Economic System of Socialism

A new central plan was meant to prioritize and direct development of these preferred structure-determining projects, while the rest of economy was supposed to continue with the NES.

At the time, the Soviet Union was advancing technologically in the space race faster than the United States, so socialist optimism was at its peak.

Ulbricht, instead of trying to make the whole economy grow, concentrated all state efforts and investments on a few high-growth industries that were expected to bring the greatest returns.

[1] The main areas of development were chemicals (petrochemicals and artificial fibers), engineering (machine tools and plant construction), electronics, data processing equipment, and automation technologies.

During 1969 and 1970, shortages of consumer goods and problems in the industrial sector led to increased complaints from the people, factory managers, and party officials.

Constant changes of economic policies were perceived as threatening to socialism, the SED regime, the working class of the GDR, and eventually alienated the USSR under Brezhnev.

Alfred Neumann, a member of the Politburo wrote to Ulbricht on April 18, 1969: Should we put up the slogan "the GDR must become better than West Germany in the economic area"?

In May 1970, Ulbricht was removed from power and left with a purely ceremonial role as the Chairman of the State Council of GDR, which he held until his death in 1973.