Titlepage book Plan - Markt - Demokratie

Plan - Markt - Demokratie --- Reflections on a bizarre experiment

Publication: VSA-Verlag (2014, Hamburg)

First insertion on Heterodox Gazette Sam de Wolff: 25 august 2014

E.A. Bakkum is a blogger for the Sociaal Consultatiekantoor. He loves to reflect on the labour movement.

Your reviewer has now read so many evaluations of the GDR-economy, that they become boring. But this is not true for Plan - Markt - Demokratie, because Klaus Steinitz is the author (together with Dieter Walter). For, Steinitz is the chairman of the Berlin association Helle Panke, which has a good reputation in left-wing circles. In the association the Leninist intellectuals of the former GDR can continue with their discussions, studies, congresses and publications. The central themes are the society, culture and history of the GDR. Thus Helle Panke satisfies a need for all, who miss a stage elsewhere.

The association indeed succeeds even now in organizing daily activities in the afternoon or evening, on an academic level, with a Leninist signature. These meetings are a comfort for the concerned, and a process of mourning. Outsiders are also welcome, at a fee of €1,50, and in this manner can get an impression of the Leninist way of thinking. During a holiday in Berlin it is definitely worthwhile to visit such a meeting. These activities are obviously in decline, and finally Helle Panke will have to integrate in the Rosa Luxemburg foundation, the scientific bureau of the party Die Linke, and now still a sister association. Nevertheless, Klaus Steinitz commands respect, as the driving force behind Helle Panke. It requires character to support a cause, which is doomed.

In Plan - Markt - Demokratie, Steinitz reflects on the GDR economy during its final thirty years, say after the completion of the reconstruction. He compares the then expectations with the true development. Due to his integer personality his opinion deserves a listening audience. This is especially true, because Steinitz approaches the theme in a scientific manner, and is willing to judge critically. In that sense he is a congenial of the GDR economist Eva Müller, often praised on this portal. Incidentally, they are both adherents of the party Die Linke, and that preference is noticeable in their books. Steinitz was even a member of the board of the former PDS1. He has kept his dislike of capitalism, but sincerely tries to motivate this in an objective manner. He pleads in favour of increased spending by the state on durability and social policies. On various places he even defends an economic zero growth (see p.36, p.107, p.179).

In the introduction (p.14) the authors admit, that according to many scientists the GDR is a total failure, and therefore the reason to analyse it is questioned. The book has indeed only value for those, who can see something good in the GDR-system. The essential question is whether a rational control of the economy makes sense. When yes, then the policy is a useful instrument for curbing the chaotic economic disturbances by means of the human mind. When no, then the policy is a detrimental instrument of personal arbitrariness. In reality both elements are naturally always present, and the GDR (and incidentally all states in the former Leninist block) as a dictature left considerable room for the whims of the Leninist potentates2. Your reviewer belongs to the advocates of moderate state interventions, but Plan - Markt - Demokratie provides little support for that view.

Which themes are addressed in the book? In 1962, everywhere in the Leninist block an attempt was made to reform the economy. The central planning functioned fairly well for extensive growth (more of the same), but fails for intensive growth (innovation). Steinitz even uses the negative term command-economy for the system. Therefore the planning had to be reduced, in favour of a system with economic incentives. The enterprise became more independent, and profits were allowed. For this purpose the budgetting of the enterprises was improved. The planning must be limited to policies of structure.

In the GDR this attempted reform was called the Neue Ökonomische System (NÖS). In principle Steinitz appreciates the NÖS, but the design was defective and half-hearted in many respects. In any case, seven years of NÖS policy do not lead to the hoped economic miracle. In 1971 Honecker comes to power, and ends the NÖS. All remaining private enterprises are nationalized. The central planning returns. Learning is easier than unlearning.

A part of the NÖS is the so-called prognosis of growth factors (PGF). In 1970 such a PGF is constructed for the GDR economy, with a time horizon until 1990. It must give a rational foundation to the year-plans and the 5-year plans. The authors conclude, that the prognosis is a total failure. The national income of 1989 is merely 74% of the target value in the prognosis. This is mainly due to the investments, which in 1989 are merely 48% of the target value. In other words, during two decades there was too much spending of the pool for a treat to all. Even more shocking than these numbers is the handling of the prognoses. Notably the target values are not based on the productive capacity of the GDR itself, but on the obsession of Honecker and the Politburo for surpassing the economic welfare of the FRG3.

It is easy to imagine the aversion of the scientists, who must give a rational foundation to this illusory political goal. This forces them to overestimate all positive growth chances, and to minimize all impeding factors. On p.30 Steinitz illustrates this with an anecdote: around 1978 the planning agency believes that at most 3% growth is possible, despite a huge political pressure. Then Honecker summons the director of the planning agency: "I really want 4%. Do not contradict me". It is striking that the prognoses were kept secret from the population. Since the Politburo had to offer something to the people, it gives the absolute priority to the consumption level. Large debts are even contracted in the capitalist states. Nevertheless, there is scarcity everywhere. On p.152 the funny remark is made, that in 1970 more than 30% of the houses do not have an internal w.c. The GDR loses the productive race on the world market.

The book is a slashing criticism of planning in the GDR, and it sums up a long list of failures. Thus the two authors, who for decades were active in the highest circles of the planning agencies, and so are undeniably experts, confirm the generally present negative image of the Leninist system. Considering such criticism from within, it can no longer be doubted, that this form of planning leads to a significant corruption of the economy. Besides, the authors describe how all attempts to reform the system have failed. In short, the Leninist planning is a fundamentally unsound system4. Yet Steinitz does not come to this conclusion, because on p.190 he states that the central planning does offer many opportunities. The GDR would simply have failed to use then. After the preceding text this statement is no longer very credible. Träume sind Schäume.

Since Plan - Markt - Demokratie is the story of a hopeless failure, the book hardly contains any constructive ideas. No attempt is made to make comparisons with the planning in capitalist states. So the book is not a standard work about economic planning. And the presentation is not very attractive, because the authors can not sufficiently escape from their old GDR habits. For instance, in the text the standpoints are often repeated, so that the book is 33% thicker than is necessary. During GDR times the intention of this approach was probably to firmly instill the dogma's in the minds of the readers. Everybody must see the light. However, the present-day reader prefers less positiveness, and somewhat more nuances. That would have been good, also because the natural authority of the authors is limited.

So according to the present standards the judgement about Plan - Markt - Demokratie is harsh. The book wil probably not become a blockbuster for the VSA-Verlag. Nevertheless, the book has its merits, albeit as a curiosity, as a reflection on a bizarre human experiment, which could not live up to its promises. The ideal society can not be established quickly. Thus the story is fascinating matter for people, who want to know the GDR from insiders. It is also possible to consult the original GDR publications, but this requires a tolerance of endless citations of Lenin, Brezhnev, Ulbricht, Honecker and the SED congresses.

  1. The PDS is the successor of the Leninist SED. Since the SED was partly founded by SPD members (social-democrats), both parties are culturally related. Therefore one would expect that after the disappearance of the SED its members would again join the SPD. Yet that happened only to a limited degree. The main reason is probably, that the former SED leaders do not have a future within the SPD; their democratic attitude is too weak. This may have motivated the establishment of the PDS, which is evidently a source of political jobs. Another cause of the SPD is the economic invasion from the west, which leads to distorted regional relations. (back)
  2. Not everybody shares this view. At the time the German protest singer Ernst Busch wrote the song Frieden heißt Sieg: Sowjetsoldaten, Sowjetkolonnen, / stehen im Osten bewaffnet bereit. / Schützen die Freiheit im Kampfe gewonnen, / schützen das Land daß von Knechtschaft befreit. / Das Land wo Fabriken, die Äcker und Wälder / allen gehören, wo keiner mehr Knecht. / Arbeiter, Bauern sind Herren der Felder / und der Maschinen. Ein freies Geschlecht. / Es kämpfen im Osten die Sowjetsoldaten / um uns zu befreien von Knechtschaft und Krieg. / Und ein Wille, Ein unsere Staaten. / Kampf für den Frieden. Frieden heißt Sieg. / Tausende Kämpfer in Kerkern gefangen. / Viele der Besten vergossen ihr Blut. / Mancher versagte, ist von uns gegangen. / Wir doch erstarken, der Kampf stählt den Mut. / In Städte und Dörfer, Fabriken und Toren / wächst in den Massen der Wille zu Tat. / Es hat sich das Volk aus dem Frieden geboren / Erde und Himmel, sich selber den Staat. Around 1933 Busch appeared for some time on the VARA radio. (back)
  3. This is naturally strange, because the protest singer Ernst Busch wrote the song Kleine Anfrage an unsere Westdeutschen: Für wen habt ihr Ödland gerodet und die Felder bebaut? / Für wen habt ihr alles geerntet und aufs Speicher gestaut? / Für wen habt ihr Kohle gebrochen und die Feuer geschürt? / Für wen habt ihr Häuser errichtet und Maschinen montiert? / Für wen habt ihr Hunger gelitten und im Winter gefroren? / Für wen habt ihr Kinder erzogen und im Krieg sie verloren? / Für wen schaft und darbt ihr Proleten und macht euch noch Sorgen? / Für wen lebt und sterbt ihr Proleten und wartet auf Morgen? / Für euch oder für die Herren? / Immer nur für die Herren wart ihr frei zu dulden, zu klaffen und schlagen. / Wann endlich Brüder seit ihr so weit zu kämpfen und das Leben zu wagen? / Für euch und für eure Welt? Wann, wann, wann seit ihr so weit? So the Politburo also wants to reach that level. (back)
  4. At the time the state bureaucracy also criticized the Leninist society. However, it did not target the system itself, but the human (mis-)behaviour in it. Thus the satirical magazine Eulenspiegel is filled with jokes. For instance: a group of naked men carries a banner with the text: "Our plan contribution: use of synthetic fibers reduced by 100%". Or a man asks in the shop: "You merely have one type of sausage?" The shopkeeper replies: "You do not expect that we offer 99 types for your pleasure, do you?" Or: three workers are drunk in a bar. One says to the other: "First he wanted to go home with his bonus. Then I explained that it is essential to make the step from ME to US". Or: in the bar a drunk man lies on the floor. The barkeeper proudly shows a certificate with the text: "Best sales plan performance". Or a man says: "I buy two pieces of each product. That solves the problem of the spare parts". Or a man says: "We have the historical mission to surpass the FRG with our producion, and then he begins to complain about trifles such as the shortage of whistling kettles and buckets". Or a stoker walks through the train wagons with a bucket of coal, and says: "My colleague has coupled the tender all the way behind". Or a Russia soldier is in front of a classroom, next to the teacher. A pupil asks: "What did he say?" The teacher replies: "He is impressed, that I have learned you to understand Russian for six years". It is all more sourish tham subtle, and the punishment for too sweet an image of man. (back)