Unit 2: The development of the East German state 1961-85 Flashcards
Background
2a - stabilisation of E.G after 1961
- Berlin Wall built.
- Guaranteed labour supply.
- Advances towards Communism could begin.
The GDR’s economy after 1961
2a - stabilisation of E.G after 1961
- Mid-60s to the mid-70s, there were improvements in living standards.
- But housing shortages began after it was built, as the mass migration alleviated the problem before.
- Problems reaching 100% employment.
- SED had no scapegoat
- OPEC crisis resulted in problems. As did NES and NSS.
The end of mass emigration
2a - stabilisation of E.G after 1961
- End of mass migration was abrupt.
- 136 were killed trying to cross the Wall while it was erected.
- No real opposition in the GDR. Some remembered the results of the 1953 uprising.
- There was some support for the Wall. Border-crossers were hated in the GDR.
The NES, 1963-8
2a - stabilisation of E.G after 1961
- Launched by Ulbricht, directed by Mittag
2. Not political, purely economic.
The aims of the NES, 1963-8
2a - stabilisation of E.G after 1961
- Government maintain economic planning
- Directors lower down in economy given more autonomy
- Profit introduced as measure of economic performance
- Workers received bonuses and higher wages for those with higher level skills
- Focus on scientific and technical innovations in optics and chemicals.
- Industry-university links made
- Allowed as an experiment by Khrushchev
- Create competitiveness between the FRG and the GDR
Problems with the NES, 1963-8
2a - stabilisation of E.G after 1961
- Managers given new powers often did not have the financial skills to balance books and turn profits
- Resources still scarce and managers had hard time getting what they needed
- Some saw it as deviation from Marxism-Leninism. They did this by taking extended sick leave or working slowly.
- The higher wages were often useless, no goods to buy.
- It didn’t remove the central planning – therefore inefficiencies compared to West Germany.
- Reparations went on, and Ruhr was in the West – structural inefficiencies that could not be fixed with economic system
Why the NES ended, 1963-8
2a - stabilisation of E.G after 1961
- USSR wanted to centralise central planning throughout Eastern Bloc
- Brezhnev ousted Khrushchev in 1964. Was a hardliner, and was worried about the effects of experiments in the Bloc.
- The Chairman of the State Planning Commission, Apel, shot himself in response to Brezhnev’s criticism.
The ESS (Economic System of Socialism) 1968-71 (2a - stabilisation of E.G after 1961)
- Centralisation put back.
- Extended central planning to agriculture and trade.
- Restored price subsidies to promote key industries like computers, chemical and plastics.
- Higher planned production
Problems with the ESS (Economic System of Socialism) 1968-71
2a - stabilisation of E.G after 1961
- Difficult to maintain desired progression in research and development
- GDR still didn’t have resources to equal the west
- Between 1968 and 1971 there was an average growth rate of 5.7%
- Productivity never reached FRG levels
- Centralised control stifled efficiency and innovation
- Consumer goods neglected
- Ended when Honecker ended it while Ulbricht was on holiday
Positives of the ESS (Economic System of Socialism) 1968-71
2a - stabilisation of E.G after 1961
- GDR replaced Poland as USSR’s main trading partner
- Got into top 10 trading nations in the world
- Achieved while reparations were still being paid to the USSR and Marshall Aid money was never taken.
Increased econ production
2a - stabilisation of E.G after 1961
- SED recognised need to increase consumer goods production
- Televisions, fridges and washing machines were all best in Eastern Bloc
- Chocolate, shoes, coffee and fruit, however, was poor compared to the West
- SED often avoided blame. These problems often blamed on the USSR and the division of Germany
Consumer Socialism and Better Welfare
2a - stabilisation of E.G after 1961
- SED thought that a contented workforce would work harder
- Called “Unity of Social and Economic Policy”
- 1972 saw every single private and semi-private enterprise nationalised, even though these industries made up 11% of GDR production
- Nationalisation ended in 1976
- Industry grew at average of 5% each year through the 70s
- By 1980, almost all the households had a television and a fridge
- 85% had washing machines
Intershops
2a - stabilisation of E.G after 1961
- Intershop was chain of state owned stores in the GDR
- Sold foreign goods and only took foreign currency
- They provided stark contrast to East German stores who had poor quality goods
- Didn’t cause as much discontent as Delikat and Exquisit stores.
Delikat and Exquisit
2a - stabilisation of E.G after 1961
- Government run stores.
- Took East German currency
- Sold Western Goods
- Out of reach for majority of the E.G. population, resulted in resentment.
- Party officials used it a lot.
- Sold goods like Dresden China
Problems from the Unity of Social and Economic Policy
2a - stabilisation of E.G after 1961
- Problems arise from mid-70s onwards. Problems undermined ability of the government to provide consumer goods
- OPEC crisis of 1973 suddenly raised oil prices
- GDR had very few natural resources
- Lots of money spent on oil resulted in little money to spend on imports