The economic modernisation of East Germany

Evidence of a successful economy: Agriculture: - By % of agricultural production came from collective farms. Industry: - Banks and large companies were nationalized by 1948 only 39% of industry remained in private hands Socially: - Living standards and industrial output were the highest in the Soviet bloc

Explanation for success: - Agriculture: -seizing land from estates and distributing it to the peasants and refugees collectivization -Industry: a two year plan is introduced followed by a five year plan in 1950 to place emphasis on heavy industry. - Economy integrated into the Soviet economy through Comecon

Elements of failure: Living standards and rates of industrial production were well below those of West Germany. Prices of food, houses and basic necessities were kept down but consumer goods prices were high. The regime was unpopular. Many East Germans left for west Germany via Berlin. By East German’s had left via Berlin to attempt to resolve this Russia erected the Berlin wall in 1961.

Reasons for elements of Failure: Russia turned their zone into a satellite state, it was a single party communist state run on Stalinist lines. At the end of the war the Russians stripped their zone of ₤7 billion worth of industrial assets as reparations. The re distribution of land created a large number of small inefficient farms. Emphasis was placed upon heavy industry and consumer goods were neglected. People leaving East Germany was a problem as many who left were young and skilled.