East vs West

There are many things that people have in common such as a name. However, in some instance the name has different meaning. The occupation of the Soviets placed heavy burden on East Germany’s capital and resources, on top of the fact that this country was already suffering of heavy loss during the two World Wars. Despite this, the economy reestablished rapidly among the communist countries. However, this was not growing as in the market based economy as the market-based economies in the Western world started to develop, because Central Planned Economy (CPE) was almost entirely based on state-owned enterprises and capitals. Advantages of the CPE are that it can maximize the continuous utilization of all available resources and that it serves as a social fulfillment rather than individual. Examples of the disadvantages of this economic system are the ignorance of the product quality, the ineffective use of resources and inefficient allocation of goods and services. This made trade with other countries that provided better goods rather difficult. Also, international trade became unpredictable when the availability and the variation of the goods started to increase, thus the prices of the products being very fluctuous. Taking these factors into account, the government made five-year plans and one year plans in order to produce goods in the most efficient and satisfying way. Although there were suggestions made by a large number of the population to improve the standard of production, the final decision was always made by the government until the breakdown of the communism. Surprisingly, East Germany increased significantly in its production after the war. During the 50’s and 60’s, most of the country was already influenced by collectivization. The output of the industrial sector increased dramatically. Consequently, the GDP jumped up and investment took place in large numbers. The future seemed very colorful at that time.

However, during the 70’s, the CPE started...