Eastern Bloc - Economies

Economies

Because of the lack of market signals, Eastern Bloc economies experienced mis-development by central planners resulting in those countries following a path of extensive rather than intensive development. Consumer goods were lacking in quantity in the shortage economies that resulted. The Eastern Bloc also depended upon the Soviet Union for significant amounts of materials. Economic activity was governed by Five Year Plans, divided into monthly segments with government planners frequently attempting to meet plan targets regardless of whether markets existed for the goods being produced. Growth rates within the bloc began to decline.

Meanwhile, Western Germany, Austria, France and other Western European nations experienced increased economic growth in the Wirtschaftswunder ("economic miracle") Trente Glorieuses ("thirty glorious years") and the post–World War II boom. Overall, the inefficiency of systems without competition or market-clearing prices became costly and unsustainable, especially with the increasing complexity of world economics. While most western European economies essentially caught up in large part with the United States levels of per capita Gross Domestic Product (GDP), the Eastern Bloc countries did not. They possessed per capita GDPs significantly below their comparable western European counterparts, for example (Eastern bloc countries are in green):

Per Capita GDP (1990 $)	1950	1973	1989	1990
United States	$9,561	$16,689	n/a	$23,214
Finland	$4,253	$11,085	$16,676	$16,868
Austria	$3,706	$11,235	$16,305	$16,881
Italy	$3,502	$10,643	$15,650	$16,320
Czechoslovakia	$3,501	$7,041	$8,729	$8,895(Czech)/ $7,762(Slovakia)
Soviet Union	$2,834	$6,058	n/a	$6,871
Hungary	$2,480	$5,596	$6,787	$6,471
Poland	$2,447	$5,334	n/a	$5,115
Spain	$2,397	$8,739	$11,752	$12,210
Portugal	$2,069	$7,343	$10,355	$10,852
Greece	$1,915	$7,655	$10,262	$9,904
Bulgaria	$1,651	$5,284	$6,217	$5,552
Yugoslavia	$1,585	$4,350	$5,917	$5,695
Romania	$1,182	$3,477	$3,890	$3,525
Albania	$1,101	$2,252	n/a	$2,482

Per Capita GDP 1989 Deutsche Marks	1989
West Germany	35,877 DM
East Germany	15,318 DM

Their economic systems, which required party-state planning at all levels, ended up collapsing under the weight of accumulated economic inefficiencies, with various attempts at reform merely contributing to the acceleration of crisis-generating tendencies.