chapter  10
Communism and its collapse: East Germany and the Russian Federation
Pages 29

In the Soviet Zone of post-war Germany, the German Democratic Republic (GDR), was founded in October 1949. The republic was based on the Soviet model of a centrally directed economy, society and polity, under a single party, the German Communist Party, now SED. Never simply following Soviet orders the German communists sought to outguess or outdo the Soviet line (Weitz 1997: 367). A centrally planned system was quickly put in place. In 1950, the Ministry for State Security, ‘Stasi’, was set up along with its ever-expanding system of informants (ibid.: 361). By 1950, 76 per cent of industrial output was produced by nationalized or Soviet-run firms and the banks and insurance firms were entirely nationalized (ibid.: 359). The first Five Year Plan was introduced in 1951 (ibid.). Labour, wages and production levels were centrally controlled; no independent trade unions were permitted (ibid.: 360). Changes were initially more slow in agriculture. By 1959, only 40 per cent of agriculture was in state hands, but in 1960, within the space of three months, the whole of agriculture became collectivized (ibid.: 367). In 1972, virtually everything that remained of a private sector was taken under state control (ibid.: 359).