ECONOMIC CRISES, STRUCTURAL CHANGE 103
nally, this chapter illustrates that even the economic upheavals following
the collapse of the Eastern Bloc were still heavily infl uenced by the long-
term structural change that had taken shape in the decades prior to the
1990s. All three sections focus on macroeconomic developments within
the two Germanies.^1
Crises in East and West Germany
The division of the German single economic area had diff erent conse-
quences for the two “new” Germanies that emerged after the war. In
terms of economic structure, the Soviet Occupation Zone (SBZ)/GDR
suff ered from substantial disadvantages. It lacked raw materials as well
as most basic industries, but it did have a strong manufacturing sector.
The Western Zone, which later formed the Federal Republic, covered a
larger and more economically homogeneous area. Additionally, the dis-
mantling of industries and reparations payments that were demanded of
East Germany in the early postwar period, which far outweighed those
of the Western Zone, necessitated rather signifi cant structural changes
in the economy. Meanwhile, the nascent planned economy, with its ten-
dency to hedge against foreign economic risks, further exacerbated the
disadvantages that plagued the East German economy.^2
The separate monetary reforms were not only supposed to eliminate
the existing monetary surplus in 1948, but also set a divergent course
for the economic systems in what would become East and West Ger-
many.^3 The ordoliberal school of thought largely prevailed in the West,
laying the foundation for what would later be termed a “social market
economy,” which ideally combined the economic effi ciency of the mar-
kets with a minimum level of social security and a stable institutional
framework.^4 The East, in contrast, began with the construction of a zone-
wide planning apparatus while preparing economic plans along Soviet
lines.^5 Spurred on by the Marshall Plan—which not only infl uenced for-
eign economic policy, but also had a psychological eff ect on politics and
society—the economy in the Western Zone grew faster than in the SBZ/
GDR. In turn, the West German level of welfare became the standard of
comparison for the East German population. This comparison with “the
West” thus remained an important parameter for economic policy de-
cisions in the GDR. Simultaneously, the SED leadership always had to
bear in mind that the GDR belonged to the Soviet bloc, which was what
justifi ed its existence in a political and ideological as well as military and
economic sense. In West Germany, on the other hand, proponents por-
trayed the “social market economy” as the best way to move away from