[lbo-talk] German unification poses problems

Wojtek Sokolowski sokol at jhu.edu
Wed Sep 22 13:18:56 PDT 2004


This article http://news.bbc.co.uk/2/hi/business/3672712.stm says that 13 years after the unification East German economy is still ailing, which results in growing support of the right wing parties in the East.

The question I have, however, is this:

The poor performance of East German economy in 1991 was blamed on communism. Thirteen years later, the performance is still poor. Are we to blame that on capitalism now? Or capitalism, like God's grace, is good by definition, and any facts to the contrary are simply irrelevant?

Another question. When the political system has changed, but the economic performance has not, it stands to reason that the causal connection between the former and the latter is at least suspect. Thus, "communism" was not necessarily the reason of the poor economic performance. But if something else than communism was causing that poor performance, perhaps communism did a quite good job counteracting the negative influence of that something else, perhaps as good or even better than capitalism - judging from the current performance.

Perhaps Brad DeLong has something to say on the subject.

Wojtek



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