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Transforming the Command Economies
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16617 |
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Section : |
SPECIAL SECTION
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| Issue
Date : |
11 / 1989 |
5,331 Words |
| Author
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Christian Watrin
Christian Watrin is professor of economics and social studies
at the University of Cologne in Germany, where he holds the
chair for economic policy; the managing director of the
Institute for Economic Policy; and the director of the Seminar
for Economic Policy. He has been chairman of the Advisory
Council to the Federal Ministry of Economic Affairs since
1987. |
Whether or not socialist economists can learn anything from Germany's economic history since World War II depends on what they are striving for. If their aim is only to revise their centrally directed economy, they might look to East Germany, where the ruling Communist Party still clings to the traditional principles of the Soviet bloc model. If, instead, they want to recast their economies along market-oriented lines, they should study West Germany's recent history and the economic revolution it launched in 1948.
Economists whose only interest is in minor reforms of a command economy, and who therefore look to East Germany for guidance, will not find the view very hopeful. Although East Germany's economy appears to be doing better than those of other Eastern block economies (e.g., Czechoslavakia, Hungary, Poland, Romania, Bulgaria, and the Soviet Union), life in the German Democratic Republic is still quite grim, whether seen from a Western perspective or from the viewpoint of those trapped behind the Berlin Wall. According to Western sources, about 6 percent of East Germans have asked their government for permission to leave. They want to immigrate to West Germany where they would have full rights as citizens. In 1988, approximately 90,000 émigrés left; many more would leave, given the opportunity.
Visitors to East Germany can watch people queue up in long lines in front of shops to buy basic goods. If east Germans want to purchase a tiny, outmoded car called the Trabant, they must either get on a waiting list for ten to fifteen years or pay much more than the official price on the black market for immediate delivery. The appearance of East German cities is deplorable; houses have not been painted in decades, and new buildings start to deteriorate almost immediately. Environmental protection is negligible compared with Western standards. Nevertheless, there may be some truth in statistics that cite the German Democratic Republic as the healthiest among the ailing Eastern economies.
However, for those socialist economists who want to reform their economic system to achieve a market order, it may be most instructive to consider West Germany's switch from the centrally directed economy Hitler created to a social market economy.
At the end of World War II, the Third Reich was dissolved. Its western region fell under the control of the Allies, who divided it into three zones ruled by separate military governments. These zones were areas of Europe that had suffered tremendously due to the war's devastation. In the
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