Economic Theory

An alternative history: REAL socialism is being tried. A drama in 10 acts (Part 2)

Continued from Part 1.


“A socialism for the many”: VL/PDS coalition treaty signed in East Berlin

The Guardian, 28 April 1990

The first round of coalition talks was awkward. It was bound to be. The United Left (VL), the senior partner in the GDR’s new coalition government, grew out of the civil liberties movement, which spent its entire existence protesting against the iron rule of the Socialist Unity Party (SED). And the Party of Democratic Socialism (PDS) grew out of the SED, which, until just a few months ago, had tried so hard to stamp out the ‘counterrevolutionary’ protest movement. A meeting of former protesters, with the successors of the people they had been protesting against, was never going to be easy.

But during the second meeting, the ice broke. And during the third meeting, they got on like a house on fire.

The PDS – which won 16% of the vote in last March’s election – has reinvented itself. They have expelled quite a few of the SED’s Stalinist hardliners. They have promoted some of their more idealistic reformers, modernisers and liberalisers (some of them Western-educated) to top positions. Its new generation of leaders are not career politicians. They did not join the SED out of opportunism. They used to be the troublemakers, who would ask difficult questions at party assemblies. Perhaps the reformers and the protesters have always had the same aims, and just tried to achieve them in different ways.

The VL has also learned. Its leaders had to accept that protesting and dreaming of a better world is not the same thing as governing. They had to accept that they cannot just smash everything, and start from scratch again. They had to temper their impatience, and accept the need to start from where they are.

But make no mistake: If the coalition treaty is anything to go by, this will be a profoundly radical government. Its civil liberties and human rights agenda alone is one of the boldest we have ever seen. The new GDR will guarantee complete freedom of conscience, freedom of the press, freedom of religion, freedom of speech, freedom of assembly, freedom to travel, a right to privacy, a right to due process, and a right to a fair trial. The hated Stasi has already been dismantled, and its former senior officials are being prosecuted. Stasi records will be preserved, and every GDR citizen who has ever been spied upon has a right to access their own files.

But these reforms, while a huge step forward for the GDR, will not impress Western observers: They will simply make East Germany more like West Germany. The most interesting reforms will take place on the economic front.

State-owned enterprises (VEBs) will be thoroughly democratised. All major management functions will be passed on to democratically elected Workers’ Councils. The VEBs will become largely self-governing, autonomous entities, comparable to worker-run cooperatives.

What is even more ambitious is the agenda of democratising the drafting of the Five-Year Plans. At the moment, the State Planning Commission (SPK) – the GDR’s equivalent of the Soviet Union’s Gosplan – is the epitome of technocracy and elitism. It makes a complete mockery of the Marxist idea that ‘the working class’ is in charge of the economy. An ordinary worker has no more influence on the decisions of the SPK than an ordinary Catholic has on the proceedings of a Papal conclave; the former could no more alter production plans than the latter could recall a Pope and elect a new one. Five-Year Plans are drafted behind closed doors, and then imposed upon the population from on high.

The promise of socialism has always been that it would give ordinary working people control over economic life. In practice, workers in socialist countries have no more control over such matters than workers in capitalist countries. The latter are at the behest of market forces, the former are at the behest of a technocratic elite. This is what the VL means when they say that the GDR was not really socialist. And this is what they are now trying to change.

From now on, the head of the SPK will be democratically elected once every five years. The SPK will be obliged to consult extensively with external stakeholders. Democratically elected ‘Consumer Councils’ (Konsumentenräte), whose requests the SPK will have to take into consideration, will be set up all over the country. Every citizen of the GDR one will be free to join as many consumer councils as they wish, and to set up new ones. The minutes of every SPK meeting will be published, as will be the preliminary Five-Year Plan drafts.

The key passage in the coalition treaty reads:

“In the past, we have had state planning of the economy, and state ownership of the means of production. This is not good enough. This is not socialism. In the future, the people will plan the economy, and the people will own the country’s productive assets. The GDR used to call itself a Workers’ and Farmers’ State, but in truth, it was a bureaucrats’ and politicians’ state. This is where the GDR went wrong. And this is what we want to change.”

After just over forty years, East Germany is finally discovering the true meaning of socialism. What took you so long?


Continue to Part 3.

Head of Political Economy

Dr Kristian Niemietz is the IEA's Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).

2 thoughts on “An alternative history: REAL socialism is being tried. A drama in 10 acts (Part 2)”

  1. Posted 18/12/2017 at 14:49 | Permalink

    “In the future, the people will plan the economy, and the people will own the country’s productive assets.”
    That’s Capitalism isn’t it?

  2. Posted 18/12/2017 at 19:04 | Permalink

    There really needs to be a full-on assault on Socialism/Communism. (this is a good start)
    We have in the U.K., waiting in the wings, a potential Prime minister who is quite happy to wrap himself in the Flag of international Communism, a flag drenched in the blood of over 100 million deaths.
    Jeremy Corbyn BTW was the man who tweeted in 2014;
    “Chavez has shown us there is a better way than austerity”
    There’s so little food on the shelves in Venezuela now that they are eating Flamingos.

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