The Structure Of The East German Economy

Originally published in 1987, this book brings together leading authorities from Germany and the USA who analyze how the East German economy actually operated - planning and management, pricing, investment and innovation, the financial system, agriculture and foreign trade (including the special concessions granted by the then Federal Republic of Germany). The volume is an insightful study of one of the least studied and most successful of socialist economies.

The establishment of the Communist social model in one part of Germany was a result of international postwar developments, of the Cold War waged by East and West, and of the resultant partition of Germany. As the author argues, the GDR's 'new' society was deliberately conceived as a counter-model to the liberal and marketregulated system. Although the hopes connected with this alternative system turned out to be misplaced and the planned economy may be thoroughly discredited today, it is important to understand the context in which it developed and failed. This study, a bestseller in its German version, offers an in-depth exploration of the GDR economy's starting conditions and the obstacles to growth it confronted during the consolidation phase. These factors, however, were not decisive in the GDR's lack of growth compared to that of the Federal Republic. As this study convincingly shows, it was the economic model that led to failure.

Für diese Untersuchung wurde dem Autor am 13. 9. 2007 der René Kuczynski-Preis für herausragende Publikationen auf dem Gebiet der Wirtschafts- und Sozialgeschichte verliehen. Der Autor definiert die Wirtschaftsleistung Ostdeutschlands im Vergleich zu Westdeutschland neu. Dazu zieht er in der wissenschaftlichen Literatur vorliegende Berechnungen und eigene Schätzungen heran. Zum einen bestimmt er die Wirtschaftsleistung für die Stichjahre 1936 und 1954 neu, um den Einfluss der Startbedingungen abschätzen zu können. Außerdem berechnet er die Produktion der Industrie und ihrer Branchen auf Basis physischer Angaben für den Zeitraum 1936-1991 sowie darauf aufbauend das gesamte Bruttoinlandsprodukt Ostdeutschlands neu. Die erzielten Ergebnisse sind innovativ und erweitern unser Wissen über Niveau und Entwicklung der Wirtschaft auf dem Gebiet der DDR. Es handelt sich um die derzeit beste, breiteste, fundierteste Berechnung der Wirtschaftsentwicklung der DDR, und zwar im Vergleich mit Westdeutschland.

"It is, perhaps, worth stressing that economic problems arise always and only in consequence of change. So long as things continue as before, or at least as they were expected to, there arise no new problems requiring a decision, no need to form a plan. " (Hayek, 1945, p. 523) This book is based on my research for the degree of Doctor of Philosophy which I received from Lancaster University, England in the second half of 1997. It is an analysis of the structural transformation of the economic system in East Germany and the behavioural relations these changes imply. The approach of institutionalised transformation (not the least by the creation of the Treuhandanstalt) is examined with a theory-based framework which is derived from system-theoretical, evolutionary and constitutional-ethical considerations as well as from the newly developed adjustment model which has been constructed as a dynamic transformation approach. A relationship between norm changes, the new institutional framework of the economic system and the compatibility of the latter with changes of the remaining partial societal systems is recognised. Rigidity factors in the system's flexibility to react as well as the adjustment of economic behaviour to structural changes are analysed. The "marginal product of system change" is defined (section 2. 8. 2).

The transformation of east Germany since unification has wrought vast changes in the economy and in society and left deep scars as the types of social protection offered by the centralised socialism of the previous regime gave way to uncertainties and individualised life chances. Social Transformation in Eastern Germany investigates the deep economic and social processes which east Germany has undergone, highlighting the restructuring, the social impacts and the stresses of adjustment experienced by key social groups whose workplace and social context has been recast almost out of recognition since 1990.

This timely examination of the major issues in German unification emphasises its impact on different sectors of the economy and their likely consequences.