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Masterpost on the German Democratic Republic (East Germany)

Introduction
Throughout its 41 year existence, the German Democratic Republic (GDR) found itself constantly at the center of the Cold War. The Berlin Wall, set up to divide East Berlin from FRG-controlled West Berlin, quickly became the most famous symbol of the conflict. Despite this, most people (including most socialists) know relatively little about this nation; how its economy functioned, what kind of life did it give its people, etc. However, in the light of recent studies finding that 57% of East Germans feel that life was better under socialism (see sources below), many people have grown more curious about this particular country. As such, in this post we will go over various aspects of the GDR in detail.
All sources are listed at the bottom. I will indicate which source I am using whenever I quote from one.
Historical Background and Starting Conditions (WWII and Pre-War Era)
World War II left Germany a shadow of its former self. Cities had been leveled, and the economy had been utterly devastated. East Germany in particular was at a serious disadvantage; it had always been far less industrialized than Western Germany, and as such, it had depended largely upon the West for its economic needs. According the US State Department's study of East Germany:
Before World War II, the area that later became East Germany was not well developed industrially. Because this area lacked raw materials, heavy industry was generally located in other parts of the German state. Compounding the problems for the newly created East German state in 1949 was the massive destruction during World War II of the industrial plant that had existed there and the subsequent Soviet dismantling and removal of factories and equipment that had survived the war. [...] During the interwar years, the territory that is now East Germany was profoundly dependent on external economic ties. In the mid-1930's, it shipped almost half of its total production to the other parts of Germany... This domestic trade featured sales of agricultural products; textiles; products of light industry, such as cameras, typewriters, and optical equipment; and purchases of industrial goods and equipment.
In other words, East Germany depended totally on the West for its heavy industrial needs, and paid for these needs by selling its agricultural and light industrial products. However, after the war, this balance between East and West was thrown off. According to the US State Department's report:
Major dislocations occurred after World War II, when Germany was divided into two sections, one part dominated by the Soviet Union, and the other by the Western Allies.
Because it could no longer rely on its former system of internal and external trading, the Soviet Zone of Occupation had to be restructured and made more self-sufficient through the construction of basic industry.
This was no small feat for the fledgling GDR, especially seeing as it received virtually no large-scale economic aid from the USSR (which was too busy rebuilding itself after WWII to worry about pumping money into East Germany). In addition, the GDR had to pay heavy reparations to the USSR for the damage caused during WWII. This acted as a major obstacle to development. According to The East German Economy, 1945-2010, published by the German Historical Institute, direct and indirect reparations paid by East Germany between 1946 and 1953 amounted to $14 billion in 1938 prices. Another statement on this is found in the US State Department's study:
The reorientation and restructuring of the East German economy would have difficult in any case. The substantial reparations costs that the Soviet Union imposed on its occupied zone, and later on East Germany, made the process even more difficult. Payments continued into the early 1950's, ending only with the death of Stalin. According to Western estimates, these payments amounted to about 25 percent of total East German production through 1953.
This is in direct contrast to the West, which received large aid investments from the United States as part of the Marshall Plan, as well as lucrative trade relationships with the developed nations. Now, let us examine how the GDR developed in spite of these factors.
Economic Growth and Industrial Development
Despite all of the aforementioned significant disadvantages, the East German economy managed to overcome its difficulties and develop at an impressively rapid rate. This is especially true in terms of heavy industry. According to the US State Department study:
During the 1950's, East Germany made significant economic progress, at least as indicated by the gross figures. By 1960 investment had grown by a factor of about 4.5, while gross industrial production had increased by a factor of about 2.9. Within that broad category of industrial production, the basic sectors, such as machinery and transport equipment, grew especially rapidly, while the consumer sectors such as textiles lagged behind.
Despite the priority given to heavy industry, consumption also increased steadily during this period:
Consumption grew significantly in the first years, although from a very low base, and showed respectable growth rates over the entire decade.
At the end of the 1950's, some analysts feared an economic crisis in the East, spurred by the "brain drain" from East to West; however, this did not occur, and the East German economy continued to grow impressively in the 1960's. The US State Department reports:
As the 1950's ended, pessimism about the future seemed rather appropriate. Surprisingly, however, after the construction of the Berlin Wall and several years of consolidation and realignment, East Germany entered a period of impressive economic growth that produced clear benefits for the people. For the years 1966-1970, GDP and national income grew at average annual rates of 6.3 and 5.2 percent, respectively. Simultaneously, investment grew at an average annual rate of 10.7 percent, retail trade at 4.6 percent, and real per capita income at 4.2 percent.
This growth continued on through the next decade:
As of 1970, growth rates in the various sectors of the economy did not differ greatly from those of a decade earlier... Production reached about 140 to 150 percent of the levels of a decade earlier... The growth rates in production resulted in substantial increases in personal consumption... throughout the 1970's the East German economy as a whole enjoyed relatively strong and stable growth. In 1971, First Secretary Honecker declared the "raising of the material and cultural living standard" of the population to be a "principal task" of the economy; private consumption grew at an average annual rate of 4.8 percent from 1971 to 1975 and 4.0 percent from 1976 to 1980... The 1976-1980 Five Year Plan achieved an average annual growth rate of 4.1 percent.
The 1980's saw some economic difficulties for the GDR as Western banks clamped down on credit for the East and the USSR reduced oil deliveries by ten percent. This led to a period of slow growth as the GDR rushed to step up exports; despite this, the economy did manage to pull through and deliver impressive growth results during this period (though it did fall short of the plan). The US State Department reports:
The 1981-1985 plan period proved to be a difficult time for the East German economy... However, by the end of the period the economy had chalked up a respectable overall performance, with an average annual growth rate of 4.5 percent (the plan target had been 5.1 percent).
The overall impacts of the industrialization strategy of the GDR were extremely positive. As the US State Department reported in 1988:
Industry is the dominant sector of the East German economy, and is the principal basis for the relatively high standard of living. East Germany ranks among the world's top industrial nations, and in the Comecon it ranks second only to the Soviet Union.
Overall, the socialist system in the GDR managed to industrialize the nation at a rapid rate, enabling the country to sustain itself without constant infusions from the West. It did this despite numerous aforementioned disadvantages, a feat which should be celebrated.
Increases in Living Standards
The socialist system in the GDR did not only succeed in rapidly developing the nation; it also provided a steadily increasing quality of life for the people. The US State Department reports:
The East German standard of living has improved greatly since 1949 [when the GDR was established]. Most observers, both East and West, agree that in the 1980's East Germans enjoyed the highest standard of living in Eastern Europe. Major improvements occurred, especially after 1971, when the Honecker regime announced its commitment to fulfilling the "principal task" of the economy, which was defined as the enhancement of the material and cultural well-being of all citizens.
This focus on increasing quality of life for all citizens, rather than providing profit for the capitalist class, is a unique feature of the socialist system, which provided steadily improving living standards. The US State Department study states:
Since the inception of the regime, the monthly earned income of the average East German has increased steadily in terms of effective purchasing power. According to the 1986 East German statistical yearbook, the average monthly income for workers in the socialized sector of the economy increased from 311 GDR marks in 1950 to 555 GDR marks in 1960, 755 GDR marks in 1970, and 1,130 GDR marks in 1985. Because most consumer prices had been stable during this time, the 1985 figure represented a better-than-threefold increase over the past thirty-five years.
State subsidies meant that basic necessities (food, housing, etc.), public services (healthcare, education, etc.), and even small luxuries (restaurant meals, concerts, etc.) were all remarkably cheap, especially when compared to the capitalist West. The US State Department reports:
In East Germany, the GDR mark can purchase a great number of basic necessities because the state subsidies their production and distribution to the people. Thus housing, which consumes a considerable portion of the earnings of an average family in the West, constituted less than 3 percent of the expenditures of a typical worker family in 1984. Milk, potatoes, bread, and public transportation were also relatively cheap. Many services, such as medical care and education, continued to be available without cost to all but a very few. Even restaurant meals, concerts, and postage stamps were inexpensive by Western standards... In the mid-1980's, East Germans had no difficulty obtaining meat, butter, potatoes, bread, clothing, and most other essentials.
The housing situation was also greatly improved:
Beginning in the 1960's, the government initiated a major campaign to provide modern housing facilities; it sought to eliminate the longstanding housing shortage, and modernize fully the existing stock by 1990. By the early 1980's, the program had provided nearly 2 million new or renovated units, and 2 million more were to be added by 1990. As of 1985, progress in this area appeared to be satisfactory, and plan targets were being met or exceeded.
The situation in terms of consumer goods was also improving; the US State Department reports that as of 1985 in the GDR, 99 percent of households had a refrigerator, 92 percent had a washing machine, and 93 percent had a television.
Economists had often thought that the GDR mark was weaker in terms of purchasing power than the West German D-mark; however, a study from the Institute for Economic Research in West Berlin (as reported by the US State Department) disproved this idea:
In 1983, the Institute for Economic Research in West Berlin undertook one of its periodic studies in which the purchasing power of the GDR mark was measured against that of the West German D-mark... The Institute concluded that, as a whole, the GDR mark should be considered to have 106 percent of the value of the D-mark in purchasing power, an impressive gain over the 76 percent estimated for 1960, 86 percent for 1969, and 100 percent for 1977... the analysis clearly invalidated the view commonly held in the West that the GDR mark had very little purchasing power.
Overall, the socialist system in the GDR managed to steadily and rapidly increase quality of life for the people, despite the numerous disadvantages facing the country.
Healthcare in East Germany
The GDR provided medical treatment free of charge to its people. This system allowed East Germany to keep up with West Germany in terms of healthcare conditions, despite the latter being wealthier (by virtue of its extensive trade relations with developed nations). The Health Care Financing Review (a US government-affiliated publication) reports:
In terms of real resources devoted to health services and in terms of health service activities, the two countries seem to have been fairly similar. The GDR was reported as having 2.3 physicians per thousand in 1985 (World Health Organization, 1987), compared with 2.6 in the FRG. In 1977, the GDR was reported as having 10.6 hospital beds per thousand, compared with 11.8 in the FRG, and both countries had similar levels of dentists and pharmacists per thousand. Hospital length of stay was reported as similar in the two countries, Given that hospital beds per thousand were similar, this suggests that admission rates were not very different. Finally, consultation rates with doctors seem to have been similar in the two countries at 9.0 per person in the GDR in 1976 and 10.9 per person in the FRG in 1975 (Health OECD: Facts and Trends, forthcoming). If the GDR enjoyed a similar volume of health services to the FRG but had much lower health expenditures per capita, then the prices of health services must have been much lower in the GDR.
The GDR maintained high healthcare standards, which improved steadily, and in some cases faster than those in the West (though starting at a lower level; Eastern Germany had always been worse-off in terms of health than the West). The Health Care Financing Review states:
Turning to health status, in 1987, the reported expectation of life at birth in eastern Germany, 69.9 years for males and 76.0 for females, was not far behind that of western Germany at 72.2 for males and 78.9 for females. The infant mortality rate, which had been 7.2 per 100 in 1950, had fallen to 0.92 in 1986. Although the infant mortality rate was above that of western Germany in 1986 (0.85), the fall since 1950 had been larger. If the official figures can be believed, the former GDR had respectable health statistics for a country with its standard of living... Improvements to health status in eastern Germany seem to have kept up, more or less, with those in western Germany.
Overall, healthcare standards in East German were highly respectable, especially when one remembers the disadvantages facing the GDR, as well as the fact that healthcare was provided free to all people, which cannot be said of the West.
Education and Childcare in East Germany
The educational system in the GDR was very solid. For one thing, there was widespread access to preschool and kindergarten services. According to the US State Department study:
Attendance at kindergarten was not mandatory, but the majority of children from ages three to six attended. The state considered kindergartens an important element of the overall educational program. The schools focused on health and physical fitness, development of socialist values, and the teaching of rudimentary skills. The regime has experimented with combined schools of childcare centers and kindergartens, which introduce the child gradually into a more regimented program of activities and ease the pains of adjustment. In 1985 there were 13,148 preschools providing care for 788,095 children (about 91 percent of children eligible to attend).
After kindergarten began, children entered the compulsory stage of education:
Compulsory education began at the age of six, when every child entered the ten-grade, coeducational general poly-technical school. The program was divided into three sections. The primary stage included grades one through three, where children were taught the basic skills of reading, writing, and mathematics. The primary stage also introduced children to the fundamentals of good citizenship and, in accordance with the 1965 education law, provided them with their "first knowledge and understanding of nature, work, and socialist society." Instruction emphasized German language, literature, and art as a means of developing the child's expressive and linguistic skills; about 60 percent of classroom time was devoted to this component. Mathematics instruction accounted for about 24 percent of the curriculum and included an introduction to fundamental mathematical laws and relations. Another 8 percent was devoted to physical education, which comprised exercises, games, and activities designed to develop coordination and physical skill. Poly-technical instruction was also begun at the primary level and consisted of gardening and crafts that gave the child a basic appreciation of technology, the economy, and the worker; about 8 percent of classroom time was allotted to such instruction.
After completing mandatory education, students had several choices:
Upon completion of the compulsory ten-year education, the student had essentially three options. The most frequently chosen option was to begin a two-year period of vocational training. In 1985 about 86 percent of those who had completed their ten-year course of study began some kind of vocational training. During vocational training, the student became an apprentice, usually at a local or state enterprise. Students received eighteen months of training in selected vocations and specialized in the final six months. In 1985 approximately 6 percent of those who had completed their poly-technical education entered a three-year program of vocational training. This program led to the Abitur, or end-of-school examination. Passing the Abitur enabled the student to apply to a technical institute or university, although this route to higher education was considered very difficult. In 1985 East Germany had a total of 963 vocational schools; 719 were connected with industries, and another 244 were municipal vocational schools. Vocational schools served 377,567 students.
Students were guaranteed a job upon completing the ten-year compulsory education:
The educational system's major goal was producing technically qualified personnel to fill the manpower needs of the economy. The government guaranteed employment to those who completed the mandatory ten-year program.
The university system was also of remarkably high-quality, and attendance was extremely inexpensive (though entrance requirements were very competitive):
In 1985 East Germany had 54 universities and colleges, with a total enrollment of 129,628 students. Women made up about 50 percent of the student population. Courses in engineering and technology headed the list of popular subjects. Medicine, economics, and education were also popular choices. There were 239 technical institutions, with a total student population of 162,221. About 61 percent of the students studied full time, while the remainder enrolled in correspondence study or took evening classes. The three most popular fields of study at the institutes were medicine and health, engineering and technology, and economics. Courses at the university and technical institutes consisted primarily of lectures and examinations. Completion of the program led to a diploma or license, depending on the field of study.
As of the mid-1980's, higher education was very inexpensive, and many of the textbooks were provided free of charge. Full or partial financial assistance in the form of scholarships was available for most students, and living expenses were generally minimal because most students continued to live at home during their courses of study. Germans have a high regard for education, and the regime has generally supported young people who have wanted to upgrade their level of skills through further training or education.
Overall, the educational system in the German Democratic Republic was high-quality and widely accessible to all.
Women's Rights in East Germany
The GDR had a remarkably strong record in protecting women's rights, far stronger than the capitalist West. According to the US State Department study:
The East German record in the area of women's rights has been good. Women have been well-represented in the work force, comprising about half of the economically active population. As of 1984, approx. 80 percent of women of working age (between eighteen and sixty) were employed. The state has encouraged women to seek work and pursue careers and has provided aid to working mothers in the form of day-care centers generous maternity benefits.
Women's access to education was very strong in the GDR, again much stronger than in the capitalist West:
The state also has made a concerted effort to provide educational opportunities for women. The number of women with a university or technical school education has increased over the years. Of the students enrolled in universities and colleges in 1985, about 50 percent were women.
Birth control was widely-available and free of cost, and abortion was available upon the woman's request. The US State Department reports:
A liberal abortion law, promulgated in 1972 amid protests from religious circles, permits abortion upon request of the mother... As of the mid 1980's, information on contraceptive methods was available to the public, and women could obtain birth control pills at no cost.
In addition, the state sought to provide assistance to working mothers through a highly-developed child-care system:
An elaborate network of daycare centers provides care for the child while the mother is at work. In 1984 there were 6,605 year-round nurseries with room for 296,653 children. These nurseries provided care for 63 percent of eligible children.
Overall, the situation for women in East Germany was far better than it was in West Germany, and the GDR's women's rights record was quite impressive.
Buyer's Remorse - The Disaster of 1989
Most people in the West imagine the fall of the GDR as a time of widespread euphoria and freedom; however, for millions of people in East Germany this was far from the case. One excellent account of this time was written for the Guardian by Bruni de la Motte, an East German woman who has since become a British trade union negotiator. She reports that widespread unemployment and misery occurred after the fall of communism:
Little is known here [the West] about what happened to the GDR economy when the wall fell. Once the border was open the government decided to set up a trusteeship to ensure that "publicly owned enterprises" (the majority of businesses) would be transferred to the citizens who'd created the wealth. However, a few months before unification, the then newly elected conservative government handed over the trusteeship to west German appointees, many representing big business interests. The idea of "publicly owned" assets being transferred to citizens was quietly dropped. Instead all assets were privatized at breakneck speed. More then 85% were bought by West Germans and many were closed soon after. In the countryside 1.7 million hectares of agricultural and forest land were sold off and 80% of agricultural workers lost their job.
Another article from the Guardian reports on the long-term impact this has had on the economy in Eastern Germany:
Productivity in the former east was 70% of that in the west in 1991 and rose to just 73% in 2012, in part a legacy of the number of factories that were bought by west German industrialists and deliberately run into the ground to scotch competition... Experts say the fact that most of the large industry and production bases are in the west and that those in the east are far smaller – with most employers in agriculture or service industries like meat-processing and call centres – will have a long-term effect of increasingly holding back the economy in the east and ensuring that the wage discrepancy remains and likely worsens.
Bruni de la Motte notes that a mass-purging of academia and professional life took place after the fall of communism:
Large numbers of ordinary workers lost their jobs, but so too did thousands of research workers and academics. As a result of the purging of academia, research and scientific establishments in a process of political vetting, more than a million individuals with degrees lost their jobs. This constituted about 50% of that group, creating in East Germany the highest percentage of professional unemployment in the world; all university chancellors and directors of state enterprises as well as 75,000 teachers lost their jobs and many were blacklisted. This process was in stark contrast to what happened in West Germany after the war, when few ex-Nazis were treated in this manner.
A housing crisis, as well as the mass seizure of workers' homes, also took place:
In the GDR everyone had a legally guaranteed security of tenure and ownership to the properties where they lived. After unification, 2.2m claims by non-GDR citizens were made on their homes. Many lost houses they'd lived in for decades; a number committed suicide rather than give them up. Ironically, claims for restitution the other way around, by East Germans on properties in the West, were rejected as "out of time".
She remarks that since the fall of communism, many people have come to appreciate the benefits that socialism offered:
Since the demise of the GDR, many have come to recognize and regret that the genuine "social achievements" they enjoyed were dismantled: social and gender equality, full employment and lack of existential fears, as well as subsidized rents, public transport, culture and sports facilities. Unfortunately, the collapse of the GDR and "state socialism" came shortly before the collapse of the "free market" system in the west.
This is supported by the fact that (as mentioned above) 57% of former East Germans say that life was better under communism (see sources below). For further writing by Bruni de la Motte, I recommend her book Stasi Hell or Workers' Paradise? Socialism in the GDR - What Can We Learn From It? This book presents an honest appraisal of the successes and failures of the German Democratic Republic from the perspective of somebody who actually grew up, went to school, worked, and raised a family there. I will link it in the sources below.
Conclusion
The German Democratic Republic was not a perfect society, and it is unwise to pretend that is was; however, it did provide a high standard of living to its people, coupled with strong economic and social security. Guaranteed employment, housing, healthcare, and education, as well as subsidies on basic necessities; strong protections for the rights of women and children; widely available and inexpensive cultural activities such as theaters and concerts; these are benefits which many millions of people have come to sorely miss in the years since the GDR's fall.
Perhaps the best summation of this complex topic is given by Bruni de la Motte, in the conclusion to her book Stasi Hell or Workers' Paradise:
The GDR experience of socialism stands in marked contrast to the dismantling of the welfare state and the concomitant rampant privatization of every aspect of life now taking place in Western Europe, from culture to healthcare and other essential services, as well as to the denial of social values and the extreme individualization of life. We live in an atomized society, rapidly falling apart, with little social ethos and no long-term goals. Many today, especially young people, are living without hope or sense of a secure future. Socialism can still offer an antidote and an alternative. And the experience of socialist countries like the GDR can provide pointers for a way forward and help renew one's hope.
In our age of late capitalism, climate change, and resurgent fascism, this message is more relevant than ever before.
Sources
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