After the Crisis
From Griffith REVIEW Discussion
© Copyright Griffith University & the author.
13 September, 2010
Dr Vera Butler
(Pascoe Vale, VIC)
Recently I obtained a copy of Griffith REVIEW 25: After the Crisis, and I read with interest Tom Morton’s contribution ‘A short prehistory of the future’. The author deals with issues of German reunification, and as a political economist I have kept close track of developments in the two parts of that country,
My (German) sources of information paint a dismal picture of economic disparities, twenty years after the ‘fall of the wall’. I enclose a photocopy of a map showing July 2009 unemployment data for East and West Germany. According to the latest information, the Eastern part veers towards 20 per cent unemployment, compared with the West’s average of 7 per cent.
I don’t know how familiar Tom Morton is with the brutal take-over of East German industries by Bonn’s ‘Treuhand’ organisation. Although some plants were technically backward, others were of very high standard, notable the Iena glassworks, which supplied Soviet (and now American) space industries with telescopic lenses, or the Rostock shipbuilding facilities, which their West German competitors acquired literally for a song and immediately closed down. There were the renowned Leuna synthetic rubber works, and many more examples.
The German Democratic Republic (DDR) had educated a highly trained workforce and had a huge export industry to all Eastern European countries – until the introduction of the Deutschmark cut the country off from all of its non-Western markets who were unable to pay in ‘hard’ Western currencies. This was not just coincidental, but a well-planned policy, as is now known.
Moreover, West German capital flooded into newly developing countries of Asia, Latin America and Africa for short-term and highly profitable investments, rather than focussing on slower, long-term investments in the newly-acquired Western part of the country, or in Europe’s south, like Greece or Portugal. Unfortunately, capital investment is not guided by national or social considerations, but is primarily motivated by profits.