GHDI logo

Walter Ulbricht on the "New Economic System" of the GDR (December 16, 1965)

page 2 of 3    print version    return to list previous document      next document

The results of the implementation of the plan in 1965 substantiate the fact that the new economic system of planning and management has proven itself. Yet they also confirm that we will still have significant scientific and organizational problems to solve in 1966 and in the following years. The most important result of the new economic system of planning and management was and remains: The creative initiative of the workers and the quality of the leadership in the firms, in the Associations of Nationally-Owned Enterprises [Vereinigungen Volkseigener Betriebe or VVEB], in the agricultural production collectives [landwirtschaftliche Produktionsgenossenschaften or LPGS], in the nationally-owned farms, in the agricultural councils, and in the state organs have increased considerably.

The good results of 1964, when socialist industry satisfied not only the production plan but also the profit plan for the first time in many years, and when agriculture achieved a significant increase in market revenue, have continued in 1965.

[ . . . ]

We have been successful because we have paid more and more attention to the basic principle, “What benefits society must also be advantageous to industry and the workers.” By properly stimulating the initiative of workforces and leaders in a material way and by improving political-ideological work in the economic sector, the main driving force of socialist production has become more effective. In our industry, a closed system of economic leverage has taken form, although – and this should definitely not be concealed – there are still numerous unsolved problems.

In the first stage of the new economic system of planning and management we have overcome a series of administrative elements in planning that had directed firms toward goals that were not entirely in accordance with the interests of society. We did this, for example, through the gross production index, through which firm productivity is gauged and on whose basis bonuses are also determined. Additionally, in the first stage, the VVEB were transformed into economic leadership organs within the industrial branches, whereby the personal responsibility and autonomy of supervisors and workforces was greatly fostered. Most of the VVEB have made good progress in the last two years in applying economical accounting. But there are still concerns about fifteen to eighteen VVEB that have yet to successfully convert to the labor system of the new economic system of planning and management.

Important components of the closed system of economic leverage were not only worked out but also put into practice. Profit was emphasized as the standard measurement of productivity for factories and the VVEB. The reevaluation of basic resources was completed. In 1964, the first stage of the industrial price reform in basic industry was carried out; this year saw the second stage, in which new prices were introduced for basic elements in the chemical industry, for building materials and mineral raw materials, timber, non-iron metals, textile raw materials, and other goods. Reevaluation of the basic resources and industrial price reform greatly motivated the VVEB and the workers to make precise calculations and realize increased profitability. At the same time, the foundation for stimulating personal material interests was also improved. The new contract law, the new investment ordinance, and changes in the area of materials logistics represent additional important prerequisites for employing economic means to orient the VVEB and the companies to work in the interest of the national economy.

[ . . . ]

first page < previous   |   next > last page