Posts Tagged ‘black market’

How A Coffee Shortage Almost Ended East Germany

Saturday, January 6th, 2024

East Germany was widely cited as the most successful of the Warsaw Pact puppet states, the one whose industrious nature “made communism work.” That was never true, but East Germany did seem to function more efficiently than the rest of the bloc.

One reason: Coffee.

  • “In the fall of 1977 the Ministry for State Security, the Stasi, East Germany’s feared secret police, warned the government that the country was on the verge of revolt. The trust lost in this incident would never be restored.”
  • “From the beginning, East Germany did not have access to the same level of luxury goods as the non-Soviet bloc West. Immediately after the second World War and through the 1950s, the Soviet Union supplied most of the coffee in the German Democratic Republic.”
  • “As East Germany became more autarkic from the Soviet Union, so followed its need to supply coffee independently.”
  • “The average East German coffee household expenditure was twice the amount spent on shoes, and equal to the amount spent on furniture.”
  • “This accounted for 4% of all retail sales in the GDR. As the East German state attempted to gain coffee independence, they also pushed as a core part of East German identity. Coffee allowed workers to be more productive, which contributed to a more prosperous society while maintaining an aesthetic of an invigorated society.”
  • “There was a problem though: it was a scarce resource and it was expensive to import. But, because of its importance, the Socialist Unity Party (the SED, who were effectively the state) saw a bargain that could be had from it. By being able to provide a scarce resource, it gave them legitimacy. But to gain this legitimacy they were constantly fighting back against a black market.”
  • “Officially any interaction with the black market
    was illegal. Unofficially everyone knew it existed, and the Socialist Unity Party wasn’t happy with it, but it offered a window into what scarce resources would engender support if they could provide them.”

  • “Even before the Cold War, coffee in Germany was scarce – the blends were often not real coffee but blends of varying quality. This continued on after the post-war division and a fight between the Socialist Unity Party and the people of East Germany. The SED wanted to be the ones to provide coffee – the public wanted more of it and at a better quality. Thus developed a black market that the SED was constantly trying to stay ahead of.”
  • “One of the reasons for the Berlin Wall was that the SED couldn’t regulate the black market. It allowed goods to flood in from the West they were trying to provide, while allowing goods from the East (with subsidized prices) to flow out.”
  • “But, by 1973, things in East Germany had stabilized and things were, well, good. At least according to the CIA.”
  • “The SED had achieved a Faustian bargain: A black market where people had to depend upon relationships with each other to get access to goods meant that the populace actively grew in solidarity with each other.”
  • “The average East German citizen was willing to deal with shortages because it was something everyone was enduring together. In short, East Germany had entered a period of political stability, with a relatively high standard of living, and the shortcomings of the system reinforced the ideals that the system preached.”
  • “Two events at the beginning of the 1970s shook the East German economy to its core: the 1973 oil shock, and a failed coffee crop in Brazil. These events compounded within the fragile East German economy: to import goods from the west (such as oil) they needed to use western currency. As the price of oil skyrocketed, so did the rate at which East Germany drained its reserves of Western currency.” This part I’m not so sure of. I believe that East Germany imported most (but not all) of its oil from the Soviet Union under the Comecon plan. Oil prices from that did increase, but not immediately.
  • “Luxury goods, like coffee, became prohibitively expensive in an economy planned out to the penny. Before the failed coffee crop, East Germany spent 150 million marks per year on coffee imports. After the crisis began, this number had skyrocketed to 700 million. The SED was faced with a dilemma: money for oil, or marks for mocha?”
  • “They attempted to split the difference. The only coffee imported would be the higher end blends that the party leadership used. Lower end brands were either eliminated completely, or the recipe adjusted to use less coffee. Further, certain blends would only be available in Intershops, which required the use of Western currency – which would help the state refill it’s currency coffers.”
  • “East Germans rejected the new coffee mixes in a way the state was not prepared for. In a report to SED leadership on September 1, 1977, the Ministry for State stated that, ‘the quality and price of [the new coffee mixes] are rejected by broad circles of the population.'”
  • “Complaints recorded by the Stasi included ‘critical indications of taste,’ and a first indication that the new mixes were unable to be processed to the ‘full filtering capability in household machines.’ The coffee mixes were breaking the machines.”
  • “The Stasi further expressed in this report that workers resented party officials requesting austerity for workers, while still importing ‘expensive Western cars for officials.'”
  • “Additionally, Stasi reports say that citizen did not believe the ‘information policy.’ Far from just rejecting the new coffee mixes, were rejecting the SED’s handling of the crisis.”
  • “By September 12, the frustration over austerity moved to unrest. A Stasi report stated that in discussions among workers, ‘skeptical, resigned, pessimistic and negative opinions up to aggressive arguments become clear.'”
  • “While blaming Western media for this development, the Stasi also states that there are rumors of ‘warning strikes.'” These strikes would demand wages be paid in Western currency so that they could shop at the Intershops.”
  • “In relation, the report states growing frustration with the expansion of Intershop stores, with the simultaneous ‘elimination of low-price coffees and the limited supply in restaurants.’
  • Workers also believed that the classless East German society was now stratified, with three distinct categories: those without western currency who would be forced to endure austerity, those with access to western currency who could shop at Intershops, and ‘privileged persons and high officials who…drove expensive Western cars and [weren’t] affected by austerity.'”
  • “These last two categories were contrasted with the common worker and pensioner who ‘have returned to the point where begging letters have been sent to [West Germany]’ for coffee.'”
  • They were even criticizing Party officials! “East Germany was on the precipice of a revolt.”
  • “The SED would finally act on 23 September to contain the growing unrest. The price of the lowest quality mixes was reduced, and a communication was published on the coffee shortage, explaining the reasoning behind austerity measures.”
  • East Germany also started sourcing coffee from Vietnam.
  • Eventually, of course, East Germany would cease to exist due to the “internal contradictions” of communism and because the Soviet Union could no longer afford to keep it’s foot on Eastern Europe’s neck.

    Note: Bluehost has been dog slow for the last 24 hours. If this keeps up tomorrow I’ll try to go through the agonizing technical support process to do something about it…

    LinkSwarm for August 14, 2015

    Friday, August 14th, 2015

    Austin had a very, very wet spring, but August is shaping up in normal fashion: Bone dry and hot as hell. Try to keep cool and enjoy a Friday LinkSwarm:

  • “There is no real distinction between today’s Democrats and socialists.”
  • Democrats have an America problem.
  • The email scandal could very well sink Hillary:

    Politicized or not, the DOJ will be increasingly boxed in by the FBI and intelligence community investigations. Normally, when the intelligence community finds classified materials in unauthorized locations, it seeks felony prosecutions. Gen. David Petraeus was sunk for keeping his own personal calendars in an unlocked drawer at home. The calendars were deemed classified, even if they lacked an official stamp. President Clinton’s CIA Director, John Deutsch, lost his job and security clearance for using his portable computer at home. It had classified material on it. Those violations are trifling compared to Hillary Clinton’s exposure.

    (Hat tip: Instapundit.)

  • Longtime Hillary Clinton aide Huma Abedin may be joining her in the big house
  • Bernie Sanders up over Hillary Clinton in New Hampshire? #WhiteVotesMatter
  • Ohio Democrats continue their youth movement by recruiting 74-year old Ted Strickland for a Senate race.
  • Someone spilled millions of gallons of toxic waste into a river! Call the EPA! Oh wait, it was the EPA.
  • Islamic State executes 300 electoral civil servants in Iraq. Good thing we’ve got Nobel Prize winner Barack Obama sowing peace and stability to the Middle East rather than that warmongering bungler Bush… (Hat tip: Jihad Watch.)
  • So why did the Obama Administration pretend Taliban-head Mullah Omar was still alive when he’s probably been dead 2 years? (Hat tip: Prairie Pundit.)
  • And why is the Obama Administration siding with the terrorists and against the Americans who have already won legal judgments against them?
  • A whole bunch of gun myths debunked. (Hat tip: Borepatch.)
  • Just why did the University of Minnesota think it needed grenade launchers? (Hat tip: Say Uncle.)
  • China devalues the Yuan. This is Big Freaking News, but hard to conceptualize, since China’s economic statistics are have not even a nodding acquaintance with reality, and haven’t for at least a decade. So is China’s current bubble bad, or super mega world-shatterling bad?
  • Your guide to global black market pricing.
  • Islamic State Worse off than Greece?
  • Brazil: Super-Duper boned.
  • Great Cthulhu emerges as surprise front-runner in Labour leadership contest.”
  • Tianjin, China Blows Up Real Good.
  • Jihadis kill four, kidnap six from hotel in central Mali. That’s really going to crimp your vacation plans. (Hat tip: Jihad Watch.)
  • Cop-killing inmate dies in prison riot. Alas, my electron microscope is being recalibrated, so I won’t be able to find the proper sized violin to commemorate this sad occasion… (Hat tip: Dwight.)
  • Social Justice Warriors continue their war on comedy on campus.
  • Man arrested for shooting at police in Ferguson was completely unarmed. Except for his guns.
  • Cool World War II radio intercepts story, via Instapundit.
  • Florida Man has been busy.