Economic stabilisation after 1961

Question 1

What did the Berlin Wall successfully end?

Answer 1

Mass migration

Question 2

What did the Berlin Wall offer?

Answer 2

Stability

Question 3

What kinds of stability did the Berlin Wall offer?

Answer 3

Political Stability
Economic Stability
Security and Order

Question 4

How did the Berlin Wall offer political stability?

Answer 4

The Berlin Wall allowed the government to maintain control over its population and prevent potential political dissent

Question 5

How did the Berlin Wall offer economic stability?

Answer 5

The GDR could retain its workforce and prevent a brain drain that could further weaken its economy

The wall also limited the flow of resources and capital from East to West which helped stabilise their economic situation

Question 6

How did the Berlin Wall offer security and order?

Answer 6

This control over the movement of people helped the GDR maintain social order and prevent potential disruptions or unrest

Question 7

What stimulated the economic reform programme?

Answer 7

The retention of people with technical understanding and know–how

Question 8

The period following the building of the Berlin Wall until the late 1970s when severe economic problems emerged is most commonly associated with…

Answer 8

the “normalisation” theories of historians such as Mary Fulbrook

Question 9

The normalisation thesis

Answer 9

Mary Fulbrook = The GDR survived for so long because many of its citizens accepted it as part of everyday life

Jeanette Madarsaz = The Wall closed off any avenues of escape and people just went on with their everyday lives (routinisation)

Question 10

Why were many workers reluctant to strike?

Answer 10

because of the possible consequences

Question 11

What was clear by the 1960s?
(negative)

Answer 11

That the economic performance of the GDR was faltering and growth rates were falling

Question 12

The economic performance of the GDR was faltering and growth rates were falling by the 1960s — what shows this?

Answer 12

From 1951 – 64 the amount of investment more than doubled

From 1951 – 64 the growth in national income halved

Question 13

When did Ulbricht announce the NES?

Answer 13

January 1963

Question 14

What does the NES stand for?

Answer 14

New Economic System of Planning and Management

Question 15

What did the NES aim to improve?

Answer 15

It aimed to improve economic efficiency

Question 16

How did the NES aim to improve economic efficiency?

Answer 16

Through developing procedures in which managers would be driven more by initiative and technology than by Marxist–Leninist ideology

Question 17

What was reduced so that the planners could concentrate on the big picture rather than the minutiae of the planning process?

Answer 17

The level of central planning

Question 18

The State Planning Commission and SED were still in overall control but having decided what should be produced…

Answer 18

they left the producers (those who best knew how to go about it) to get on with their jobs without unnecessary bureaucratic interference

Question 19

What was the goal of the Associations of National Enterprises (V VBs)?

Answer 19

Profit (no longer would plans be based on how much they produced on paper but on how much profit they made in reality)

Question 20

While elements of the NES may have smacked of capitalism, Ulbricht had no intention of…

Answer 20

weakening fundamental communist structures

Question 21

What was still centrally controlled under the NES?

Answer 21

Supply and demand

Question 22

Many party functionaries opposed the NES because…

Answer 22

they feared it weakened central control and the ideological underpinning of economic development

Question 23

In 1963 Ulbricht had originally believed it would take the NED ___ or _____ years to embed itself. He was wrong

Answer 23

two
three

Question 24

What were the reasons for the weaknesses of the NES?

Answer 24

– Labour force
– Pricing structure

Question 25

Labour force

Answer 25

Many people did not have the skills to work in a new way and found it difficult breaking past practices – they never had to worry about concentration or quality for example

Many lacker technical expertise

Question 26

Pricing structure

Answer 26

In centrally planned economies (where prices are determined by the government) there is a tendency for essential non-luxury goods to be priced too low

This happens because the planners want to make these goods affordable for everyone

This creates problems for producers

They either have to accept lower profits (which goes against the purpose of the planned economy) or produce fewer goods – leading to shortages in the market

Question 27

Between 1968–71 there were periodic and unexplained shortages in household goods from toilet paper to toothbrushes and certain foodstuffs were often in short supply – provide a piece of evidence to substantiate this

Answer 27

East Germans were often seen carrying “perhaps” bags – as they passed a shop it may perhaps have something unexpected on sale

Question 28

What economic partnership did the GDR join?

Answer 28

COMECON

Question 29

When did the GDR join COMECON?

Answer 29

September 1950

Question 30

What was COMECON

Answer 30

An economic organisation formed by socialist countries to promote cooperation and coordination in economic planning and development

Question 31

What did the GDR supply the Soviet Union as part of COMECON? What did the GDR get in return?

Answer 31

The GDR supplied the Soviet Union with manufactured goods such as machine tools while the Soviet Union offered raw materials

Question 32

What did the GDR become dependent on?
(COMECON)

Answer 32

The raw materials provided by the Soviet Union under COMECON (particularly oil)

Question 33

__ per cent of the GDR’s oil was supplied by the USSR

Answer 33

87

Question 34

What allowed all COMECON members access to the technology of the others at little cost?

Answer 34

The “Sofia Principle”

Question 35

By the early 1980s the USSR and COMECON accounted for __ to __ per cent of GDR trade

Answer 35

65
75

Question 36

What did COMECON lead to?
(negative)

Answer 36

Massive foreign debts for the GDR

Question 37

“overtaking without catching up”

Answer 37

This was a rather torturous idea which meant that as it could not catch up using its present outdated technology and equipping itself with comparable technology would simply maintain the existing gap

Question 38

1976 – 80 Five–Year Plan annual growth rate

Answer 38

4.1 per cent

Question 39

From 1971 – 1975 the percentage of skilled workers rose from __ per cent to __ per cent

The biggest rise was in young people:
__ per cent of __ to __ year olds were classed as skilled

Answer 39

44.9
53
80
25
30

Question 40

Between 1971–85 at least __ per cent of skilled workers were doing jobs ______________ with their skills

Answer 40

20
incommensurate

Question 41

Historian views on the NES/ESS

Answer 41

Jörg Roesler = it was a “paradigm shift”

Arvid Nelson = the reforms were predicated on “the absolute imperative of control… Liberalism and decentralization were window dressing”

Peter Grieder = “the truth lies somewhere between these two propositions…”

Eli Rubin = “Market mechanisms were introduced” but “without any serious political will to relinquish ultimate authority over the economy”. This led to “confusion and chaos”. “Rather than mixing the best of both systems, the reforms managed mostly to mix the worst of both systems”

Peter Grieder = But whatever the tensions in the NES/ESS they were not severe enough to render it dysfunctional. Nelson’s conclusion that the programme “was doomed from the start” is therefore overly deterministic”

Question 42

According to a critique of Ulbricht’s economic policy written shortly after his downfall and signer by Honecker…

Answer 42

the former SED First Secretary had wanted to go much further in reducing central planning, even proposing its replacement with a system of “self-regulatory” mechanisms

Ulbricht was also determined to preserve the remaining private and semi-state owned businesses which had proved so productive

Question 43

Despite Ulbricht’s enthusiasm for the reforms…

Answer 43

he helped create the conditions for their abolition

Question 44

How did Ulbricht help create the conditions for the abolition of his own economic policies?

Answer 44

His obsession with forcing the pace of the “scientific-technological revolution” led him to overemphasize “structure-determining” areas of the economy at the expense of the consumer industries

Question 45

Ulbricht’s obsession with forcing the pace of the “scientific-technological revolution” led him to overemphasize “structure-determining” areas of the economy at the expense of the consumer industries - what did this lead to?

Answer 45

Shortages of essential goods appeared in the shops (the situation worsened by the harsh winters of 1968-9 and 1969-70)

Question 46

Historian’s concluding views on Ulbricht’s economic reforms

Answer 46

Historians have debated whether the reforms represented a “missed opportunity” for the GDR

“To argue that they could have prevented the country’s economic decline in the 1970s and 1980s is to deny the systemic problem of state control” (Peter Grieder)

The reforms “represented an attempt to slow the rate of rotation of the downward spiral, not to tackle the underlying problems” (Corey Ross)