(FROM: The Politics of Labor in
a Global Age: Continuity and Change in Late-Industrializing and Post-socialist
Economies
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9 Globalization in One
Country: East Germany Between Moral Economy and Political Economy
Abstract:
Examines one effect of
globalization on labour in the case of unified Germany: the rise of a new
particularism. A number of scholars have started to speak of the new divide
between eastern and western Germany in terms of ethnicity. As useful as this
analogy is, however, it has the disadvantage of being just that—an analogy.
Seen differently, the source of the new cultural divide in Germany is the
conflict between two very different, historically shaped moral economies.
Despite Stalinist misdevelopment, the economy of the communist East, through
everyday labour practices, inculcated a set of egalitarian economic values. For
political reasons, the unification strategy after 1991 did not challenge these
values but accommodated them. Such a strategy thus guaranteed the persistence
and even growth of regional identities in post-unification Germany. The new
particularism in other locales, therefore, may stem from the clash not only of
'civilizations' (Huntington), but also, rather more prosaically, from the
conflict between dominant labour and leisure practices, of notions of what is
properly commodified and what is best put outside of markets—practices that are
being challenged by global markets, and the diffusion of tastes, values, and
institutions.
Keywords: economic
values, egalitarianism,
German
reunification, Germany,
globalization,
industrial
relations, moral
economy, regional
identity
The revolutions of 1989-91 propelled the
states of Central and East Europe back into the international capitalist
economy from which they had been cut off for half a century or more. Suddenly,
the economies of the region were exposed to the full impact of international
market forces, the rapid spread of tastes and values across frontiers, and the
influence of international regimes and institutions—in short, the force of what
political scientists have recently dubbed 'globalization'. Nowhere is this more
true than in East Germany, a country that was absorbed into West Germany after
1990 just as the latter was about to enter its own globalization crisis.
Post-socialist transformation and rapid reunification have brought home the
force of global market pressures to most East German workers in an especially
acute form. While other formerly communist states retained national
sovereignty, and could thus regulate their re-entry into the global market
through tariffs, taxes, and exchange rate policy, what is now eastern Germany re-entered
the global market-place overnight without any of these protections. It is thus
not a unique case that defies comparison, but it is an extreme case that can be
useful for illustrating the effects of the new globalism. 1
1 Andreas Pickel, 'The Jump Started Economy and the
Ready-Made State: A Theoretical Reconsideration of the East German Case', Comparative
Political Studies, 30: 2 (1997).
One effect, in particular, that I want to
highlight in this essay is a much-discussed but little-studied feature of
globalization: the tendency for the new universalism of the global market to
produce new kinds of ethnic and regional particularism. Political theorists and
social scientists have already speculated on the strange simultaneity of
globalization and nationalism, of universalism and particularism in the present
era, put most poignantly by Benjamin Barber as 'Jihad vs. McWorld'. 2
2 Benjamin Barber, 'Jihad vs. McWorld', The Atlantic
Monthly, 269: 3 (March 1992).
What remains unclear, however, is the causal relationship
between the two that generate particularistic identities from universalist
challenges.
What I want to argue is that the new cultural
divide in Germany between easterners and westerners, one that appears to be
deepening, is an illustration of the new globalism and particularism at work.
Because Germans, eastern and western,
share a common ethnicity, the politics of post-unification provide a laboratory
of sorts for exploring the dynamics of globalization and particularism in the
post-cold war world that allows us, in effect, to hold ethnicity constant. To
anticipate the argument that follows: the ironic resurgence of an eastern
German identity is the result of global market forces confronting the work and
leisure habits of a society that was systematically cut off from the
international division of labor for forty years. The new cultural divide in
Germany is the product of two very different moral economies confronting each
other. One implication of this analysis is that the new particularism in other
locales may stem from the clash not only of 'civilizations', but, rather more
prosaically, from the conflict between dominant labor and leisure practices,
and between notions of what is properly commodified and what is best put
outside of the market. These practices are being challenged by global markets
and the diffusion to the East of new tastes, values, and institutions.
Moral Economy, Markets, and Particularism
One way of thinking about the cultural divide
in Germany is in terms of ethnicity. 3
3 For an excellent argument exploring, and ultimately
criticizing, this point of view, see Marc Howard, 'A East German Ethnicity?
Understanding the New Division of Unified Germany', German Politics and
Society, 13: 37 (1995),
49-70.
The language of cultural marker and
stereotypical social exchange that litters the writing on ethnicity has begun
to creep into the analytical discourse on Germany. 4
4 Wolfgang Engler, Die
Ostdeutschen: Kunde von einem verlorenen Land (Berlin: Aufbau, 1999); Luise
Endlich, Neuland: Ganz einfache Geschichten (Transit, Berlin, 1999).
Such a characterization is indeed tempting.
Any number of statistical indicators could be used to support such an analysis.
Consider, for example, just one: marriages. In Berlin during 1995 there were
16,383 registered marriages. Of this number only 4% were 'intermarriages'
between East and West Berliners. In the same period Berliners married
non-Germans at almost eight times this rate. 5
5 'Die Ost-West Ehe bleibt auch
weiter die Ausnahme', Berliner Zeitung (9 Aug. 1996),
16.
This snapshot statistic suggests that well
after formal unification East and West Germans continued to interact as
'foreign' groups. As useful, however, as the ethnic analogy may be for
understanding the character of cultural conflict, it has the disadvantage in
the German case of being just an analogy. The cultural divide in Germany may be
like ethnic conflict, but it is not ethnic conflict.
What is it then? It makes little sense to
argue that there is something immutably different between East and West
Germans. Such essentialist rhetoric is of little use to the social scientist,
if for no other reason than the fact that identities change over time,
sometimes rapidly, sometimes slowly, but they do change. I propose to explain
how forty years of institutional separation created a very different moral
economy in the East from the West, and how this eastern moral economy is
beginning to change the landscape of politics in Germany as a whole.
A word on moral economy is in order. The
literature on this subject is now so vast as to constitute a subindustry within
the social sciences. Although it is highly diverse in its claims, the notion of
moral economy can be boiled down to a few simple propositions. It maintains
that economic man is a historically contingent phenomenon and at best an ideal
type. People tend to make tradeoffs between goods only up to a certain point;
thereafter, some things are not 'for sale'. For moral economists, most people
have a fundamental sense of what is just and fair, and this sense forms their
'bottom line' beyond which exchange behavior will either not be engaged in or,
when engaged in, it will be experienced as a moral violation. Furthermore,
people will generally tolerate a social order only so long as an implicit
social contract which lays down the bottom line of exchange is not violated. Of
course, what this bottom line is, hence the nature of the moral economy, will
differ from case to case. It therefore makes sense to speak of different moral
economies in different societies. Interest remains an important category for
moral economists but how interests are formed, the ultimate content of
interests, and conditions under which interests become politically salient, is
directly mediated by historical experience and cultural milieu.
A number of observable implications of this
highly abstract principle can be discerned. Let me concentrate on just one:
reactions to commodification. Since Karl Polanyi's work, we know that eras of
commodification of land, capital, and labor are among the culturally most
shocking and politically most volatile because, even though markets rapidly
destroy old structures and norms, the terms of new implicit social contract are
slow to be worked out. Although Polanyi casts the response to the
commodification of the British economy in the eighteenth, nineteenth, and
twentieth centuries in a kind of mushy, reified functionalism—of 'society protecting
itself' through poverty laws, trade tariffs, welfare states, and currency
debasements—that we may no longer find appealing, subsequent authors have
easily recast his thought in terms of the ways in which received notions of
'fairness' and 'economic justice' shape interests in rapidly commodifying
contexts. 6
6 E. P. Thompson, 'The Moral Economy of the Crowd in
Eighteenth Century England', Past and Present, February 1971;
James C. Scott, The Moral Economy of the Peasant (New Haven: Yale
University Press, 1976);
Barrington Moore, Injustice: The Social Basis of Obedience and Revolt
(Armonk: M. E. Sharpe, 1988).
Curiously, social scientists have yet to apply
these categories to post-communist East Europe.
Yet nothing would seem to be more obvious,
especially for East Germany. More than any other population in formerly
communist East Europe, East Germans have confronted a sudden and almost
complete commodification of their economy. While most analysts of
post-communism have concentrated on the Leninist legacies and the barriers they
pose to the successful construction of political democracy, very few have
inquired or taken seriously the cultural legacy of communist economics as
opposed to politics. Few scholars have discussed the ways in which these
economic legacies have contributed to the creation of new post-communist
identities, precisely because the blatant economic inefficiencies of communism
had let to its collapse in the first place.
Communism's collapse, however, should not dull
our sense for how strongly Leninist economic institutions influenced not only
social structures but also fundamental attitudes on issues of economic
inequality, exchange relationships, employment, management, and even political
participation. Neoliberal economics, with its assumption of instantaneous
adjustment at both the individual and institutional level to altered
incentives, may have kept us from appreciating this. At a material level, the
assumption of instantaneous adjustment to new 'incentives' may be more or less
true but at a cultural level it most certainly is not. The idea that such
fundamental areas of human life as housing, schooling, and day care, as well as
food and other staples, should be subject to cost-benefit calculations and the
ups and downs of the market does not sit well with most East Germans,
regardless of political orientation. Somehow the market, understood in this
sense, offends their sensibilities even as they participate in it, understand that
there is no practical alternative to it, and are prepared to do precious little
to change it. 7
7 In fact, most Germans now maintain that East Germans in
their behavior and East Germany in its ethos are, if anything, more
'capitalist' than their Western counterparts.
What might be described as an egalitarian
moral economy of communist society appears to have persisted well into the
capitalist transition.
Survey research on popular attitudes toward
capitalist patterns of social stratification in post-communist societies has
yielded contradictory results. In two papers using a telephone survey, written
shortly after communism's collapse, Robert Shiller, Maxim Boycko, and Vladimir
Korobov sought to show that attitudes toward equality and inequality across
nations were quite similar and, remarkably, Russian and US attitudes were
almost identical on issues of stratification and income distribution. 8
8 Robert Shiller, Maxim Boycko, and Vladimir Korobov,
'Popular Attitudes toward Free Markets: The Soviet Union and the United States
Compared', American Economic Review, 81 (1991),
385-400; 'Hunting for Homo-Sovieticus: Situational versus Attitudinal Factors
in Economic Behavior', Brookings Papers on Economic Activity, I (1992),
127-81.
The assumption and conclusion of these studies
was that communism did not really alter attitudes to commodification and
equality, or to the extent that it did, such attitudes would change rapidly
under a new incentive structure. Although these issues continue to be hotly debated
in the scholarly community, it was only natural that East and West Germany
became laboratory settings for similar research designs. The two Germanys seem
to present the perfect control cases for the effects of immersion in different
institutional orders on basic economic values in, what were before 1945,
identical political cultures. Robert Rohrschneider, in several painstakingly
researched articles on this topic, has come to the opposite conclusions of
Shiller, Boycko, and Korobov. Using representatives from the Berlin parliament
as respondents in face to face interviews, Rohrschneider consistently finds
that regardless of party affiliation, respondents from East Berlin consistently
support more egalitarian outcomes, greater governmental control over and
intervention in the economy, and advocate the value of 'solidarity' more
frequently than their West Berlin counterparts. 9
9 Robert Rohrschneider, 'Cultural Transmissions versus
Perceptions of the Economy: The Sources of Political Elites' Economic Values in
the United Germany', Comparative Political Studies, 29, 1 (1996),
78-104; 'Report from the Laboratory: The Influence of Institutions on Political
Elites' Democratic Values in Germany', American Political Science Review,
88: 4 (1994),
927-41.
The unification strategy has accommodated
these differences in basic economic orientations. Unification with the West has
permitted a special sort of post-communist economic policy in eastern Germany.
It is at once both a shock therapeutic and a moral economic approach. On the
one hand, more than any other post-communist country or region, eastern German industries
and workers have been subject to the direct pressures of global economic
competition, the results of which are discussed in greater detail below. On the
other hand, unlike other post-communist countries, social stratification and
income inequalities in eastern Germany have remained relatively stable since
1991. Comparing eastern Germany and Hungary, for example, Bruce Headly, Rudolf
Andorka, and Peter Krause, using household panel data, found that after the
revolution of 1989 income inequality increased very rapidly in Hungary, quickly
surpassing that of West Germany. In East Germany, by contrast, 'net income
inequality is almost unchanged since communist times and is much below West
German levels'. Most surprising is that at the height of the unification shock,
from March 1991 to March 1992, as measured by the German panel survey, there
was no increase in inequality at all. The narrow distribution of net incomes in
East Germany is a product primarily of federal taxes, transfers, and subsidies.
Although others have shown that inequality is slowly increasing in East
Germany, the influence of political and social considerations is far greater in
East Germany than in Hungary, Russia, or probably any other country in formerly
communist East Europe. 10
10 Bruce Headly, Rudolf Andorka, and Peter Krause,
'Political Legitimacy versus Economic Imperatives in System Transformation:
Hungary and East Germany, 1990-1993', Social Indicators Research, 36 (1995),
247-73, quotation is from p. 261. See also Das Parliament, 17-24 January
1997,
1.
This peculiar strategy was not merely the
result of West Germany's capacity to underwrite a simultaneous market and
welfare policy in the East. It also corresponded to the interests and attitudes
of the main players on the ground during unification. The most commonly
identified interest groups in determining the unification strategy of high
wages and low inequality were the West German trade unions. After quickly
colonizing the eastern German industrial landscape, the German trade unions
lobbied successfully to move up eastern German wages faster than productivity
in the hope of preventing wage competition from driving down wages in the
West—wages that were among the highest in the world. For their part, the
leading politicians in what at the time of unification was the ruling party in
Germany, the Christian Democratic Union (CDU), had no interest in staving off
this trade union offensive. Nor did it express any interest in challenging East
German conceptions of social justice. Such challenges might merely have created
a solid bloc of potential Social Democratic (SPD) voters in the East by
permitting social inequality to increase rapidly after 1991. By accommodating
rather than attacking the prevailing moral economy of the East, the strategy of
unification has served to perpetuate rather than overcome the cultural divide
between East and West.
In the next
section, I explain how this came to be. This requires an exploration of the
origins of differing conceptions of economic and social justice in the East and
the West in the post-World War II era. Because the story of the West is one
that has been told before and, by now, is very well documented, I concentrate
on the East, using the West only for contrasts. Explaining the current cultural
divide, however, also necessitates a deeper enquiry into the origins of the
unification strategy and its impact on East and West Germans. The next two
portions of the chapter take on these tasks. The tentative conclusion is that
while the continued cultural divide in German will not lead to the creation of
two states, it will, as cultural divides have in other contexts, change the
shape of national politics for good. The politics of unification mean that
there is no going back to the old Federal Republic.
East German Workers and Sovietization: A Twofold Stunde Null
(Zero Hour)
Memoirs and archives have revealed how
difficult and uncertain was the creation of the West German social market
economy during the 1950s. 11
11 This section is adapted from my book, The Politics of
Economic Decline in East Germany, 1945-1989 (Chapel Hill: University of
North Carolina Press, 1997).
It was by no means certain that West German
public opinion would tolerate what appeared at the time to be a protracted
period of hardship after the 1948 currency reform that ultimately put the
country on the path to self-sustained economic growth. It is now easily
forgotten how poor most West Germans were in the late 1940s and early 1950s,
how little they traveled, and how little they consumed. Consider, for example,
a typical newspaper report in 1947 on the physical health of Berlin workers.
We came to the conclusion that the enterprise
youth is not gaining but losing weight and that the overwhelming portion of
young people are considerably underweight. One of the most shocking cases
recently is that of Liselotte W., sixteen-and-half years old, who works in
Tempelhof. She is 1.5 meters tall and weighs 26 kilos. Another youth from the
same district is 1.69 meters tall and weighs 40 kilos. A fifteen-year-old is
1.38 meters tall and weighs 32 kilos. 12
12 Tribüne (3
March 1947). In Dietrich Staritz, Die
Gründung der DDR (Munich: DTV, 1987), 206-7.
As we now know, West Germany during the 1950s
succeeded in transforming not only most people's fundamental political values,
but also altered conceptions of social justice that were prevalent in the first
post-war years to allow for a market economy to develop. In the years
immediately following unification in 1991, many western Germans looked back to
the 1940s and 1950s as a model for repetition in the East: like western
Germans, eastern Germans could and would eventually make their way to the
economic promised land. If the West Germans had built a market economy from
scratch in 1945, so too could the East Germans in 1991.
Forgotten in all of this is that the East
Germans had already started from scratch once before in this century, in 1945,
and were being asked to start from scratch once again. The East German Stunde
Null was if anything even more trying than the one experienced in the West.
The Soviet occupation authorities behaved atrociously by any standard one might
imagine. 13
13 Norman Naimark, The Russians in Germany
(Cambridge: Harvard University Press, 1995),
esp. ch. 2, on rape.
In the economy, industrial plant that was not
dismantled as reparations for shipment to the Soviet Union, where a large part
of it simply rotted on the rail spurs, was used as a source for reparations
from running production. German labor, a highly skilled commodity, was probably
regarded as one of the greatest trophies of the war.
But whatever the Soviets' hopes for the
traditional German virtues of hard work and discipline in their own zone of
occupation, the orientations and behavior of East Germans quickly changed under
the impact of the difficult post-war conditions and Soviet labor practices.
This is not to say that seventy years of German working-class culture could be
wiped out overnight by 'sovietization'. It could not. Indeed, significant
aspects of this culture were not at all incompatible with Soviet labor
practices. Well into 1947, for example, the extensive system of vocational
training developed during the Kaiserreich and extended into the Nazi
period continued to operate, utilizing many of the principles associated with
the 'company loyalty' school developed in the 1920s and 1930s by the
conservative industrial pedagogue Carl Arnhold.
Sovietization, however, did change things,
albeit not in a simplistic way. The history of work in postwar East Germany is
less a story of implementing a master plan for sovietization than it is of
crisis management. Of course, as in every country of eastern Europe, the Soviet
military authorities precluded the development in East Germany of independent
working-class organizations, especially after 1947. But suppressing
working-class organizations could not begin to solve all the problems of labor
motivation and productivity. Inducing East Germans to work set off a bitter
conflict over wages and piece rates. The resolution of this conflict within the
confines of the command economy created a new kind of German worker, and
working class, with different habits, expectations, and definitions of what is
just and proper, with a different moral economy than that of its predecessor or
what was beginning to take shape in the West.
As in the West, one finds in East Germany in
the late 1940s and early 1950s moving reports in the newspapers of the day of
severe malnourishment among young workers. The line between survival and
starvation was one easily crossed. The collapse of the financial system,
coupled with shortages in every sector of the economy under the weight of
reparations payments, rendered monetary wages a weak instrument for tying labor
to the workplace. With almost nothing to buy, it made little sense to work for
money. Where money did matter, if one had a lot of it, was on the black market.
Most East Germans spent several hours per day in the black market and several
days each month roaming the countryside in search of food. Initially, then, it
was not so much a matter of getting East Germans to work as they did before,
but rather of inducing them to show up for work at all. In the years following
the war, absenteeism remained high and labor discipline lax. Those who arrived
at the factory gates often did so on empty stomachs or severely malnourished.
Of necessity, the economic ethos in this
society was one that is strangely reminiscent of James Scott's peasant 'in
water up to his neck'. The prevailing ethos was egalitarian, defensive, even
cooperative, and inclined toward survival rather than the maximization of gain.
The institutional expression of this ethic was the spontaneously formed
enterprise council, which, with Soviet toleration, coordinated production and
distributed equally to their employees a portion of production to trade against
what little food and consumer goods that could be found. Enterprise councils
have a rich history in German industrial relations, extending back to the
Weimar period and in some cases before. In the post-war years, East German enterprise
councils took on two new roles. First, they helped identify and root out active
Nazis in industry, although in the case of management the Soviet record on
removing these officials was mixed. Second, with many managers having fled to
the West, councils performed the valuable service of getting production up and
running again. But as they were composed primarily of Social Democratic and
Communist workers, enterprise councils could hardly have been expected to
increase labor discipline and productivity with the traditional tools of
differential reward and labor segmentation.
It was not until the end of 1947 and the
beginning of 1948, with the onset of the cold war and Zhdanov's articulation of
the 'two camps' theory, that the Soviets made their move against the social
bases of the post-war moral economy. In October 1947, the occupation
authorities issued Order 234. In essence the order was a full blown transfer of
Soviet-style labor institutions to East Germany. Enterprise councils were
abolished or incorporated into centrally directed trade unions. The order also
called for a number of social measures to address the most urgent needs of East
Germans: industrial safety, strict limits on the use of child labor, longer
vacation time for workers involved in physically exhausting labor,
'polyclinics' and nursing stations in the workplace, improved living conditions
for workers, and increased wages for female workers. Most important,
enterprises were put on special lists, called '234 lists', and received extra deliveries
of food for preparation of hot meals served in the workers cafeteria and
consignments of industrial consumer goods to be distributed at the workplace.
Workers deemed to be especially productive or those involved in hard physical
labor received a type 'A' meal. Those evaluated as less productive or
performing less strenuous tasks received a less caloric and nutritious type 'B'
meal. This principle was to be used in the direct distribution of consumer
goods at the workplace as well.
The order also contained a number of measures
to improve labor productivity. First and foremost came the fight against
'slackers and corruption'. Absentee workers who did not produce a medical
excuse could now have their ration cards taken away. In extreme cases they could
be assigned to clear rubble from bomb sites, which, along with construction,
was among the most poorly paid work and was almost never included on the Order
234 lists of enterprises receiving extra food. Most important on the discipline
side, the order called for the reintroduction of piece work (Akkordarbeit)
and other forms of productivity-based wages throughout industry. To assist
management in raising productivity, Soviet-style 'socialist competitions' were
to be employed and those individual workers who contributed most to raising
productive norms were to be designated 'activists' and receive financial and
political rewards.
Thus began the process of 'sovietization' of
the East German labor force. Through a combination of incentives and sanctions,
the particular Soviet method of binding ordinary people to their place of work,
of refashioning the factory as a social and political, as opposed to purely a
economic institution had begun. Much of this, of course, was not new to German
workers or managers. Siemens and Zeiss had been pioneers in designing social
policies internal to the enterprise. Yet, as socially oriented as many German
workers and industrialists may have been in the pre-war era, they operated in a
political and economic environment far different from the one confronting
workers and managers in Soviet-occupied Germany. For one thing, the presence of
the Soviet military authorities precluded the formation of anything like the
independent employer and employee organizations that had hammered out personnel
and wage policy in the Weimar era, and now in West Germany. The absence of
legitimate interest representation meant that any wage settlement would be
viewed by everyone from the outset as suspect, as an expression of state policy
or, worse, 'Russian' policy, rather than as the result of wage negotiations
between nominally independent parties.
Beyond the legitimacy question which would, of
course, never go away, East German management confronted a far different set of
incentives than its prewar counterparts. Pre-war German industry, for all the
excesses of a highly organized internal market, still faced a modicum of
domestic competition and the discipline of a highly competitive external
market. These conditions no longer obtained for East German industry. Pervasive
shortages and Soviet reparations policy all but guaranteed that the entire
productive capacity of almost any given enterprise could be sold. Rather than
being determined by demand, the success of East German managers was a function
of their ability to secure the necessary inputs of production, of which labor
was among the most important. It was this factor that yielded to labor a
measure of power and ultimately determined the path of East German development.
Under these conditions, when the measures of
Order 234 were implemented, the results were surprising and frustrating to both
the Soviets and the East German communist authorities. Type A and B meals were
never really doled out as intended; instead, complained one report to the
center, workers continued to 'eat from the same pot'. Where management
stiffened its resolve to increase the differential of reward, workers often
spontaneously evened out differences by purchasing goods for each other.
According to communist party reports from enterprises, many foremen could not
be stopped from putting all the piece-work tickets of any one shift into a
common urn in order to ensure equality of reward. Piece-work equipment was
regularly sabotaged, and piece-work engineers and rate busters were often the
targets of physical threats and intimidation. In short, 'everyday resistance'
hindered the successful implementation of any plan by the authorities for a
crypto-marketization of industrial relations in what was still an egalitarian
moral economy.
The workers were assisted by managers who were
under pressure from both the Soviets and the evolving East German state
authorities to maximize production at any cost. Management's behavior was
crucial, for however intrepid the resistance of ordinary people, once the
Soviets wanted a policy there was no real way of stopping it. What management
could and did do, however, is to corrupt the entire Taylorist apparatus set up
by the Soviets, and continue to reward workers relatively equally. Most
managers even used the onset of piece work to raise all wages beyond what they
should have been. The East German communists and the Soviets wavered in their
response to this retreat by management. Occasionally they attempted to make a
run at the norm question, as during the rise and demise of the East German
Stakhanovite movement in the late 1940s and early 1950s, but usually this
amounted to little more than lip service. By turning what was supposed to be an
economic measure into a socio-political one, East German managers were behaving
quite rationally and shored up their position in a sellers market for labor.
This cat and mouse game between ordinary East
Germans and the state continued unabated until 1953, when the regime took a
quite serious run at the norm and wage question—interestingly, against the
advice of the Soviets who had 'advisors' located in all strategic offices of
the East German planning bureaucracy. Such runs were thought to be periodically
necessary because wage competition between enterprises for scarce labor tended
to increase solvent demand for consumer goods and the money supply beyond what
was considered healthy. As in earlier years, the plan to raise output norms
might once again have been undermined at the enterprise level had it not also
been combined with price increases in transportation costs, consumer goods, and
health care. The result was the first mass protest in the history of Soviet
occupied eastern Europe. Over 500,000 people protested in 272 cities throughout
the country on 17 June 1953. Wage demands quickly escalated to political
demands, all of which could only be put down with Soviet tanks.
The 17 June 1953 strikes, and the aftermath in
the weeks to come, clearly frightened the East German leadership as well as the
Soviets. Although communist party leader Walter Ulbricht managed to keep his
job—barely, we now know in retrospect—the June events had frightened him. In
order to buy labor quiescence, the communist party, with Soviet approval,
continued to corrupt the entire Taylorist apparatus set up for measuring old
norms and implementing new ones. Gradually, the outlines of an implicit
agreement (or 'social contract') between the workers' state and the working
class began to take shape: production could rise so long as norms remained low
and wages high, relative to productivity. Industrial unrest did reappear
sporadically throughout the 1950s, as the regime tried time and again to
manipulate wages and piece rates. But enterprise party organizations and
management had little interest in creating unnecessary industrial conflict and
both tended to cave in to whatever demands workers might make. Rather than
attempt to change this moral economy, communist authorities from very early on
capitulated to it, and this gave ordinary East Germans an extraordinary degree
of 'blackmailing power' against the regime.
Throughout the 1950s wages rose faster than
productivity in virtually every sector of industry, a problem that the
leadership would repeatedly attempt to rectify, albeit with little success. 14
14 Twelve years after the June events, for example, when
the management of the Oberspree Cable Works tried to adjust piece rates, a
report of the Committee for Labor and Wages lamented that 'the workers declared
that if new piece rates were introduced, they would take up work in another
enterprise. Five workers took the discussion about the use of new rates, which
would not have led to any wage reductions, as cause to quit'.
Never again would any East German leader
attempt to implement development policies by asking for sacrifice from the
population. East German leaders remained frightened of East German workers
throughout the 1950s—which is why the Politburo built itself a specially
guarded, and stocked, estate at Wandlitz—and even after the Wall was built in
1961. As an older generation of East Germans resumed its place and a new
generation entered the workforce after 1945, both developed habits, orientations,
and interests that were different from those of the working class of prewar
Germany and what was starting to take shape in the West. The work ethic and
culture of the East German working class had been completely refashioned. In
the absence of a capitalist labor market, the egalitarian impulse developed in
the early post-war years could not be broken as it was in the West. The long
run impact of this moral economy was to preclude any meaningful economic
reform. As it happens, the only period of economic reform in East Germany was
the 1960s, and this was headed off as soon as it became apparent that its
continuation would require raising prices for consumer goods and transferring
workers away from inefficient enterprises. The latter issue caused a mini riot
in the coal mines of Zwickau. By 1974, the State Planning Commission noted that
officially set wages had lost whatever stimulative function they might have
had. In many industries, wages had not changed in fifteen years; in metallurgy
and machine building, twenty years. Piece-workers increased their wages through
easily overfulfilling weak piece rates. With the specter of the workers
uprising in June 1953 still haunting the communist party twenty years after the
event, party and management refused to touch the issue. In consequence, piece
rates became hopelessly outdated. In VEB Mikromat, for example, an electronics
enterprise in Dresden, piece rates had not changed since 1956, and by the
1970s, were usually met at a rate of 160%.
Ignoring the center, management informally set
wages as it saw fit. In 1974, a mere one-quarter of wages fell within the
centrally determined guidelines, and in industry and construction only
one-tenth. Notwithstanding official rules requiring significant wage
differentials within an eight-tiered scheme, in practice, wage differentials
remained small. The average aggregate figures can be seen in Table 9.1.
As illustrative as these undifferentiated figures are, they nevertheless
conceal some especially egregious cases of wage leveling in certain branches of
the economy. In a number of enterprises, combines, and even entire industries,
it was quite common for the average worker to earn more than a foreman. In the
machine tools and heavy machine industries, for example, an average worker took
home 63 and 50 marks respectively more per month than his immediate superior.
Table 9.1. Eastern Germany: Monthly Average
Gross and Net Wages in Industry: GDR Marks
|
Source: Gunther Kusch et al.,
'Schlussbilanz—DDR', in Fazit einer verfehlten Wirt schafts-und
Sozialpolitik (Berlin: Duncker & Humblot, 1991), 109.
Survey research done since 1989 has generally
supported the argument that East Germans valued and continue to value equality.
The failure of the East German state to devise and inculcate at a social level
a vision of meritocratic inequality that could have withstood the creation of
an advantaged political/economic class, ultimately set it apart from the West.
In explaining the rapid demise of East Germany, a number of sociologists have
argued that the decisive factor was the disparity between society of official
meritocratic equality and a society that in reality consisted of fairly
significant and growing inequalities. 15
15 Gordon Marshall, 'Was Communism Good for Social Justice:
A Comparative Analysis of the Two Germanies', British Journal of Sociology,
47: 3 (1996),
397-420; J. Hunick and H. Solga, 'Occupational Opportunities in the GDR: A
Privilege of the Older Generations', Zeitschrift für Soziologie,
23: 2 (1994),
237-53; H. Mayer and H. Solga, 'Mobilität und Legitimität. Zum Vergleich der
Chancenstrukturen in der altern DDR und der Alten BRD order: Haben
Mobilitatschancen zu Stabilität und Zusammenbruch der DDR beigetragen', Köner
Zeitschrift für Soziologie und Sozialpsychologie, 46: 2 (1994), 193-208.
I find the explanation fairly convincing. East
Germans knew exactly whom to blame. What angered them and drove them into the
streets in large numbers was the public revelations after November 1989 that
their leaders lived in a style, however modest by western European upper-class
standards, that was simply unobtainable for the vast majority of most East
Germans. Unification provided the tantalizing possibility of having it all,
lifestyles of the elites and a standard of living that would not drop. What
most East Germans did not appreciate at the time, especially those who went out
in the streets calling for unification late in December, was that an economic
union with the West would bring not only new wealth but also an instant
commodification of social and economic relations that had been decommodified
for more than forty years.
East Germany Between Development and Dependence
One thing that stands out about the economic
commentary on German unification is how polarized the commentators are. Experts
tend either to predict an inexorable march toward relative economic equality
between East and West, based on the growth rates of the decade, or an
unstoppable decline into a new German Mezzogiorno. 16
16 In a recent issue of Das Parliament, the time
frame for economic equality between East and West was put at 20-25 years and
that the current levels of transfers will last that long as well! (17-24
January 1997,
1).
This is not the place to elucidate the
assumptions and logic of these competing analyses. What is worth noting,
however, are the most general trends.
The economic policies of the other
ex-communist countries have shifted back and forth between neoliberal shock
therapy and state-led industrial policy, as politicians and populations have
learned to discard ideological formulas in favor of pragmatic solutions to
problems of early capitalism. In eastern Germany, on the other hand, western
German largesse has enabled the five new states to sustain shock therapy over
an extended period despite the significant social costs. At the same time,
clearly eastern Germany has received more 'external' assistance than any other
ex-communist country. From the time the GDR ceased to exist and joined the
Federal Republic, on 3 October 1990, until the Autumn of 1995 nearly a trillion
Deutschmarks of public money flowed from the west to the east, and the amount
of support for the East continues to be astounding.
Western assistance has softened the shock
considerably. Even so, the transition has not been smooth, nor has it gone
according to plan. Predictions made at the time of unification, that the time
needed for the East to catch up with the West was about five years, have been
continually pushed into the future. Part of the explanation for the faulty
forecasting was an underestimation of the economic disparities between East and
West; few western Germans had a good grasp of the real economic situation in
the East. But part of the reason was also a rather naive belief in the power of
the 'market' in the West, a belief buttressed by eight years of solid economic
growth in West Germany before unification. Such an illusion was also
facilitated by a mythologized history of the 1950s during which Germans
bootstrapped their way to prosperity. Ignored in all of this was the true
nature of the German 'economic miracle'. It was in fact driven not only by the
market but also by a complex set of non-market institutions that evolved
slowly, mostly by trial and error, over a period of ten years during which the
standard of living remained low and currency restrictions remained in force. By
1995, however, most German politicians had jettisoned facile comparisons with
the post-war era and come to the realization that unification will be a very
long-term process.
The German experience in the East suggests
that, even under the most favorable conditions, when support exceeds anything
given West Europe under the Marshall Plan, constructing capitalist institutions
of self-sustained growth from scratch is an experiment in many ways just as
ambitious as the communist one that just failed. This lesson may be obvious but
it is one that reinforces what has long been supported by students of late
economic modernization. Success in economic development is not only, or even
primarily, dependent on the amount of capital available to an economy but,
rather, on the economic institutions in place to utilize the capital at its
disposal. 17
17 For the classic statement, see Chalmers Johnson, MITI
and the Japanese Economic Miracle (Stanford, CA: Stanford University Press,
1986).
Capital and other resources may be transferred
relatively quickly, especially in the 1990s, but the institutions and social
structures designed to absorb and use them do not lend themselves to rapid
transfer.
In 1990 most East Germans wanted unification
for a very simple reason. Whether measured in terms of living standards or
political and social freedoms, socialism was a failed experiment. Amalgamation
with the most successful capitalist country in the world, West Germany, simply
made sense as the best and most painless route to prosperity and freedom. With
the choice thus put, a clear majority of East Germans voted for parties
supporting rapid unification in the first free national election held in the
GDR's history, on 18 March 1990. After that date, things moved quickly. By July
1990, an economic, monetary, and social union between the two countries was in
place, and by year's end the GDR ceased to exist, its territory incorporated
into western Germany as five new states within the German federal system.
A decade later, the results are impressive,
especially if one ponders the counterfactual, 'what would eastern Germany have
looked like without unification'. Between 1992 and 1995, the economy in the new
German states grew between 7% and 10% per year, making Germany's east the
fastest growing region in Europe at the time. Since then, however, growth has
slowed considerably. East German productivity, which before unification had
stood at about a third of West German levels, now stands at between a half and
two-thirds, depending on the sector under consideration. Rudimentary economic
infrastructure, such as roads, rail links, and telephone communications in the
new states has been vastly improved by a steady stream of government investment. 18
18 Whereas in 1988 only 17% of East German households had
telephones, corresponding to the level of Crete, between 1990 and 1993, 2.3
million new lines had been installed, with the expectation that the West German
level would be attained by 1997. Manfred Wegner, 'Produktionsstandort Ostdeutschland', Aus
Politik und Zeitgeschichte, B, 17/94 (29 April 1994), 20.
But such overt signs of progress do not tell
the whole story. For one thing, they mask very low starting points. Quite apart
from the dismal state of the East German economy before unification, the
immediate impact of unification between 1990 and 1992 was to unleash a
depression in the east, the magnitude of which surpassed all expectations.
Unable to compete with the West after the currency union—overnight this measure
created a fourfold increase in the costs for east German goods and services—and
subject to rapid privatization under the supervision of the German
privatization agency, the Treuhand, East Germany industry collapsed. 19
19 In 1991, an American economist, George Akerlof, proposed
that the shock be further cushioned by temporarily continuing support for
uncompetitive enterprises which would shield them from 'foreign' competitors
and predatory investors. His advice was never given any serious thought in
policy circles. George Akerloff, Andrew Rose, and Janet Yellen, 'East Germany
in from the Cold: The Economic Aftermath of Currency Union', Brookings
Papers on Economic Activity, 1 (1991).
Table 9.2
tells the story from industry and manufacturing, in which four out of five jobs
have been lost since 1990, as well as other sectors. Unification has meant an
unprecedented kind of forced occupational mobility. Very few East Germans today
work at the same jobs as a decade ago. While such mobility might be common in
the United States, it is neither common nor welcome in Germany. 20
20 Helga Welsh, ' Four Years and Several Elections Later:
The Eastern Political Landscape after Unification', in David P. Conradt et
al., Germany's New Politics (Tempe: German Studies Review, 1995).
Table 9.2. Eastern Germany: Unemployment
(1991-2000)
|
Source (1991-5 data) Eckart, 'Der
wirtschaftliche Umbau in den neuen Bundeslandern', Deutschland Archiv,
26: 6 (June 1995), 585.
Table 9.2
shows aggregate unemployment rates since 1991. In assessing this table it must
be noted that the figures do not include those on government-funded retraining
programs, make-work programs, short-time work, or early retirement. If they
did, the numbers would be closer to 30%, and in some areas higher.
Notwithstanding this caveat, two items stand out. First, the real losers of
unification are women. In fact, two-thirds of all unemployed East Germans are
women. 21
21 Elke Horst and Jürgen
Schupp, 'Aspekte der Arbeitsmarktentwicklung in Ostdeutschland', Deutschland
Archiv, 28: 7 (July 1995), 737-42.
Despite some success in bringing down male
unemployment in 1994-5—though not from 1996 to 2000—little headway has been
made in reducing female unemployment from an uncomfortably high level. As a
result of these new pressures, the East experienced an unprecedented and much
publicized decline in the birth and marriage rates immediately after
unification, as young women delayed starting families until they found their
footing in the new social order. 22
22 Nicholas Eberstadt, 'Demographic Shocks in Eastern
Germany 1989-1993', Europe-Asia Studies, 46: 3 (1994).
However, there is some evidence that the
situation is now starting to 'normalize'. Second, aggregate unemployment rates
started to bottom out only in the first half of 1994, well after the economy
started to turn around. On the fifth anniversary of unification, official
unemployment in the east hovered at approximately 14% with significant regional
variation. The latest figures as of time of writing (September 2000) put
unemployment in the East at 16.8%.
This latter observation—rapid economic growth
in a stagnating (or even collapsing) labor market—suggests that the
stabilization and turnaround of the East German economy has had little to do
with sustained, 'domestically' driven growth. Indeed, if one looks a little
deeper, it is easy to see just how dependent on the West the East German
economy was in the decade after unification. In 1995, the estimated DM158bn
marks in transfers to East Germany ended up receiving from the federal
government, other Länder (states), the European Union, and social
security amounted to more than 25% of the resources available in East Germany
for consumption and investment. Whereas East German demand for goods reached
about DM610bn in 1995, only DM380bn goods were produced there. Trade flows tell
a similar tale. In 1994, East Germany bought DM255bn from the West, while
selling a mere DM45bn in return. There is not one major East German product
that has a market throughout the Federal Republic; those that have managed to
survive do so at a regional level. Despite high level commitments of major
German producers to 'buy East', only about 10% of East German production is
sold in the West and even less makes its way on to world markets. 23
23 Hans-Peter Brunner, 'German Blitz-Privatization', Transition:
The Newsletter About Reforming Economies, 6: 4 (April 1995),
13.
Thus the balance of trade remains heavily
tilted in the West's favor.
Much of the incoming capital has been spent on
consumption and, as Table 9.3
suggests, much has flowed into construction. Besides the building of new homes
and apartments, a wave of commercial and retail construction drove most of the
initial East German recovery. According to one expert, however, the region
simply does not require much of what was being built. For example, between 1990
and 1995, DM50bn were invested in metropolitan Leipzig, mostly in large
shopping centers and the like. Meanwhile 17% of commercial real estate remains
empty. 24
24 Herbert Henzler, 'Der
Aufschwung Ost had noch viele matte Stellen', Suddeutsche Zeitung (10
Sept. 1995).
If the five new states are to be anything more
than sales markets for West German firms, subsidized by large governmental
transfers of wealth to the East German population, some sort of industrial
policy must be put in place.
Table 9.3. Eastern Germany: Sectoral
Employment: in 1,000's (1991-4)
|
Source: Karl Eckart, 'Der
wirtschafliche Umbau in den neuen Bundeslandern', Deutschland Archiv,
28: 6 (June 1995), 585.
The central problem in the new German states
is that the de-industrialization that occurred in the first years after
unification has not been overcome. Measured against western standards, East
Germany under communist rule was over-industrialized; now however it is clearly
under-industrialized. Approximately one million people today work in industry
in the East; by western standards this number should be 3.4 million. The rapid
growth in the service sector after unification corrected what had been a
typical weakness of a command economy. But further growth in this sector will
depend on demand for services from industrial enterprises in the regions. It
will also depend on the willingness of western firms investing in the east to
use locally based service providers rather than relying solely on their tried
and tested teams of external consultants, programmers, and market research from
the West. Illustrating this problem, the head of a market research firm in
Rostock complained to me in 1999 that 'since almost all large investment comes
from the west, breaking into market research depends on developing connections
with western firms who, in all honesty, have no need for new partners in the
east. The fact of the matter is that West Germany and Europe produce more than
enough to cover demand in east Germany and for that reason our situation is
completely unlike that in the west after the second world war'.
Given the absence of large capital holders in
the five new states, industrial investment will necessarily come from western
Germany and other developed capitalist countries. Much of eastern Germany's
future will thus depend on how attractive it is as an investment site. In
comparison with other post-communist countries, eastern Germany enjoys a highly
stable political and institutional environment for investors, which, in theory,
should make it appealing for investors. In fact, the record since unification
is mixed. While some areas in eastern Germany, such as Dresden and Leipzig have
been successful, others have not. One problem continues to be labor costs.
Fearing downward pressure on wages from cheaper eastern workers, German trade
unions quickly dominated the eastern landscape and have consistently put upward
pressure on eastern wage settlements. But with a persistent disparity in labor
productivity, raising eastern wages rapidly up to the level of the West
rendered unit labor costs for potential large investors even more threatening
than they already are in western Germany. Describing the impact of high East
German wages in the context of a globalized labor market in 1994, German
economist Fred Klinger characterized the situation dramatically, 'Worldwide
there is, by far, no more comparable production location that is simultaneously
so expensive, so productively weak, and infrastructurally so poorly equipped'. 25
25 Fred Klinger, 'Aufbau und
Erneuerung: Über die institutionellen Bedingungen der Standortentwicklung
in Deutschland', Aus Politik und Zeitgeschichte, B, 17/94 (29 April 1994), 8.
Thus, despite a good start after unification,
productive investment has begun to lose pace. High unit labor costs deter not
only large corporate investors, they also make it difficult for small- and
medium-sized businesses to stay afloat. The new medium-sized firms that
sprouted after unification are currently undergoing a crisis of solvency; the
majority are going bankrupt, a phenomenon not unusual in itself but alarming
when one considers just how small the East German Mittelstand is
compared to the West. As the subsidies and tax breaks from the federal
government that are intended to promote enterprise in the east run out over the
next few years, one can expect the bankruptcy rate to increase substantially.
With the Treuhand having finished its work of
privatizing enterprises at the end of 1994, many Germans developed the sneaking
suspicion that despite impressive gains in construction, infrastructure, and
consumption, reestablishing a base of productive industry throughout the new
states will not come about without some sort of regional economic policy. This
is slowly becoming the consensus at both the federal and Land (state)
level. Yet even with such a consensus, it is not clear whether Germany has
either the political will or economic capacity to continue to pour in resources
to the East at the rate of the past decade. Unification has not only created
new problems, it has also brought old ones to a head more quickly than
expected. In particular, the German welfare state, a staple of national
integration since Bismarck's time, will most likely continue to be downsized in
the coming years, as the Federal government searches for ways to defray the
costs of high unemployment, industrial restructuring, an aging population, and
economic uncertainty in the new states. The flexibility and adaptability of
German-style organized capitalism is currently being pushed to the limit by the
costs of unification. 26
26 Calculated at between DM120m and DM140bn per year, the
total support of the West for the East is between 4% and 5% of the West's GDP.
For this reason, most economists now predict
that levels of development in the new German states will be far more differentiated
than in pre-unification West Germany. 27
27 From a socio-demographic perspective, this also marks a
return to the pre-war pattern of emigration. During that era German governments
had customarily allowed backward areas to stagnate and encouraged the poor in
those areas to emigrate to the West. Today, this has again more or less become
the pattern in Germany.
One can already see the contours of this
differentiation. Whereas unemployment levels in Dresden are already lower than
in such crisis-ridden western cities as Bremen and Wilhelmshaven, such
traditionally backward areas of East Germany as Mecklenburg-Western Pomerania
or Brandenburg, where the old communist government made some effort to even out
the differences, will probably resume their status as sparsely populated and
poor areas. More than a generation ago, Albert Hirschman argued that small
differences in levels of development tend to reinforce the backwardness of the
backward region and the advantage of the advanced region because small
differences quickly accumulate into large advantages. 28
28 Albert O. Hirschman, The Strategy of Economic
Development (New Haven: Yale University Press, 1958),
185-211.
Although post-war Germany policy managed to
even out regional economic differences through administratively intricate
financial transfers, this policy was designed to work among regions with
economies at roughly the same level of development. Extending the policy
eastward after 1990, however, has put a severe strain on the German budget
which, if continued, will necessitate either higher taxes or significantly
lower social benefits for Germans today and in the future. Budgetary
considerations will therefore ultimately reinforce the advantages currently
enjoyed by Germany's richer regions.
Persistence of Regional Identities: Workers and Politics in the Long
Run
Even though East Germans are eating better
food, receiving better health care, buying more consumer durables, living in
better apartments, travelling abroad more frequently and to pricier
destinations, and breathing better air at home, many still complain that the
skills and communal habits acquired under socialism have been devalued by the
transition to capitalism and a Western culture that belittles the lives lived
in the GDR's forty-year history. This is true even for the vast majority of
East Germans who continue to say that unification was both a good idea and a
necessary step. West Germans, for their part still supportive of a unified
Germany if somewhat irritated at the cost, recognize too that neither political
nor economic unification are substitutes for nation-building. As one West
German admitted in a conversation in Fall 1998, 'my positive feelings about
unification do not contradict the fact that from the standpoint of basic values
I still probably have more in common with Danes, Frenchmen, and the Dutch than
with most east Germans'. Surveys continue to show that most western Germans rarely
visit eastern Germany.
Undoubtedly, the strains of unification have
exacerbated the cultural divide that was already in place when unification
occurred. Most Germans have the uneasy feeling that unification has somehow
changed everything; there is no going back to the old Bundesrepublik.
Often overlooked in the literature is how unification has changed not only East
Germany but also the West. The changes are subtle but important, and they range
from the mundane to the strategic. The future of such bedrocks of West German
political stability as the welfare state and Germany's strict subordination to
the US lead in foreign policy are now quite open to debate.
Notwithstanding these new challenges to
western Germans' source of identity, they pale in comparison to the changes
experienced in the East. Public opinion in the East is volatile and difficult
to gauge from the polls. As already noted, the vast majority of East Germans
continue to judge unification with the West to have been a good idea. Few would
want to go back to 'really-existing socialism'. There is nevertheless a
widespread feeling among East Germans, much more widespread than expressed in
the public opinion polls, that something
is wrong with the new order that has descended upon them. Such amorphous
sentiments cannot be explained by relative deprivation. Rather, they are
related to the sudden and almost complete commodification of the economy. After
all, measured purely in terms of living standards East Germans are the true
winners of communism's collapse. Even though most East Germans earn more money
and consume better products than before unification, the idea that such
fundamental areas of human life such as housing, schooling, day care, as well
as food and other staples, should be subject to cost-benefit calculation
remains morally malodorous. The 'moral economy' of communist society appears to
have persisted well into the transition period.
West Germans have very little understanding or
sympathy for this moral economy; understandably so, since addressing its core
elements would mean dismantling an order that has given them an enviable
standard of living. Such fundamental differences in opinion between East and
West Germans complicate the task of nation-building. Differences between East
and West will persist for some time. Not surprisingly, political elites have
been quick to adapt. While the major political parties are careful not to play
the East off against the West, politicians of all persuasions have learned to
pitch their messages differently depending on the regional audience. Successful
politicians and administrators usually have dual cultural competencies that
allow them to swim in both eastern and western waters. When they do not, they
do not survive long.
The federal elections of 1994 and 1998, and
the regional elections in 1999, provided a litmus test of sorts for unified
Germany. 29
29 Matthias Jung and Dieter
Roth, ' Kohls knappster Sieg'; Jürgen Falter and Markus Klein, 'Die
Wähler der PDS bei der Bundestagswahl 1994'; and Urstila Feist,
'Nichtwähler 1994': all in Aus Politik und Zeitgeschichte (B,
51-52/94, 23 Dec. 1994).
In English, see the excellent series of articles in Conradt et al., Germany's
New Politics. For the 1998 results, see Russell J. Dalton, 'Germany's Vote
for the "New Middle" ', Current History, 98: 626 (1999),
176-80. The following discussion draws on these various studies.
West Germans, never asked at the ballot box
whether they wanted unification, could use the opportunity to vent their
frustrations with the costs of unification, which at the very least amounts to
a yearly personal and corporate income tax surcharge. East Germans, after years
of vicariously experiencing an idealized capitalism through television, could
now vote on what they thought of 'really-existing capitalism'.
In 1994, although the Social Democrats (Sozialdemokratische
Partei Deutschlands; SPD), managed to capitalize on voter anger in several
regional and local contests, improving economic news at the beginning of the
year and a general sentiment that there was no alternative to the Christian
Democrats at the federal level allowed for the re-election of Helmut Kohl for
his last term in office. By 1998, voters had tired of the CDU which had been in
power since 1982. At the same time, Gerhard Schröder, the new leader of
the Social Democrats, had managed to refashion the message of his party in the
manner of Tony Blair and Bill Clinton so that it would appeal to voters at the
center of the political spectrum. The makeover worked and in the 1998 elections
the SPD won a plurality and formed a coalition government with the Greens. One
year later, however, in the wake of a growing impression that the SPD/Green
government was no more competent than its CDU predecessor, the SPD suffered a
series of stunning defeats in a number of state (Land) level elections,
which, in the German political system, is reflected at the national level in
the makeup of the upper house of parliament, the Bundesrat. In 2000,
Schröder managed to stabilize his authority not because of any changes in
policy but rather thanks to the corruption scandal that enveloped the opposition
CDU.
How is the cultural divide between East and
West Germans reflected in differences in voting behavior? The big difference
between West and East German voting behavior has been in the performance of the
smaller parties which under Germany's proportional representation system have a
relatively good chance of capturing seats. In 1998, the Free Democratic Party
(FDP), which had been a coalition partner in every CDU government since 1982
and currently advertises itself as a party of free enterprise, sustained its
support in the West at just over 7%, at the same time it all but collapsed in
the East, garnering a mere 3.3% of the eastern vote. In the 1999 state
elections in the East, it performed worse than several right-wing radical
parties, failing to receive the 5% minimum to be allotted seats in the state
parliaments. Given the weak development of East German business, few East
Germans had much interest in the Free Democrats. Similarly, the Greens, who had
done poorly in the 1990 elections, fared much better in the West in 1994,
easily clearing the 5% hurdle in nearly every state level election as well as
in the federal campaign. But in the East they lost much of the support they
enjoyed after 1990, ending up with a mere 4.3% of the eastern German vote. In
the 1998 federal elections the Greens fared slightly worse than in the 1994
campaign and were unable to improve their position in the East. Whereas the FDP
had trouble finding a chic upper middle-class constituency in the East, the
Greens had trouble finding a solid 'post-materialist' constituency among East
German voters.
The largest divergence between East and West
Germany, however, has been the performance of the Party of Democratic Socialism
(PDS), the successor to the old communist party. While receiving a paltry 0.9%
of the western vote in 1994, the PDS consistently booked nearly 20% of the East
German vote at both the federal and state levels, and 34.7% in East Berlin. In
the 1998 federal elections, PDS sustained and even increased its share of votes
among East Germans. Furthermore, in the 1999 state elections in four East
German states, the PDS often outperformed the Social Democrats and in East
Berlin it received an astounding 40.6%. Such consistently high levels of
support for an 'anti-system' party that is still uncomfortable with its own
Leninist past is a source of quiet concern to many Germans in the West. The PDS
campaigns have been cleverly formulated and implemented. The PDS portrays
itself as a 'socialist alternative' to all the other parties, as a party that
represents the ideals and interests of its old communist clientele, while
simultaneously fighting for the interests of those who feel somehow
disenfranchised by unification. The PDS has also gained in strength by
mobilizing voters in the East who had simply stopped voting altogether. In
addition to an unanticipated strong vote among young people, the fact that 27%
of white-collar workers and 35% of civil servants in eastern Germany voted PDS
in 1994 suggests that party loyalty runs deeper than expected, even among East
Germans who successfully negotiated the transition. 30
30 Gerald R. Kleinfeld, 'The Return of the PDS', in Germany's
New Politics, 209.
Whether the PDS will be able to sustain its
strength in the East, expand its voter base into the West, or simply fade away
as the material and spiritual difficulties of unification become less salient
remains an open question. Some evidence suggests that it will be a part of the
eastern German political landscape for some time to come. 31
31 The following evidence is drawn from Falter and Klein,
'Die Wähler der PDS', 24.
First, the PDS has had an usually persistent
clientele. Four-fifths of its 1990 voters remained loyal to the party in the
1994 election and these numbers were sustained into the 1998 and 1999
elections. Such a level of party loyalty puts it above any other party in the
East. Almost 70% of its voters are long-time members of the party, which
suggests that in an era of declining party identification, the PDS constitutes
an important exception. Second, the social characteristics of PDS voters
indicate that changes in the economic or social conditions in eastern Germany
will not affect the party loyalty of PDS voters. They tend to have above
average education levels, to be politically alienated and distrustful of the
Federal Republic's political institutions, and overwhelmingly 'socialist' in
orientation, believing that the GDR had more good than bad points. It is
possible that such a nostalgic outlook will pass as conditions in the East
improve, but this will more likely result from a new generation coming to
accept the new Germany as inevitable and natural. Whether the PDS will be able
to adapt to a changing generation of voters remains an open question.
Apart from voting behavior there appears to be
a long-term sense of disappointment in the East with the institutions of
representative liberal democracy. Commentators on the left have tended to
attribute this malaise to a nascent discursive political culture of 1989 that
was destroyed by the electoral professionals. There is probably some validity
to this argument but it may also be worth looking deeper into the East German
past in order to understand why so many people are dissatisfied with liberal
institutions. One German psychologist, for example, has argued that although
few East Germans would want to return to 'really-existing socialism', the de
facto blackmailing power of the population in the GDR gave them a sort of
immediate access to power—'if you don't come and fix my heating, I won't vote
in your rigged elections'—that is missing in a representative democracy, where
power is necessarily indirect and distant. 32
32 Lydia Lange, 'Warum so
viele Ostdeutsche von der repräsentativen Demokratie enttäuscht
sind',' Die Zeit (10 Jan. 1997),
from www.zeit.de
In the East German workplace and
neighborhoods, with their continuous cycles of party, trade union, and
educational meetings, politics was experienced not only as something
oppressive, and even laughable, but also as something that was, as the Germans
say, 'skin near'. Politics in the new order is experienced as something distant
and irrelevant and the PDS has profited from this at the local level by
cultivating a strategy of grassroots politics—the only party to have succeeded
in doing this in the East.
Conclusion: Globalization and Moral Economy
East Germany's globalization crisis, an
extreme variation on a common post-socialist theme, has reinforced old
identities and even created new cultural differences that might have otherwise
been ignored. I have argued here that what is driving the new particularisms in
Germany today is the impact of global markets on conceptions of work and the
market that reflect the legacy of forty years of Leninist economic
institutions. Although East Germans have improved their material quality of
life, they continue to feel a lack of recognition for the distinctive moral
economy that they brought into unified Germany. Political theorists, such as
Charles Taylor and Axel Honneth, have recently argued that the 'need for
recognition' runs as deep as that other bedrock of interest based political
analysis—the need for self-preservation. 33
33 Charles Taylor, Multiculturalism and the Politics of
Recognition (Princeton: Princeton University Press, 1992);
Axel Honneth, The Struggle for Recognition (Cambridge: Cambridge
University Press, 1995).
If their analysis is correct, then the mode of
unification, which cast aside forty years of East German history while
preserving the economic equalities that were the basis of that history,
explains the nature of the continuing cultural divide in Germany today. Such
divisions and boundaries can be easily 'ethnicized' and taken advantage of by
political entrepreneurs. Germans will surely not be politically divided again
in the manner of pre-1989, if only because the elites on both sides of the old
borders are, for the most part, committed to making unification work. In a
'Europe of regions', however, the kinds of regional tensions in culture,
interests, and identity may gradually erode what were considered after 1991 to
be sovereign inevitabilities.
The strategy of unification which accommodated
the old communist moral economy appears to have helped perpetuate the divide
between East and West in unexpected ways. It is not clear that an alternative
strategy of unification, that of leaving the East to fend for itself in a
market with high tariffs, would have worked much better. While it might have
altered fundamental attitudes towards economic inequality, it would also
probably have produced more unrest. We do know, however, that the new divide,
whatever its ultimate causes, is slowly and permanently changing Germany.
First, regional variations in development will probably grow in the years to
come as the budget is stretched to its limits by the costs of unification which
remain at approximately 4-5% of West German GDP. Second, the need to compete
politically in the East will probably alter the structure and governance of the
major parties. If the PDS survives or thrives at the local level, decisions
will eventually have to be made on acceptable forms of cooperation because, a
decade after unification, it remains the most firmly rooted party in the East.
Third, the German model of industrial relations is quickly being undermined by
the growing fiscal crisis of the state—brought on in part by the costs of
reunification—and the continuing stagnation of the labor market in the East.
These considerations, when taken together, suggest that the costs of Germany's
globalization crisis of unification have been, and will continue to be, much
higher, than anyone would have dared imagine a decade ago.