests

It was the Russians who showed firmness

Question 37

What did the June 1953 uprising highlight?

Answer 37

The dissatisfaction of the East German population and revealed cracks in the Soviet-backed regime

Question 38

What were the outcomes of the June 1953 uprising?

Answer 38

The government made some concessions (such as reducing work quotas and raising living standards) but also increased repression to prevent further uprisings

Question 39

What was announced on the 17th of June?

Answer 39

Wage rises

Question 40

There was a certain amount of ostensible self-criticism following the June 1953 uprising — what quote reflects this?

Answer 40

“If large numbers of workers don’t understand the party’s position, then it is the party which is to blame not the workers.”

Question 41

What was the long-term significance of the June 1953 uprising?

Answer 41

The uprising had a lasting impact on East German society and politics

It further eroded public trust in the government and contributed to a sense of opposition against the ruling regime

The event also inspired later movements for political change in the GDR

Question 42

When was the New Course abandoned?

Answer 42

June 1955

Question 43

What did Walter Ulbricht say about the New Course following the June 1953 uprising?

Answer 43

Ulbricht claimed unequivocally in an SED meeting on 1 June that:
“It was never our intention to choose such a false course and we will never choose it”

Question 44

What was reorganised following the June 1953 uprising?

Answer 44

The Party and state organisations

Question 45

Why were the Party and state organisations reorganised following the June 1953 rebellion?

Answer 45

To afford more internal security

Question 46

The Stasi had one officer per ___ citizens, the Nazi Gestapo had one per ____

Answer 46

320
3500