Economic situation after 1961: the end of mass emigration; the New…

The idea

After the Berlin Wall closed the border in 1961, mass emigration from the GDR ended, easing the loss of skilled labour and allowing economic planning to stabilise. The New Economic System (NÖS, 1963–68) introduced limited market mechanisms, profit incentives and decentralised decision-making, aiming to raise productivity. From 1968, the Economic System of Socialism (ÖSS) recentralised control and set ambitious targets, especially in key industries. Economic production increased, and the regime sought to raise living standards by expanding consumer goods, though shortages persisted. The GDR joined COMECON in 1950, and its membership provided access to raw materials, markets and specialisation, but also tied the economy to Soviet priorities. Overall, these changes helped the GDR become the most prosperous Soviet-bloc state, yet underlying inefficiencies remained.

What earns the marks

• Explains that the end of mass emigration after 1961 reduced labour shortages and helped stabilise the economy.
• Describes the New Economic System (1963–68) as introducing profit incentives, decentralisation and limited market elements.
• Explains that the Economic System of Socialism (1968–71) recentralised planning and prioritised key industrial sectors.
• Assesses the extent of increased economic production, including the availability of consumer goods.
• Explains the importance of COMECON membership for trade, raw materials and economic specialisation.
• Evaluates the overall impact of these economic changes on the GDR's stability and living standards.

Common mistakes and how to put them right

• Confusing the New Economic System with the Economic System of Socialism.

  Put it right: The NÖS (1963–68) introduced limited decentralisation, while the ÖSS (1968–71) recentralised control.

• Assuming that increased production automatically meant abundant consumer goods.

  Put it right: Although output rose, shortages and long waiting lists for consumer items remained common.

• Treating COMECON as a purely beneficial arrangement.

  Put it right: Membership provided access to resources but also constrained the GDR to Soviet economic priorities and limited trade with the West.

• Stating that mass emigration continued after 1961.

  Put it right: The Berlin Wall effectively stopped the flow, which had significant economic consequences.

Exam tips

• Use precise dates and names of economic systems to show detailed knowledge.
• Link economic changes to their social and political effects, such as improved living standards or continued discontent.
• When discussing COMECON, explain both its benefits and its limitations for the GDR.
• Support arguments with specific examples, such as the emphasis on consumer goods in the 1970s or the GDR's trade with the USSR.