This book is the result of a conference which took place in December 2013 to analyse the economic system of the GDR and its transformational process after the unification of the two Germanies. Twelve authors contribute to the six sections of the book, and to say it right away, the quality of their contributions varies significantly. The first two chapters are personal accounts of the collapse of the GDR by Helmuth Kohl’s economic policy advisor, Johannes Luedewig, and the GDR dissident and member of the first freely elected GDR parliament, Richard Schröder, respectively. The third chapter, by Jürgen Schneider, the only one in part two of the book, is an attempt to explain the influence of the Soviet model on the GDR economy. These chapters can be summarized under the rubric ‘we won’—or in Schröder’s case ‘you (i.e. the SED) lost’. While Schröder at least manages to lighten the mood with some funny anecdotes and GDR political jokes, Luedewig’s chapter in contrast is a mere exculpation of the political decision (and its economic consequences) taken by the (West) German government. Schneider’s chapter is a collection of quotes on socialist economic theory by socialist economists or statements on economic policy, either from Soviet sources or from GDR economic encyclopaedias and economic text books. The third part of the book describes in three chapters the systemic deficits of the socialist planned economy. Here Spiridon Paraskewopulos summarizes the fundamental shortcomings of a planned economy before he elaborates on the four economic stages of the GDR; Udo Ludwig provides a summary of the overall economic development (gesamtwirtschaftliche Entwicklung) of the GDR economy and Christian Heimann, based on the interwar writing of the economist Ludwig von Misis makes the case that—and explains why—a planned economy must ultimately fail due to its immanent shortcomings. Things get a bit more technical in part four of the book, when Klaus Ziege-Bollinger and Host Harte, the former a manager involved in the running of two former GDR companies, the latter a certified accountant and tax accountant, explain why there were such devastating negative effects on the actual economic balance sheets of the supposedly tenth biggest economy in the world. In a nutshell, the balance sheet of the GDR economy was based more on how a socialist economy should work according to theory rather than how it performed in reality. This discrepancy then helped to explain why there was such a sharp reduction on the balance sheet after the economic union (Wirtschafts-, Währungs- und Sozialunion) of May 1990. The fifth part looks at exactly the issues associated with the economic, currency and social union. Economist Rüdiger Pohl, who at the time had warned about the economic and political consequences of the currency union, provides one of the book’s strongest chapters on the introduction of the Deutschmark. The West German currency had an almost mystical status amongst GDR citizens and inevitably this led to a great deal of disappointment in the five new states when FRG affluence failed to materialize. The resulting labour market policies and interventions are described by Mathias Knut, a renowned expert on labour markets and employment. He highlights the fact that because of the severe contraction of the East German labour market in the wake of the currency union and the privatization of formerly state-owned companies by the Treuhand, by the end of 1991 almost two million former GDR citizens, some 20 per cent of the 1989 workforce, had been sent either into early retirement or into reduced hours, re-training or work creation programmes; this compares to 1.3 million who were ‘officially’ registered unemployed. The costs for these measures were, of course, staggering and had a long-term impact on the social security system of West Germany as well. Based on his excellent book, the late Gerhard A. Ritter explains how the social security system of the East was adapted to that of the West and how and why this was (and still is) a very contentious point especially for the pension system, as, on one level, East German pensioners can be seen as the financial winners of unification due to the traditionally low state pensions in the GDR. The last part of the book consists of only one chapter, written by the book’s co-author Karl-Heinz Paqué. A well-respected economics professor and for four years (2002–2006) Minister for Finance in Saxony Anhalt, Paqué provides an interim assessment of the economic unification and the challenges it still faces. In scores of statistics and tables, he highlights what has been achieved since 1990 but similarly makes it clear that there are still significant challenges and even outright risks for the economy of the former East Germany. The chapters in parts three to six provide a plethora of statistical data which will be helpful to anyone interested in the economics of unification. Having said this, the book has one big shortcoming. The vast majority of the book’s contributors favour liberal economics or are neo-liberals. None of the authors challenge the achievements or failures of the Treuhandanstalt; on the contrary, its work is described as unavoidable. Considering the vast amounts of deficit the Anstalt had at the end of its work and considering the hundreds of billions of unemployment benefits that had to be poured into East Germany, one wonders why no alternatives which lay between state-planned socialism and neo-liberal capitalism were presented—possibly because those ideas were (and are) not politically opportune? © The Author(s) 2018. Published by Oxford University Press on behalf of the German History Society. All rights reserved. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model)
German History – Oxford University Press
Published: Sep 1, 2018
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