Economic Security and the GDR
"A second Bill of Rights under which a new basis of security and prosperity can be established for all — regardless of station, race, or creed."-FDR
Economic Growth, stable inflation, a satisfactory balance of payments, low unemployment, and improved competitiveness. These are the 5 key macroeconomic objectives that in the UK we learn about for A levels and GCSE’s. Their benefits are touted and the government aims to achieve them. They are a key talking point in elections when measuring a government’s success.
In recent years they have been criticized as short-sighted and not being capable of displaying the nuances of what leads to a happier life. Growth has been persistent but we are facing a mental health crisis. Granted, during recessions and economic downturns suicides rise and people generally turn to despair, but the lack of detail into personal lives that these stats and measurements give is sorely missing. Many have rushed to find new methods of measuring an economy's success.
Overlooked is security. It’s the bedrock of a happy life and economy and we can learn from history its value and popularity.
The GDR is a good example of how economic security can make people happier. The GDR had many, many, many, flaws. It was deeply politically repressive, it had no free speech, no free press, and union rights were weak. The centrally planned economy had many inefficiencies and due to the lack of trade, and productive capacity, and geographical limitations, cars, bananas, and other consumer goods were either in short supply, poor quality, or both. But despite all of these flaws, many of the older generations look back on it fondly with great nostalgia and in one poll over half of East Germans who lived in the GDR defend it. Here is a detailed article on the matter.
Part of it is due to nostalgia for the older days, which is common for almost all nations, but I believe that part of it is the security it gave people in many aspects of social services and the welfare state, especially after much of this was eroded after reunification.
In the GDR many aspects of security were achieved. There was very high access to low-cost housing; 60% of newly renovated housing was given to working-class families in 1971. Accurate data is difficult to find due to lack of archival records but it is almost completely agreed upon that homelessness was very low, both Western and Eastern sources confirm this. They would be provided by housing, although the quality of housing was poor and a large amount of it had to be replaced after reunification due to its low quality, access was high. Housing was even allotted by employees, often near factories, work became stable and a sense of community around their work was created. People were rarely fired from their job due to a lack of profit generation, more stability. After reunification, many became homeless as housing fell and people had to move to areas with less housing for jobs.
Can’t get much good footage of the remnants of this so you will have to put up with this video from NFKZ which shows one in Russia.
Childcare was heavily subsidized and women having children as well as working was encouraged. If a child was born out of wedlock, it could be possible to give them a basic upbringing through state support. Relationships and personal bonding could be better maintained,
“After my divorce, I had my job and my salary, and I didn’t need a man to support me. I could do as I pleased.” - Ms. Durcheva
Women didn’t need to stay with men for financial reasons and the financial pressures that led to divorce were arguably weakened. These ideas are detailed in the Book, “Why women had better sex under socialism”, which although I haven’t read, has been recommended to me and is meant to be very good on the matter.
Education both, lower and higher was free and grants were given to afford basic necessities and living expenses when studying at University. Struggling to afford uni rent was not an issue for the vast majority of people.
Health care was seen as a right of all citizens. No matter your wealth, age, gender or health you were guaranteed access to healthcare. Although the system was inefficient and waiting times were long and some people slipped through the cracks, people felt secure in knowing that if they fell ill the collective would take care of them.
Socially, the GDR was also very secure. Due to people not having to move nearly as much for work or to access affordable housing, and social activities, sports and childcare were heavily subsidized people were able to form connections with others, friendship groups remained intact during this period.
Post reunification
I would see reunification as a net positive, but for many East Germans, it wasn’t. Heavily subsidized industries that couldn’t generate profit or were inefficient were cut out by the free market and when they went private, simply could not compete. Unemployment rose massively in certain towns and with these areas of work gone, people had to move. Moving from where people worked and lived due to the country and project they had known for decades collapsing would hurt anyone. Approximately 70% of East German women lost their job after 1990 and the East German unemployment rate was 20% and in certain rural towns, the entirely subsidized factor or job provider shut down, causing massive poverty and migration.
The economic security was gone. Housing, childcare, jobs, friendship groups, social life and many aspects of the culture were ripped away. The West Germans were wealthier, but to East Germany, they couldn’t just achieve that wealth overnight. Suicide rates rose for those who felt left behind, abandoned by a system that valued hyper individual success, productivity and profit above all. When your life gets stripped away like that, when decades have to pass before your country has to see the benefits before your job loss seems worthwhile, is it really any surprise you miss the “Good Old Days” of the GDR?
This isn’t to say that the GDR was better or even good. But what I am saying is that security and stability are highly valued economic values for everyday people. It’s not just a former Marxist Leninist regime phenomenon, we see this in the rust belt with jobs moving overseas and elsewhere. People want an anchor for their lives that ensures they don’t drift away into poverty and economic anxiety in the waves of economic hyper-competitiveness and neoliberalism.
Closing thoughts on the GDR and Security
These aspects of the GDR aren't to say that the GDR was perfect, or even a half-decent economy, but a key piece of evidence that shows that that economic security and stability are highly valued by ordinary citizens. When people are protected and liberated by economic security, people are freed from economic anxiety and can embark on happy lives. This economic security shouldn’t be the full goal, but the cement and tools used to build a happy and structured life and economy.
Economic Insecurity Elsewhere
Economic insecurity has become an ever growing problem in the western world. As the cost of housing and childcare rises and job security becomes shakier and more people live paycheck to paycheck. In May 2020, a poll found that 44% of Americans were concerned about whether they were able to afford food.
Job security is a key determinant about how economically secure you feel, this job security can better help you save and plan for the future and not feel the crushing anxiety of the feeling you may lose your job. During the 2008 financial crisis suicides rose significantly as well as divorces and this has been repeated throughout almost every recession.
How can someone have the freedom to embark on a fulfilling life having all their social, moral, economic and personal needs met when they worry about keeping food on the table or struggle to access the basic needs for living a happy life?
In the UK for instance after deindustrialisation post Thatcher, there was widespread poverty and unemployment in former mining towns, most notably in Yorkshire, Rochdale, Newcastle and the North. These areas suffer from higher drug addiction rates, mental health issues and suicides. Although poverty fell under Blair, the rebuilding of a robust welfare state that many, particularly on the Left hoped for never came. Blair simply papered over the cracks without replacing the foundations. More council housing was built and homelessness fell but systemic issues in our economic system that lead people to be economically insecure and unfree remain, leading many to fall through the web of our society. The jobs and systems that many depended on in the former industrial heartlands never came back, leaving it in higher rates of poverty decades later.
Trying to achieve a baseline of economic security, where people feel able to live a full and fulfilling life, where they won't be crushed by debt, homelessness, rent, job insecurity and or otherwise has long been a goal on the broad left. FDR has been talking about these ideas since his 1944 State of the Union address. He attempted to create an “Economic Bill of Rights”, consisting of various economic policies and social welfare programs that would enable everyone to have a decent standard of living.
These rights consisted of:
the right to earn enough to afford basic necessities like food and clothing
the right of every farmer to sell their crops for a decent price
the right of every businessman to trade in a fair and competitive market
the right of every family ro a decent home
the right to medical care and have good health
the right to have protection from the negative effects of economic downturns
the right to work a stable job
Final Thoughts
The GDR was an inefficient economy that lacked innovation, was overly bureaucratic and failed to provide decent consumer goods. But for many, it allowed them to have a standard of living that they couldn’t fall below and opportunities in housing and education that were always given. Full security did not come after reunification. This I believe is why so many miss the GDR and although their suffering is sad we can use it as a lesson to learn the value of economic security for a happy and fulfilling life. By realizing the successes and failures of the GDR and its social programs we can build a fairer and freer society.
Thanks all for reading! I will definetley some time in the near future do a second article on this topic, but focus on the how we create a secure economy. I will put up a twtiiter poll tommorow for the topic of the enxt substack so stay tuned.
Twitter @DsMetros
Cheers