The Economy
The high levels of investment in high technology inevitably led to the neglect of less technologically sophisticated areas within the economy in which it could have been more competitive.105 In 1988 the UN Economic Bulletin highlighted the downturn in exports to the West of machinery, consumer goods and, most particularly chemicals, in which East Germany had hitherto enjoyed a competitive advantage.106 In many cases, exports to the West were sold at prices well below cost simply to ensure a supply of hard currency with which to service a national debt which was spiralling completely out of control.107 Despite the enormous levels of investment in them, the new technologies represented only a very small proportion of the economy and even had they reached the ambitious growth targets laid down in the 1986 directives, they could not have been expected to have a major effect on other sectors of the economy in the short term.108 Faced with the wholly unachievable necessity of running an estimated DM 6.5 billion trade surplus with the West every year in order to service its debt, Finance Minister Schürer advocated a radical cutback of consumer price subsidy as the only means of rectifying the situation. The Central Committee,
however, threw out the plan on the grounds of its irreconcilability with socialist economic and social policy.109 Shortages of even the most basic consumer goods within the GDR worsened despite imports of Western capital goods more than doubling between 1985 and 1988 110 and open discontent over economic conditions was becoming more and more apparent while demands for greater liberalisation within society increased.
Social and Academic Unrest
Levels of disaffection also became increasingly apparent throughout the higher education sector, both among staff and students, and the situation deteriorated rapidly towards the end of the decade. For example, meetings of the academic trade union were hijacked by staff and students to discuss why the country was so much in debt to the FRG; what, if there was no acid rain in East Germany, was affecting the forests so badly; the high fat
105 Stokes, Constructing Socialism, pp 193 - 194
106 United Nations Economic Bulletin for Europe, 1988, Vol. 40, No. 3, p 388 107 Kopstein, The Politics of Economic Decline in East Germany, pp 96 – 100 108
Doris Cornelsen, ‘The GDR economy at the turn of 1986/87’, DIW Wochenbericht 5/87,
http://www.springerlink.com/content/y632w0p210224j8q (accessed 20.2.2008), p 9
109 Maier, Dissolution, p 106
content of sausage products; the poor quality and unfashionable design of shoes, textiles and other consumer goods; the shortages of basic medicines; and the delays in being called for medical tests and procedures. Academics at another Hochschule asserted that it would be more honest if the media, without denying the successes of the GDR, also
acknowledged the country’s problems.111 Organisations within the Hochschulen, such as the Jugendkommission of the academic trade union were having increasing difficulty in recruiting students to act as functionaries while others reported that members “were not taking their positions seriously”.112 The general impression obtained from the primary sources is that the authorities were increasingly disconcerted by events. In the absence of any other obvious solution, the state’s response was an attempt to crack the ideological whip even harder. Open dissidence was severely punished and motivational events arranged to debate subjects such as “the optimal development of the personality in the educational process taking particularly into account the demands of the scientific and technological revolution“.113 Trade union influence was brought to bear on higher education teachers to remind them of their “great responsibility”, their “creative
relationship” with students and the need for “the achievement of a creative atmosphere … in order to deal with the new demands and their associated ideological problems”.114
As general social dissidence increased, however, in the absence of Soviet willingness to provide military support as in the past, it was impossible to enforce what Günter Mittag described as “the primacy of the social over the majority of individual interests”.115 In the end, the opening of the borders to the West in Hungary sealed the fate of the GDR,
precipitating the fall of the Berlin Wall and reunification with West Germany.
Conclusion
The effect of changes in higher education on economic growth is obviously impossible to quantify precisely. There are, nevertheless, a number of points which can be made.
111 Reports of meetings at the Technische Hochschule Magdeburg and the Pädagogische Hochschule
Güstrow in ‘Gewerkschaft Wissenschaft ZV Sekretariatsvorlage nr. 31/86’, 17.3.86, p 2, SAPMO DY 53/1090
112 ‘Bericht der Jugendkommission des ZVs zu ihrem Beitrag bei der Verwirklichung der Aufgaben der 9.
Zentralen Delegiertenkonferenz’, 17.4.89, pp 4 – 6, SAPMO DY 53/921
113 ‘Ausschreibung zur 5. Zentralen wissenschaftlichen Konferenz der FDG-Studenten und jungen
Wissenschaftler lehrbildender Einrichtungen der DDR’, 12.2.87, SAPMO DY 53/1098
114 ‘Konzeption zur Vorbereitung der Berichterstattung und Erarbeitung der Vorlage für das Präsidium des
Bundesvorstandes des FDGB’, 21.8.88, SAPMO DY 53/1101
Firstly, its contribution to economic growth was considered important enough that a great deal of governmental time, effort and rhetoric was devoted to it. Secondly, higher
education institutions were responsible for the training of the vast majority of those employed in the larger research effort as well as of virtually all the leading cadres in the people’s economy. Thus, the restrictions on student numbers because of an apparent lack of appropriate employment most certainly had an disadvantageous effect on the pool of academic research talent available to the economy and of technicians and the innovative potential available to industry, as well as fomenting a great deal of social discontent among the young because of their reduced opportunities. Moreover, even though the policy was reversed in 1976 in order to produce more graduates in the areas of the key technologies, student numbers maintained an overall downward trend thereafter, though this is partly explained by demographic developments.
Thirdly, the quality of the teaching was obviously as critically important to the economy as were the subject areas prioritised by the planners. (By 1988 the numbers studying the technical sciences (41, 700) simply dwarfed any other area of study including economics (17,336), medicine (12,954) and mathematics and the natural sciences (8,401)).116 However, much of the teaching was formulaic and subject specialisms were constantly narrowed involving a risk of rapid technical obsolescence. The virtual exclusion from much of the published scientific work of western scientists because of the risk of ideological subversion was exacerbated by restricted access to much of the scientific material published in the GDR, especially in priority areas such as microelectronics. Moreover, the GDR’s tendency to appoint senior teaching and research personnel on the basis of political reliability rather than scientific ability does not necessarily inspire confidence in their intellectual achievements or that the results in terms of effective education were optimal.
It would be wrong, however, to dismiss the humanities as irrelevant to GDR higher education. As the files of the Kulturbund (Cultural Association) and the Institut für
Marxismus Leninismus make very clear, the GDR was also anxious to establish a presence
as a cultured and civilised country albeit within the fairly narrow parameters of the East German vision of socialism. There was, for example, much emphasis on the better integration of ‘suitable’ art, classical and folk music, dance and literature into the
Hochschulen as an essential factor in the development of class-consciousness, and the need
to utilise the potential of higher education institutions for the development of the
intellectual and cultural life of the whole country.117 Moreover, a thorough education in the history of socialism and philosophy in the form of Marxism-Leninism was considered critical for the full development of the socialist personality. However, the humanities were never allowed to assume the prominence which they did in West Germany and the primary function of the Hochschulen (and of the good socialist personalities created there) was seen as being of service to the economy.
Fourthly, although basic research was initially promoted more strongly in the Hochschulen following Honecker’s accession to power, this position was largely reversed as economic necessity dictated the need for industry to take responsibility for the majority of the financing of research in the Hochschulen. Thus, the facilities in the Hochschulen were once again put to use in the fulfilment of the combines’ production targets. It was not until the late 1980s that real emphasis began to be put upon the sort of basic research which might lead to technological breakthrough, and even then this was hampered by the unwillingness of the ‘industrial partners’ to fund it when the perspectives were so long term and the benefit to the individual firm was uncertain. Moreover, because of the increasing impoverishment of the country, the government was forced to severely restrict the amount of foreign currency given to higher education institutions to purchase necessary research equipment from the West. This, combined with the ‘intensified use’ use of
outmoded, existing equipment well beyond its intended service life meant that research in the higher education sector was operating under an almost insurmountable disadvantage and was unable to achieve the sort of results dictated by the planners. That said, higher education’s contribution to the GDR research effort was smaller than that of the Akademie
der Wissenschaften; however, similar strictures affected all research institutions in the
GDR.
GDR Hochschulen were not, then, the bastions of learning dedicated to producing the best from each individual student and researcher portrayed in the literature of the SED. Rather they were ideologically hamstrung, cash-strapped institutions with an overburdened teaching body, too narrowly focused on a few key and ultimately unachievable technologies and on the practical problems of individual industrial and agricultural
117
See for example, ‘Ergänzungsvorschlag für unsere Stellungnahme zum Entwurf der Kommission über die Weiterführung der 3. Hochschulreform’, 18.2.1969 and ‘Nachgereichter Diskussionsbeitrag zur Sitzung des Präsidialrates am 21.2.1969’, both in SAPMO DY 27/7558
collectives. They were also subject to violent swings in educational policy. The state, therefore, failed to make optimal use of higher education and compromised its potential contribution to the economy. Nevertheless, as a number of commentators have pointed out, GDR engineers were well trained; GDR academics produced a number internationally well-regarded textbooks and publications; and the research conducted in the Hochschulen was regarded far more highly by international observers than the GDR’s industrial R&D, even if ultimately regarded by the GDR itself as “mediocre” on the international scale.118 The GDR’s lack of economic success was far more a result of the political, economic and cultural rigidities of the socialist system as practised in East Germany. The decisions of the planners were not necessarily based on economic criteria and poor planning decisions led to an overwhelming emphasis on high technology sectors where there was little chance of the GDR ever becoming competitive, thus neglecting the lower-tech industries where it might have stood some chance. Lack of competition in the industrial field gave no impetus to competitive, innovative activity resulting in low productivity, inefficiency and the manufacture of products which became increasingly unsaleable on the international
market. Moreover, tradition, labour law, class and gender bias prevented the absorption of graduate level personnel into positions in industry where they might have made a
difference. The massive outlay on high-tech research programmes only added to the strain of an economy already stretched to breaking by the repercussions of the 1979 oil crisis and the GDR’s extensive social welfare programmes.
118 East German report on ‘Lehre, Forschung und Weiterbildung in der DDR’, June 1990, cited in Bentley,
Research and Technology in the former German Democratic Republic, pp 114 – 115; Förtsch, ‘Science, Higher Education and Technology Policy’, p 41
Chapter 7
Conclusion
The story of this thesis has been in essence about the development of higher levels of human capital in two very diverse social and political systems, the means chosen to achieve this and their impact on economic growth in both states. It proceeds from the hypothesis that the technological progress theory of economic growth is valid: that
investment in human capital development will result in increasing returns to scale and thus will have economic benefits for a country by enabling increases in productivity and
growth. In other words, that long-term economic growth fundamentally depends on the ability of human capital development to produce the new ideas and technologies necessary for such growth.
The ability of a society to generate its own technological innovation is likely to be
economically beneficial in several respects: for instance, in terms of being first to market, improved productivity and the financial benefits accruing from patent rights. There are, moreover, further benefits related to a country’s international status and political influence. There can also be little dispute that a rapidly technologising society requires an
increasingly well-educated workforce in order to be able to exploit the new technologies and reap the economic benefits of doing so. However, as the literature on human capital development theory also makes clear, investment in education of itself is no guarantee of economic growth: certain preconditions are necessary. In the academic sphere, these include the necessity of expanding the areas most relevant to the development of science and technology; a flexible infrastructure open to new ideas and economic development; competition between individual educational institutions in order to stimulate a more efficient absorption of technological advances into the curriculum, improve teaching and accelerate research efforts; and continued investment in both physical and human capital. Also critical in terms of turning the effects of increased human capital into economic growth are efficient systems of technology transfer; exposure of the economy to the market to allow marketplace competition to encourage innovative activity and the adoption of new technology within industry; and the existence of effective forms of management both in the higher education sphere and in industry in order to optimise the activities of the labour forces of both in response to new technology. In the absence of any of these, increased investment in higher education is unlikely to bring all the rewards anticipated of it.
The story, however, also concerns the relationship between the cultures and traditions of two countries and the development of patterns of education which conformed to the cultural and ideological mores of each, as well as to a more economically-driven agenda. Thus, the impact of the higher education system on economic growth in East and West Germany can be assessed only within the context of the radically different social systems of each state. My thesis has presented a fairly comprehensive overview of the
development of higher education in both East and West Germany from 1945 – 1990 in order to highlight, not only the main changes to both systems, but the extent of their general impact on each country in economic terms. This concluding chapter will return to some of the questions posed in the discussions in chapter one of the thesis. I will relate these to both countries’ responses to the challenges faced over the period under
consideration and will also try to draw some tentative conclusions as to the effects of these changes on the economic growth of both countries.
Questions
The questions raised in the introduction concerned the viability of the re-establishment of the pre-Weimar elite system of higher education and its self-imposed alienation from economic need on the one hand; and the restructuring of higher education according to Marxist-Leninist principles and the enforcement of a strong orientation to perceived economic and societal need on the other. Related to this are the issues of the subjects offered and taught at higher level, the number and type of graduates produced by the respective systems, the quality and orientation of the teaching and research performed in higher education and whether these represented an adequate response to the challenges posed by a rapidly developing technological environment. This, in turn, raises questions with respect to the effectiveness of the control and administration of higher education and the impact of much larger numbers of graduates on the employment markets. The
influence of the divergent institutional structure of both countries is also of particular significance, firstly, in terms of how the development of human capital at a higher level was/was not encouraged and secondly, of how the action taken was translated into technological and industrial performance. Ultimately, the questions to be answered are how the effective the respective systems were in developing systems of higher education which which were of benefit to their economic growth and, to some degree, the extent of
the part played by different factors such as levels of investment, industrial forms, patterns of management and social change.
Challenges
Germany’s stellar reputation in the training of scientists and in the research and
development of science and technology during the nineteenth century was, arguably, based somewhat less on the basic research performed in the traditional university system than on the efforts of the Technische Hochschulen, industrial enterprises and a number of
independent and state-run research institutes which focused very strongly on applied as well as basic research. The interwar period, however, was characterised firstly by self- imposed partial isolation from the international scientific community during the duration of the Weimar Republic, which Forman has referred to as “the cold war in international scientific relations” with the Allies,1 and secondly by the National Socialist policy of rigorous isolation from the international scientific community, its focus on the war effort and its rejection of swaths of academic disciplines, particularly the more modern
interdisciplinary fields of science such as biotechnology, geophysics and astronomy. The effects of both on German science and technology were harmful, resulting in the opening up of large gaps in more modern technologies between Germany and the USA. There were, therefore, parallels in the situation of West and East Germany in their mutual need to reconstruct their economies, adjust to the limits imposed by new borders and develop an entirely new type of society from the ashes of a fairly disastrous three decades or so. The answer appeared to lie in scientific and technological progress, key to which was the growth and development of higher education.
West Germany
The challenge faced by the federal governments of the FRG, once the initial phase of reconstruction was past, was the development of a higher education system which was more closely attuned to a rapidly developing technological world. This, in effect, meant the democratising and expansion of the highly elitist system which had existed prior to the First World War in order to create sufficient numbers of graduates with the higher level qualifications in the technical sciences needed to re-establish West Germany’s presence as
1 Paul Forman, ‘Scientific Internationalism and the Weimar Physicists: The Ideology and Its Manipulation in