ABSTRACT
After echoing the Soviet " Yevgeni Liberman debate" in 1962, the following year the East German leadership launched the second wave of reform in communist countries, that of the 1960s. The New Economic System was to combine centralized planning and a "broad application of material incentives in the form of a complete and coherent system of economic levers." The relative flexibility added to the centralized model by the 1963 reform had been made possible by partially limiting the planners' ambitions and reducing the tautness of the plan. A reversal took place in "perfecting" the system when a new type of intermediary centralization was introduced, the combines, which became, in Erich Honecker's words, the "backbone" of East German economic organization. The idea of a closed flow of production, a leitmotif in economic literature on the combine, means that it includes all the elements of an economic circuit, from research and training all the way to sales, foreign trade, and market analysis.
