ECONOMIC CRISES, STRUCTURAL CHANGE 109
unintended consequences from certain actions” that led “the economy
into crisis.”^27
Economic policy thus became a crisis management tool that was char-
acterized by rather short-term reactions to changing circumstances.^28
The dilemma facing the social-liberal government was that the intra-
industrial structural change that it accepted constantly produced social
costs, but it hardly had any infl uence over the shape of this transforma-
tion. Its crisis management measures reached their limits as the social
costs began to exceed the possibilities aff orded through the welfare state
and the willingness of the trade unions to make concessions. The con-
servative-liberal government that took over in 1982 also had to strug-
gle with this problem. It also wanted to roll back on state intervention
while strengthening entrepreneurship and the social market economy.^29
These eff orts were successful in some respects in the 1980s, but rela-
tively low real growth rates made it clear that the era of the “economic
miracle” was over for good. Nonetheless, the shift toward supply-based
economic policies had already begun under the social-liberal coalition.
The “neoliberalism as a conservative project” approach adopted by the
Christian Democratic Union (CDU) under Helmut Kohl successfully con-
solidated the budget and buff ered infl ation. At the same time, however, it
led to some cuts in social services inspired by such supply-based policies
and the spectacular privatization of some public companies. Simultane-
ously, the government kept up the tradition of structural policies that
had evolved since the 1960s while limiting its business cycle policies.
Ultimately, neither Keynesian nor neoclassic-monetarist concepts could
generate a new growth dynamic on their own.^30
In sum, the short-term factors fueling the crises in East and West Ger-
many were indeed diff erent. On one side of the Iron Curtain, they were
primarily tied to a growth off ensive forced by politicians; on the other side
of the curtain, supply shortages and corresponding price hikes, which
were also infl uenced by policy decisions, fed the fl ames. The political re-
actions to these crises also diff ered in terms of their novelty and content.
Whereas East Germany primarily opted for a return to allegedly tried and
true alternatives, West Germany chose to explore ostensibly new options.
For a long time, the East weighed in on the side of certainty; in contrast,
West German politicians and experts were uncertain how to proceed.
However, one thing that both sides had in common was that they had
not paid enough attention to the long-term factors behind the slump in
growth and the perceived crises of the 1970s.
Furthermore, these factors were very much alike in East and West
Germany. For both countries, the reconstruction and “catching up” po-
tential stemming from the economy’s disastrous years in the interwar