History Revision- economy and society

• Policies shaped by communist ideology
• Modern,classless and industrial state
• Pushed policies regardless of opinion
• Central direction class system rid of to make way for marxist-leninist state
• Aim: build a new worker’s paradise to bring about radical transformation of post war EG

1. Dismantled industrial plants, still demanded heavy reparations, 25% went to USSR, SED could only change economy with ref to USSR
2. GDR cut off from Ruhr no coal and steel, limited resources
3. Loss of labour to wesr caused drain which continued and grew as change spread
4. State planning led to dislocations and difficulties- collectivization

• Moved towards collectivization
• 1945- Land Reforms broke up large land holdings
• 1952 and 1960- two waves of collectivization
• 1952- independent farmers and labourors forced to become members of collectives and borrow equipment- 45% of agriculture
• Low yield detrimental to agriculture
• Lack of food contributed to 1953 troubles
• 1959-60 many fled due to hunger
• 161- rationing introduced
• 1970s EG self sufficient, stable but citizens had restricted diet.

• 213 SAGs created to produce goods for USSR, reparations
• VEBs peoples enterprises, 76% industry nationalized
• Banking taken into state hands
• Hos curbed independent retailers
• Little heed paid to supply and demand, plans were out of date, targets met by lowering standards
• Shoddy workmanship encouraged through price fixing and encouraging quantity rather than quality
• Targets met by ignoring consumers and keeping wages permanently low
• More fled for economic rather than political reasons
• 1961- Ulbricht forced to build wall= renewed confidence
• 1963- NES more flexible approach
• Decentralization, profit incentives, decision making powers and focus on quality rather than quantity
• NES incompatible with fixed prices
• Prague Spring 1968- system abandoned in favor of increased centralization
• Five Year Plans- soviet model, ambiguous, constantly revised to give impression of progress
• 1950- first 5YP promised double output that of 1936, emphasis on hevay industry, GDR joined COMECON
• 1951- 76% of trade directed to USSR
• 1952-annual conference SED declared, GDR ready for ‘building of socialism’
• Beat capitalism, attempts to raise productivity= June 1953 Uprising
• Stalin’s death= focus on consumer goods
• 1956- second 5YP- fail, quietly abandoned in 1959
• 1959- New Seven Year Plan- ambiguous targets, Ulbricht announced vy 1961, socialist economy would overtake that of the FRG, due to level of production- plan had initial success but targets unrealistic, downturn in 1960= abandoned in 1962
• GDR growing rate of 3% by 1960, seemed poor compared to FRG’s 8% in the 50s.