IN OCTOBER 1949, one month after the founding of the Federal Republic, the German Democratic Republic (GDR) was founded. This move cemented the final division of East and West, which had been presaged by the introduction of two different currencies in 1948. From the very beginning, the GDR, as the Socialist state that was modeled on the Soviet Union, suffered from serious economic problems as a result of the damages and ravages caused by war. While the West soon prospered, thanks to generous financial help from the United States and the other western allies, the GDR had a bad start. The East suffered much due to exploitation by the Russians, who dismantled much of their industry and took it back to Russia.

Although the state economy recovered in the 1960s and 70s, the situation began to deteriorate again in the early 1980s. Despite all efforts of the SED (Sozialistische Einheitspartei Deutschlands) to convince its citizens of the prosperity of the state, the economic problems returned with a vengeance. People generally remained skeptical of a state that had to fence in its population with the help of barbed wire, watchtowers, mined land strips, and self-triggering automatic guns. By the time the Wall came down in 1989, a total of almost 200 people had been killed in their efforts to escape. The lack of freedom to travel proved to be one of many elements of the GDR regime that drove the GDR populace to despair, a fact that is dealt with in Volker Braun's Die Übergangsgesellschaft (Society in Transition, 1982).