A natural experiment

The division of Germany into a socialist and an at least vaguely capitalist part was one of history’s great natural experiments. The outcomes of the experiment speak for themselves. After reunification, East Germany’s GDP per capita was just one third of the West German level. The poorest West German region, Schleswig-Holstein, was still two and a half times as rich as the richest East German region, Saxony. Every other available indicator of economic performance (productivity, capital intensity…) shows a similar gap. There was a three-year gap in life expectancy as well.

The cost of cleaning up the mess left behind by socialism has been colossal. Net fiscal transfers from West to East Germany since 1990 add up to €1.9 trillion (in today’s prices), which is roughly equivalent to the GDP of Britain.

Add to that the human cost associated with over four decades of totalitarian rule – the imprisonment of dissidents, the shooting of people attempting to commit Republikflucht (=’desertion from the republic’, i.e. emigration), censorship, surveillance etc. – and you can make a fairly strong case against socialism.

But this debate has been settled long ago, right? Nobody would defend the GDR nowadays, right?

Wrong. Seumas Milne, a former Guardian journalist and currently the Labour Party’s Executive Director of Strategy and Communications, still does.

A capitalist counterrevolution?

In an interview with George Galloway on TalkSport Radio, on the 20th anniversary of the Fall of the Berlin Wall, Milne presented a peculiar interpretation of history.

In his version of events, the popular uprisings of the late 1980s, which brought down the regimes of the Eastern bloc, never happened. What really happened was a counterrevolution initiated from above. Sinister forces conspired to overthrow the Workers’ State, and force a capitalist economy upon an unwilling public. The average Joe never wanted any of this. He was just a passive bystander, who did not understand what was happening until it was too late. In Milne’s words:

“[T]here was a group of people in power who saw that they stood to benefit from the restoration of capitalism, and many ordinary people who benefited in many ways from the form of socialism there was in Eastern Europe didn’t really feel ownership of the system, and they didn’t necessarily see what was happening, or what they could do to stop it.

But […] most people in a good number of those countries regret the loss of […] the positive aspects of that system […] 1989 was an important shift, and an important loss, for many millions of people. As well as some gains. […]

In Eastern Germany most people today have a positive view of […] the GDR, and regret its passing […] [T]he huge social benefits that have been lost, not only in Eastern Germany but across Eastern Europe and in the Soviet Union are mourned by the people of those countries”.

The Berlin Wall, in this version of events, was primarily an instrument of defence against Western aggressors. This is true for the less pleasant aspects of the GDR in general: if the West had not been so mean to them, the GDR would have been a civil liberties paradise. Milne explains:

“A particular form of socialism grew up in the post-war period in the conditions of the Cold War […] East Berlin was absolutely at the front line of the cold war. That’s what the Berlin Wall was. It was a front line between two social and military systems and two military alliances, and a very tense one at that. It wasn’t just some kind of arbitrary division to hold people in, it was also a front line in a global conflict. And that conditioned a lot of the things that happened”

It is a creative reinterpretation of history. It is also complete nonsense.

The March 1990 Volkskammer election

Let’s start with the idea that the ‘silent majority’ of the GDR’s population still supported socialism, and was just overwhelmed by events. In hindsight, we often treat the Fall of the Berlin Wall, Germany’s reunification, and the introduction of a market economy in the East as inextricably linked, or even just different stages of one single event. They were not. The GDR’s fate was not sealed on 9 November 1989, but on 18 March 1990, the day of its first-ever democratic election (which would also be its last).

Several of the parties that ran for that election were explicitly opposed to reunification, and for the preservation of socialism. Those were, in fact, the main themes of that election: it’s the economy, stupid. The option of preserving socialism was definitely on the ballot paper. We could imagine one of those parties, or a coalition of several of them, winning the 1990 election, in which case reunification would not have happened, and the GDR would have continued to exist as a sovereign, socialist state.

Firstly, the Socialist Unity Party (SED), which had ruled the GDR for forty years, ran for office again. It had renamed itself the Party of Democratic Socialism (PDS) in the meantime, and expelled some of its Stalinist hardliners, thus presenting itself as the party of a nicer version of the status quo. Secondly, the democratic protest movement also contained explicitly socialist groups, who wanted to democratise the GDR from within, but were also committed to preserving it. Those groups formed an electoral alliance, the Coalition for Action United Left (AVL), which ran on a socialist platform.

Thirdly, a West German Trotskyist party, the Spartakist Worker’s Party (SpAD) set up an East German branch, to “mobilise against a capitalist reunification, and for a socialist future”. Their diagnosis was that the GDR’s version of socialism wasn’t REAL socialism, and that REAL socialism had not been tried yet:

“The Stalinist bureaucracy of the SED government proved itself unable to fulfil the people’s desire for freedom and justice, and discredited the idea of socialism. We, the Spartakisten, say: Socialism, under the real leadership of the working class, has not even begun yet.”    

Last but not least, there was the ultra-hardline Communist Party of Germany (KPD). Their diagnosis of the events was that the SED had been infiltrated by traitors and counterrevolutionaries, and needed a return to the good old days of Stalinist purges. I think Seumas Milne would have liked them.

Thus, in the March 1990 election, socialists were spoilt for choice. The reason why reunification happened, and why a Western-style market economy was introduced, was simply that the anti-market/anti-reunification parties won less than one fifth of the vote between them.

Do East Germans want the GDR back?

But that was then. What about Milne’s claim that a majority of East Germans today have “a positive view of […] the GDR, and regret its passing”? Presumably, Milne refers to a 2009 survey in which people were asked whether they agreed with the statement that the GDR had “more positive sides than negative sides”. 57% of respondents agreed.

However, according to a different survey, 74% of East Germans also say that reunification had brought them personally “more advantages than disadvantages”. This survey contains a more detailed breakdown by policy area, and it specifically asks respondents to benchmark East Germany against West Germany (or the reunified Germany).

It turns out that in the areas most clearly related to the economic system, namely ‘economy’, ‘living standards’ and ‘opportunities for professional self-realisation’, the West enjoys a clear lead. The West does worst in the categories ‘school system’ and ‘protection from crime’, neither of which are specifically socialist: the school system and the police were (and still are), of course, also state-run in West Germany.

There may well be a lot of East Germans who miss aspects of the GDR, but it is not necessarily the socialist aspects that they miss. Today, we would presume that somebody who has a positive view of the GDR must be politically on the (far-)left, but the GDR also had various aspects that would appeal to hardline conservatives.

The GDR’s school system was highly discipline-focused, even militaristic. The GDR’s criminal justice system was tough and punitive. These are aspects which the reunified Germany (or Britain) could easily copy, but I doubt that this would make Seumas Milne happy.

Unfortunately, the above survey does not ask about immigration. But judging from the huge East-West gap in support for anti-immigration parties, it is not a huge stretch to argue that some of today’s GDR-nostalgia is not about socialism at all, but about immigration. The increase in immigration, or exposure to foreign cultures more generally, was one of the biggest changes that people experienced after reunification. The GDR had some immigrants, namely from poorer socialist countries like Cuba and Vietnam, but compared to today, it was an ethnically and culturally very homogenous country. As always with social changes of this kind, some people are happy about it, some are not.

Seumas Milne seems to assume that when East Germans say that they miss the GDR, what they mean is that they miss state-owned car manufacturers, five-year plans, military parades and hammer-and-compass banners. Some may. But some of them miss things about the GDR that would make Seumas Milne cringe, namely a disciplinarian education system, a tough-on-crime criminal justice system, and cultural homogeneity.

A protection rampart?

Further, Milne’s claim that the Berlin Wall was built more for defence purposes than to stop emigration is ludicrous. Between the founding of the GDR and the construction of the Wall, more than 2.7m people migrated from East to West Germany. If they had all lived in one place, they could have formed a city larger than Hamburg. And this figure is an absolute lower-bound. It is based on records from West German refugee centres, so it does not count people who, for example, stayed with friends or relatives.

This massive brain drain undermined the economy, and jeopardised the Five-Year Plans. The GDR simply could not have functioned without emigration controls. In this sense, the Wall and the border fortifications achieved their aim. It abruptly stopped the exodus, and the planners could engage in workforce-planning again.

In the GDR, the Wall was officially called the ‘Anti-Fascist Protection Rampart’. Milne simply regurgitates the regime’s propaganda. Its military relevance, however, was zero. If the Cold War had turned hot at any point, the Wall could not have stopped a missile or a warplane. At best, it might have slowed down a tank by five minutes, or ground troops by twenty minutes. It was not even useful as a protection against espionage, because it was only ever a barrier in one direction.


East Germany was the richest country of the former Warsaw Pact. It was probably the least bad example of a socialist economy that has ever existed; indeed, as far as socialism goes, the GDR was probably as good as it gets. And yet, it still could not convince its citizens to stay. It still depended on a heavily fortified border, a shoot-to-kill order, a pervasive secret police, and in the worst case, on Soviet tanks, for its very survival. Overall, that is not an impressive record.

But we’ll see. Maybe Seumas Milne will soon get a chance to try out his version of socialism in Britain, which will, no doubt, avoid all these pitfalls.


Head of Health and Welfare

Dr Kristian Niemietz joined the IEA in 2008 as Poverty Research Fellow, becoming its Senior Research Fellow in 2013 and Head of Health and Welfare in 2015. Kristian is also a Fellow of the Age Endeavour Fellowship. He 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). In 2013, he completed a PhD in Political Economy at King’s College London. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and at King's College London, where he taught Economics throughout his postgraduate studies. He is a regular contributor to various journals in the UK, Germany and Switzerland.

8 thoughts on “Seumas Milne on East Germany: Historical revisionism at its worst”

  1. Posted 25/08/2017 at 16:13 | Permalink

    An excellent article which comprehensively shows that Milne “cherry picks” facts to suit his version of events. He is a true champagne socialist, because he has the money, the family and academic background which his family money allows him to be. My late father in law was a working class Yorkshireman, who worked at the same factory on the same lathe for over forty years. He always said that ” you have to be able to afford to be a socialist” and that socialism was very good at spending everyone else’s money.
    The GDR was an oppressive, brutal and totalitarian machine which murdered many of its citizens for the slightest dissent, encouraged friends, neighbours, children and husbands and wives to spy on each other in order to enforce its iron fist in a concrete glove hold on power. Why are we even giving this man the oxygen of publicity?

  2. Posted 25/08/2017 at 17:47 | Permalink

    Interesting article but you’re attacking a soft target. No-one takes Seamus Milne seriously because he is so clearly representative of a commonplace British archetype – the perpetually adolescent public schoolboy contrarian stuck forever in 1968. Everyone knows someone just like him.

  3. Posted 25/08/2017 at 18:33 | Permalink

    I lived in Poland in the 1980s and occasionally went to Berlin (West) to stock up on things that weren’t available in Warsaw (i.e. everything except bread and jam). This was at a time when the CIA billed East Germany as the world’s 10th economy. Visiting East Berlin, I was astonished to see that the workers’ districts in the east of the city were even more basic and soulless than the Warsaw housing projects. In Poland, we had rationing of food and petrol and most other daily consumer necessities. The government spokesman said many people approved of rationing because it guaranteed them a minimum of staples. He didn’t discuss that rationing was only necessary because the system structurally produced scarcity. Milne never experienced that in his life. If he had, he wouldn’t be nostalgic for it, unless he’s a masochist.

  4. Posted 25/08/2017 at 18:36 | Permalink

    Political belief is based on emotional thinking where reason has to be totally suppressed as that is the only means of coping with discomforting data which is not onside with belief. This was proved over a decade ago by researchers imaging the human brain using MRi scanning. See ‘Emory study lights up the political brain’ https://www.sciencedaily.com/releases/2006/01/060131092225.htm.
    …”None of the circuits involved in conscious reasoning were particularly engaged,” says Westen. “Essentially, it appears as if partisans twirl the cognitive kaleidoscope until they get the conclusions they want, and then they get massively reinforced for it, with the elimination of negative emotional states and activation of positive ones.”…
    In other words the political brain is in bliss as it luxuriates in its own confirmation bias thus making reason-based thinking impossible if belief is in question.
    Confirmation bias is a much bigger problem for the left because only one of the five moral triggers matters in the slightest to the left liberal brain – harm/care. The other four moral values are viewed in a very negative light. This means liberals are incapable of even understanding the concerns of most of the population due to their narrowness of moral values.
    See ‘Conservatives have broader moral sense than liberals, says ‘Righteous Mind’ author’ http://www.washingtontimes.com/news/2012/jun/26/righteous-mind-author-haidt-conservatives-have-bro/
    ….He polled over 130,000 conservatives and liberals on moral issues and found that while conservatives rely on all six foundations equally in making moral judgments, liberals favor care, liberty, and fairness, and were often indifferent to concerns of sanctity, loyalty, and authority. Libertarians, relying primarily on the liberty foundation, had the smallest moral domain of all, which probably explains a great deal…

  5. Posted 25/08/2017 at 22:12 | Permalink

    Watch the film “Lives of Others”.

  6. Posted 25/08/2017 at 22:41 | Permalink

    It’s a strange mentality that goes looking for falsehoods to bolster their beliefs. I can only imagine it’s because too much self-esteem and deep-seating dreams have been invested.

    Thanks for the research and article.

  7. Posted 26/08/2017 at 15:43 | Permalink

    Excellent article, Kristian.
    I haven’t studied this, so only have anecdotes from my own experience. My father was a German from the Sudetanland, who later was a prisoner of war in Britain and remained. Because of the ban on emigration from the East, he never saw his parents again after the war and they died in the 1960s. Technically, he could have visited them, but actually could not as he was very poor, mostly working on building sites and could never save the money for the trip. He was very bitter about the life his parents endured – he said that they lived on nettle soup for a while when they had their house in the Sudetanland confiscated by the state (building the house and paying for the materials with a bank loan was his father’s life’s work) and they were forcibly moved to East Germany along with my father’s sisters (for some reason all his brothers ended up in West Germany). He used to send them parcels but all the goodies were stolen by those controlling the postal system.
    Later on, I met a few East Germans in my early 20s on a day trip into East Berlin and later visited them in East Berlin before the wall had come down. Their lives were grim – crammed into horrible, dark flats. When I visited the food prepared was pasta with tomato sauce – I think there wasn’t much variety of food available. My one friend was involved in the churchyard protests. She said she could away with it because her father was in the Communist party, so she had some protection against arrest.
    Later still, I had an East German boyfriend. He did point out the disadvantages of reunification – notably that there was no longer full employment – also, his parents loved their new TV but it did breed discontent as they could now see how others in the West lived and had lived all these years (they were ignorant of this before) and they were still pretty poor. He, however, got a well-paid job in a brewery based in Hamburg, so he came out of it well. He used to say that when he was in University, four boys shared a dormitory and you knew that one of them was a Stasi informant, so you always had to be on your guard. For me, this is the most pernicious aspect of life under a totalitarian regime – no price can be put on freedom of thought and expression. He said that in any group of four, one was likely to be an informant.
    Anyway, as you say, Seamus Milne doesn’t know what he’s talking about if he holds up East Germany as a country to aspire to in any shape or form.

  8. Posted 28/08/2017 at 13:16 | Permalink

    Eric Honecker said: The only rights you have are clothes on your back a roof over your head and food in your belly otherwise you have no rights. [That sums up 40 years of the DDR].

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