Market reforms bring hardship to East German workers, youth

Scan page 12

German youth-East and West-celebrate reunification in 1990. Euphoria has now worn off.

The selloff of the old East German state firms has provided a spectacle of capitalist greed and plunder that is also having its political impact in West Germany. In its Sept. 3 issue, the Suddeutsche Zeitung did a balance sheet of the activity of the bolding company set up to supervise the privatization of the East German firms, with the following conclusion: "By the end of July, the Trehand took in 11.6 billion Deutschmarks for all the successful purchases of enterprises. This was accompanied Some of Trehand's operations have produced real scandals, such as the selling off of the Teltow Tool and Instrument Company for a symbolic price of one mark to the According to Der Spiegel of Nov, 4, a secret study done for Treuhand estimated the value of the company's assets at between 170 and 270 million marks. After a report in Der Spiegel, the official responsible for the sale was fired and became the subject of an investigation by the Berlin prosecutor. Wisser did not help things any by proposing to sell the land owned by the company for 30 million marks to another This is an illustration of the beauties of the market, which, it must be supposed will not be lost on the working people both in West and the former Bast Germany.

While their standard of living is collapsing or being threatened, the market and its encouragement of "enterprising spint" is producing a swarm of vultures, large and 12 SOCIALIST ACTION DECEMBER 1991 If there were going to be a showcase of capitalist restoration, East Germany should have been it. Its economy was relatively advanced, with some industries competitive even in the world capitalist market. It has been integrated into a much larger capitalist state—one of the three richest in the world and the one, therefore, that had the tremendous resources necessary for subsidizing reconversion.

In a generally pessimistic view of the prospects for capitalist development in Eastern Europe, however, the well-informed British business magazine, The Economist, pointed out in its Sept. 21 issue that East Germany had become a bugbear instead of a boost for the marketizers of Eastern Europe and the Soviet Union.

"Understandably daunted [by their own negative results]," the editors write, "East European government have hesitated. While still paying lip service to rapid privatization, many officials have begun to advocate a more gradualist approach. Most have been horrified by the collapse of industry in the former East Germany, once considered the most industrially advanced country in Eastern Europe."

Since reunfication, industrial production in East Germany has been in free fall. It is now supposed to have "stabilized" at a level of about a quarter that of 1988. In August, the official unemployment in East Germany was 1.1 million, with 1.5 million on short time, and 500,000 in training schemes. That is out of a total population of 16 million, of which about half, 8 million, are economically active.

And this says nothing about hidden unemployment, or special regional problems. For example, according to Der Spiegel of Nov. 11, in the eastern part of East Germany the unemployment rate goes as high as 75 percent.

West Germany destabilized

Such an economic collapse has not been seen since the Great Depression or the destruction of Germany at the end of the Second World War. The West German govemment and capitalists are pouring vast sums into the former East Germany all right, but only to maintain consumption, that is, provide a market for West German business and to stave off social collapse and the dangers that it could create.

In the absence of productive investment, such subsidies are only leading to accumulating debt and rising inflation. The overall deficit is going up by about 200 billion marks a year, according to the Social Democratic Party's estimates. That compares with a projected federal income of 425 billion marks in 1991.

Interest on the national debt is already going over 100 billion marks this year, and is expected to reach 200 billion marks in 1995. Inflation, which was at zero per cent in 1986, has already risen to 4.5 percent in West Germany, and is still higher in the former East Germany.

The West German press has begun making alarmist noises, Winfried Wolf pointed out in an article in the Oct. 28 issue of International Viewpoint, the fortnightly magazine of the Fourth International.

"It doesn't add up," Der Spiegel fretted. "Who's going to pay?" Wirtschaftswoche demanded. "Can our marks hold out?" Stern inquired.

Wolf pointed out that the same time the government was pursuing inflationary policies in subsidizing demand in the former East Germany, the Federal Bank has taken a deflationary course, raising interest rates-apparently in anticipation of a recession. Recently, Wirtschaftswoche (issue No. 32) wrote: "Everything points to the fact that we are standing directly in front of a recession." The West German business and prestige press has begun to raise calls for "iron austerity."

There are already 2 million unemployed in West Germany, making a total of 5 million for the reunited country. The figures point to a coming disaster for working people throughout the German state. It will be worse for those in the former East Germany—and they are likely to be, to one degree or another, scapegoats for it. But the axe will come down on the entire German working class. The relative impact may be greater on the West Germans, who have, been used to prosperity. The Easterners have already had their hopes for a better life dashed.

Grim picture of youth The social and political effects of the economic collapse in the former East Germany have already started to provoke alarmed commentary in the West German press. For example, in its Nov. 11 issue, Der Spiegel published a long feature on East German youth that painted a grim picture. It began with a interview of a group of young people in a club, where all the talk was about present economic problems and the "good old days" before the turn to the market:

"At present, in the new federal states, 170,132 youth are without jobs. Among those under 20, the number has risen from 14,447 in mid-1990 to 42,679 now. Among those between 20 and 25, it has gone from 40,252 to 127,483, and the trend is up.

"Alcohol consumption has risen sharply among young people. Hard drugs ... are not yet so widespread, but high school students are already sniffing glue and solvents. Sects and spiritualist groups are booming. Instead of delight in greater freedom, many young people are gripped by a fear of not being able to survive.' A Berlin doctor specializing in treatment of young people reported "a disturbing rise of suicides and suicide attempts." Even those who could be expected to welcome the new freedom were overwhelmed by the economic ruin.

"The blond Enrico, 17, with an earring, should have reveled in the new times. ... However, he finds the world bad. Punks think about unemployment and so on. That is what the models of the colorful street kids in England did after all, and the East punks can now follow in their footsteps. In Saxony, in Riesa, where Enrico lives, life is now like in the north of England.

"The new times have brought poverty to Riesa. The steelworks on which the small city depends is closing. In their songs, the Church Thieves [an Eastern punk group] sing of a desperation that many know from their own homes, where mothers are out of work and have begun to drink."

A Berlin pastor was quoted as saying: "The conflict cauldron of society is heating up. While self-confident and enterprising youth are needed, a whole generation threatens to sink into melancholia, self-pity, cynicism, and rage."

The reporter noted: "Hardly any of the unemployed youth can manage with the support they get. Every fourth one has to cut back drastically on food. For Tilman, it is just 'enough for the plastic sausage from the A&P.' "

There were expressions of resentment of the Western politicians: "With graffiti such as 'the Baltic Sea is still there' on the Rostock shipyard buildings, they are protesting against the West German politicians, who, Lars, 22, complained, stole from them everything from free contraception pills to vocational training and certificates, 'the real advantages of the [former] German Democratic Republic.'"

"Not even time for lunch"

A roundtable interview with East German young people gave even clearer signals. One young woman said: "I wanted to study athletics. I am a top swimmer.

by promises [and only promises] of DM 67.8 billion.

Frankfurt businessman Claus Wisser.

firm in which he is a partner.

small-G.F. And I want to continue that. But I have already leared one thing about capitalism. Either you go for a family and a nice home, an orderly life, or a career. A woman cannot have both. I look at my mother. At her job, she doesn't even have time for lunch."

The Spiegel reporter asked: "Nonetheless, things are a lot freer and easier in the schools today. Or do you want the old strict times back?" One replied: "Of course, a lot of things were bad. But a lot of things were not so bad." "What?" the reporter asked. Another young woman answered: "You knew you had a future. And you had a secure job."

One of the young people had drawn some political conclusions: "Socialism is over, that is clear. But I also don't think that capitalism is the solution. What is it doing against the destruction of the environment, against hunger in the Third World? I don't know what sort of ideals are still possible."

The feature claimed that the response of East German youth to the economic disaster was. essentially alienation, a rejection of politics, or at most an attraction to nationalism and right-wing extremism. Such phenomena certainly exist. It could hardly be otherwise when there is no credible left alternative, and the social catastrophe has developed so quickly. Antisocial right-wing youth gangs, along with skyrocketing street crime, were cited by the interviewees as important factors in the decline in the quality of life in the former East Germany.

The protests against the destruction of the social gains under the old regime were also presented as nostalgia for the security offered by a pateralistic state. But these advantages—a guaranteed JOb, free childcare, free vocational education, the right to contraception and abortion-are part of an economy intended to serve human needs rather than profit. They should also be attractive o West German working people, who are Ilso facing chillier economic winds.

The problem is one of perspective, a credible alternative economic policy to the free-market nostrums made popular by the West German "economic miracle" and the collapse of the East German bureaucratic system. The objective need for such a perspective is there. But it requires a political development—the emergence of a militant leadership on the trade-union and political levels—which is a complex process whose tempo cannot be predicted. Such an alternative would have to appeal to West German workers as well.

However, it seems that, for better or worse, what was one of the most, if not the most, stable capitalist country in the world has suddenly become volatile. It remains, thus, to be determined whether the reunification will strengthen or weaken German capitalism. The ruin of the former East Germany has clearly reclarified the basic evils of capitalism, as well as the social gains that the abolition of capitalism in the old GDR brought.

A spectacle of plunder