Since the fall of the Berlin Wall, the significance of the German Democratic Republic (GDR) and all that it purported to stand for has been largely cast aside. Other than as a cautionary tale, the GDR has been widely seen as offering little to contemporary political discourse. By contrast, in recent years, its experience, especially in its early formative period, has attracted a lot of attention from historians.Footnote 1 In part this burst of activity can be attributed to the opening of closed archives in eastern Europe, but it is also related to the desire to understand better how a flawed system could maintain such seeming stability for so long, and then, how all that could collapse so suddenly and ignobly in 1989. Was its demise inevitable, rooted, as it were, in the DNA of the system, or were there alternative paths that could have been taken? Much of the recent research is founded on the premise that insights and answers to such questions can be uncovered by going back to the origins of the system.Footnote 2 This article is written in the same vein. Its aim is to shed light on how aspects of the East German workplace evolved in the period between the beginnings of Soviet occupation and the establishment of a Soviet-style planned economy by 1949–50.Footnote 3
Like any economic system, a Soviet-style economy is more than the sum of its parts. It is not just the formal architecture of planning and control. These were, of course, essential, but could only function if placed in a setting that was conducive. Just as organ transplants can be rejected by the recipient's body, new institutions out of touch with, and unaccepted by, the community it works for are unlikely to take.Footnote 4
This article examines the process whereby socialist workplace norms were introduced and gradually accepted in East Germany. Here, the focus is on the formation of “core” norms: work habits and routines, disciplines, and modes of remuneration central to getting things done on the shop floor. For the system to function, these norms needed to be broadly accepted by workers; they didn't need to be warmly embraced by them. These “core” norms can be thought of as the rules of work, the rules that even the lazy, unmotivated worker takes for granted.
In changing the workplace, the GDR faced a formidable challenge. It is, of course, a problem that all economic systems confront, especially in their gestation periods. The revolutionary new work norms based on “punctuality, respect for hierarchy, frugality, and temperance” that the factory system introduced during the industrial revolution in Britain were resisted by a first-generation workforce more accustomed to less routinized rural work.Footnote 5 Factory norms, however, gradually took root, largely thanks to the determined use of incentives—both of the carrot and stick varieties. Appropriate behavior was rewarded with better pay, promotion, and other benefits; bad behavior with the opposite, plus the added threat of unemployment. Indeed, the existence of competitors beyond the factory's walls prompted both workers and bosses to respond to and implement appropriate incentives.
But how were norms established in a Soviet system largely devoid of competitive mechanisms? This article addresses this issue with reference to the introduction in occupied East Germany of one important element of the Soviet workplace: piecework (Akkordarbeit). Much is already known about the establishment of piecework in East Germany. This research has provided a wealth of detail on how workers perceived and resisted piecework. The story of the party's concessions and arrangements with its workers has been vividly told.Footnote 6 Either because piecework challenged the traditions of the German labor movement or because it upset the perceived social contract between the worker and boss, the East German labor force opposed its introduction on the shop floor wherever possible.Footnote 7 In the words of Kopstein, this “everyday resistance” to piecework gave rise to a “cat-and-mouse game” between the state and the working class, a game where the state was constantly forced to put aside its plans to appease the workers.Footnote 8 Given its ultimate fate, the GDR's “system-immanent defects” and path-dependence almost lent a sense of futility to the game.Footnote 9 Demise could be read into every act.
Yet, this was surely not how the process seemed from the perspective of the late 1940s. The communist movement, and many who opposed it, did not see its actions as pointless or futile. The possibility that it might build a new and “better” society appeared very real. Nor is it likely that its changes of direction were simply reactions to worker resistance. Such resistance was, of course, an important part of the scenario and we are indebted to those whose research has rediscovered it. Yet resistance was just one part of the story and needs to be placed in a broader context. This article uses a wide range of party, union, state, and personal archives as well as contemporary newspapers, magazines, and memoirs. Inter alia it explores how the party's ability to control the economy—and itself—shaped the evolution of the East German workplace. The focus is thus not just on resistance but also on the interactions between party and worker, between the different organizations operating within the occupation zone, between the Soviet military and the German communists, and within the party itself. The article also illustrates the importance of signaling mechanisms in planned economies.
“Ein Gewirr von Sonderregelungen” Footnote 10
Following the defeat of Nazi Germany, a Soviet Occupation Zone (Sowjetische Besatzungszone, or SBZ) was set up to oversee most of the eastern territories, which would later become the GDR. A military government, Sowjetische Militäradministration in Deutschland, better known by its German acronym SMAD, was created in an environment marked by utter chaos and confusion. Initially, SMAD concentrated on security considerations, extracting reparations, supplying occupying Soviet forces, and feeding the local population. While SMAD did reshape the East German political order by breaking up the large estates of the Junkers and by merging the Kommunistische Partei Deutschlands (KPD) and the Sozialdemokratische Partei Deutschlands (SPD) into the Sozialistische Einheitspartei Deutschlands (SED) in April 1946, at this stage it had no intention of building a Soviet-style economy in the SBZ. Indeed, despite the private urgings of leading German communists for the immediate introduction of socialism, Stalin appears to have favored a united, democratic Germany, disarmed and denazified.Footnote 11 Such a position limited the power of SMAD to intervene in an economy significantly weakened by war damage.
Nor was there clarity as to who was responsible for the management of the economy in the SBZ. SMAD's central administration remained unregulated and largely without the means to implement measures. Economic authorities meanwhile had emerged in each of the different German states (Länder). Their focus was naturally regional and practical. Undesirable SMAD instructions were sidestepped, limiting any chance of policy coordination within the SBZ. Competing with each other for scarce resources, Länder's policies often conflicted and heightened the economic confusion of the time.Footnote 12
The lack of clear economic direction was compounded by what was occurring on the ground. Workplace councils formed spontaneously in the final days of the war, often with Soviet acquiescence. In thousands of workplaces throughout the SBZ, employees took advantage of their newfound freedom and abolished detested symbols of Taylorism, such as time clocks and piecework. An egalitarian, cooperative spirit permeated the shop floor.Footnote 13 Wages—monetary or in-kind—were equalized, and any profit shared among workers.
Economic necessity guided these developments. No work meant starvation for people suffering from both the deprivations of war and ongoing reparations. The SBZ had no clear policy toward workplace relations. As Pritchard has noted, “If an economic catastrophe were to be averted, the authorities . . . had little choice but to work with the councils, for they constituted the one active and constructive force in East German industry.”Footnote 14 As long as they did not interfere with political considerations or reparations, workplace councils were left alone.Footnote 15 By the end of 1945, workplace councils existed in most enterprises across the SBZ.Footnote 16 The communist movement, whose leaders had been advocating centralized control of the economy, therefore decided to harness the influence of these councils for its own ends. In a speech given on August 29, 1945, Walter Ulbricht acknowledged that workplace councils had a central role to play in reconstruction.Footnote 17 This embrace of egalitarianism and worker management was pure pragmatism. In an environment where many owners, managers, and employers had been tainted by their association with Nazism and, hence, driven out, someone or something needed to fill the void in the short term. Workplace councils were thus expected to carry great responsibilities: overseeing appointments and dismissals, monitoring prices, setting wages and norms, guarding against sabotage, and implementing denazification.Footnote 18
Unsurprisingly, wage policy in the zone remained confused. Egalitarianism coexisted alongside wage differentiation. A temporary wage freeze was put in place throughout all occupied zones in 1945. New wages were supposed to correspond to existing wage laws, but exceptions were permissible in certain cases, such as when there was a pressing need for raw materials.Footnote 19 Early SMAD orders strengthened the “egalitarian” push of the workplace councils: an eight-hour day (forty-eight-hour work week) was regulated in February 1946; confirmed paid vacations offered in May 1946; and in a move designed to encourage people to move back into industry, equal pay for equal work (men, women, and juveniles) was established in August 1946. A minimum wage of 104 Reichsmarks per month was introduced in 1947.Footnote 20
The overriding concern for SMAD at this point was to find a way to make the SBZ self-sufficient, and this could only be achieved through a rapid, sustainable increase in production in key industries. Thus, at the same time that wages were being harmonized across most industries in the SBZ, strong wage differentiation was being introduced for “specialist workers.”Footnote 21 The coexistence of Länder-operated nationally owed enterprises (Volkseigenen Betriebe), Soviet-controlled corporations (Sowjetischen Aktien Gesellschaften), and privately owned companies amplified the differences in practice across the economy.
In 1945–46, the antiegalitarianism of piecework was hard to justify, especially to the rank and file of the party where notions of leveling were popular. The German labor movement had a long tradition of opposing piecework. When large enterprises began to adopt piecework and elements of Taylorism in the 1920s, trade unions countered with the slogan, “Akkord ist Mord” (piecework is murder).Footnote 22 Outright union rejection gradually gave way to conciliation in the Weimar Republic: if piecework could not be abolished, then the most exploitative aspects of it would be mitigated through labor contracts.Footnote 23 The KPD, however, had resolutely opposed piecework throughout the Weimar and Nazi periods, though its opposition gave way to pragmatism in 1945 when the magnitude of the calamity facing East Germans became evident. Piecework was acceptable, but only in exceptional cases. As Roesler noted, “in the east at first, not just the workers but also leading economic functionaries of the SED sensed that the piecework wage as material incentive would be needless in a future socialist Germany, as they were acting as owners of the confiscated enterprises.”Footnote 24 Hamstrung by circumstances and for want of any other real alternative course of action, party leaders began to advocate that natural ideological drive and pure idealism could substitute for real control over the workplace. Fritz Selbmann, at the time Saxon Minister for the Economy and Economic Planning, spoke of the hopeful sign of a new relationship to work from the “activists of the first hour” who on the basis of their “forward-looking political objectives” and “love for their people” prompted them to “take over the leadership in reconstruction.”Footnote 25
Yet, here the SED was just making the most of a bad situation. The wage regime that emerged in the period following the war was guided by an uncertain mix of worker spontaneity, ad hoc activism, and official expedience. As Selbmann told Bruno Leuschner, head of the SED's Department of Economics and Finances, “the totally confused measures” of SMAD bred a “chaotic situation” and ensured that real economic control could not be established.Footnote 26 The material conditions for the introduction of an SBZ-wide, performance-related wage did not exist in the period 1945–47. Change, when it did arrive, was prompted by economic crisis and the worsening relations between the Soviets and Western Allies.
First Steps: “Mehr produzieren, gerechter verteilen, besser leben!” Footnote 27
In the years immediately following the war, Soviet attitudes to the future of East Germany were conditioned by the desire not to provoke international conflicts. While the possibility of a united Germany remained, Stalin did not want to give the impression that a new state was being built in the SBZ. By 1947, however, he had come to the conclusion that his one-state solution was off the cards. Coupled with the acute food shortages that followed the harsh winter of 1946–47, the growing realization that the zone might indefinitely remain under Soviet control led to a shift in thinking at the highest levels of the SBZ: some control of the economy needed to be handed over to local administration.Footnote 28 On June 4, 1947, SMAD Order 138 established the German Economic Commission (Deutsche Wirtschaftskommission, or DWK).Footnote 29 Under the chairmanship of Heinrich Rau, the DWK, the first German administrative body responsible for the entire zone, was expected to coordinate all economic activities within the SBZ. The formation of the DWK, however, did not signal Soviet acceptance of the sovietization of the economy; rather it was a pragmatic response of SMAD to the internal and external exigencies (including the loss of natural trading partners with the formation of the bizone) it faced in 1947.
The new DWK immediately launched itself into an intensive debate about piecework, a debate that would ultimately lead to the adoption of the motto, “produce more, distribute fairer, live better” at the 2nd SED Party Congress in September 1947.Footnote 30 The DWK realized that, alone, the “activists of the first hour” would not save the SBZ. Drawing on the precedent set by Lenin, Stalin, and the Soviet experience, Ulbricht justified the use of piecework in a “democratic economy” because this system could no longer be used for the exploitation of the workforce, and the increase in production—one of its final goals—would be used for the benefit of all.Footnote 31
SMAD supported the SED's new resolve. On October 9, 1947, it issued Order 234. Dubbed the “Construction” Order, it consisted of a broad series of measures designed to address the most urgent issues facing the SBZ. Point 4 of the order called for the systematic expansion of piecework wages, the clearest sign yet that wage differentiation would be centralized and coordinated from above and that material stimuli—not egalitarianism—would drive the economic revival.Footnote 32
In contrast to earlier laws and rulings, this order was “not an ad hoc response to economic and social problems in the SBZ.”Footnote 33 The order may have been issued by SMAD, but the main work behind the scenes came from the East Germans: the SED, Free German Trade Union Association (Freier Deutscher Gewerkschaftsbund, or FDGB), and the DWK worked closely together on Order 234. Herbert Warnke, president of the FDGB, and his deputy, Hans Jendretzky, edited the final text.Footnote 34 Broadly applied economic incentives, often in the form of wage differentials, were the centerpiece of a campaign by the aforementioned agencies to win the “hearts and minds” of workers. The SMAD newspaper, Tägliche Rundschau, printed 100,000 brochures about Order 234 on October 10, 1947. The day before, a press conference was called to promote the order where Max Herm, deputy president of the Ministry for Labor and Social Welfare (Ministerium für Arbeit und Sozialfürsorge, or MAS), discussed the “wording” of Order 234 with twenty workplace councils and trade unions.Footnote 35
As noted earlier, for many workers piecework was tainted by its association with capitalist and Nazi industrial life. Workplace councils across the country had abolished it in 1945 as one of their first acts. As a result, the party anticipated significant opposition to the extension of piecework. In a sitting of the FDGB Federal Executive (Bundesvorstand) on the eve of SMAD Order 234, Ulbricht spoke of the need for a “change in attitude toward work” within enterprises.Footnote 36 The order aimed to transcend traditional workplace practices.
The party leadership faced challenges both from the workforce and from within. As a report sent to the SED Party Executive (Parteivorstand) from a local SED group in Kösteritz in December 1947 illustrates, a “lingering egalitarianism” among many workers was causing internal divisions within the SED.Footnote 37
Why is work morale sinking? Because the incentive to work is missing! The real wage, which sinks from month to month, is a fact that higher piece rates won't change. There are only a few idealists among the workers who today can develop a better attitude toward work. The attitude that dominates is that all these measures will lead to higher exploitation and lead to little good for the majority. We must use our eyes and ears to understand the masses. And the masses say, “Don't let yourself be exploited. Don't let yourself be exploited, for you are a human being!”Footnote 38
The limited powers of the DWK to curb the actions of Länder posed further problems for policy coordination. The DWK did not yet have the authority to impose orders, and conflicting regulations and decisions continued.Footnote 39 As the Thuringian Ministry of Economic Affairs bluntly asserted, “of the decisions of the Berlin Economic Commission, we will implement whatever we consider advisable and correct.”Footnote 40
The prominence and pervasiveness of workplace councils also limited the DWK's scope for action. Issues of enterprise management needed to be negotiated with each council. In these discussions, the interests of the enterprise's workforce usually took precedence. While this situation had been previously tolerated, the SED now saw the councils as obstacles. As Selbmann explained, “we don't want an enterprise parliament where the workplace council has to be consulted about every screw that has to be obtained, but . . . a tight leadership aware of its responsibility upward and downward.”Footnote 41
The need for Soviet-style one-man-rule and a more centralized control of the economy were now acknowledged. Moreover, it came to be realized that working-class resistance to piecework could, indeed should, be broken with the assistance of the trade union movement. Accordingly, increasing pressure was steadily put on unions and workplace councils to come under the control of the party-run FDGB, whose function, according to Ulbricht, should be to carry out the economic-political goals of the party.Footnote 42 The party used intensive political schooling to make shop stewards and councils “less responsive to pressures from below, and more amenable to manipulation from above.”Footnote 43 In November 1947, Ulbricht wrote:
Of greater importance for the raising of worker productivity are the new work rules, which were devised by the central administration for work together with representatives of the FDGB. In these work rules it is stated that the application of accord wages should be expanded as a means to raise worker productivity and wages. While reading these regulations, old trade union colleagues will remember how they earlier fought against accord wages and the bonus system. Earlier, that was correct. With the liquidation of the power of corporate and bank capital, the existence of nationally owned enterprises, democratic economic organs, and full rights of codetermination for trade unions, we must, however, take a different position.Footnote 44
The party also realized it needed to give and receive accurate, reliable information to promote and gauge the effectiveness of Order 234. At an enterprise level, this would require the cooperation and participation of the FDGB, workplace councils, unions, plant managers, and workers. Order 234 Work Groups were set up to get the message down to the grass roots, monitor progress, and report back to the SMAD. It was realized that there was also a general lack of “ideological understanding” at the enterprise level and particularly in the press. The problem was twofold: a lack of systematic coordination and the failure to get a single correct message out.
A report on the implementation of Order 234 from Mecklenburg-Vorpommern, for example, concluded that in that Land:
The participation of the press in the implementation of Order 234 is weak and mainly inept. To our knowledge, no article has appeared in the Mecklenburg press of a leading government figure or politician about the decree. The examples that are given by the press are often exaggerated or have nothing to do with the order in reality. For example, changing the amount that should be produced is repeatedly interpreted by the press as the success of Order 234.Footnote 45
Such exaggerations in production numbers often had unintended consequences. An internal report from within the DWK entitled “What Must Become Even Better: The Press and ‘234’” noted:
The impression is aroused in the labor force that the economy finds itself in a rapid boom (in part, this is because of reports of an increase in production of thirty to fifty percent) and the question comes up: where is all this excess production? Moreover, these figures depart from the actual purpose of the construction plan 234, which wants to bring about a rise in worker productivity.Footnote 46
The Chemnitz branch of the FDGB similarly expressed “irritation” with newspaper reports that presented a different view of reality than the one it saw. One such headline appeared in the Sächsischen Volkszeitung on December 15, 1947: “The Piecework System is Established.” The story reported that in the Saxon metal industry, the number of workers on piecework rates had risen from twenty percent at the end of the war to eighty percent. Subsequent inquiries revealed that the figure in December 1947 was a mere 13.6 percent (a rise of 7.1 percent from the previous October), a rate regarded as unsatisfactory.Footnote 47 The problem lay not in the fact that the information was false, but in the signal it sent to the workers. A report from a 234 Work Group in April 1948 found that “In the press, numbers about the expansion [of piecework] are repeatedly given that are extremely exaggerated. It is even claimed here and there that the percentage has already risen again to approximately seventy to eighty percent. Such reports must lead to neglect in the task of expanding wage differentials.”Footnote 48 A similar report concluded, “These irresponsible numbers lead one to assume this important task has been ‘solved’ and is not to be worried about.”Footnote 49
Establishing Control: Der Leistungslohn und der progressive Akkord Footnote 50
By the beginning of 1948, the SED had demonstrated the will to take control of the economy; what it still lacked was an ability to do so effectively. Despite its hopes, the DWK simply did not have the means at its disposal to take on the power and influence of the Länder and the workplace councils. More than that, the party also began to realize it did not have the mechanisms in place, both outside and, worryingly, inside the SED, to mold convention and opinion in ways conducive to its goals.Footnote 51 As a consequence, over the course of the second half of 1947 it had made relatively little progress in establishing order and control over the SBZ's economy.
Such an assessment clearly applied to its attempt to introduce piecework. At the behest of SMAD, members of the DWK traveled across the zone in early 1948 and compiled a series of reports on the implementation of Order 234. The picture that emerged was not encouraging. Before 1945, eighty percent of the industrial workforce performed under piecework conditions. Footnote 52 This had fallen to twenty to twenty-five percent by 1946, and a half-year report from MAS in April 1948 showed the percentage of workers on piecework in early 1948 had barely risen: from twenty-three to twenty-six percent.Footnote 53 Another report from the same period found that the rate was approximately twenty-five to thirty percent.Footnote 54 Rates of piecework remained relatively high in leading industries such as coal mining, which were not so affected by material shortages. Nevertheless, norm fulfillment remained below prewar levels.Footnote 55
The DWK attributed its failure to three factors. The first was its lack of authority over the economy and inability to bring SMAD and Länder ministries, not to mention workplace councils, under its control. This gave rise to inconsistencies, even inaction in parts. A report on the implementation of the order from Mecklenburg-Vorpommern noted:
Fundamental measures to raise worker performance have not been tackled so far. The only Ministry that has accomplished systematic work in the direction of the order is the Ministry for Labor and Social Welfare while, for example, the Ministry for Economics explained it actually “has little to do with the order.”Footnote 56
Further on, it added, “The subjective resistance to the implementation of the order exists in the inadequate or totally absent initiative and activities of different leading figures (Ministry for Trade and Supply, Ministry for Economics, the Agency for Economic Planning) and the unsatisfactory ideological schooling in the enterprises.”Footnote 57 These agencies and some workplace councils were accused of “indifference,” “inadequate political understanding of the necessity for the order,” “anarchism,” “corruption,” and even “sabotage.”Footnote 58
The SED lobbied the Soviets for a significant extension of the DWK's power. On February 12, 1948, they obliged with the introduction of SMAD Order 32.Footnote 59 This order gave the DWK the power to legislate and was quickly followed on March 9 by another placing all existing SMAD and Länder administrations under its direct control. The DWK was now the preeminent institution in the SBZ with unprecedented authority to manage its economy.Footnote 60
The second factor that plagued the introduction of piecework was the lack of consistency in how it had been implemented across the SBZ. No common piecework system had been specified. Versions varied between regions and between enterprises. In many cases, the system in operation provided little incentive for improved performance. The old hourly wage would be guaranteed irrespective of output, so that workers were not disadvantaged by irregular production. Workers would also be guaranteed a premium or bonus if a certain target was achieved. Often the difference lay in how the “progressive” element was calculated and at what rate of production it cut in. A coal mine in Altenburg, for example, paid workers a bonus of 0.50 Reichsmarks when they reached 6,500 tons per day in January 1948—even though the daily target was 7,000 tons!Footnote 61
The third factor was that even when introduced, piecework did not guarantee workers better wages. A DWK report dated February 4, 1948, conceded, “After the introduction of the piecework wage, wages actually fell in many enterprises. Comrade Rau reports this as characteristic for Brandenburg.”Footnote 62 Unsurprisingly, workers objected.Footnote 63 The party realized that wage differentiation could only succeed if it actually provided workers with incentives to work harder. Real wages had to go up.Footnote 64
The DWK began work on a set of guidelines for a progressive wage differential that would standardize practice across enterprises and make piecework more attractive, especially for the best workers. If implemented properly, under these guidelines, workers could theoretically earn unlimited, progressively increasing premiums over the base piece rate for marginally greater production.Footnote 65
Adopting common guidelines for piecework, however, was not enough. In March 1948, the DWK issued orders that workers who transferred to piecework were to be guaranteed a fifteen-percent increase in income.Footnote 66 In June of that year, a sitting of the SED Parteivorstand upheld this guarantee and made piecework earnings in principle unlimited in amount.Footnote 67 Performance bonuses were also no longer to be taxed.Footnote 68 A report from a 234 Work Group in April 1948 claimed that the new approach had delivered positive results. The case of a wire transmission department at a steel mill in Hettstedt was cited. Every machine had a normal production per shift. If workers reached their daily target, each would receive a ten-percent bonus on top of the base rate; and if they exceeded norms by twenty percent, this bonus would rise to fifteen percent. Production per head went up from 4.3 tons to 6.95 tons and performance per hour rose from 24.6 kilograms to 38.9 kilograms. The report found that workers also took more care with tools and materials and with better use of work time were able to make the same amount with fewer workers (from 132 to 92). The average wage per hour rose from 0.99 Reichsmarks to 1.58 Reichsmarks, while the highest paid worker now received 2.10 Reichsmarks. The overall wage bill remained unchanged as the earnings were split among fewer workers. In the period from October 1947 to February 1948, norms were exceeded each month, and average monthly performance per worker rose thirty percent.Footnote 69
Yet, this example was an anomaly in many respects. The shortage economy and soft budget constraint that enterprises operated under led to the hoarding of labor. Enterprise managers responded by setting weak output norms that workers could easily meet and exceed, thereby raising total wages and making their enterprise more appealing on the labor market.Footnote 70 In a letter to Rau, a senior SMAD official complained that by September 1948, eighty percent of workers at the Maximilian Steel and Iron works were on “progressive” wage differentials, yet norms were based on the average performance for July and August (the lowest months in the last eighteen months). This led to a wage explosion of more than sixty percent, though year-on-year productivity actually fell by twenty-four percent. Similar examples were supplied from foodstuff, coal, and industry enterprises.Footnote 71
Serious divisions were also emerging in the SED over the direction of wage policy. As wages seemingly spiraled out of control, a bureaucratic battle raged behind the scenes over the primacy of “progressive” wage differentials. Selbmann, now DWK deputy chairman, and Gustav Brack, head of MAS, held opposing views. Selbmann believed that finding ways to increase work effort was key and that workers would only take up piecework if it remained “progressive.” In other words, wages needed to stay high to stimulate workers to work harder. By contrast, Brack contended that the primary focus of policy should be output and norms—not wage—growth. Wage growth that outstripped productivity growth only raised costs and choked off the expansion of output. Wages needed to be held in check until production had risen.Footnote 72
An internal document from the DWK hints at how bitter the dispute between the administrative agencies responsible for implementing the order had become.Footnote 73 It speaks of “a series of open errors on the part of comrades in the party, administration, and the unions,” who used material shortages as an excuse for not devoting enough energy toward Order 234.Footnote 74 “The underestimation of the ideological schooling of the workers has led to them not yet recognizing the new relationship to work.”Footnote 75 In a shoe factory in Magdeburg, for example:
A female worker explained in response to a query that she was probably in the position to make 130 pairs of shoes instead of 120, that she only made 120 because she received the same income as for 130. Workplace councils and enterprise leaders explained, “The time of piecework is over: piecework is murder.” When the question was raised whether it was known that coal miners work under the earth in bare feet because there are not enough shoes, they saw the error of their ways.Footnote 76
This criticism was part of a growing, more general, realization among the SED leadership that simply having a clear party line would achieve nothing if there were no mechanisms to convey that message clearly and speedily down to the shop floor. These mechanisms needed to be found, strengthened, and systematically coordinated. In this light, the DWK noted in early 1948 that the press should be better used to propagate the nascent activist movement.Footnote 77 It was a theme that would be returned to later in the year.
Meanwhile, the SED continued its internal battle over wage policy. The internal report mentioned previously openly criticized wage differentials, which did not take “the financial viability of the enterprise . . . into consideration.”Footnote 78 Several high-profile figures were castigated for their excessive enthusiasm. Nevertheless, in September 1948, Selbmann still maintained, “I regard it correct from the outset to treat the question of progressive wage differentials as the dominant question.”Footnote 79 In an article published in the magazine, Die Einheit, Warnke likewise argued that the progressive wage differential was the only correct wage system.Footnote 80 Indeed, as late as November 1948, despite the growing criticism and calls for tighter norms from within the SED and from SMAD, Rau could still counter with a different message: “A further question that needs to be cleared is that of norms. One always speaks about the setting of new norms. That appears to be premature and harmful.”Footnote 81 Further on, he added, “We have, for example, in a resolution one such sentence that says one must establish performance norms in all enterprises. That sounds smart and correct; we also believed that it was right. And yet it is false.”Footnote 82
The lack of consensus on priorities and norms created confusion in enterprises. Amid acrimonious claims of “opportunistic conspiracy” and “sabotage,” the SED referred the matter to the SMAD, which eventually ruled in favor of Brack's position.Footnote 83 The DWK was admonished for “irresponsible behavior.” Lowering norms had led to a “disproportionate growth in wages and production costs,” which “threatened the currency and financial system” and made many enterprises “nonviable.” A potash-coal mine in Bernburg, for example, was allegedly using norms that corresponded to forty percent of the 1943 levels. That meant the same work performance in 1948, when compared with 1943, cost 2.37 marks instead of 1.10 marks.Footnote 84 The DWK was ordered to work on a new set of guidelines: norms were to be tightened across the board and progressive wage differentials limited to essential industries and linked to the lowering of production costs.Footnote 85
Tightening Control: “Freund Hennecke gab das Signal”Footnote 86
The new guidelines were released on September 29, 1948, and made applicable to all state-owned enterprises. At their heart lay a new principle that “the basis of the wage differential is shaped by the work norms, which are established in the enterprises according to normal performance.”Footnote 87 Normal performance now corresponded to the time it took a majority of workers to do the job. Time studies would be used to determine the “average time.” This was the first widespread introduction of what would later become known as technically based work norms (Technische Arbeitsnormen, or TANs).Footnote 88
To alleviate workers' fears, norms were only supposed to rise when “technical conditions” changed, not through higher performance of the workers alone. Wage commissions were set up within enterprises to deal with issues of norm setting and verification. Work norms were communicated to workers via pay slips and displayed on bulletin boards within the enterprise.Footnote 89
These guidelines set out to expand the number of workers on wage differentials. The “progressive” element still existed in theory and without limits, but in addition to being restricted to priority industries such as iron, coal, metal, machines, and transport, its payment was now linked to “genuine” work norms and an enterprise lowering costs, and required permission from the relevant industry authority.Footnote 90 Performance bonuses were also offered for suggestions that raised productivity or led to cost savings.Footnote 91 To make piecework more appealing, tax rates on wage differentials were also lowered.Footnote 92
To monitor these work norms, workers on wage differentials were handed out wage slips before the commencement of each job, which made clear exactly what was expected of them. These slips detailed every aspect of the job: type of work, quantity produced, time allowed for production, set-up time, total time used, allowance for contingencies, total time allowed, cost per minute, and percentage of norm fulfillment.Footnote 93
Parallel to the extension of progressive wage differentials in 1948, offices for work preparation were created within enterprises, and a Central Commission for Time Studies was established in May 1949 within the DWK.Footnote 94 The main task of this commission was to introduce TANs, which would become the basis of future work norms.Footnote 95
Selbmann gave a wide-ranging talk on the issue of technically based norms to the SED Parteivorstand in July 1949, which is useful to quote at length. It demonstrates the party's—and his—new outlook.
Now comrades, the foundation of wage differentials is the application of technically correct work norms. I believe we must ask ourselves, what then are technical work norms? . . . Technical work norms—one must express that openly—are not somehow guessed or are work norms by rule of thumb, rather technical work norms rely on the exact determination of times and studies of work. That has been the point of the battle for technical work norms in the U.S.S.R.Footnote 96
Of course, the implementation of TANs, let alone getting workers to accept them, was beset by problems. The hope was that workers, together with enterprise managers and under the leadership of the unions, would agree to the piece rate and time permitted. The outcome should be “technically justifiable” and “socially responsible” norms.Footnote 97 Circumstances, however, practically ruled out a lengthy consultative process and standardized measures. Over a relatively short time, thousands of work norms needed to be checked and newly established. In many cases, work studies were replaced with stop watches. Even more frequently, time studies were forgone and figures based on capacity and experience were used instead.Footnote 98 Interruptions in production because of supply bottlenecks, ongoing dislocation from the war, and reparations also made it impossible in many cases to set appropriate work-based norms.
If norms were set too high because these conditions had been ignored or officials had been too vigilant with their stop watches, workers would lose wages unless a correction was made to the time permitted for a job. Furthermore, a switch from “experience statistics” to TANs would reduce the scope for wage increases. Workers knew this and were determined to defend their wages through the maintenance of soft norms.Footnote 99
A distinctive feature of this new SED approach to wages was that it was accompanied by an orchestrated campaign from the center to overcome such resistance. This was a campaign that for the first time coordinated all party, SBZ, and state organizations. Trade unions became “transmission belts” for party policy, while the “sporadic character” of the activism of the early postwar years was transformed into a series of systematic, planned, and integrated movements all pushing a single, unambiguous message.Footnote 100 Heroic feats of labor and socialist competition now became key weapons in the party's arsenal of influence.
First in the SED's sights was the workplace where competing voices continued to confuse the message. At an FDGB conference in Bitterfeld in November 1948, councils were abolished in enterprises where more than eighty percent of the workforce was organized into official unions. Shortly thereafter, this ruling was extended to all enterprises. Councils were deemed no longer necessary.Footnote 101 Unions would now take orders from above and assist in the introduction and promotion of wage differentials based on the performance principle. Nevertheless, resistance within the FDGB continued from former Social Democrats and workplace delegates who still believed that the primary function of unions should be to represent the material interests of workers rather than employers. This attitude was condemned by the FDGB leadership as “only-trade-unionism” (Nurgewerkschaftlertum).Footnote 102
The FDGB began to propagate wage differentials actively in the first half of 1949. To counter internal resistance, its Bundesvorstand produced “schooling material for enterprise functionaries” that aimed to explain similarities and differences between piecework wages and wage differentials. The rationalization of work norms under capitalism was contrasted with the emphasis on improving worker productivity in nationally owned enterprises, whose benefits flowed to all workers.Footnote 103 Various newspapers and magazines, including Die Freie Gewerkschaft, Die Wirtschaft, and Neues Deutschland, were used to convey the message.Footnote 104
The SED also felt it needed a positive role model to inspire workers to take up differential wages and TANs; it found one in Adolf Hennecke. The heavy propagation of the activist movement from October 1948 can be viewed as an acknowledgement from SMAD and the SED that the system was struggling to change workplace conventions. A new, stronger signal was needed to get the system to operate.
On October 13, 1948, Hennecke, a coal miner at the Oelsnitz Coal Mine in the Erzgebirge, brought in 24.4 cubic meters of coal during a single shift, a feat that exceeded his work norm by 387.3 percent.Footnote 105 There was nothing spontaneous or miraculous about Hennecke's achievement. His record attempt was planned by the Saxon branch of the SED, indeed stage-managed, more than a year in advance. The initial impulse came from a visit to a large factory in the U.S.S.R. where the leader of the Saxon SED, Otto Buchwitz, was able to witness firsthand the putative benefits of Stakhanovite workers.Footnote 106 The Hennecke shift was prepared four days earlier when the management of the mine, along with representatives from other mines, functionaries of the SED and FDGB, and colleagues from the Tägliche Rundschau gathered to discuss ways to promote an activist movement.Footnote 107 In a speech delivered to the SED Parteivorstand on October 20–21, 1948, Buchwitz revealed the extent of this involvement:
One should not imagine for a moment that this was a chance accomplishment; we consciously developed this case. I would like to say a few words about this: our goal was to find a way that we could develop an activist movement. We said to ourselves that for this we needed a central figure, a personality, and I am perfectly happy to admit that we were influenced [by the fact] that we needed someone like Stakhanov here. We searched for a man, and the district leadership helped us. Director Wellershaus searched for a man and we proceeded from the thought that, best of all, we would find him in coal mining, because that is the basic material we need for everything in the economy.Footnote 108
Yet, in spite of all this planning, not to mention what was to come, the initial reaction to Hennecke's feat was painfully reserved. Unbriefed, cautious local party officials and unionists did not know how to react and awaited a clear signal from the leadership as to the event's importance.Footnote 109 That sign came three days later when an open letter from the party leaders appeared in all newspapers across the SBZ praising Hennecke's “groundbreaking act.”Footnote 110 The official campaign had begun. In the days that followed, a stream of articles lauding Hennecke and reinforcing his significance appeared in the press. The Tägliche Rundschau was typical of the coverage. It explained to its readership, “In this way, the coal miner Adolf Hennecke established an unprecedented record in worker productivity in German coal mines and through this created an undisputed new era in the battle of German workers to reconstruct the German economy destroyed through war.”Footnote 111
The deeds of Hennecke were further popularized and mythologized through songs and poems, films and newsreels, special activist pledges and uniforms, billboards and posters, pins and medals. Schools and streets were even named after him.Footnote 112 The campaign made Hennecke a household name. He apparently received thousands of letters and telegrams of congratulation from young workers and schoolchildren, many clearly sincere, who saw in his movement an opportunity to improve working conditions; by summer 1949, up to 60,000 of these Hennecke activists had placed their faith in the power of socialist competition to transform the eastern zone.Footnote 113
Once the movement had taken root, the SED and SMAD, which had shown great interest in developments, began to shift their attention to those who followed Hennecke as well. The priority became the promotion of “production activists” within individual factories and ensuring that “Henneckists” were properly rewarded for their deeds. Old Stakhanovite films were shown; the movement was actively promoted in newspapers and journals; and workers were encouraged to “Keep up with the Progressivists,” local heroes of labor, whose example would supposedly inspire fellow workers to similar heights.Footnote 114
The immediate response from workers to the Hennecke movement was, of course, largely negative.Footnote 115 It, after all, threatened existing norms and wages. Nevertheless, this movement and the system of socialist competition it engendered from October 1948 became one of the most important signaling devices at the party's disposal to influence attitudes to wages, norms, and shop-floor practices. The movement was soon centralized and directed from above. On November 17–18, 1948, the DWK invited forty-five outstanding Hennecke activists to a workshop in Berlin. The “Berlin Resolution,” as it became known, was designed to broaden the base of the activist movement, which in the short term would help the party meet the requirements of the half-year plan of 1948 ahead of schedule and prepare for the first two-year plan of 1949–50.Footnote 116 The FDGB organized the first “Hennecke Activists” conference on February 4–5, 1949, where workers met and pledged to spread the movement through a series of competitions, staged to commemorate key dates, anniversaries, and upcoming economic plans.Footnote 117 Socialist competition commissions were set up within enterprises to oversee these events. In October of the same year, the FDGB organized the inaugural “Day of the Activists” competition to commemorate the first anniversary of Hennecke's record-breaking shift. The goals of such competitions were by then well known: to lift production, to recognize activists and innovators in production, to broaden the activists' movement, and to eliminate all errors and weaknesses in work.Footnote 118 By 1951, the system of socialist competition was embedded enough for the FDGB to call for the first “mass-based initiatives” as a prelude to the first five-year plan. Approximately 1.6 million workers participated.Footnote 119
If viewed purely from the perspectives of whether they increased labor productivity or convinced workers of the need for higher norms, then the activist movement and socialist competition clearly failed. Such is the standard interpretation, rightly offered by most historians.Footnote 120 Many in the SED leadership undoubtedly knew this, too, which begs the question, why then did socialist competition remain a visible feature of East German society until the end? Looking at the origins and rationale of the movement in 1948 rather than at the productivity gains it failed to deliver over the coming decades offers an explanation that does not place ideological blindness or “political ritual” at its core.Footnote 121 To be sure, socialist competitions were ideological, propagandist exercises, but it needs to be asked: to what purpose were such contrivances? The answer offered here is grounded in basic pragmatism: to instill, and then maintain, core socialist values and conventions in the East German workplace. In Soviet-style economies, socialist competition was one of the relatively few means available to ruling parties, such as the SED, to signal their intent and directly influence core norms.
Despite resistance at the grassroots level, most workers gradually accepted the need—if purely for cynical or selfish reasons—to adopt wage differentials. From the earlier sections, we know this was linked to weak norms and the opportunity to earn unlimited progressively increasing wages (at least initially). The example of activists such as Hennecke was a counter to the soft norms prevalent in most enterprises. Though trailblazing acts failed to inspire widespread copycat record setting, they did demonstrate both official determination and a potential to raise production. Hennecke and others like him also clearly revealed the intent of the authorities to snuff out once and for all the egalitarianism of earlier years. Perhaps their most important significance, however, was the unambiguous signal they gave to workers that hard work, commitment, and acceptance of the new shop-floor realities would be rewarded.
The party had come to recognize that mercenary reasons could work where appeals to ideological purity, class solidarity, or morality failed. At the first Activist Conference in November 1948, Selbmann could thus declare:
It is necessary to show the individual activist that his best performance improves not only the situation of our people but also his own personal situation. That is only achievable when the worker knows that when I exceed my work norm by so and so percent, my wage rises. Only then is the incentive given for a broader en masse commitment of our workforce to the goal of peak performance.Footnote 122
The number of workers on wage differentials increased steadily from 1949. By 1951, the rate was twice as high as 1948, three times as high as 1946–47, and higher than the number of piecework workers in West Germany. Nearly two-thirds of industry workers were on wage differentials—double the amount of 1948.Footnote 123 Outright opposition to piecework dissipated when workers realized they could make the system work for them. Nominal wages continued to rise during the first two-year plan of 1949–50, and the opening of state-run retail stores and restaurants in November 1948 meant Germans in the SBZ could legally shop ration-free for the first time since 1945.Footnote 124 In this environment, performance-based wages started to make sense. Even allowing for exaggerations in the numbers, and notwithstanding the high expectations of the SED, the attempt to introduce wage differentials from 1948 cannot be categorized as a failure in terms of getting workers to accept, if reluctantly, a key element of the Soviet workplace at any rate.Footnote 125
It was, of course, hardly an unalloyed success, either. The acceptance of piecework came at the expense of TANs: soft norms made piecework more appealing to workers, but undermined the attempt to link norms to productivity. All attempts to standardize work norms through time and work studies were resisted by the workers. The SED set ambitious targets for raising norms in the second half of 1949, and work preparation bureaus were created in all main branches of industry in the third quarter of 1949. Yet, once again cautiousness prevailed and by the end of 1951, only ten percent of norms could be classified as technically based.Footnote 126 Norms would remain a sensitive and unresolved issue for the next few years, eventually coming to a head in 1953 when the SED arbitrarily called for them to be increased by ten percent in honor of Ulbricht's birthday. The workers revolted.
Conclusion
In outline, the story this article tells is familiar: introducing piecework in East Germany was a long struggle beset by resistance, and it required frequent adaptations and the overcoming of many obstacles. Yet, the article has also brought other elements, typically left unconsidered, to this story. Above all, it has shown that the history of piecework in the SBZ amounted to more than the SED's fearful responses to worker resistance. The introduction of piecework was in fact an integral part of a dual process whereby the party acquired control of the economy and then learned how to exert influence on its direction. To achieve the latter, it first needed to learn how to control and direct itself.
The party's path to sovietization was neither clear cut, unidirectional, nor even assured. In the immediate aftermath of the war, egalitarianism pervaded the workplace. To the extent that policy existed at all, it was marked by ambiguity, contradiction, and confusion. The SMAD, SED, Länder, workplace councils—and from June 1947 the DWK—all coexisted and often operated at cross-purposes. SMAD Order 234 in October 1947 marked the first major attempt to alter labor practices in East Germany. Yet, its implementation proved problematic. Even with Moscow's go-ahead, the SED and DWK lacked the means and ability to take decisive action. Two things were missing: the political power and authority to act, and the support mechanisms to convey its messages to workers and enterprises and to influence shop-floor conventions.
SMAD Order 32 in February 1948 tackled the first weakness, finally empowering the DWK and turning it from one of numerous, competing economic authorities in the SBZ into its preeminent. The second requirement took longer to meet. The development and systematic coordination of “transmission belts,” party discipline, campaigns, activist movements, and socialist competitions evolved over the course of piecework's introduction. Their evolution was hardly exogenous; rather it was shaped by experience and the encumbrances the SED encountered along the way. The party learned by doing.
This article has shown the particular importance to planned economies of mechanisms by which those in authority can clearly signal their intent, instructions, and priorities. In such settings, independent signals such as prices become meaningless, and citizens are compelled to find ways to discern which of the growing volume of often contradictory directives flowing down from above need to be heeded. Here, the role of signaling becomes vital. The state needs to find ways to get its message to the public in a comprehensible, unambiguous manner. There needs to be coordination between all branches of the party and state. Multiple messages merely breed confusion.Footnote 127
This article has also challenged the view that the resistance of workers prevented the SMAD and SED from immediately implementing the full Soviet model. As Kopstein asserted, “in essence, Order 234 was a full-blown transfer of Soviet-style labor relations to East Germany,” but eventually the political authorities retreated “in the face of labor's continued resistance on the shop floor.”Footnote 128
As we have shown, such a view significantly undervalues the other forces and pressures at play that were influencing SMAD and SED decision making. Here it is important to recognize the difference between the theory of Stalinism, which was well known to the party, and the practice, which, due to a lack of first-hand experience in 1947, still had to be worked out. While the SED certainly began with this Soviet “tool kit” at its disposal, its understanding of how those methods could be practically implemented within the immediate postwar German context remained unclear. Nor did Order 234 signify the beginning of the “full-blown” Soviet workplace in the SBZ. It was introduced at a time when there was no unified economic authority in the zone. The DWK remained relatively weak and was months away from being able to assert itself forcefully.
None of this, of course, should be taken to imply that we believe that worker resistance was unimportant. Everyday resistance mattered, and the SED certainly did react to it. Our contention is that the party's response was not simply to acquiesce to workers' demands; rather it was to step back and devise better ways to influence them in the future. It was a strategy that was not without success. From 1949, when material incentives were better structured, the uptake of piecework did gather momentum. Not unlike the first industrial workforce in Britain, East German workers' resistance waned when they saw their pay increase. Perkins's description of industrial revolution Britain resonates with the East German experience: “by and large, it was the prospect of higher wages which was the most effective means of overcoming the natural dislike for the monotony and quasi-imprisonment of the factory.”Footnote 129
Moreover, as Hübner has previously noted, the line between the ruler and ruled, central to the resistance argument, is not easily drawn.Footnote 130 Reality is far more complex. In the late 1940s, the SED was not yet a tightly organized entity set above the workplace and separated from the people. Many of its activists were workers and genuinely shared their coworkers' fears and beliefs. As we have seen, this led to division and uncertainty even within the SED. The party versus the workers scenario does not completely ring true.
There is a deeper issue here, too. The existence of worker grievance and everyday resistance does not in itself necessarily imply anything. Both occur to some extent in all workplaces, in all systems, especially when work norms are challenged and changed. Attempts to increase work rates and reduce pay foster discontent and opposition in market economies, too. Indeed, it could be contended that there is even a sense in which a modicum of everyday resistance could be a positive thing, a safe way for the labor force to express its dissatisfaction without challenging the foundations of the system. For Marxist-Leninist states, where expression is severely curtailed, such a safety valve could be particularly valuable. Yet, this assumes that things do not get out of hand. The impact everyday resistance makes depends on two factors: whether the conditions that prompt it remain, decline, or intensify and whether those who are being resisted are able to address the source of the grievances or at least sideline them. Resistance deepens and becomes problematic when both of those factors steadily move in the wrong direction.
The events of June 17, 1953, illustrate the point. The June uprising was sparked by a major political miscalculation by the SED. In May, it had simultaneously raised production norms and prices on food, health care, and public transportation, actions that together threatened to lower workers' wages by as much as a third.Footnote 131 Unsurprisingly, the workers took to the streets. While these demonstrations also provided a forum for political grievances to be openly aired, they were motivated overwhelmingly by material concerns. In this regard, it is noteworthy that workers quickly began to return to work when the hated measures were lifted and before the Soviets intervened.Footnote 132 Many workers may have resented SED policies that undermined their standard of living, but most did not take the opportunity to challenge the conventions of the new workplace. Piecework and production norms remained; just the levels at which they were set were recalibrated.
By the early 1950s, the SED had thus successfully built the core of a Soviet-style economy in the GDR. In saying that, it is worth emphasizing that that is not the same as claiming that the SED had built a system that was economically successful. As time would show, it clearly had not. The ongoing resistance of workers was one reason that it did not succeed, but, as the massive literature on the weaknesses of Soviet-style planned economies reveals, it was just one of many.Footnote 133
