BOTH WESTERN and eastern judgements on the present economic situation in the GDR are contradictory. Nonetheless there can be no question that the real condition of the industrial and agricultural enterprises, trade, energy, construction, transport and means of communication is far worse than had been suggested by the propagandists of bureaucratic management. Even the pre-November assumptions of the GDR's western trading partners have been proved over optimistic over the past few months. No doubt the
GDR's efforts to maintain a good payments record with foreign creditors gave a distorted impression of the reality.
This reputation was bought with a constantly deteriorating trade structure with respect to the developed capitalist countries, and an enormous increase in exports to balance declining proceeds.
WINFRIED WOLF
HE proportion sinking of
T exports made up of modern technical manufactures was balanced by increasing exports of materials
(potash and raW brown coal fashionable clothes, supply and labouring, meat and livestock, and fruit and vegetables. As with all the so- called
"real-socialist"
countries, long
"change",
• before the the GDR had
• become more and more a low wage back-
International Viewpoint #186 • June 4, 1990 up zone for the EC, and above all, as a result of the inner-German customs union, for West German industrial and commercial concerns.
The rate of exchange by which East German marks were turned into hard currency was 1:2.4 in 1980, but 1:4.4 in 1989. This deterioration in the terms of trade found its economic expression in the fact that between 1980 and 1988 while the annual growth of produced es was thus being lost on average in the 1980s. In order to finance the sinking export income, the share of exports to the capitalist countries rose from 21.4% of produced national income in 1980 to 45%
Here are some indicators that express the state of our economy.
At the end of the 1950s, labour productivity here was 35% behind that in the Federal Republic. In the 1960s it briefly touched 25% and today it is 40 to 50% behind. While in the first half of the 1980s productivity rose by 4.3% per annum, after 1985 it fell 3.5%. The result: while the gross social product of each FRG citizen is around 65,000DM per year, the dis posable national income produced by a GDR citizen is some 30,000DM.
Resounding phrases about intensive growth
Despite the resounding phrases of Honecker, Stoph and Mittag at party conferences and central committee meetings to the effect that the core of the SED's economic strategy was the changeover from extensive growth to intensive growth, the exact opposite process took place from 1981 to 1989:
• growth in basic stock (fixed capital) 45%;
• growth in national income 41%
The rate of productive accumulation developed in line with such figures and was catastrophic, sinking from 16.1% in 1970 to 10% in 1988, a development reinforced by the ambitious maintenance of a
social policy that was in many ways exaggerated and out of touch with the real needs of the population.
This meant that in many sectors of the economy, not much more than the simple maintenance of production was attained. In order to pursue ambitious prestige projects (for example in the sphere of electronics), and to finance a wholly disastrous energy policy, the central authorities took from the enterprises, many of which therefore lacked the means to renew their technically and structurally worn out buildings and equipment. This of course also had the additional effect of worsening the impact on the environment.
The branch of industry where the equipment is the least worn out is mechanical engineering. Even so, the number of installations in this branch that are more than 20 years old rose from 54,900 in 1986 to 60,000 in 1989. Things are much worse in the chemical, textile and food industries. Energy production is in an especially ghastly state. In 1985, 56% of the power stations came from stations that came on line before 1970, with the corresponding low level of functioning and high output of pollutants. The antiquated nature of the structure has not changed in recent years.
All kinds of strange reasons for this development have been given both from left and right. tomed - both from right and left - to employ the label "socialist" for the GDR are now arriving at quite opposite
Apologists seek excuses for failure
The champions of capitalism assert that the failures of all the countries of called "really existing socialism" prove that socialism is now on the way out. On the other hand the apologists of the allegedly socialist character of the system are reduced to attributing the failures of the GDR's economy to the following factors:
• The hugely inferior starting point of the GDR after the Second World War (lower level of industrialization, higher war losses, the burden of reparations, sharpening of disproportions as a result of the country's division and so on;
• The disastrous economic policies pursued by Honecker, Mittag and Stoph from the mid-1970s, and especially from the
But just as it would be unreasonable to blame unemployment, cyclical crises and mass poverty in the Third World - products of the capitalist system — on the economic policies of specific governments, even if they can have a certain influence, it would equally be wrong to blame the faults in the system in the GDR on preceding conditions or individual bureaucrats.
The economic history of the GDR is a chain of short-term upturns, crises and
The enthusiasm for reconstruction after 1945 was soon followed by the changeover to administrative economic planning. This involved a forcing of the pace in favour of heavy industry on the model of the Stalinist industrialization drive, and was perceived by the working class and other economically active layers to be against their interests. The result was the uprising of June 1953.
A changeover to a "new course" was soon bogged down in a burgeoning mini-
PLANUJ DOTe
"Plan ahead" sterial bureaucracy. The building of the wall and the subsequent "call to production" resulted in a brief upturn, which with the "New Economic System of Plan(NOSP) resulted in something and Economic Management of a boom. It turned out in fact that this type of economic leadership - which was demagogically presented as democratization - was the most successful, involving the transfer of responsibility from the central bureaucracy to lower levels with more competence in dealing with details and increased use of so-called "economic levers". But this period was short-lived, since it soon came up against the contradiction between the drive of the econompower and the claims of the party bureau-
The eighth SED Congress in 1971 marked both the end of this policy and the start of the Honecker era. announced new guiding principle of the unity of economic and social policy was no invention of Honecker. It was merely a transformation of Stalin's "discovery" of the basic economic law of Socialism into an economic and political directive. In the first years this policy was sustained by the ruthless commercial exploitation
EAST GERMANY of the oil price rise in a way that had catastrophic consequences for the GDR's own energy policy, and the enormously easier terms for credit at the start of the
This brought about a new economic breathing space. It was used to gradually change the relatively stable balance of forces between the party, state and ecoestablished in the second half of the 1960s, which might then have seemed like an ideal form of post-Stalinist bureaucratic rule, back towards a neo-Stalinist regime.
This culminated in the mid-1970s with the thoroughgoing changeover to the combine structure, which sacrifice of all the advantages of the rich production and marketing experience of the middle and small enterprises, their many sided productive structure and their capacity to react quickly to new needs. In their place came the disadvantages of the centralization of industry into vast monopolies in terms of the development of prices, costs and their real expression, capacity for innovation and the length of time it took innovations to be introduced into production. Increase in power of combine directors The change however served its purpose of ensuring, for more than a decade and a half, the domination of the party bureaucracy inside the bureaucratic system. As a consequence of the concentration and reduction in numbers of the economic bureaucracy, the power of the combine directors, who were in fact directly subordinate to the party leadership in the person of Günter Mittag, grew. Thus the state bureaucracy (in the Ministries and above all the planning commission) were excluded from a share in power. This meant the replacement of all economic sense with the subjective decisions of Mittag; the combine directors became the satraps of this economic
There can be no doubt that the persistence of this form of exercising power even after the mid-80s and its dogmatic presentation was decisive for the quick and almost unchallenged collapse of the post-capitalist system of rule. Here, however, I am only concerned with the internal problems and contradictions of the system that existed in the GDR for four decades.
Proponents of the idea of so-called "market socialism" overlook the fact that Marx considered all the contradictions of capitalism to be concentrated in embryo in the commodity form.
Thus anyone who sees the reason for the failure of the GDR's economy in the insufficient use of market mechanisms June 4, 1990 • #186 International Viewpoint
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EAST GERMANY and thus puts the plan/market alternative in the centre of their attention is overlooking the fact that it was precisely the capitalist expressions of the law of value (capital, surplus value, average rate of profit and so on) that have led to the enormous growth in the forces of production. A "socialistically" restrained law of value will miss out on these results. This is why nearly all the political forces in the GDR, including the majority who were in the opposition in earlier years — from Eppelmann to Böhme — went in a few weeks from masking their ideas in phrases about the "socialist market economy" to the non or even anti-socialist demand for the "social" market economy on the West German model. Process of transition
The main reason for the failure of the GDR, as in all the other countries of "real socialism" is the absence of any process of transition from the abolition of capitalist property towards the development of socialist relations of production. That means, it was not enough to legally relabel the appropriated means of produc-
KERO representatives of the interests of all the workers!"
• "Enterprise union organizations as a part of stronger unions and also as representatives of enterprise interests!"
• "Enterprise council and union leaderships as worksharing cooperating organs of representation!"
• "Only one enterprise representative for the interests of the producers!"
This confusion was hardly the key to the development of the ability of the workers and employees to to fight.
The situation is now slowly beginning to become clearer given the increasing perception of the social risks that accompany the development of the market economy. A not negligible contribution to this is the compromise reached by a large majority between the VL, the FDGB and the SPD (Socialist Party) at the central round table Whereby the agreement of the SPD was bought with a concession on illusions about "parity participation".
The idea seems to be steadily gaining ground that the key thing for working class activists in connection with the gradually awakening class tion as people's property. By PALOMO in La Jorada (Mexico City). C&W Syndicate. Socialism really begins when the producers are organized in forms of grassroots democratic decision-making and have in their hands immediate power over the means of production and the results of production, both in the enterprises, and at a regional and national level.
The economic motivation resulting from a sense of responsibility based on control of the means of production, combined with the advantages of economic planning in the form of economic regulation related to need, offers the only alternative to capitalism. There would certainly still remain for a long time the need for economic categories not based on utility, under conditions of a constantly deepening process of workers participation. I therefore fully support the brief expression of opinion in the position paper of the United Left (VL):
We "need....not less, but more planning - but this time an economically sound form of regulation, using value and price relations, and based on self-management and corresponding to needs. This will be realized through the use of market mechanisms."
But the alternative of a society of socialist freedom and democracy has, at least in the GDR, been wasted. While the International Viewpoint #186 • June 4, 1990 few real socialist forces inside the SED wear themselves out in the struggle to renew their party and have therefore withdrawn from work in the factories, the United Left argues about the content of a socialist alternative, and everybody else has long ago set off in the direction of reunification.
### Trade union movement disintegrates
It is noticeable that in November 1989 the movement stopped outside the doors of the enterprises. From this the captains of industry, now freed from Mittag, have drawn a huge increase in their power. The workers had no response to this, especially since the FDGB (trade unions) had gone downhill and the attempts at renewal from above have so far had little success. The bruising struggles over the forms of enterprise representation had a harmful effect on the politicization of the
All possible variants were proposed:
• "Enterprise councils as organs of self-management!"
• "Enterprise councils as organs of struggle for limiting the negative consequences of capitalist restoration!"
• "Enterprise councils as legitimate consciousness is the creation of stronger forms of enterprise representation, using the space created by the present lack of legal definition. In this way rights and conditions can be fought for and protected, which can form a better starting point for resistance to the approaching massive attack from the side of the the new union of West German private capital and GDR/ German state capital.
Where the enterprise union organizations have been renewed from top to bottom, their leaders, insofar as they are ready to represent the interests of all the workers, are to be prioritized, since up until now they still have a better legal position in the GDR. Where the forces of the union are so weak that no self-renewal is possible, the councils must take on this task. Delegations from the left in the unions and councils in the FRG are very helpful here. They can nail many illusions about West German "freedom" . *