Civil Society And The Economy Specific Reference To East Germany Essay, Research Paper

Civil Society and The Economy

Introduction

Linz and Stepan list and describe a set of five elements that determine a consolidated democracy. Civil society, political society, rule of law, usable state of bureaucracy, and an institution of economic society all interact in complex ways to bring about democratic consolidation in countries. This paper focuses and emphasizes the interactions between the ?development of a free and lively civil society . . . [and] an institutionalized economic society . . . [which] must be present, or be crafted, in order for a democracy to be consolidated? (Linz and Stepan pg. 17).

Two former communist countries, East Germany and Poland, will be analyzed and critiqued about the prospects for sustainable democracy. Specifically, an analysis of the civil societies in the countries and how they react to their current economic situations will be used as a determinant for their chances of sustaining democracy.

Both East Germany and Poland are considered success stories. Both countries have undergone free elections that have brought about new leaders in the country that have represented the citizens needs and wants, but the transition for these countries hasn?t been easy. Many citizens in both of the former Soviet bloc countries feel that their votes aren?t changing the social and economic conditions, and are rejecting the system with this ?learned helplessness?. An increasing number of citizens in both countries are turning to right wing policies as a result of the new and challenging social and economic order. Where before workers were guaranteed jobs, allowances, and other provisions from the state, now they face the cutthroat competition that defines capitalism.

The economic societies in the countries have been approached from very different angles. Whereas East Germany was immediately incorporated into the strong economic and social conditions of West Germany, Poland was forced to handle the transition alone. While in East Germany labor and initiative collapsed and flowed West, Poland had no where to go, and the capitalist West flowed into their economy in the form of investments. The result has been very positive for Poland, which is now one of the fastest growing economies in Europe, but very negative for East Germany which is dawdling in high unemployment and low foreign investment.

In societies where the party aspired to control all aspects of life, including persecution for unauthorized association, social life was very weak. Martial law and danger of persecution for unauthorized activities encouraged citizens in both countries to restrict their social ties to kin and very close friends. The result of this phenomenon has had a profound effect on the quality of civil societies in these countries. Susanne Spulbeck describes the state of East Germany: ?In the course of my fieldwork, I came to realize that communication in the public sphere was characterized by much mutual fear . . . the deep ? seated feeling of insecurity that had been instilled by the experience of fifty years of unpredictable state surveillance . . . [and a]ccordingly there is a tendency to avoid the public sphere altogether, rather than actively occupying it and claiming it as one?s own . . . [the p]ublic sphere [is] characterized by a fear of the other, where the surveillance system of a once all powerful state is still widely thought to be at work, the concept of the citizen as an active and politically responsible person is difficult to realize.?

The Economies: From Socialism to Capitalism

East Germany

To get a full picture of what the economy in East Germany is doing, one must look at situations that occurred around the time of the reunification in 1990. West Germany?s Chancellor, Kohl, made a very rash decision. To assure the East German votes for reunification, Kohl agreed to exchange one duetschmark for the almost worthless East German currency. The money supply was immediately flooded, and interest rates rose. Higher interest rates discourage entrepreneurs from taking loans and entering the market, and discourage older businesses to expand, and thus high unemployment quickly followed.

In addition, if Germany were unified, Kohl promised East Germans the same benefits West German citizens receive including social services (retirement benefits, welfare, etc.) and a $100 billion annual subsidy to promote economic growth. East Germany immediately began to rely heavily on the annual payments. West Germany was still not done. To prevent the flow of skilled laborers from East Germany to a higher wage paying West Germany, East German wages had to be raised, which further discouraged economic expansion. The GDR had poor pollution regulations, and many areas are still laced with toxic substances. The pollution will take billions of deutschmarks to clean. The outlook for East Germany looked weak, but West Germany was persistent on making the former inefficient communist state into an economic asset.

The German government has installed over 2800 miles of new railroad tracks, and over 5000 miles of highways. In addition, to make up for the poor investment opportunities in East Germany, the government also offers business subsidies and tax breaks to companies willing to invest in the east. Since 1990, companies have taken advantage of such incentives, and invested over $625 billion dollars in East Germany. Deutsche Telekom completed from scratch a highly advanced fiber optic and digital telephone network. With the West German subsidiaries, real estate investment also rose. Huge office buildings and hotels are appearing throughout cities. The economy isn?t strong enough to make use of such structures, leaving them unoccupied, as the cities become extremely overbuilt. With such major renewals, it is no wonder that 17percent of the East German work force are employed in the construction industry.

Even with all the stimulation and money pouring in from all sides, unemployment in East Germany is soaring at 17percent and 9.1percent in West Germany. Four million Germans (10.6percent of the workforce) are unemployed. Such a figure hasn?t been seen in Germany since post-WWII in 1945, and the citizens are displeased. There are several causes for the unemployment. As mentioned above, the high interest rates make business investments in East Germany look unattractive. In addition, with an average wage rate of $16 per hour, Germany has higher wage rates than the US, and one of the highest rates in the world. The German workforce enjoys many more holidays than the American workforce, and receives a 13th month salary bonus at Christmas. Companies increasingly invest in neighboring countries like Czech republic, Hungary, and Poland where wage rates are dramatically lower. Strong stubborn labor unions aid in decreasing the flexibility of changing the wage rates. With 2.7 million autoworkers as members, IG Metall is resistant to any wage cuts, and is actually currently seeking a 6.5percent pay increase.

East German citizens claim that finding jobs in the communist GDR was much easier than finding a job presently. The unification brought the closing of thousands of GDR?s unprofitable factories. Newly privitized companies could not afford to hire as many workers, and do not provide as many benefits to the worker as in the old communist regime. The free market system has increased competition for jobs, and left many unskilled laborers behind. The Rostock shipyard for example employs half the workers than the GDR employed. (Lynch) Most of the investments in East Germany have led to highly automated factories, which supply minimal jobs. For instance, the city of Schkopad is currently receiving $7 billion in aid from the government to tear down a Dow Chemical power plant and replace it with a state of the art system. In the old communist regime, the plant employed 18,000 people. Directly after the fall of the Berlin wall, the plant employed 4000 people. After the renovations to the plant are finished, the plant will employ 2200 workers. This is not the only instance of technological advancement interfering with the economy. A prescription drug company, Salutas Phatma Gmblt, built a $200 million dollar factory in 1997. Robots measure the dose, place the dose in the mold, and package the pills. The factory employs a total of 320 workers. The Opel unit of General Motors has one of the most advanced auto assembly plants in the world.

Experts claim that East Germany will have the most modern economy and infrastructure in fifteen or twenty years. West German citizens are growing impatient. While a large majority of West Germans were willing to bear the burden of rebuilding Eastern Germany in 1990, they are increasingly becoming tired of supporting the weak East Germany. The East German output per person is half what it is in West Germany, and had an output in 1996 of only $230 billion. The 7.5percent solidarity tax Germans pay to support East Germany doesn?t seem to be doing anything, and leave West Germans to question its role. It is doubtful that West Germany will stop aiding the weak economy, though, since it has invested so intensively in it since 1990. The dye is cast.

Chancellor Schroeder is working to create jobs throughout Germany. ?Alliance for Jobs? has already had its first meeting. To increase employment, Schroeder proposes lower labor costs (even though it may be political suicide), reform the welfare system, create more flexible workplaces, allow Germany to be accessed more easily by small companies, and lower retirement age (which is currently at 65).

The economic gap is not the only burden that separates East from West Germany. DeMaiziere, the first freely elected leader of East Germany in the short time after the fall of communism, claims that ?the psychology of everything done in East Germany is all wrong.? He claims West Germany is trying to undue what they think to be the ?bad communist ways,? without realizing that 2.4 million of 11.5 million East Germans were members of the old communist party in the GDR. These citizens have pride of what they accomplished in the communist regime and feel like West Germans are rapidly revising what took them a lifetime to create. It?s as if what was accomplished under the communist regime didn?t amount to anything.

This factor accounts for a lot of dissent felt by East Germans toward West Germany. East Germans complain of being able to find jobs in the GDR, are discontent with the ill economy, and the 20percent average higher salary that West Germans have. Former Chancellor Kohl, the ?reunification Chancellor,? is routinely booed when he visits East Germany. DeMaiziere relates what is happening in East Germany to the parable in the bible when Moses was leading the slaves out of Egypt. The slaves wanted to return to Egypt where they had a roof under their head, and something to eat and drink. Moses went to pray and ask God why they were reacting like this and how he could improve their condition, and God answered that only when the last slave dies will the condition change. East Germans are having a difficult time adapting from a system where they were guaranteed employment to the dog eat dog world of capitalism.

Poland

The main difference between East Germany and Poland is that Poland wasn?t spoiled by an immediate flow of money. The Polish government created a situation where Polish laborers could leave their job at the factory and have the opportunity to create their own business. While German economy is dominated by large scale endeavors like building huge hotels, advanced energy systems, and fiber optic networks, Poland has a large service oriented economy. While Germany is employing more and more lower class laborers (mainly as construction workers), Poland has created a situation where a middle class could be formed, and it has worked remarkably.

Poland set out immediately to build a western society, and its market economy is making leaps and bounds. Although, during the first several years, inflation, unemployment, poor standards of living, and a ?centrally controlled economy run by discredited communists? (Weinstein) plagued the Polish economy, Poland fought back with fundamentals. They sought western aid, and used it to pay for economic reform. Weinstein writes that ?[the k]ey to Poland?s success have been two policy decisions. . . [f]irst Poland adopted what might be called the Balcerowicz rule. . . [t]he second major decision was scarier. Poland forced insolvent firms into bankruptcy, preventing them from draining resources from productive parts of the economy.?

The Balcerowicz rule, named after Deputy Financial Prime Minister Leszek Balcerowicz, liberates entrepreneurs to sell basically whatever product they want for basically whatever price they want. This competition couldn?t take place in East Germany because of its obligation to conform to the laws of West Germany. The Balcerowicz rule aids capitalism in many realms. It allows entrepreneurs to undermine state owned firms with lower prices, and encourages many low financed businesses to enter the market. Thus, privatization and competition ? the capitalist way – in Poland is well on its way.

The second step was crucial in alleviating the government from supporting incompetent businesses. While Germany is providing subsidies and tax breaks to incapable businesses, Poland lets the cutthroat competition of capitalism have its way with them. Many workers left the factory to create their own store or manage banks, and thus ?Poland drained workers out of worthless factories into units that could produce the goods that people wanted to buy.? (Weinstein)

Once a communist dominated economy, Poland has emerged as the most entrepreneurial country in the ex-communist region with over two million new businesses since the old regime fell ranging from banking to health care to tourism and leisure activities. Poland easily gained investments from Europe (particularly Germany) and the US who both acknowledge their stable middle class, the improvement of Poland?s currency, the zloty, and the highly educated workforce. Poland?s GDP has been rising this year by about six percent, and has been estimated to be over five percent in 1999. Inflation is estimated be down 10 percent by the end of the year as prices drop rapidly.

The Tradeoff of Economy and Right Wing Politics

East Germany

Attitudinally, a democracy becomes

the only game in town when, even in

face of severe political and economic crisis,

the overwhelming majority of the people

believe that any further political change

must emerge from within the parameters

of democratic procedures. (Linz and Stepan pg. 15)

Many East Germans, dissatisfied with the economic situation, have looked to the simpler forms of government in the midst of the economic and political transformations. As taboo as it may be, a large number of Germans are leaning toward right wing politics. Many Germans are concerned with losing their jobs and status to foreigners, and xenophobia is very high in the Lander. Outbreaks like Hoyerswerda, Rostock-Lichtenhagen firebombing, and the assaults in Solingen, indicate a need for government attention. As economic situation worsens, the parties are sure to gain more support.

Currently, two parties exist in Germany promoting right wing policies: the German People?s Union (DVU) and the Republikaner which denies any affiliation with fascism. In 1993, the Hamburg Office for Protection of the Constitution estimated a total of 65,000 right wing extremists. 64,000 of these extremists are considered to be militant. The surprising fact is that half of the right wing extremists are in East Germany, which would make sense, but only a quarter of the entire German population is located in East Germany. In the last elections, the right wing votes didn?t come close to seating anyone in the Bundenstag. The parties work within the framework of democracy to stop the ?overload of government and decay bourgeois culture and values.? (Michael Minkenberg pg. 73) The majority of the right wing violence doesn?t stem from these parties, though.

The extremity appeals to many youths. The offenders are surprisingly young men, ranging in the ages of 14 to 32 but the average ages are 17. Millionaire Gerhard Frey, a chief contributor to the GPD, claims, ?Voting for the right is as much a part of youth culture today as techno and skateboarding.? These unorganized youths with rudimentary political ideas strike out spontaneously at foreigners, gays, Jews, and non-whites with the belief that they are speaking for the majority. Many neighborhoods have skinhead gangs that have adopted illegal nazi flags and symbols. Vandalism is commonly found throughout Germany. Swastikas and neo-nazi graffiti sprayed on walls in cities, defacement of Jewish cemeteries, and holocaust memorials vandalized.

Kristallnacht, a somber remembering those Jews deported by nazi storm troopers back in 1938 and the commencement of the genocide, was also a night for the right wingers. A memorial commemorating the mass deportation of the Jews in Berlin was found lamed with three swastikas were scratched into the metal Star of David atop the monument.

The outbreak in East Germany is believed to have stemmed from confusion surrounding the collapsing political and social values East German citizens once had. Right wing extremist participation is a result of East German citizens? reaction to new government with closed mindedness, and their inability to cope with the cultural and economic developments taking place around them. With the collapse of the communist regime, adults find it hard to explain to their children why they participated in such a system. When confronted East German parents are questioned about the communist regime, they don?t know whether to answer that they were naive to the fact that it was bad system, thus making them look stupid, or if they did know, why they didn?t rebel. The deterioration of family values is a key factor in why so many youths are turning to right wing extremism.

Another factor that brings on the high rate of right wing support in East Germany is a German term called vergangenheitsbewaltigung. It means coming to terms with the past. East Germany had been under dictatorship basically since 1933. West Germany has come to terms with the nazi past, and has strong feelings against such absurd beliefs. With forty years of democracy under their belt, West Germany approaches the issues with more maturity than their eastern counterpart. Meanwhile, East German communism bottled up such beliefs and mentalities, and they may be reemerging. The leader of German?s Jewish community, Ignatz Bubis, warns, ?One cannot only look to the glorious sides of history and suppress the unpleasant ones. Those who are not prepared to address this aspect of history and try to look away or forget, must accept the fact that history can be repeated.? Having history repeated in Germany is the last thing anyone wants.

The right wing extreme values that are being adopted are an example of the poor civic fabric in East Germany. The outlook for Germany is bleak with youths accepting such ridiculous values. Luckily, there are things being done to curb the extremity. Chancellor Schroeder, the first Chancellor not to have been alive during WWII, led the proceedings of Kristallnacht this year as 70,000 Jews marched through Berlin on November ninth. He proclaimed, ?sixty years later, we look forward, without forgetting the past.? Jewish leaders didn?t think the proceedings were getting across to citizens, and decided to parade in rememberance.

Other positive gains in the fight against racism, anti-Semitism, ?gay bashing?, and xenophobia have been made by bands. Anti-racist bands like WAR (white Aryan resistance) have made their stand clear through their lyrics. Hopefully these rock bands will help to curb the problem.

Poland

The right wing extremism in Poland doesn?t gather nearly as much support as do Germany?s parties. There are a number of possible reasons for such outcomes. First, unlike Germany, the workers are content with their economy. They don?t feel as big a need for change in the current system. Second, Poland has a huge religious affiliation with the Catholic Church. The Catholic Church plays a major role of enforcing Christian values in the writing of laws. The Church looks down upon violence and acts against humanity. Third, the right wing parties that are alive in Poland are very extreme, which discourages many Poles from joining.

There are two major right wing parties in Poland: the Polish National Party and Polish National Commonwealth (PWS-PSN), and the Polish National Front (PNF). Both parties have a strong skinhead core (Szayna: 120). Both parties are also ultra-nationalistic. They want a ?pure Poland?, and believe only where economic and political rights are reserved solely for Poles will the Polish culture flourish.

The leader of PWS-PSN is Boleslaw Tejkowski. He was ordered to a psychiatric exam by Polish courts in 1992. The party is strongly anti-Semitic and believes Jews to be the route of all their troubles. They claim there is a Jewish conspiracy to gain wealth for themselves. They believe Jews have taken over the Solidarity movement, have always controlled communism, and even go as far to proclaim the Jews direct the Catholic Church. PWN-PSN is approximately 15,000 strong. In the 1993 elections, though they had much trouble getting on the ballots, they accounted for .11 percent of the total votes. In polls conducted in May of 1992, 24 percent of the polish population reported to be familiar with the party, and 60 percent of those people chose to have the party prosecuted.

The NFP is an extreme right wing party that believes in militarism and holds deep hostilities to all ethnic minorities. Their ultra-nationalistic beliefs go as far as to claim that everything non-Polish should be eradicated. They also had trouble getting on the ballots in the 1993 election. The votes totaled to a meager 565, a .004 percent of the country?s votes.

It is a good sign to see that despite unemployment levels of about 15 percent and even reaching as far as 20 percent in some regions, that the Polish are not resorting to these ridiculous organizations. The Poles are reacting to their new democracy with a maturity and knowledge that extremism is going nowhere