If you had asked a person on the street 16 years ago how reasonable he thought reunification of Western and Eastern Germany was, he would have probably laughed at you. However, only one year later, at the end of 1989, reunification was all of the sudden back on the agenda and discussed everywhere around the world. Within less than a year the GDR went through its most severe crisis from which it would never recover. Political scientists and historians would not have imagined that the GDR could dissolve so easily and so quickly. Thousands of citizens were fleeing to the West and literally hundreds of thousands were protesting in the streets of Leipzig and Berlin. The regime was internally divided and had no power to withstand the forces that were bringing its end. About a decade and a half later historians are still discussing the events that led to the dissolution of the GDR regime and are divided about the question whether it can be classified as a revolution or not. In my essay I will start out by looking at the weaknesses that the GDR regime had. There had to be a precondition that made the decline of East Germany possible and I will investigate that. Afterwards I will take a look at three different phases that the upheaval in 1989/90 had, namely the flight, the mass protests, and the Round Table talks. At the end of the paper I will discuss arguments in favour and against the notion that the GDR upheaval was a revolution and conclude with my own evaluation. Most of this essay is based on the book Dissolution by Charles S. Mayer (1997) and a chapter from the book The Rush to German Unity written by Konrad H. Jarausch (1994). Please note that I will most of the time refer to an “upheaval” when I describe the events in the GDR in 1989/90. I will try to avoid the term “revolution” in order to not take any position in favour of or against one historical camp or the other.
Revolutions or upheavals in history have never occurred that easily. There always has to be a reason, or a precondition, for a revolution to take place. Possible reasons can be tax issues like in the American Revolution, religious problems as happened in the British Revolution (one of several aspects), economic problems, severe exploitation or suppression by the governments, and numerous other reasons. When looking at Eastern Germany we can conclude that it was severe economic problems that made the upheaval possible. By 1989 the German Democratic Republic faced basically a complete economic collapse. The country’s precarious situation had been kept secretely for over a decade until the SED leadership was slowly disintegrating in the late 1980s. Before that time, no East German was aware of how serious the economic situation in reality was and also none of the Western countries had imagined that the economy was performing so badly. None would have predicted in 1985 that the GDR was in its final stage. By 1989 East Germany had a foreign dept of 49 billion valuta marks. The deficit on the current account would amount to over 23 billion marks for the year 1989 alone. Just paying the interest rate on the dept would cost the GDR some 60 percent of their yearly export earnings. Stabilizing the dept alone would require policies that would drop the living standards by 25 to 30 percent. The question that automatically comes up is how that could have happened. What could have lead to such a failure of the economic policy that was conducted in the GDR? In order to understand the whole problem, we have to take a look at the long term disabilities that were imposed on the system by socialist production and policy. I will therefore describe in the next paragraphs two essential problems that led to the collapse of the economic system.
First of all the GDR was running an extended welfare state which it could have not afforded according to its economic performance. Many people argue that the basis of this problem was laid with the eigth SED party congress in 1971. During that conference it was decided upon that German communism must support a generous consumer society and welfare state. In practise this meant that consumer prices, social services, housing, or vacations should be heavily subsidized. This was also partly done in order to overcome the large gap that existed already with regard to Western Germany which did have a generous welfare state. The GDR government thought that it could otherwise undermine the exeptance of the regime if East Germans saw how much better their Western neighbors lived. In other words the SED leadership was convinced that if the citizens have enough food, a shelter to live in, and leisure time activities, they will not complain about the system. However, the economic situation in the GDR was not prosperous enough to finance such an expensive welfare system. Economic policy makers soon learned that the GDR welfare provisions and high personal consumption could not be financed by its own earnings but on growing indeptness. Over the years, the welfare state got even more and more expensive and the GDR faced higher indeptness from year to year. This was one of the major reasons why there occurred an economic collapse in 1989.
The second problem in the GDR was that she and also the other Communist societies were increasingly exposed to the world market in the late 1980s. The original Soviet idea was to create a “small socialist world” which would be isolated from the capitalist, Western world countries. In 1949 the Comecon, an economic organization linking the USSR with the Eastern European countries and later also with Mongolia, Cuba, and Vietnam, was created. This organization had been designed as a countepart to the West’s “Organization for European Economic Cooperation” (OEEC) which would later be reorganized as OECD. However, by the 1980s there was an increasing demand for goods that were produced outside the socialist bloc. The problem was that under the Comecon the communist countries were condemned to trade for each others less desirable products or else had to borrow from the Western world. Especially East Germany faced increased pressure to import Western goods and technology during the 1980s. The only way to finance this demand was through a rising indeptness. However, as the indeptness to the West increased, tensions also grew within the international socialist trading community. Comecon planners originally did not aim at a free market exchange. By the 1960s and 1970s the Soviets sought to assign different contributions to each national economy. Bulgarians for example were supposed to produce wine and fruits while East Germans were responsible for machine tools. However, once these countries realized that they could actually sell their products for hard currency on the world market, they did not want to sell them for less inside the socialist bloc. Political pressures imposed by the confrontation of East and West on the other side made trade reforms very difficult. Instead, the USSR was willing to pay for its hegemonic position in the communist bloc. Soviet subsidy is estimated to have ranged from about 30 to 118 billion US dollars from 1970 till the mid 80s. Prices therefore remained politically determined inside the Comecon so that there was no free market equilibrium. However, as every country can be better off in the presence of free trade, possible gains from trade have not been realized under the Comecon system. At the end of 1990 the Soviets were also completely bankrupt and announced that from that year onwards they would only accept hard currencies for their exports at world market prices. This was more or less the end of the Comecon and the organization was effectively disbanded in January 1991. In summary, the Communist economies can be characterized by low productivity and energy wasteful manufactures. By the late 1980s world market constraints simply caught up with the Comecon and this paved the way for the GDR upheaval as well as the uprisings in the other European countries.