Economic System of Socialism

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The Economic System of Socialism (ESS) was an economic policy implemented in East Germany between 1968–1970, led by General Secretary of the Socialist Unity Party Walter Ulbricht. It focused on high technology sectors in an attempt to make self-sufficient growth possible. Overall, centralized planning was reintroduced in the so-called structure-determining areas, which included electronics, chemicals, and plastics. Industrial combines were formed to integrate vertically industries involved in the manufacture of vital final products. Price subsidies were restored to accelerate growth in favored sectors.

The annual plan for 1968 set production quotas in the structure-determining areas 2.6% higher than in the remaining sectors in order to achieve industrial growth in these areas. The state set the 1969–70 goals for high-technology sectors even higher. Failure to meet ESS goals resulted in the conclusive termination of the reform effort in 1970.


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