Carroll Quigley - Tragedy and Hope - A History of the World in Our Time

Khrushchev’s journey was notable in other ways. At Camp David with President Eisenhower, he revoked his six-month time limit for settling the German question, on the ground that the consideration of the problem by the Foreign Ministers Conference of the summer of 1959 had suspended the urgency of the problem. At the meeting of the General Assembly of the United Nations in September, Khrushchev won considerable support for his suggestion that the Soviet Union was willing to reach complete disarmament supervised by mutual controls, including aerial photography.

During his visit, Soviet Foreign Minister Gromyko provided a curious glimpse into the intricacies of the Soviet system. At Camp David he tried to make a deal binding each party to limit its propaganda radio broadcasts to the other to three hours a day, with the unstated implication that Moscow might stop jamming the Voice of America if this agreement was reached. Although our broadcasts in Russian, at that time, were only three hours a day, we refused the offer by saying that we wished to increase, not reduce, the flow of information. Gromyko left the impression that the jamming was an expense and burden on the Soviet system. At any rate, in June 1963, with the relaxation of the Cold War, jamming was stopped by the Russians without any agreement.

The weakening of the Soviet position, which the Kremlin recognized in regard to missiles in 1961, also appeared to them in other fields, and was fully apparent to anyone who wished to look at the comparative prosperity of the two Superblocs. Nowhere did this comparison stand out more clearly than in divided Germany, and nowhere could the Kremlin accept it less readily.

In the 1950’s and early 1960’s, the contrast between the (East) German Democratic Republic and the (West) German Federal Republic were as between night and day. The West, with about 55 million persons, was booming, while the East, with less than 17 million, was grim and depressed. The West German economic miracle was based, as we have said, on low wages, hard work, and vigorous pursuit of profits by private enterprises little hampered by the government or labor unions. It was, in fact, the closest example of traditional nineteenth-century laissez faire that the mid-twentieth century had to offer. The government, under the influence of Minister of Economics (later Chancellor) Ludwig Erhard, operated in terms of what they called “a socially conscious free market economy” ( soziale Marktwirtschaft ), but the play of free economic forces was to be found in lack of interference by the government and competitive wage rates rather than in price competition among industrial producers. The fluctuations of the business cycle were dampered down by the government’s fiscal policy, and it was said that possible inequities in the distribution of the national product could be remedied by a progressive income tax mild enough not to interfere with incentives. Otherwise, taxes were drawn to encourage industry to plow its profits back into the business rather than to raise wages. This policy and the national tendencies of the German outlook favored production of capital goods over consumer goods and for the export market rather than for domestic use. After 1945, labor unions, which had been closely associated with political activities and with agitations for drastic economic and social reforms before the Nazi regime enslaved them, sought to avoid politics and to concentrate on wages and work conditions (as do unions in the United States); but these activities in Germany had traditionally been the concern of other agencies (such as works councils), and they could hardly be much influenced by unions in a period of surplus labor and low prices such as prevailed in Germany in the 1950’s.

This surplus of labor in West Germany came from the influx of 13 million refugees into the area, chiefly from East Germany and Czechoslovakia. Once the boom started, the demand for labor was so great that refugees continued to be welcomed, and at least two-thirds of a million non-German, unskilled workers were imported from Italy, Greece, Spain, and elsewhere in southern Europe. The docility and eagerness to work of these peoples kept wages low, profits high, and the boom going through the 1950’s and into the 1960’s. As late as 1960 only 38,000 man-days of labor were lost by strikes and lockouts in West Germany, compared to almost half a million in the Netherlands, 3 million in the United Kingdom, and 19 million in the United States in that year.

Some of the consequences of this system, besides the most obvious one of booming prosperity, were that the structure of monopolized industry with great rewards for the upper classes, with lesser rewards and little social mobility for workers, continued in the 1950’s as it had been in Germany since its industrialization began. In 1958 eight great “trusts” still controlled 75 percent of crude steel production, 80 percent of raw iron, 60 percent of rolled steel, and 36 percent of coal output. The number of millionaires (in marks) more than doubled in four years in the middle 1950’s. Yet less than half of the eligible workers were in unions, union membership went up only 20 percent, while the working force increased 67 percent after 1949, and only an insignificant part (5 percent) of university students came from the working class compared to a rate five times as high in Great Britain.

To the outside world, and to most Germans, especially East Germans, the inner nature and structure of the West German “economic miracle” was of little significance. What did matter was that the average West German had steady work at adequate wages and limitless hope for the future. The 10 percent increase each year in the West German gross national product was something that could not be denied or belittled.

Among those who had no desire to ignore it or to belittle it, but, on the contrary, were eager to participate in it, were the East Germans. They continued to flee westward from poverty and despotism to plenty and freedom. Every effort made by the Communist regime to stem that flow merely served to increase it. The more police who were sent to guard the frontier between East and West Germany, the more police there were to flee westward with the others.

The reasons for these flights to the West were clear enough. East Germany has been a Stalinized regime under an unpopular tyrant who is sustained by twenty-two Russian divisions because he is willing to administer East Germany as an economic colony of the Soviet Empire. In spite of Khrushchev’s denunciations of Stalinism, he supported a Stalinist regime under Walter Ulbricht, the Communist dictator of East Germany, because that type of regime extracted the largest booty from its territory for the Kremlin.

This pressure became worse on East Germany just after 1959, when the attractions of West Germany became greater, and the endless demands on Soviet resources for missiles, space spectaculars, improved standards of living, and a disintegrating agricultural system were increasing. To fulfill these demands, East Germany scrapped its unfinished second Five-Year Plan in 1959 and switched to a Seven-Year Plan synchronized to the Soviet Union’s new Seven-Year Plan for 1959-1965. As part of that plan, came a forced collectivization of the half of East German agriculture that still remained in private hands. In three months, February-April 1960, almost a million farmers were forced into less than 20,000 collective farms by methods of violence and social pressure similar to those Stalin had used thirty years earlier in Russia. And the consequences were, in an economic sense, very similar: agricultural production collapsed. Shortages of food were soon followed by other shortages, especially of coal. As might be imagined, the East German winters of 1961-1963 became grim nightmares. The Seven-Year Plan of 1959 proved almost at once to be unfulfillable, and was replaced by a new and more modest one for 1964-1970. But the area’s subordination to Russia was hardly eased at all.