Back in the Cold War, economics was usually the standard yardstick with which to measure the basic differences between East and West Germany. Since reunification, however, economic history has taken a back seat to political and social histories of the defunct German Democratic Republic (GDR), as scholars have sought new interpretative frameworks for making sense of the exotic world of “real existing socialism” east of the Berlin Wall.

In his highly stimulating and far-reaching book, Jonathan Zatlin returns our attention to the most fundamental aspect of East German material culture, money. His study centers on “the East German attempt to create a society of inexhaustible plenty and limitless good by eliminating money” (p. 3). While he mostly concentrates on the causes and consequences of the Honecker government's fateful decision to import Western currency to stabilize the creaking GDR economy, Zatlin discusses money matters in much broader terms, touching as he does on East German economic theory, social planning, and the popular reception of state policies. To this end he makes use of an impressive array of source material, ranging from government documents, police files, private papers, popular jokes, and citizen complaint letters. Especially interesting is the way in which he reveals how this late-twentieth-century regime's “antipathy toward money” remained beholden to early-nineteenth-century Owenite notions of money as a source of economic injustice and spiritual alienation. Even if Honecker's economists—most notably Günter Mittag—realized that they could never eliminate money as the repository of economic activity and value, the ideals of “non-Marxian socialism” long informed state planners' beliefs in the distinction between “real” and “false” needs, as well as the desperate attempt to keep consumer desires on a short leash.

To provide a rounded picture of the GDR's “money culture,” Zatlin neatly divides his book into two parts. The first addresses production. Individual chapters are devoted to East German financial planning; the tortured 1970s decision-making process to “monetarize” the East German economy by introducing the logic of the profit motive to earn more Western cash on international markets; the coming of economic crisis resulting from these policies; and the ultimate collapse of the GDR economy as a failed experiment in the “dictatorship over needs.” What Zatlin does particularly well in this section is illustrate how the GDR was being squeezed by both international economic forces (most notably the oil crises of 1973 and 1979) and political dangers gathering at the frontiers. This not only meant the specter of West German prosperity to the west, but also political upheavals to the east; indeed, the Polish Uprisings of 1970, 1976, and 1979 served as worrying object lessons of what might happen if the state's pricing policy of basic goods went awry. As one GDR State Commissioner conceded in 1981, “at our front door we have imperialism with its propaganda on three television channels. And now we have the counterrevolution in Poland at our backs” (p. 107). What follows is a very readable account of why the GDR took the monumental step (ostensibly in the name of eliminating black markets and increasing exports) of seeking West German loans and importing Western currency. The odd upshot was the creation of a two-currency economy, one in which “[b]y the late 1970s, capitalist money had displaced socialist money as a store of value and a medium of exchange” (p. 31). Socialist money was thus deployed to satisfy basic needs, while capitalist money was used to satisfy consumer desires for “creature comforts” and social status. Such policies may have stabilized the economy in the short run, but they brought in their train a host of perilous after-effects, including compromised security. As Stasi Chief Erich Mielke repeatedly pointed out, lower trade barriers with West Germany posed great dangers for the GDR, not least because the importation of electronic media (photocopying machines, for example, were sold in mail-order catalogs in the late 1980s) potentially undermined the regime's information monopoly. If nothing else, this goes a long way in revising Stasi-centric views of the GDR, to the extent that Zatlin makes clear that the “need for hard currency continued to take precedence over security concerns” (p. 281).

Part II, entitled Consumption, chronicles the popular reaction to these policy adventures, tracing how the regime's entanglements with capitalist money irreparably undid its claims to moral superiority. In this section, chapters are dedicated to the ill-fated automobile industry; the creation of Intershops, Exquisit, and Delikat stores as “enclaves of capitalism on socialist soil”; as well as mounting popular anger toward this new socialist culture of class and status, as seen in the form of the ubiquitous citizen complaint letters sent to various state authorities. Here Zatlin ably shows how Western money became a source of economic privilege and moral resentment among ordinary people, reinforcing the widespread feeling among many East Germans that they were “second-class citizens in a capitalist world.” Automobiles in particular were singled out as a dangerous vehicle of private desire and social differentiation, underscoring the glaring hypocrisy between the touted egalitarianism of Party ideology and the growing social divisions created by Western money and prestige objects. The same went for the high-end consumer durables available for purchase at the luxury shops and mail-order catalogs (such as Genex), which shamelessly peddled the “very same social fantasies that the SED officially condemned as commodity fetishism” (p. 244). What made matters worse was that the shops were quite successful; by 1976 eighty-five percent of the revenue from the GDR's Intershops—initially created to absorb Western currency from West German tourists traveling in the GDR—came from East German customers. But it was not just socialist currency that was being depreciated in this Faustian bargain with West German banks; the SED's political authority was eroding with its money. The explosion of written citizen complaints in the 1970s and 1980s registered this deep discontent toward the state, be it for not making high-end goods affordable for everyone or for sacrificing the regime's socialist credentials on the altar of economic growth.

In this sense, Zatlin's fine book chronicles the doomed career of socialist money in the GDR, as it went from being an idealized “conduit of social justice” to a popular “symbol of disenfranchisement.” While one cannot help but wonder how typical this story was compared with other East Bloc economies, Zatlin's book makes a compelling case that GDR leaders had hastened their own demise by “selling off” their beloved Berlin Wall long before citizens ever breached the borders in 1989.