I found this documentary intriguing mainly because it contradicts nearly all the brainwashing I received in public school at the height of the anti-Soviet Cold War. Among other new facts I learned
In the early post war period, there were socialist and communist Germans fleeing the Western zones (occupied by US, UK, and French military), as there were anti-Communists fleeing East Germany.*
The Soviets and East Germans vigorously campaigned for a unified Germany, with Berlin as capitol. They were opposed by Western allies determined to create a separate West German state (presumably for the same reason the US insisted on creating two Koreas and two Vietnams – ie to enhance US control over the region).
The East German Socialist Unity Party invited West German members to their first party conference, which was primarily concerned with lingering German antisemitism, ultra-nationalism and fascism.
The East Germans blockaded trade to West Berlin (in the Eastern zone), when despite vigorous Soviet and East German opposition, the Allied occupiers created a separate West German currency (that threatened to collapse the East German economy). The blockade was lifted once West Germany adopted a constitution and elected a Parliament, president, and chancellor.**
*German communists and socialists were terrified of the new government of Allied occupied Germany, mainly owing to the brutal persecution they had received under the Third Reich (eg arrest, torture, extrajudicial assassination, and imprisonment in concentration camps).
**The Allies used the blockade to score a major propaganda coup, instituting an “airlift” of food and other consumer goods to West Berlin (with the implication that the East German government was depriving them of food and other necessities).
East German Privatization and the Difficult Legacy of the Treuhand
This documentary provides a detailed timeline of the four-year privatization of East Germany following the 1989 fall of the Berlin Wall. The privatization was overseen by the Treuhand Trust. Originally appointed in 1990 by the East German Council of Ministers, it was ultimately run by West German corporate and political elites. Following reunification in August 1990, it was the responsibility of the West German government in Bonn to oversee Treuhand. However the Bundestag provided no oversight at all until a massive Treuhand corruption scandal erupted in 1992.
During its four-year existence, Treuhand privatized 10,000 state-owned East German enterprises, put three million East Germans (70% of the workforce) out of work and permanentlyy deindustrialized East Germany.
According to the filmmakers, some of this disastrous outcome stemmed from the rigid neoliberal bent of Trehand managers; some from bribery and corruption; some from from incompetence; and some from the avarice of West German entrepreneurs who bought West German businesses that competed with them and shut them down. East Germany experienced massive public protests and even a hunger strike as thousands of factories closed and millions of East Germans became jobless.
Some factors contributing East Germany’s financial collapse were beyond Treuhand’s control. At the time the two Germany’s reunited, East Germany lost most of its export market as the Communist regimes in other Eastern bloc countries collapsed. To prevent the East German mark from collapsing, the Bundestag introduced the Deutschmark into East Germany in July 1990. This led to massive price inflation of German consumer goods, leading East German residents to reject them in favor of cheap West German products. With no sales revenue, East German companies were forced to turn to Treuhand for loans and subsidies to pay their staff.
In 1992-93 when the Bundestag intervened, Treuhand was forced to preserve designated East German industries by providing loans and subsidies to businesses willing to modernize.
One-hundred-fifty convictions resulted from the Treuhand corruption scandal. As in the former Soviet Union, East German were promised shares in their state owned enterprises as they were privatized. These shares never materialized.
The Greek documentary Catastroika provides a somewhat different perspective on Treuhand’s role in the wholesale privatization of East Germany’s state-owned industries: See Privatization and the Theft of the Commons
This documentary, featuring NSA whistleblowers Williman Binney, Thomas Drake and Edward Snowden, challenges the dismissive attitude (Who cares? I have nothing to hide) of many Smartphone and Internet users towards government agencies and corporations that collect all their personal data.
Binney, Drake and Snowden maintain everyone has something to hide. For example, health information collected by dating sites and sold to insurance and pharmaceutical companies. And the 60% of us who engage in minor lawbreaking. And all the free speech activities (following the Christchurch shooting, New Zealand is a prime example) that used to be legal but are illegal now.
Binney and Drake are particularly concerned about all the data governments collect on us – allegedly to protect us against terrorism. Even though mass surveillance hasn’t prevented a single terrorist act. Which is no surprise when you understand the true purpose of mass surveillance. Namely to protect governments against us, ie to suppress activities that might undermine the power of the oligarchs who control our so-called democracy.
To demonstrate this point, the filmmakers interview an East German human rights activist, who has kept the thousands of records the Stasi kept on her prior to reunification. In addition to recording all her phone calls and meetings with fellow activists, 49 friends, including her boyfriend, made regular reports to the Stasi on all her movements and activities.
Hidden History: How the Gladio Assassinations of Alfred Herrhausen and Detlev Rohwedder Turned Eastern Europe into a Wall Street Sweatshop
Late Pentagon and intelligence inside Col Fletcher Prouty was the first to raise the alarm that the 1989 assassination of Deutche Bank president Alfred Herrhausen was intelligence-related. This was two decades before the CIA/NATO’s secret Operation Gladio* assassination program became common public knowledge. Although officials on both sides of the Atlantic blamed the so-called Red Army Faction, the extremely sophisticated bomb that killed Herrhausen was well beyond the expertise of amateur extremists.
In a 1992 interview with the Italian Newspaper Unita Prouty states “Some great power center wanted for some reason to get rid of the board spokesman of Deutsche Bank on that day and in that manner, in order to teach others a lesson. So there is a message in the way he was killed.” He adds,“When you consider the great importance of events in the Soviet Union, in Eastern Europe, and especially in Germany . . . then the Herrhausen assassination is tremendously significant. We must not allow it to be swept under the rug.”
In Prouty’s view, the key to the Herrhausen assassination, occurring three months after the fall of the Berlin wall, was his revolutionary proposal to found a Polish development bank, modeled on the German Kreditanstalt fur Wiederaufbau, which played a crucial role in the postwar economic reconstruction of Germany.
What Went Wrong with East Germany?
Economist and historian William Engdahl would explore the Herrhausen assassination in more depth in a 1992 article entitled What Went Wrong with East Germany. The article points out that Herrhausen’s banking views differed significantly from those of the US/British banking establishment.
Herrhausen, recruited by Chancellor Helmut Kohl to assist in planning the economic reunification of Germany, was a champion of third world debt forgiveness. Poland’s debt service burden to help stimulate development in former eastern bloc economies. He also argued strongly for a slow process of German reunification, one that would make full use of East German worker’s superior technological education and skill level. This approach would stimulate East German industrial infrastructure development while simultaneously protecting East Germans against a sudden loss of social supports they enjoyed under the communist regime. Most controversially he proposed to build a high speed rail link connecting Paris, Hanover, Berlin, Warsaw and Moscow.
The 1991 Assassination of Treuhand Chief Detlev Rohwedder
Instead of taking 10 years, as Herrhausen proposed, following his murder, the process of German monetary and economic union was compressed down to one year. In June 1990, Kohl appointed Detlev Rohwedden to head the government created company Treuhandanstalt to oversee the disposition of the entire East German economy. From the outset, Rehwedder, who shared Herrhausen’s vision of East German infrastructure development, was in constant battle with the western banking establishment and other members of Kohl’s cabinet. He insisted on modernizing East German state industries to make them economically viable, whereas the Anglo/American banking establishment sought to simply dump them onto the open market for private investors to buy up.
In his final interview five days before his death, he announced victory – a vital Treuhand policy change from that of immediate privatization to one emphasizing the rehabilitation of existing industries to make them more competitive.
On April 2 1991, Rohwedder was assassinated by a so-called “RAF third generation” sniper who left no forensic traces to his identity. Within weeks of his death, Rohwedder’s Treuhand policy was quietly reversed under new leadership.
The doors of Treuhand were opened to a host of management consultants to pick over the 81,000 East German companies under Treuhand and prepare them for rapid sell-off. Western firms were offered large incentives to buy former East German state owned firms only to shut them down, fire the work force, or use them in similar jobs at a fraction of what western workers would get.
The social consequences of this new Treuhand policy were staggering. In summer 1992, the real level of unemployment (including half time workers) in former East Germany was 40% of the work force.
*Operation Gladio was part of a post-World War II program set up by the CIA and NATO supposedly to thwart the influence of left-wing groups and politicians in electoral politics in Western Europe. They were notorious for false flag operations in which bombings and assassinations were blamed on fictitious communist groups such as the “Red Brigages” and the “Red Army Faction.” The existence of Gladio was confirmed and admitted by the Italian government in 1990, after a judge, Felice Casson, discovered the network in the course of his investigations into right-wing terrorism.
Catastroika is a Greek documentary on neoliberalism, with a specific focus on the privatization of publicly owned resources. Although it makes no mention of historian Richard Linebaugh, its depiction of the neoliberal privatization movement provides an elegant illustration of the ongoing theft of the Commons (see Stop Thief: the Theft of the Commons).
After a brief overview of the University of Chicago economists (championed by Milton Friedman) who first put neoliberal theory into practice during the Pinochet dictatorship, the documentary tracks the wholesale privatization of Russia’s state owned industries after the 1993 coup by Boris Yeltsin, in which he illegally ordered dissolution of the Russian parliament (see The Rise of Putin and the Fall of the Oligarchs).
The fire sale of state assets to oligarchs and western bankers would virtually destroy the Russian economy, throwing millions of people into extreme poverty and reducing average life expectancy by ten years.
The Privatization of East Germany
With German reunification in 1990, East Germany would be the third major target for massive privatization. According to German economists interviewed in the film, the process amounted to an “acquisition” of East Germany by West German bankers. The West German government set up an agency called Treuhand to buy up state owned East German businesses at the rate of ten to fifteen a day – a total of 8,500 businesses in four years. The process, undertaken with virtually no oversight, predictably resulted in massive chaos and fraud. Many well-performing East Germany companies were dissolved for the simple reason they competed with West German businesses. Three million (out of 4.5 million) East German workers lost their jobs, which East Germany’s GDP shrank by 30%.
Using Debt to Compel Compliance
With the gradual demise of the world’s dictatorships during the 1990s, debt, rather than brute force, became the main mechanism to compel people to give up their publicly funded assets. At present, most of the focus is on Greece.
Current EU Commission Jean-Claude Juncker holds up Treuhand (which incurred a 250 million euro debt German taxpayers are still paying off) as a model for the Greek Asset Development Fund. The latter has been steadily selling off (at bargain basement prices) Greek railroads and municipal power and water systems.
The Dismal Track Record of Privatized Utilities
The filmmakers end the film by highlighting the disastrous outcome of Britain’s decision to privatize its railroads in 1993, the city of Paris decision to privatize its water service in the 1980s (it’s recently been re-municipalized due to massive public unrest – like privatized water systems in Bolivia, Ecuador and Argentina) and California’s experiment with electricity deregulation in the 1990s (leading to the Enron scandal).*
*The Enron scandal involved massive securities fraud and a deliberate conspiracy by power companies to withhold power to drive up electricity prices.
Do Communists have Better Sex? is a comparison of sexual mores in East and West Germany prior to the fall of the Berlin Wall. Studies suggest that East German women found sex more satisfying. A 1980 study found that 50% of West German women were unable to achieve orgasm, in contrast to 15% of East German women. The filmmakers attribute this difference to three general factors: the greater economic independence of East German women, a more relaxed attitude towards sexuality that allowed people, rather than the media, to control their sexuality, and the availability of well written sexual manuals about women’s sexual needs.
The Role of Economic Independence
At the end of World War II, East Germany experienced a severe shortage of men as most returning soldiers settled in West Germany. This made it necessary for women to assume men’s roles in East German industry. In contrast West German women were pressured to leave their war jobs to free them up for men. Government, churches and the media bombarded them with the message their chief role in life was to make men happy.
Owing to the large number of war widows raising children, the East German government provided generous social programs, including free child care and cooperative laundries to enable them to work full time. This made them economically independent from men and significantly reduced the pressure for them to marry.
Role of Religion
In West Germany, the church’s preeminent influence made sex a taboo topic until the late sixties. This included sex education in schools, and teachers could be prosecuted for explaining where babies came from.
In East Germany, the Communist Party took the view that healthy sexual relationships were essential for people to develop fully as human beings. The East German government introduced sex education in schools in the 1950s, though they put more emphasis on TV programming that educated parents on dealing with teen sexuality. Consensual sex was legal from age 16 up.
Access to Birth Control
In East Germany oral contraceptives were free for all women 14 and over from the early sixties when they first became available. Abortion (prior to 12 weeks pregnancy) were legal and free from 1972 on. In West Germany, feminists had to fight long and hard to gain access to birth control pills in the late sixties and abortion in 1976.
Pornography and Sexploitation
While the East German government had strict laws against pornography, sex shows and sexploitation,* they were extremely tolerant of nudism at public beaches and campsites. In addition, they directly subsidized the publication of popular sex manuals to keep men up to date on women’s sexual needs.
In West Germany, nudism was illegal, while male-oriented pornography, peep shows and strip clubs proliferated with the 1975 repeal of their pornography law.
*Sexploitation is the commercial exploitation of sex, sexual attractiveness, or sexually explicit material.