Economic Reform as Ideology: East Germany's New Economic System

Abstract

In 1963 the ruling party and government of East Germany initiated a set of sweeping economic reforms under the name of the New Economic System (NES). The reforms resembled, with some modifications, the proposals of the Russian economist, Evsei Liberman. Liberman's suggestions had been the stimulus for a now celebrated discussion in the Soviet press in the fall of 1962, but then had apparently been shelved. With the adoption of NES, the East German regime, belying its Stalinist reputation, became the first in East Europe (excluding Yugoslavia) to undertake so substantial a departure from the received principles of a highly bureaucratized command economy. Moreover, the reform scheme was coupled with a broad reorientation of the official ideology and a massive effort to mobilize all social groups on its behalf, going far beyond the agitation and propaganda campaigns which customarily accompany important Communist policy innovations. It is these ideological changes which interest us here. This article will examine the East Germans' explication and utilization of the New Economic System as doctrine, using this as a case study in the evolution of ideology in the phase of Communism. Mature Communism -the phrase is Alfred E. Meyer's-is the period in which the initial consolidation of political authority has been completed and the basic apparatus of an advanced industrial order constructed. Both the Soviet Union and the more developed states of Eastern Europe may be said to have entered this phase.l Several writers have claimed to see in mature