Where the East Meets the West: Crisis and Reform Debates in the 1980s

The Demise of State Socialism

The collapse of communist rule and the Eastern Bloc took the world of international politics and most Western observers completely by surprise. In the United States, especially, socialist countries had been widely regarded as totalitarian states where communists reigned supreme over “atomized,” passive societies. Schoolchildren in the West learned from their atlases that the Soviet empire was all the countries behind the Iron Curtain, swathed in a blanket of foreboding red and juxtaposed against the Western states in their light and airy blue. But the Eastern Bloc under late state socialism was not such a static, homogenous unit. Only a few experts, such as the German political scientist Klaus Segbers and the Swedish economist Anders Åslund, recognized the force of the social dynamics and implications of the economic crisis in the Soviet Union before 1989.1

The protracted demise of state socialism had begun many years previously, in the late 1960s. The brutal suppression of the Prague Spring destroyed any hopes for “socialism with a human face” or reforming the system. True, Poland and Hungary opened economically in the 1970s. But rather than improve the performance of their planned economies, the import of Western technology (for instance, for auto manufacturers “Polski Fiat” and the shipbuilding industry on the Baltic Coast) only resulted in massive foreign debt. The Soviet Union, which appeared so formidable to the outside world, was stagnating economically. All of the Eastern Bloc countries missed the “digital revolution” that not only marked the dawn of new technologies but also increased the importance of productivity gains and international trade.

As the economic gulf between East and West widened, the legitimacy of communist rule was increasingly undermined. In the GDR in 1956, the First Secretary of the Socialist Unity Party (SED), Walter Ulbricht, had famously promised to “overtake, not catch up” (überholen, ohne einzuholen).2Some decades later, his slogan had a hollow ring. In the GDR as much as in the other Eastern Bloc countries, the communists were unable to fulfill the unofficial contrat social of a better supply of consumer goods in exchange for political compliance.3 Many items were rarely or never available; if at all, they could only be purchased in foreign currencies from special stores: Intershop in the GDR, Tuzex in the ČSSR, Pewex in Poland, and Beriozka in the Soviet Union. Hence the importance of black-market deals, bartering, and currency smuggling as described in the introduction. (My Bohemian grandmother invented a fail-safe solution for the latter: three West German one-hundred-mark notes could be folded to the same size as one rectangular Bahlsen butter cookie. The cookie packet was carefully unglued using steam, the notes inserted, and the packet resealed.) The communists were held responsible for the scarcity because they had a monopoly on political power.

The situation escalated in Poland first. In 1979–80, the Polish government tried to reduce the country’s budget deficit by raising the prices for consumer goods and even basic foodstuffs. The public responded with mass protests and other forms of unrest. This led to the founding of the independent trade union Solidarność (Solidarity), the first mass movement to emerge beyond the party or official state organizations in a communist-ruled country. Mikhail Gorbachev later tried to alleviate the ongoing crisis of the planned economy by instituting glasnost and perestroika, but to no greater avail than the efforts of the reform communists in Hungary and Poland.

Contrary to expectations, communist rule was undermined by the East-West détente and, in particular, the Helsinki Conference on Security and Cooperation in Europe in 1975.4 The leaders of the Eastern Bloc countries initially took the Final Act of the CSCE to be a resounding success. Agreeing to respect the coexistence of the different systems and abide by the principle of nonintervention, the signatory states seemed to confirm the status quo for decades to come. But the communist regimes underestimated the impetus that the conference gave. The opposition in many countries took advantage of the legal provisions of the Helsinki Accords to formulate their demands. One result was Charta 77 in Czechoslovakia, which referred explicitly to the text of the accords and called on the government to respect human rights.

Another result of the détente and the CSCE was the partial opening of the Iron Curtain for individual travelers. The Poles, Hungarians, Czechs, and Slovaks who were permitted to travel could in this way gain firsthand impressions of the rival system. The West—including former “archenemy” West Germany—exuded a magnetic attraction, not only on account of its much more colorful consumer world but also its greater freedoms in most other areas of life. While the majority of GDR citizens were not permitted to cross the Iron Curtain, they were close enough to receive West German television signals and thus get a tantalizing idea of the West. In the second half of the 1980s, my Czech relatives visited West Germany at least once a year in order to purchase durable electronic appliances, water faucets that did not drip, and textiles of all kinds. Tens of thousands of Poles worked as harvest hands in West Germany and Sweden. Poland also sent between ten thousand and thirty thousand contract laborers to the GDR each year. As well as performing their regular tasks, these seasonal laborers and guest workers traded popular Western products and items from other socialist countries as a sideline. Commercial tourism became such a widespread phenomenon among Poles that sociological studies were written on the subject, dubbed turizm zarobkowy. Even diplomats participated in the mass-scale smuggling, much to the annoyance of the GDR border authorities who were obliged to let them pass. Warsaw evolved into a hub of trade, where Western products were illicitly sold and distributed across Eastern Europe, right up to the USSR.5

Communist propaganda suggested that international contact within the Eastern Bloc consolidated the brotherly ties between socialist nations. But often enough, the opposite was true. The cautious increase in commercial opportunities bred rivalry and misunderstandings that seemed to confirm personal prejudices (as, for instance, when Polish “tourists” in Frankfurt an der Oder snapped up the last available frying pan or pair of children’s shoes, as residents of the East German border town recalled with indignation as late as 2004). It also enabled growing sections of the Polish population to acquire capitalist skills.

The same can be said of government functionaries engaged in the economic sphere. In 1989–90, they had the choice of using their skills and contacts to ease their way into capitalism or trying to uphold the old order by force. Many managed to maintain a comfortable lifestyle after their regime’s collapse. Back in the seventies Egon Bahr, the main architect of West Germany’s social-democratic Ostpolitik (policy toward the Eastern Bloc), had trusted in “change through rapprochement” (“Wandel durch Annäherung”). Although the Eastern Bloc changed too little to prove him right, rapprochement between the East and West certainly occurred on a popular level, through trade, travelling, and tourism.

At the same time, the front lines between communist authorities and opposition forces in Eastern Europe began to yield. Over the course of bitter and extended disputes, the regimes and their opponents came to form Janus-like units. In the USSR, Poland, and Hungary in the second half of the eighties, reform communists adopted some of the opposition’s arguments and became increasingly open to change. Even in the reform-averse GDR and ČSSR, the official press started disseminating ideas that had originated with the opposition. The vision of Europe on which Gorbachev’s concept of a “common European home” was based is one example.6 Cold War historians have questioned the seriousness and impact of these visions. In any case, like the ideas of the international peace movement, they testify to trans-bloc thinking.

Meanwhile, the official economic cooperation between East and West gathered its own momentum. In the wake of the oil crises of 1973 and 1979 and the subsequent recessions, the West turned increasingly to the Eastern Bloc as a supplier of raw materials, a trade partner, and even a potential sales market. Despite having inflamed tensions by invading Afghanistan, the Soviet Union was still able to clinch the “deal of the century” with West Germany: they agreed to supply Russian natural gas to the Federal Republic in exchange for steel pipes, compressors (which were subject to export restrictions according to the Coordinating Committee for Multilateral Export Controls, or CoCom), and turbines to transmit the gas. The Austrian company VÖEST constructed an entire steel mill in the East German Eisenhüttenstadt steelworks combine; the banking group Raiffeisenbank founded its first Eastern European subsidiary in Hungary; IKEA and other major Western companies contracted with factories in Poland and the GDR to manufacture their products.7 These transactions were indeed “confidence-building measures,” and they deepened the East’s dependence on the West.

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