The politics of economic decline in East Germany, 1945-1989

Jeffrey Kopstein offers the first comprehensive study of East German economic policy over the course of the state's forty-year history. Analyzing both the making of economic policy at the national level and the implementation of specific policies on the shop floor, he provides new and essential background to the revolution of 1989.

In particular, he shows how decisions made at critical junctures in East Germany's history led to a pattern of economic decline and worker dissatisfaction that contributed to eventual political collapse.

East Germany was generally considered to have the most successful economy in the Eastern Bloc, but Kopstein explores what prevented the country's leaders from responding effectively to pressing economic problems. He depicts a regime caught between the demands of a disaffected working class, an intractable bureaucracy, an intolerant but surprisingly weak Soviet patron state, and a harsh international economic climate.

Rather than pushing for genuine economic change, the East German Communist Party retreated into what Kopstein calls a "campaign economy" in which an endless series of production campaigns was used to squeeze greater output from an inherently inefficient economic system.

Drawing extensively on sources in recently opened East German archives, as well as on his interviews of key players, Kopstein argues that East Germany's leaders faced an impossible task in trying to adapt the Soviet system to their own country's needs.

While the East German economy did outperform those of many of its Communist neighbors, it continued to lag behind that of West Germany - a critical failing in the eyes of East German workers, who had been given virtual veto power over wages, prices, and piece rates in order to secure their political support. Under these circumstances, concludes Kopstein, the lure of prosperity ultimately played a key role in the revolt of the East German people.