Thread by @RevAus199

What was Comprehensive Self Management of Resources a 🧵 :

1/ In the late GDR, the SED advanced comprehensive self‑financing inside the plan, aligning social aims with enterprise incentives while retaining central guidance—a pragmatic modernization without ceding socialist principles.

2/ It sought to fuse objective social needs with workers’ interest in high, responsibly used profit—funding intensified, expanded reproduction—while keeping plan primacy and macro coordination.

3/ Tools were three‑year norms (1988–1990), co‑designed by central bodies and combines, delivered in time for planning. Workers were briefed, and internal contracts were rewritten to fit the new accountability.

4/ Norms governed formation of own funds: Science & Technology, Investment, Reserve, and a director’s discretionary fund, plus clear rules for splitting amortization between investment and major repairs.

5/ Key shift: the production‑fund levy moved from profit into costs, intensifying pressure to use fixed assets and working capital well. The S&T fund now hinged on realized profit, binding innovation to actual efficiency.

6/ Foreign trade was integrated: export results counted in the unified enterprise result; volume and profitability were binding. One combine added import results; FX usage rights rewarded better export‑import balances.

7/ That pushed program optimization, enabled larger own funds, and, crucially, raised available national income—evidence that incentives can serve, not subvert, central planning.

8/ Measured outcomes in 16 combines after about a year: net output +10.4%, labor productivity +10.6%, net profit +16.9%, consumer goods output +7.4%. Plan and incentives reinforced each other.

9/ Ideologically, the trials affirmed a familiar thesis: social goals gain force when translated into concrete incentives. Only what is produced can be consumed; daily economic calculus became a norm.

10/ Marx’s economy of time, the value law, and planned proportional development framed practice: macro plans set proportions; enterprise accounting ensured micro choices respected time and resource constraints.

11/ Three‑year norms stabilized horizons. R&D and investment were recomputed around key technologies, quality, energy saving, lower costs, and export profitability, reorienting portfolios toward higher effectiveness.

12/ Rationalization accelerated: the share of rationalization investments rose, in‑house means expanded, and projects were prepared, executed, and commissioned more quickly and coherently.

13/ Governance incentives tightened. From 1989, directors’ pay linked to cumulative net profit, key state plan items, and one combine‑specific metric. With union consent, bonus funds appeared (Zeiss Jena, Mikroelektronik Erfurt).

14/ Discipline followed: in 1988 the 16 combines met or exceeded core indicators versus 1987 and the industrial average; most state plan positions were fulfilled, and contract arrears fell sharply.

15/ Enabling reforms mattered: combine formation, price and tariff reforms, a social‑fund contribution (1984), fixed‑asset revaluation (1986), and, since 1987, computer‑aided balancing from ministries to combines.

16/ Central institutions adapted accordingly. Planning, Finance, S&T, Prices, and the State Bank refined methods so balances underpinned planning in line with proportionality and the economy of time.

17/ Worker‑owner consciousness deepened. Waiting and downtime fell; cost accounting sharpened transparency: PCK Schwedt issued daily plant metrics, and Combine Baumwolle piloted computer‑aided post‑costing.

18/ Principle mattered: socialism here rested on social ownership and planning. Following Lenin’s accounting logic, enterprises should operate without loss; profit served reproduction, not private gain; restructuring was planned, not market‑driven.

19/ Rollout stayed stepwise. By 1990, more combines—and entire industrial ministries—were slated to operate under comprehensive self‑financing, extending what worked while learning through practice.

20/ In sum, bringing self‑financing inside the plan strengthened the unity of economic and social policy and aimed to raise produced and available national income—pursuing efficiency without sacrificing equity.