New Economic System
Encyclopedia
The New Economic System was an economic policy that was implemented by the ruling Socialist Unity Party
(SED) of the German Democratic Republic
(GDR) in 1963. Its purpose was to replace the system of Five Year Plans which had been used to run the GDR's economy from 1951 onwards. The System was introduced by Walter Ulbricht
in order to give centralised control to the economy to be run in as efficient a manner as possible.
Its main aims were to reduce the wastage of raw materials, increase the level of mechanisation used in production methods and, most significantly, to create a system in which quality rather than quantity was foremost. It was also used to rebuild the economy following the Republikflucht
which had devastated the GDR's economy prior to the building of the Berlin Wall
on 13 August 1961.
The System was largely successful and was replaced in 1968 by the Economic System of Socialism
which concentrated on building up the GDR's hi-tech industries.
Socialist Unity Party of Germany
The Socialist Unity Party of Germany was the governing party of the German Democratic Republic from its formation on 7 October 1949 until the elections of March 1990. The SED was a communist political party with a Marxist-Leninist ideology...
(SED) of the German Democratic Republic
German Democratic Republic
The German Democratic Republic , informally called East Germany by West Germany and other countries, was a socialist state established in 1949 in the Soviet zone of occupied Germany, including East Berlin of the Allied-occupied capital city...
(GDR) in 1963. Its purpose was to replace the system of Five Year Plans which had been used to run the GDR's economy from 1951 onwards. The System was introduced by Walter Ulbricht
Walter Ulbricht
Walter Ulbricht was a German communist politician. As First Secretary of the Socialist Unity Party from 1950 to 1971 , he played a leading role in the creation of the Weimar-era Communist Party of Germany and later in the early development and...
in order to give centralised control to the economy to be run in as efficient a manner as possible.
Its main aims were to reduce the wastage of raw materials, increase the level of mechanisation used in production methods and, most significantly, to create a system in which quality rather than quantity was foremost. It was also used to rebuild the economy following the Republikflucht
Republikflucht
"Republikflucht" and "Republikflüchtling" were the terms used by authorities in the German Democratic Republic to describe the process of and the person leaving the GDR for a life in West Germany or any other Western country .The term...
which had devastated the GDR's economy prior to the building of the Berlin Wall
Berlin Wall
The Berlin Wall was a barrier constructed by the German Democratic Republic starting on 13 August 1961, that completely cut off West Berlin from surrounding East Germany and from East Berlin...
on 13 August 1961.
The System was largely successful and was replaced in 1968 by the Economic System of Socialism
Economic System of Socialism
The Economic System of Socialism was an economic policy implemented in East Germany between 1968–1970, led by General Secretary of the Socialist Unity Party Walter Ulbricht. It focused on high technology sectors in an attempt to make self-sufficient growth possible...
which concentrated on building up the GDR's hi-tech industries.