To add to that: basic needs were also either free or heavily subsidized. Child care was completely free even for the smallest ones, free food in child care and

To add to that: basic needs were also either free or heavily subsidized. Child care was completely free even for the smallest ones, free food in child care and school. Clothing for children was cheap, as were books etc. for kids. Apartments were subsidized (renting a modern apartment did cost less than 10% of montly income etc.). Health care was completely free, everything, including dentists etc. OTOH "luxuries" like color TV, computers etc. were pretty expensive. Despite ethics (equal rights of men and women was a big reason) one factor was macro economic ties to Russia; East Germany (as other countries) had to produce stuff for exporting into Russia, partly without the agreed-upon imports in return. Over time this created major imbalances and thus the need to import from Western Europe, which in turn meant a high need for foreign currency. To obtain foreign currency, domestic production had to be exported in higher amounts than anticipated, thus less output was there for local consumption and investments.