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Walter Ulbricht on the "New Economic System" of the GDR (December 16, 1965)

In order to speed the growth of the East German economy, SED leader Walter Ulbricht reviewed the first stage of his New Economic System, which reintroduced market incentives into the planned economy. He also urged that its further development be based on the "scientific-technological revolution."

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Dear Comrades!


[ . . . ]

That we are in a position to properly utilize and apply the laws of social development is shown by the elaboration and development of the new economic system of planning and management that we agreed upon and introduced in 1963 and have since developed further.

The new economic system of planning and management is our instrument – with whose help we are tackling the tasks involved in the comprehensive build-up of socialism and the technological revolution in the German Democratic Republic and completing the transition from capitalism to socialism with the total victory of socialism in the German Democratic Republic.

With the new economic system of planning and management, we are creating, on the basis of the economic laws of socialism, the fundamental economic system of socialism in the German Democratic Republic. It is the economic system of a highly developed socialist industrial state with intensive modern agriculture. It is the economic system of a socialist state that has essentially mastered the unheard-of burdens imposed by the imperialist past, especially by the fascist world war and the division of the country.

It is an ideological task of the first order to insure that everyone understands the scope of this qualitative change in our economy and society. Understanding this qualitative change and its relationship to the new economic system of planning and management is a criterion for the maturity of leadership cadres, not only in the economy. The most important conclusion is: take a stand for innovation and learn! The two are inextricably connected. No comrade in any responsible position should ever forget that. Only those who take a stand and learn will live up to the new demands.

[ . . . ]

Almost three years have passed since the Sixth Party Congress and almost two and a half since the Economic Conference. At the end of 1963 we evaluated the initial results of the new economic system of planning and management and settled on the tasks for 1964. At the end of 1964, the Central Committee laid out the problems and tasks for 1965 in great detail. Now, at this meeting, we want to make a preliminary assessment of the first stage of the new economic system of planning and management and determine the problems and tasks for the upcoming years – especially for the plan year 1966.

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