200 WINFRIED SÜß
sets within the richest fi fth of the population and continuing disparities
between self-employed individuals and those employed by others. This
not only had to do with the way in which the currency reform of 1948
had favored those with real assets, but also with tax laws that were very
investment-friendly. Companies were able to avoid having to pay taxes
on a majority of their profi ts as long as these earnings were reinvested
in production-related areas. When the economist Wilhelm Krelle pub-
lished his research on the distribution of wealth in West German society
at the end of the 1960s, he unleashed a veritable scandal with his fi nd-
ings that indicated that less than 2 percent of the population controlled
over 35 percent of the country’s total assets and over 70 percent of its
productive assets. Accordingly, or at least it so appeared, the “hard core
of social inequality, which stemmed from the distribution of income and
wealth, remained mostly constant,” even though it was overshadowed
by a growth in prosperity.^25 When examined from a more nuanced per-
spective, however, this image of stable ratios of inequality turns out to
be more complex. The years between 1962 and 1978, at least, marked a
phase of substantial, wide-ranging reduction in income inequality as re-
fl ected by the decrease in the Gini coeffi cient, one of the most important
measurements of distribution for analyzing inequality, from 0.29 to 0.25.
In addition, the expansion of the welfare state eff ectively added a new di-
mension of distribution to the coordinate system of inequality. It fostered
a new form of social wealth in a quantitative as well as qualitative sense,
namely education as a form of social capital. This wealth, which had been
primarily accumulated in the form of dynamic pension rights tied to pros-
perity, relativized the importance of traditional diff erences in income and
wealth, especially in later phases of life.^26 Such pension rights served
to off set the diff erences between generations, transferring the position
that had been achieved during working life into a standard of living in
retirement.^27 Clearly, the achievement of social equality was by no means
a political priority in the Bonn Republic. Rather, the social order of West
Germany fostered performance-related diff erentiation and sought to deal
with the problem of social inequality by generalizing social security and
limiting inequality at the bottom of the material distribution spectrum.
In the GDR, however, social equality was a very prominent leitmotif.
This rested in part on the SED’s promise to build a more socially just soci-
ety. Indeed, the popular notion of leveling social diff erences and reducing
the impact of social distinctions on society as much as possible was one
of the most important sources of legitimacy for the socialist dictatorship.
Moreover, with the goal of securing its political power, the SED regime
initiated a policy that sought to strip away the privileges of aristocratic
and bourgeois elites and foster the establishment of a class of socialist