To what extent did the GDR's economy stabilize after 1961?

Question 1

What did the construction of the Berlin Wall mean for the government?

Answer 1

Meant that they didn’t have to contend any longer with the consequences of a dwindling labour supply as this wall now allowed them to have a more secure workforce and so allowed them to have more effective central planning of the economy.

Question 2

What problems did the sealing of the Berlin Wall create?

Answer 2

This dwindling population had helped to alleviate the housing shortage and had created more employment opportunities which also meant the SED couldn’t blame emigration for the GDR’s economic problems.

Question 3

How could these problems be addressed?

Answer 3

In Ulbricht’s New Economic System (NES)

Question 4

What was the time period in which the NES existed?

Answer 4

1963-68

Question 5

What was the modified form of the NES called?

Answer 5

Economic System of Socialism (ESS)

Question 6

What was the time period in which the ESS existed?

Answer 6

1968-71

Question 7

What did the NES and ESS attempt to do?

Answer 7

They attempted to make the economy more efficient by reducing central control and allowing some measure of profit to drive industry forward

Question 8

What did these policies lack?

Answer 8

Soviet support and were restricted by political maneuvering’s with the SED

Question 9

When and who was Ulbricht replaced by?

Answer 9

Ulbricht was replaced by Erich Honecker in 1971

Question 10

What did Honecker immediately do when he got put into power?

Answer 10

He immediately reversed Ulbricht’s policies and reintroduced central planning

Question 11

What policy did Honecker put into place?

Answer 11

Honecker’s Unity of Social and Economic Policy or Consumer Socialism

Question 12

What did his policy try and do?

Answer 12

Tried to bring economy and welfare together.

Question 13

What did Honecker favor which led to the underinvestment in what?

Answer 13

Honecker favoured the social side and so this led to the underinvestment in industry

Question 14

What was the crisis in 1970s?

Answer 14

The OPEC crisis was the international economic crisis which led to oil price rises which the GDR were ill prepared to cope with.

Question 15

What did the sealing of the border bring an abrupt end to?

Answer 15

An abrupt end to migration from East to West Germany.

Question 16

How many people between 1961-89 were killed when trying to cross the wall and trying to cross other border crossing?

Answer 16

At least 136 were killed when trying to get over the wall and 500 at the border

Question 17

Why were there few mass demonstrations within East Berlin or the GDR as a whole in the immediate aftermath of the wall?

Answer 17

This was because many had memories of the 1953 uprising and so didn’t want to provoke the authorities into widespread repression. There was also widespread fear of an international conflict developing into an outright war between the two nations.

Question 18

Who were border crossers and why was there resentment in the GDR towards them?

Answer 18

There had been some resentment of the border-crossers who live in East Berlin but worked in West Berlin and could therefore access western goods and also towards West Berliners who had previously used East Berlin to buy government-subsidized basic items of food that were less expensive than in the west.

Question 19

What happened to the people of the GDR after the wall was built (Normalization Theory)

Answer 19

The people just had to accept the situation and try to make the best of it. This phycological impact encouraged many to conform with the SED to create a better socialist future

Question 20

What were the two main reasons for the implementation of the NES?

Answer 20

The GDR’s newfound security following the construction of the wall gave the SED government the opportunity to adopt and experiment with new policies.
Recognized the need for economic reforms that could hopefully promote innovation and efficiency.

Question 21

What were the aims of the NES?

Answer 21

-Government retained control of overall economic planning.
-Introduced profit-making as a key indicator of performance as a means to focus more on the production of quality goods.
-Incentives for workers were introduced such as financial bonuses and increasing wages for those with higher work skills.
-Aimed to focus on scientific and technological developments especially in chemical, optics and electronic industries.

Question 22

What were the various problems with the NES?

Answer 22

-Managers often didn’t possess the appropriate financial skills to obtain necessary resources.
-There was opposition to NES ideologically. Some workers purposely sabotaged production by breaking machinery or taking extended sick leave.
-Arguments of wage differentiation

Question 23

How was the NES changed to be the ESS?

Answer 23

It was quietly modified which the SED justified by saying it was an experiment and that more communist ideology needed to be introduced

Question 24

What was reintroduced under the ESS?

Answer 24

Centralization was reintroduced

Question 25

What was ESS intended to include that the NES didn’t?

Answer 25

It was more centrally planned and was extended to include agriculture and trade as well as industry. It also placed more emphasis on developing computer technology and chemical and plastic industries.

Question 26

What were the economic results of the ESS looking like?

Answer 26

At first glance they looked promising as between 1968 and 1971 the GDR economy grew by an average of 5.7% while western estimates of its GNP rose from 3.5% in 60-65 to 5.1% in 65-70. Industrial production also rose across all sectors including electronics and light industry and this helped improve the consumer goods production improve.

Question 27

Why was this not really the case?

Answer 27

They disguised the problem that neither the NES or the ESS lived up to the high expectations placed upon them and productivity failed to meet Ulbricht’s aim of overtaking the FRG’s economy.

Question 28

What did the desire to overtake the FRG do?

Answer 28

Placed too much pressure on few industries and not enough on consumer products leading to shortages that made the cold winters more unpleasant for GDR citizens.

Question 29

How was the ESS scrapped?

Answer 29

In September 1970 when Ulbricht was on holiday Honecker passed a resolution with the Politburo that reversed the emphasis in the economy and dramatically increased central planning thereby scrapping the ESS

Question 30

What had the ESS recognized the need to improve?

Answer 30

The need to improve the consumer goods

Question 31

What was there a significant increase in the availability of?

Answer 31

In the availability of household items such as televisions, refrigerators and washing machines.

Question 32

What was wrong with these consumer goods though?

Answer 32

They were often of quite inferior quality which often left individuals dissatisfied

Question 33

Who did the East German’s blame for the inferior quality of the consumer goods?

Answer 33

East German’s blamed the USSR for the scale of reparations which had been taken after the second world war.

Question 34

After 1971 what did the SED focus on?

Answer 34

Trying to raise the standards of living through consumer socialism and better welfare

Question 35

What was the theory?

Answer 35

The theory was that a more contented workforce would work longer and harder for the state

Question 36

What was this policy called? What did it hope?

Answer 36

Unity of Social and Economic Policy and it was hoped that any increases in production would provide the capital needed to improve the social conditions in the GDR such as healthcare, education and housing.

Question 37

By 1980 what did nearly every household have?

Answer 37

Television and refrigerator while 85% had washing machines

Question 38

What were Intershops and why were they not liked by citizens?

Answer 38

Intershops were for the elite party members which sold western goods at lower prices than in West Berlin or the FRG but only accepted Western currency. They were unfair to normal citizens

Question 39

What did the OPEC crisis on 1973 do?

Answer 39

Raised worldwide oil prices which hurt the GDR as they were a country of few natural resources

Question 40

How much was loaned to the GDR from the FRG in their secret negotiations?

Answer 40

Neary two billion DM in loans from 1983 and 1984

Question 41

What is an example that shows the basic inefficiencies in the GDR?

Answer 41

The inferior quality of consumer goods was highlighted by the Trabi car. These cars were expensive and deliberately underproduced and a popular joke was that the heating was good in the Trabi while you had to push it.

Question 42

When did the GDR become a member of COMECON?

Answer 42

In 1950

Question 43

In the 1970s there was a labour shortage in the GDR and what was done to solve this?

Answer 43

Workers were brought in from other socialist counteries such as Vietnam, Mozambique, Angola and Cuba