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GDR Economics Minister Günter Mittag Explains the Failure of the Planned Economy (1991)

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And so what resulted was a schematic, if not to say stubborn, insistence on the unity of economic and social policy down to the very last detail. It wasn’t even possible to change the price for flowers, although the supply situation was demonstrably worsened by this policy, because gardeners and florists weren’t interested in more and prettier flowers. How many attempts I made here, supported by others, and how often they failed. That put me in a difficult position, because I was always obliged to officially defend the line of the General Secretary. At the same time, however, I discussed pressing problems in a larger circle of people and made sure, time and again, that relevant proposals for change were drawn up. That involved, in particular, questions relating to subsidies: the unreasonable costs levied upon companies by “social costs”, the cutting back of administrative personnel, and the redistribution of defense costs in favor of the economy. Those were always the “hot potatoes,” and they were also the “slow burners,” for at no point could a fundamental solution to these questions be found.

[ . . . ]

All in all, there was a failure to respond to the fundamentally changed development conditions of the productive forces, to unconditionally and comprehensively deal with the question of how the GDR should react.

The necessary structural adjustment of the economy in the direction of thorough modernization never came. No one was allowed to talk about structural policy. My efforts in this area didn’t get through to Honecker, and I wouldn’t have found the necessary support in the Politburo anyway. People shied away from any and every serious change to the political line.

[ . . . ]

First I would like to clarify: if this had been understood as the end of this policy altogether, then it would have already brought about the funeral of the GDR in the 1970s. It would have led to social conflicts with political consequences that presumably would have affected more than just the former GDR. That risk couldn’t be taken at a time when the Cold War wasn’t even close to being resolved, because the consequences would have been unforeseeable. Just think of the explosive situation brought about by the missile deployment. The slightest tremor in the heart of Europe would have very likely led to a nuclear inferno.

Therefore, at the time, the possibility of politically destabilizing the GDR by restricting sociopolitical measures involved an utterly incalculable political risk. In view of that, guaranteeing economic and thus also social stability was a fundamental premise of all political action.

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