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SECOND MARKETS, THIRD SECTORS, RUBBER BOOT
BRIGADES: DEFINING WORK AND UNEMPLOYMENT IN
POSTSOCIALIST EASTERN GERMANY

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ANGELA CATHERINE JANCIUS

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SECOND MARKETS, THIRD SECTORS, AND RUBBER BOOT BRIGADES?:
DEFINING WORK AND UNEMPLOYMENT IN REUNIFED EASTERN GERMANY

By

Angela Catherine Jancius

A DISSERTATION
Submitted to
Michigan State University
in partial fiilfillment of the requirements
for the degree of
DOCTOR OF PHILOSOPHY
Department of Anthropology

2004

ABSTRACT

SECOND MARKETS, THIRD SECTORS, AND RUBBER BOOT BRIGADES?:
DEFINING WORK AND UNEMPLOYMENT IN REUNIFED EASTERN GERMANY

By
Angela Catherine Jancius

The end of “real socialism” and return of mass unemployment in eastern Germany
leaves us with much to think about with respect humanity’s relationship to work/labor.
This dissertation draws from a tradition of postsocialist ethnography that has often
aspired to move beyond mere comparative description, in order to theorize trajectories.

Cold War ideologies had “black-boxed” (Latour 1987) the boundaries of debate
surrounding welfare and social inclusion. When the GDR collapsed in 1989, however, it
merged with a West German economy that was already struggling to maintain the shared
prosperity its export market had brought, while dealing with “structural unemployment.”
With the swift fall of GDR industry, this debate escalated. Mass unemployment
encouraged the circulation of competing ideas for reform, and eastern Germany became
experimentation ground for elaborate work-creation initiatives. In media, in politics, and
at lunch tables, the question of how to deal with high unemployment circulated. During
my fieldwork in the rapidly deindustrialized city of Leipzig, I spent two years (1998-99,
2000-01) observing local struggles to redefine an answer to this question.

Following reunification, Leipzig - a city of ‘/2 million residents - lost more than
100,000 industrial jobs. When my fieldwork began, Saxony’s largest employer was a
municipally-owned Leipzig work-creation firm. In the final months of my research, in
November 2001, Leipzig’s official unemployment rate still neared 20%, but the city had

won bids for both Porsche and BMW production plants. The two automobile companies,

and the supply sector that was to grow up around them, would bring an estimated 30,000
jobs. For the city government, the Chamber of Commerce, and many workers, this
heavily subsidized “reindustrialization” had become the obvious solution to the problem
of mass unemployment. But the effectiveness of this model was also contested, by
residents who considered more sustainable, alternative models.

I trace the hybrid development of a “noncompetitive labor market” (der zweiter
Arbeitsmarkt) during the first decade following socialism’s end, and this work-creation
sphere’s gradual fall from grace as the idea of a “Third Sector” gains favor, as a possible
solution for the problem of mass unemployment. This shift parallels the competition of
two powerful lobby fractions, whose standpoints in many respects mirror early 20th
century regional debates on the “social question.” Framed by the discourse of the PBS
(the successor party to the Communist SED), community groups, and trade unions, at the
millennium’s end Leipzig’s first lobby group defines itself as being against
unemployment, and representing the voice of the unemployed. Following a mixture of
Marxist and Keynesian standpoints, its main objective is to pressure the state into
fiilfilling citizens’ “right to work.” Headed by the business community and the Social
Democratic-led municipal government, a second lobby sees its purpose as focusing on
the needs of potential businesses and investors. The two lobby networks ignore the
peripheral stance of residents who argue for more sustainable patterns of economic

development.

C0pyright by
ANGELA CATHERINE JANCIUS
2004

Preface

Unemployment Futures

Scene One: The Commission For Questions Of The Future

It was a cold February aftemoon, and I sat in Herr Lambert’s living room, in the third hour of
a heated discussion on labor politics. Before Germany’s re-unification, Lambert trained
engineers in the [ignite mines south of Leipzig. After re-unification he worked for a while at
the Unemployment Office, developing apprenticeship programs to integrate East Germans
into the new West German skilled trades programs. The poor quality of retraining in the early
19905 was a main cause for long-term unemployment today, Lambert thought. Now in
retirement, he was a member of Leipzig’s “Work Circle for Municipal Work-Creation.” We
spoke about current government policies, and Lambert asked whether I had read the
influential report of the Commission for Questions on the Future in Bavaria and Saxony
(Kommisston fu‘r Zukunftsfragen der F reistaaten Bayern und Sachsen). When I answered,
“no,” he disappeared quickly, and returned with four large volumes. Skimming over the list
of authors, I noted that the German sociologist, Ulrich Beck, and several neoliberal
economists were listed as Commission members. During a discussion several weeks later,
Lambert and I found we were both critical of what appeared to be a dangerous assumption at
the study’s base - the assumption that technological change would necessarily lead to an
ever-shrinking labor market. With human involvement, this was no certain future, we

agreed!

Scene Two: The Laziness Debate

In an effort to integrate myself into the day-to-day activities of the unemployed, I became a
volunteer English teacher at a “Job Club,” at the Leipzig Center for the Unemployed (LEZ).
In late April, Chancellor Schroder was quoted in the boulevard newspaper, Bild-Zeitung,
saying, “There’s no excuse for laziness” (“Es gibt ker'n Recht auf Faulheit”). In the weeks
following, the “Laziness Debate” echoed through the public sphere. Members of the
community center decided to rent a bus in cooperation with the regional branch of the new
services trade union, Verdi, and travel to Dresden to demonstrate “against the laziness of

state and business.”

Scene Three: More The Ceiling Falls

In early May I visited the home of two women my age, sisters, who were both jobless. We
sat on the terrace that warm afternoon. The two-year-old son of one sister peeked up from
his hiding place under the table. I asked Connie and Britta whether they had heard of a 1996
Saxony law [§ 19 BSHG] enabling the Welfare Office to revoke the benefits of welfare
recipients who refirsed to accept short-terrn job contracts fiom the government. As a
historical first for the FRG, the law pushed some residents temporarily outside of the state
safety net altogether, I explained, and asked what they thought. “I think it’s o.k.,” Connie,
the younger sister, replied. “Some people I know don’t want to work at all,” she said.
“They’re content. They walk around in their gardens, or watch TV. I’m in search of some

kind of change - to get out of the house before the ceiling falls onto my head.”

vi

Scene Four: Solidarity Bonbons

During the GDR, more than ninety percent of workers had been union members. When the
GDR trade union association (the Freier Deutscher Gewerkschafisbund) collapsed after re-
unification, some West German trade unions found that most of their members were
suddenly in the East. But the face of union membership in eastern Germany was being
transformed in a second manner, as well, due to mass unemployment. Uniquely, a large
lobby of unemployed former union members formed in Leipzig. Its director, Herr Gellner,
had once played an important role in wage negotiations for the East German recycling
industry. During privatization, he had resisted the pressure to agree with lowering the East
German tariff wages. He won had this battle, but had lost the war when the entire East
German recycling sector broke apart. The coalition director’s voice filled with emotion:

“You know what’s terrible?,” Herr Gellner asked. “You only understand how the
unemployed are treated once you’re here yourself. Then you know what it means when
politics writes you off as being lazy. We’re not lazy.” “What about solidarity within the
DGB?,” I inquired. “Unfortunately, it’s not really a theme,” said Gellner. “For union reps
and management, the unemployed are like the sick. You know, ‘he has AIDS.’ Let me give
you an example... The unemployed lobby had an action in Leipzig. We were the first to give
out Solidarity Bonbons - ‘Solidarity with the unemployed’ was written inside the wrapper.
Some people threw these back at us saying, ‘We don’t want anything to do with them.’
There’s so little public discussion on the treatment of unemployed. People should realize

that every fourth person here is out of work.”

vii

Scene Five: The Chamber of Industry and Commerce, and the Rubber-Boots Brigade
When I began fieldwork, I was especially interested in learning about Leipzig’s municipal
work-creation firm, the Betrieb fiir Beschéifiigungsf‘drderung (“bfb“), which grew to become
the largest employer in Saxony after re-unification. be was affectionately called the “rubber
boots brigade” because participants often did maintenance work on city-owned buildings and
grounds. The nickname also made joking reference to the old GDR work brigades. After re-
unification, bfb helped the city to save money by making property renovations inexpensive
and re-qualifying welfare recipients (paid by the municipality) for unemployment benefits
(paid by the federal government). By the late 19905, however, both the Chamber of Skilled
Trades (Handwerkskammer) and the Chamber of Industry and Commerce (II-1K) accused the
firm of being a “relic of socialism,” and competing with the real labor market. I went to
speak with two IHK businessmen concerned about the issue.

Herr Moller asked me to imagine a man who was trying to open a landscaping
business. The man went to the bank, borrowed money, and became indebted. But competing
with the service he offered on the market, the government now offered the same service,
using unskilled labor and fimded by tax money! Herr Gratz joined in, “Through this so-
called Zwer’ter Arber'tsmarkt (“second job market”), in which the unemployed work, we have
a‘ kind of gray market economy, a new type of competition for businesses,” he said. “It’s
dangerous. They should have called bfb “VEB” [Volkseigener Betrieb, a GDR collective

firm] instead.”

viii

LIST OF ILLUSTRATIONS

Illustration #1: Fieldwork Table

Illustration #2: “Work” Is Equated with “Employment”

Illustration #3: Solving the Social Question

Illustration #4: The Social Question, Solved!

Illustration #5: Sign reads, “Ofiice Space for Rent”

Illustration #6: Black-boxing the “zweiter Arbeitsmarkt”

Illustration #7: Slogan, Cheering Up the “Second Labor Market”

Illustration #8: Current worksites of bib in 1997

Illustration #9: A Leipzig Coffee Shop and Job Club

Illustration #10: Gut Molkau

Illustration #11: The Leipzig Arbeitsamt

Illustration #12: At city hall an official shares a brainstorming
chart for the new Work Circle

Illustration #13: Leipzig welcomes BMW

Illustration #14: A woman shares her collection of newspaper articles
and reports on unemployment

12

20

24

25

48

56

6O

64

84

92

98

111

118

127

TABLE OF CONTENTS

LIST OF ILLUSTRATIONS

INTRODUCTION
Fieldwork and Methods
Chapter Outline

1. WORK, UNEMPLOYMENT AND (DE)INDUSTRIALIZATION
Unemployment in History and Theory
Modernity and the ‘Social Question’
After the Cold War: Salvagability and Dismantlement in Leipzig

II. REFLECTINGS OF INDUSTRIAL COLLAPSE
Reflecting on Industrial Collapse
Conclusion

III. SECOND MARKETS AND RUBBER BOOT BRIGADES
Birth of a new sphere of labor
The zweiter Arbeitsmarkt comes to Leipzig
Phase one: ‘getting them off of the street’
Phase two: the rubber-boots brigade
Phase three: a full circle
Conclusion

IV. A SAFETY NET
The Failed Rationalization of Welfare
The Limits of Flexibility
The Birth of Leipzig’s “Nonprofit Sector”

V. THE UNEMPLOYMENT OFFICE
A Bucket of Old Rivets
Purposeful Work
A Tightening Belt
Conclusion

VI. BEING “FOR WORK” OR “AGAINST UNEMPLOYMENT”
Some Political Context: Europe’s Most Dangerous Man
A “Right” Becomes A “Wrong”
The Network Against Unemployment
There’s No Excuse for Laziness
A New Social Contract

vii

Nu—I

17
17
23
28

38
38
48

52
53
56
52
62
67
68

69
71
77
82

86
87
93
96
103

105
106
109
114
116
117

VII. THE OLD DRILL-MAKER’S SOLUTION
Solving Unemployment: An Overview

Citizens’ Groups, Class Interests, and Round Tables
The Old Drill-Maker’s Solution

VIII. LUTHER’S LEGACY: UNEMPLOYMENT POLITICS AND THE
PROTESTANT ETHIC

Societies with Walls

Without Action, Talk does Nothing

Actors Without Structure

Having Your Own Plan

The “Community Economy”

It’s the State’s Role to Create Protections!

Conclusion

IX. CONCLUSION: AFTER THE RIGHT TO WORK

APPENDIX 1: A BREAKDOWN OF FORMAL INTERVIEWS
BIBLIOGRAPHY

xi

120
120
128
134

150
151
153
155
157
158
164
166

169

173
174

INTRODUCTION

Michael Burawoy and Katherine Verdery have described the transition from “real
socialism” (Komai 1980, Verdery 1986) in Eastern Europe and the former Soviet Union
as a process that is rooted in historical context and macro-political and economic
structure, fed by people’s imaginations of the future, and defined through “creative and
resistive processes of everyday practice” (1999: 7). This dissertation draws from a now
fifteen-year tradition of postsocialist ethnography, which has often aspired to move
beyond mere comparative description, in order to theorize trajectories.

Early in my graduate studies Germany intrigued me as a fieldsite not merely
because its eastern half had been a socialist country, but also because this merged with a
western half calling itself a "social market economy." In the GDR's socialist model,
markets were planned and social welfare was embedded within the workplace, within a
regime of full-employment. In the West German “social market” model, labor was
regulated according to capitalist laws of supply and demand, but the state was supposed
to play a strong role in the redistribution of national wealth and in aiding citizens in their
search for work. Indeed, West Germans tended to view their “social market economy” as
an improvement over the brutal markets of laissez faire capitalism, and to show pride in
the high standard of living their labor laws and generous social welfare provisions
supported.

Cold war ideologies had structured the boundaries of debate surrounding welfare
and social inclusion. When the GDR collapsed in 1989, however, it merged with a West
German economy that was already struggling to understand how it could maintain the

shared prosperity its export market and welfare state had brought, while dealing with the

problem of “structural unemployment.” With the swift fall of industry in the former
GDR this debate escalated dramatically, and in the early 19905 both East and West
German social welfare models had unraveled into something much less certain, a hazy
shade of gray. High unemployment now encouraged the circulation of competing ideas
for reform, and eastern Germany became experimentation ground for the most elaborate
of work-creation initiatives. An intricate web of EU (European Union) and federally-
fiinded organizations were structured into an emergency safety net, holding unemployed
residents in a decade-long limbo, as feasible directions for reform were debated and tried
out. In the media, in politics, and at lunch tables, the question of how to deal with
unemployment circulated. During my fieldwork in the heavily deindustrialized city of
Leipzig (1998-99, 2000-01), I spent two years observing local struggles to redefine the
answer to this question.

Following re-unification, Leipzig lost more than 100,000 industrial jobs. When
my fieldwork began, in 1998, Germany’s official jobless rate, concentrated in the East,
had surpassed a pre—WWII record of 4.8 million and the region of Saxony’s largest
employer was a municipally-owned Leipzig work-creation firm with up to 9,000 short-
term employees. By the time my fieldwork ended in November 2001, unemployment in
Germany was still reaching record heights,l but the work-creation firm (now described by
city officials as having served a “transitional” purpose) was being dismantled, and the
city had recently won bids for Porsche and BMW production plants. The two automobile

companies, together with the supply industry that was supposed to rise up around them,

 

1 Saxon unemployment soared to a new post-re-unification height in 2002, when the
region reached an annual average of 405,250 jobless (Leipzig Unemployment Office
Monthly Statistics Report. December 2002).

would bring an estimated 30,000 jobs to the region.2 The city government and business
community celebrated the auto industry’s arrival as if it were the obvious solution to a
ten-year struggle against mass unemployment and political instability. After being on life
support for a decade, this old industry and trading city had regained its “industrial heart”!
Parallel a parallel development, Leipzig had also become a testing site for a series of
welfare reforms (the merger of unemployment and welfare offices, for example), which
were slated to become part of Chancellor Schroeder’s belt-tightening federal reform,
Agenda 2010.

It was not until the final months of my fieldwork that “reindustrialization” and
sweeping welfare reform became the official solution to the dilemma of mass
unemployment. Moreover, the long-term feasibility of this path (in light of a thirty-five-
year pattern of deindustrialization in developed countries, and BMW’s proposal to issue
“Auto-Industry-Greencards” to lower-paid Czech and Polish workers) remained highly
contested, even during this early planning phase. If re-industrialization and welfare cuts
could not convincingly solve mass unemployment, what could? At the political margins,
two counter-hegemonic solutions were debated: the labor movement and the GDR’s old
Party elite demanded a return to their “right to work.” Meanwhile, church activists,
ecological groups, and former GDR “dissidents” continued to discuss possibilities for a
“Third Way,” and to debate what this might mean. Sometimes, but not often, these two
alternative lobbies interacted. In this dissertation I explore the events, networks, and
discourses that define and strengthen certain local models for solving unemployment,

while weakening the feasibility of other possible outcomes. It is also an ethnography

 

2 BMW planned to employ 5,500 workers. Porshe’s small, mostly automated plant
employed 370 workers in Leipzig.

about human beings’ relationship to labor/work, and their localized struggles to redefine

the political-economy of this relationship a decade after socialism.

Fieldwork and Methods

I first visited Leipzig for a DAAD3 summer language program, in the summer of
1997. Already interested in what had happened to the city’s more than 100,000 industrial
workers after most of its factories had been shut down or greatly reduced in size, I
became intrigued by the municipally-owned “work-creation firm.” Employing roughly
8,000 workers at the time, the Betrieb fi‘rr Beschaftigungstrderung (“the Firm for Work
Support”), or “bfb” as the firm was called, had been the largest employer in Saxony for
several years. Returning to Leipzig for exploratory fieldwork (1998-99), I focused
initially upon this unusual institution. But it soon became clear that the work-creation
firm had powerful critics, who had other opinions about how social welfare and work-
creation should be structured in eastern Germany, and I decided to broaden my analytical
framework to include this discourse. I organized a multi-site field study, centered around
interest groups and organizations who played an important role in local unemployment
politics. Parallel to this, I conducted 111 formal, semi-structured interviews (usually
taped) with unemployed residents, social workers, local business leaders, and public
officials. The interviews included 55 male and 56 female participants (see Appendix 1).
Additionally, I created a multiple choice and short-answer questionnaire with parallel
themes, which I posted to an intemet site describing my fieldwork, and left for people to
fill out at two community centers. I received 53 responses. Finally and not to be

excluded, during three years of residence in Leipzig, I learned a great deal from fiiends

 

3 The German Academic Exchange Council.

and neighbors, almost all of whom had personal experience of joblessness after re-
unification.

From the fall of 1998 until the summer of 1999, a large part of my exploratory
research included familiarizing myself with Leipzig’s many unemployment and social
welfare related organizations and lobbies. I later returned to this difficult task, in 2000.
These groups were church-related, business-related, union-related, municipally-affiliated,
and linked with political parties. They sometimes specifically targeted helping the young
or the old, substance abusers, the indebted, women, immigrants, or the disabled; some
were originally organizations of the GDR, and others had sprung up as recently as the
Wende (or “turn around,” as the transformatory period of Germany’s re-unification is
called)" Some were the new branch affiliates of West German organizations. Others,
such as the Catholic charity group, Caritas, had existed before WWII, but later developed
parallel, like-named counterparts in East and West Germany during the cold war.
Charting the parallel and diverging traditions, networks, and political affiliations of these
social organizations was both a fascinating and challenging task.

EU and federal Aufbau Ost (“rebuilding the East”) economic support made
training and counseling the unemployed one of the best financial opportunities for
businesses and organizations in post-re—unification eastern Germany. Understanding the
proliferation of unemployment and work-creation related lobbies, and the reasons people
chose to join or avoid them, enabled me to trace the economic success and political ties
that different groups maintained. Realizing this, I knew it was important to spend a

portion of my time in the field observing local networks as they formed and switched

 

“ See Chapter Two.

allegiances, shared members, invented standpoints, apd fought over funding. During any
given week in Leipzig’s busy public sphere, up to a dozen meetings were held on the
topic of joblessness.

After exploratory fieldwork in 1998-99, I returned to Leipzig for dissertation
research, fiom June 2000 until November 2001.5 Three years had passed since my first
visit, and the city continued to transform, as it had done with great rapidity since 1989.
By 1997, the construction boom had passed its final peak, and in 1999 one rarely heard
the sound of a jackharnmer. There were fewer dilapidated buildings, and the renovation
of city hall and the train station were complete. Yet, despite these outward changes,
people’s experiences during the GDR, and their memories of socialism had not simply
faded. The federal government might choose or feel pressured to follow a pattern toward
neoliberal political-economic reform, but this would represent a break from the political-
economic traditions of both Germanies. As ethnographers working in Eastern Europe
and the former Soviet Union have frequently reiterated (i.e. Berdahl 2000, Burawoy and
Verdery 1999, Hann 2002, Mandel 2002), counter to the ideological arguments of
“transitolo ” theorists the direction in which economic reforms was headed following
re—unification was not linear, but open-ended.

The continuance of old hierarchies and beliefs makes conducting research in
postsocialist Europe a challenge for younger scholars, like myself, who visited the region
for the first time after “real socialism” had ended. During fieldwork I found myself
struggling to build an internal lexicon of dismantled factories, occupations no longer

' existing, subtle cues marking old hierarchies, and joking references to a Pushkin poem.

 

5 With the aid of a German Chancellor Scholarship fi'om the Alexander von Humboldt
Foundation.

My husband, a west German journalist, moved with me to Leipzig in 1997 and was a
valuable discussion partner when it came to reflecting on the outwardly realigned, and yet
historically incongruent structures and traditions of the Old and New Federal States. As a
West German, Daniel’s experiences as an outsider differed from my own, as an
American. Divided Germany had been a microcosm for cold war polarities (Bomeman
1992). Interestingly, however, a decade after re-unification tensions between the
country’s former halves were in some respects greater than they had ever been — as any
Ossie (East German) who had moved westward, or Wessie (West German) living in the
East would attest. Native Leipzig residents frequently spoke of their mistrust of West
Germans, whom they stereotyped as greedy capitalists and colonizers.

My husband worked as a staff editor for Leipzig’s monthly city magazine,
Kreuzer, and as a media analyst and freelancer. Hence, while my days were spent at
places such as the welfare office, and community centers for the unemployed, he met
regularly with public officials, artists, and business leaders. I found that having access to
the internal dialogue taking place between local media and politicians was an important
supplement to my own fieldwork, predominantly with residents at Leipzig’s social
periphery.

For this multiple-site ethnography, I created a methodological strategy of short-
terrn participant-observation stays, with groups and organizations centrally involved in
local unemployment politics (see illustration #1). Additionally, my fieldwork included
taped and un-taped interviews, the weekly attendance of public meetings, and a
continuous scouting over newspapers, think-tank reports, and archives. Studying local

work-creation politics during a period heated discussion offered the opportunity to

observe competing models of economic knowledge: some which would become
"expertise," solidified through political and legal structures, while others would be only
marginally influential, or fall out of discourse entirely. Bruno Latour’s concept of "black
boxing” (see Latour 1987, 1991) offers a usefiil way to conceptualize this process. When
a new technological model or policy proposal is first introduced, Latour describes it as
being a set of ambiguous and debatable standpoints and figures. Through discourse,
political struggle, the production of "authorities," and the accumulation of stockpiles of
information, a fixed protocol slowly sets into place. Once a body of knowledge is
solidified through official procedure, it could be seen as being placed within a "black
box.” This conceptual sphere of taken-for-granted knowledge/policy remains stable for a
time, until its meaning is once again questioned. I imagined myself observing this
process in Leipzig. Following the dramatic events of re-unification, what aspects of
GDR labor and social welfare were still being enacted, or idealized? And what was
happening to the West German “social market economy” model? If cold war models had
fallen out of their black boxes, a post-cold war cognitive replacements were currently in
the making.

To understand the wide range of beliefs about unemployment and social welfare,
and how these were changing a decade after socialism, I spent a month as an “intern” at
Leipzig’s Unemployment Office, another at the Leipzig Department of Economic
Development, and two at the Betrieb fi'ir Beschaftigungsf‘Orderung (a work—creation firm
that until early 2002 had been the largest employer in Saxony). I taught English at a
community center for the unemployed, and took part in a business start-up seminar and in

two Networks devised to fight regional unemployment. I kept up with activities at two

occupational training centers, took part in a “bartering ring,” and conducted between one
and several weeks of research at a number of other local organizations, including: the
Oflice of Welfare, the Chamber of Industry and Commerce, the community initiative,
Agenda 21, the Chamber of Skilled Trades, the Business and Innovation Center, the
Saxony Branch of the National Union for the Unemployed, the Church of St. Nikolai, a
homeless shelter, a youth center, the central trade union offices (DGB), and the Leipzig
branch office of for the European Union’s European Social Funds (ESF) program. Over
a 2 1/2 year period, I attended local public meetings and demonstrations weekly, and
conducted taped interviews with unemployed individuals, social workers, and public
officials. Beyond formal interviews and participant-observation, I also learned a great
deal fi'om fiiends and neighbors, with whom I took part in frequent social activities.
During semi-structured interviews, I questioned residents about their biographies,
their opinions about regional labor politics, and their ideas about how high
unemployment should be dealt with. I asked people about their biographies and expert
Opinions in an equal fashion, regardless of whether they were categorized as
“unemployed,” or were serving as “experts,” in a professional or advisory role. I often
found the distinction between “layman” and “expert” to be quite fuzzy, in fact. At
Leipzig’s Department of Economic Development, the Assistant Director was quick to
relate his job refilling soda machines, after the Wende. And most of the stafi’ at charity
organizations, “Job Clubs,” and community centers were hired on two-year, government-
subsidized job contracts (ABM). Today, they were social workers and experts, but

tomorrow they might also be in a line at the Unemployment Office. Community center

staff often openly related this irony, as a way of illustrating their solidarity with the
unemployed.

During interviews, I also asked about political participation: Did a person support
a particular party, organization, or model? Had he or she taken part in a demonstration,
written a letter to the editor, or joined a community organization? Were there specific
changes related to labor that the person would like to see altered within his or her own
life, or within the community? This line of inquiry enabled my interview partners to link
their conceptual understanding of economic justice, to individual life experience, and
social and political activities. By ascribing to the background questions such as, “Why
do you believe you are unemployed?,” or “What will you do now?,” I placed the jobless
on equal footing with policy-makers and business owners, allowing them not only an
opportunity to share their biographies, but also to reflexively interpret political and
economic events.

Some of my field sites were set up through personal contacts. Most, however,
were organized by faxing formal requests to directors and public relations officials,
explaining the project and my wish to visit and/or take part in activities at their
organization. Requests were granted almost without exception, and my visits were
usually interpreted within the popular German tradition of training “intems”
(Praktikanten). Though it was clear that my research visit differed from the usual
“intemship” that was typical for a German in his or her early twenties, in offices I was
nevertheless usually introduced as “the intern,” i.e., the young visitor who would have

many questions. This status worked rather well, allowing me the freedom to conduct

10

fieldwork, while also placing my hosts in the position to serve in an official capacity as
mentors, rather than feeling as if they were merely objects of my study.

In concluding this section, I would like to make a final observation with regard to
the influence of class background upon a researcher’s subjective experiences in the field.
During fieldwork, I found it interesting to note that my own experience of growing up
within a downwardly mobile working-class family, in a heavily deindustrialized city on
the East Coast of the US, played a significant role in shaping social relationships. I am
sure that having this background aided me in gaining entry into communities where I
would have otherwise been excluded, or at least not respected. At the Leipzig Business
and Innovation Center, staff members were eager to host an American PhD. candidate.
But at gathering places for welfare recipients and the unemployed these same titles were
inappropriate to emphasize, and had the potential of branding me an untrustworthy
conversation partner. In instances when anti-American or anti-middle—class (or
Bildungsburger) sentiment ran high, I found that sharing my background as the daughter
of a pharmacy clerk and a construction worker made a great difference. It eased people’s

suspicions with regard to my intentions for conducting research.

11

 

 

Black-b oxlng Unemployment

S octal The man
Tlird Markets to Wait
Secta'?
Tredmd . annual
Trade

 

 

A Third
Way?
W
om" Unerrplayment and
Work Policy Socialism

 

 

 

Cit!
Work-Creation Welfare
.... 0m )— -
man!
Dell

Pro-Business
Low crtyrran

  
 

Illustration #1: Fieldwork Table

 

Chapter Outline

Going back to 19th century discourse on the “social question” of unemployment
and poverty in the growing industrial centers of Europe, my first chapter looks at the
concept of “unemployment” in social theory and in history, and contextualizes this study
within anthropological literature on work and unemployment. I describe the competitive
quest toward “full—employment” during the cold war, and present an overview of the
economic collapse and restructuring that took place in eastern Germany following re-

unification.

12

 

Drawing from personal accounts, Chapter Two focuses on the narratives of four
union leaders involved in the struggle against industry closures. Although these men had
different opinions about socialism and communism, they shared in common the belief
that the almost complete dismantlement of GDR industry and firms was unnecessary, and
had been orchestrated by a corrupted power elite (their description of this elite differed),
responsible for robbing wealth and social welfare from the region.

In Chapter Three, 1 illustrate how the merger of East and West German social
welfare ideologies led to the popularization of a hybrid new labor sphere, a government-
subsidized zweiter Arbeitsmarkt (“second labor market”), after re-unification. By the
mid-19905, Leipzig’s municipally-owned work-creation firm (the Betrieb fiir
Beschtiftigungsfdrderung) grew to become the largest employer in the region. Its
charismatic director mobilized state and European Union firnds for projects premised
upon the idea that technological unemployment was inevitable. The firm provided an
inexpensive labor force for renovations, saved the city tax money, and appeased a strong
“right to wor ” lobby (a merger of the labor movement and old GDR power networks).
In doing so, it managed to create a functional - if albeit strained (and unspoken) -
symbiotic relationship between old and new power hierarchies for a time. By the end of
the 19905, following increasing criticism from the business community, this relationship
and the work-creation firm itself had dissolved.

Chapters Four through Six turn to the issue of social welfare. Chapter Four
documents the growth of an “emergency safety net,” built by community groups and
occupational training organizations. The availability of a substantial amount of state

redistributed wealth offered an opportunity for semi-autonomous community groups to

13

pool resources, and gain local political influence. Still, the effectiveness of their lobbies
was limited by their almost complete dependency upon municipal, federal, and EU
fiinding. Realizing this, in the late 19905 East German community groups began to
consider how they might adapt the “Anglo-American” idea of a “nonprofit sector,” to
create a possible source of autonomy. Chapter Five looks at the bureaucratic power of
state control by focusing on the social rules governing welfare’s distribution, at the
Leipzig Unemployment Office. Beneath the guise of rationalism, personal relationships
and particularistic rules often guide social workers’ decisions on the allocation of
resources. I argue that in Leipzig the old GDR ethic of a “right and duty to wor ” was
particularly influential in guiding patterns of favoritism.

Chapter Six focuses on the tension between local interest groups lobbying
“against unemployment” (including PDS “right to work” fractions), and those lobbying
“for work.” As the “right to work” lobby lost influence in city government, it retreated to
the grassroots level. The municipal government meanwhile strengthened its relationship
with the business community, and began a campaign to introduce new policies for
welfare reform, and to woo the automobile industry to Leipzig. They worked hard to
present city government as “business friendly” and devoid of any remnants of the
socialist era.

However, the struggle between the “right to work” lobby and the “pro-business”
lobby did not represent the only possible solution to the problem of unemployment. In
Chapter Seven I pay recognition to the “alternative” solutions that have been largely
ignored by city officials and the business community. I begin with some suggestions

made by residents during interviews. I then focus on the “alternative” path represented in

14

the faded networks of the citizens groups who led the movement for political reform in
the late 19805. During the “round table” discussions of 1989-1990, these groups were
concerned with issues such as ecology, human rights, and social equality, and they
supported the idea of a “Third Way” government. The marginal political influence of the
GDR’s “intelligentsia” following re-unification has been attributed to the argument that
they were unable to build a trusting relationship with the working-class. If their faded but
still existing networks are to play a role in future politics, the gap between workers’
concerns about unemployment, and church and citizen groups’ interests in the idea of a
“Third Way,” will need to be bridged. The final section of this chapter includes an
interview with one resident who moves between both groups, and reflects on the macro-
political and economic issues that he sees as an inherent part of the problem.

Chapter Eight returns to the present, as a moment in time, and to a public forum at
St. Thomas’ Church in Leipzig, where residents debated unemployment policies, and
possible directions for economic reform. Here, religious and market discourse mingled in
a discussion of morality and social inclusion. Although which social welfare model
should be used remained a point of debate, everyone wished to figure out some structural
way to deal with joblessness and increased inequality. People seemed most intrigued by
ideas relating to the “community economy” and to the “third sector.” Their discussion
ran interestingly parallel to debates about the “social question” which had taken place in
Leipzig a century earlier. It was a discourse that increasingly directed people’s attention
away from “the state,” and toward the idea of “civil society.” But this concept was
“J anus-faced,” as Michael Burawoy has noted: Civil society’s false appearance of

autonomy from the state represented hegemony. However, it was simultaneously a

15

conceptual sphere that offered “a terrain for challenging that hegemony” (Burawoy 2001:
3). German discussions of the “Third Sector” have been influenced by international
pressures toward neoliberal reform, but also by a counter-hegemonic discourse
emphasizing the need for a “Third Way,” which criticized laissez faire capitalism, and

promoted support for social inclusion and sustainability, local economics.

16

CHAPTER ONE: WORK, UNEMPLOYMENT AND (DE)INDUSTRIALIZATION

Unemployment in History and Theory

This opening chapter focuses on how people have conceptualized work and
unemployment since industrialization, how beliefs about wage labor have related to
policy, and how these policies have been implemented within the context of German re-
unification.

It was only in the late 19th century that “unemployment,” defined as a condition
during which individuals were unable to sell their labor on the market, first became a
social issue in industrializing Europe and North America. With the introduction of wage
labor people began equating the concept of “work” with “employment,” and regulating it
to the abstract realm of the “labor market.” Marx critically observed that capitalism had
transformed this creative and fulfilling endeavor of “work” (Arbeit), into “labor power”
(Arbeitskraft): the potential utilization of work, for the purpose of accumulating wealth
(1957[1867]: 138). When sold on the market for material survival, work was no longer
an activity that enabled people to fillfill their potential as human beings, Marx argued
(see also Sayers 1988). Instead it became an alienating and “dehumanizing” act, through
which the very essence of an individual’s humanity was lost. The worker “no longer
fe[lt] himself to be anything but an animal” (1978[1844]: 74).

Interestingly, depression era ethnographies depicting the first wave of mass
unemployment one half century later, described a social experience that mirrored the
alienation Marx and Engels had attributed to labor’s commodification. One classic
ethnography of joblessness was Jahoda, Lazarsfeld, and Zeisel’s community study,

Marienthal (1960[l933]), describing an Austrian town that experienced near total

17

unemployment after its textile factory shut down. Schooled in the psychological tradition
of Vienna, the authors distinguished five stages (shock, optimism, resignation, despair,
apathy) during which the unemployed were isolated from the stability of their old
lifestyles. Other depression era research focused on the psychological effects of
joblessness over time (i.e. Bakke 193 3, Beales and Lambert 1934), and observed people’s
shared sense of sympathy with the unemployed. In the context of mass unemployment,
those not personally jobless still knew neighbors and relatives who were.
Anthropologists who have written about unemployment and deindustrialization more
recently (e.g. Hall 2003, Howe 1990, Moser 1993, Nash 1989, Pappas 1989, Pine 1996,
Rehn 1988, Wight 1993) have consistently described this same pattern of alienation.6
“What seems universal,” Gregory Pappas wrote in a study of unemployment in
Barberton, Ohio, “is the manner in which members of a society lose self-respect and a
sense of well-being when their usual modes of attaining satisfaction are disrupted” (1989:
127).

Since anthropological studies of work and labor became popular during the 19705,
they have largely taken a comparative approach. The ideology of the industrial work
ethic quickly became taken-for-granted in the growing cities of Europe and North!
America (e. g. Thompson 1966), and social scientists were equally susceptible to its
doctrine. Although anthropologists such as Malinowski and Firth included domestic and
reproductive labor in their description of work activities observed during fieldwork (see

Narotzky 1997: 39-41), only after “deindustrialization” began sweeping through old

 

6 In a comparative essay on the social anthropology of work, Chris Hann notes that once
the industrial work ethic is internalized, “one would rather be an alienated worker, than
alienated and unemployed” (1999: 51). [Translated from German].

18

centers of industry did social scientists begin to problematize the male-breadwinner
model of the 40-hour work-week in the “West,” and to begin looking at “work” in a more
holistic light. Industrialization had equated labor with the narrow concept of
“employment,” and “deindustrialization” now forced unemployed factory workers and
social theorists alike to move beyond these conceptual boundaries.

Anthropology’s interest in the broader meaning of work came also at a time when
the discipline was growing in size, and struggling to break from old disciplinary
boundaries (and the “mythology of the pristine primitive” [Wolf 1982: 18]). Initially, the
subject brought scholars from diverse theoretical backgrounds into the same publications.
Sandra Wallman’s edited volume on The Social Anthropology of Work (1979) and
Gershuny and Pahl’s research on “household” and “underground” economies (Gershuny
and Pahl 1980, Pahl 1984) set a foundation for ethnographers to begin exploring the
ambiguous distinction people made between the work that took place in the “formal labor
market” (i.e. taxable wage labor), and work activities that took place outside of this
sphere. Herbert Applebaum soon followed suit with two books on Work in Market and
Industrial Societies, and Work in Non-Market and Transitional Societies, (both published
in 1984). The Society for the Anthropology of Work was established, and other

collections followed (e. g. Calagione, Francis and Nugent, eds. 1992; Garnst ed. 1995).

19

 

 
     

"Black Market"
Work

 

 

Illustration #2: “Work” 15 Equated with “Employment”

 

Within this comparative fi'amework, feminist and Marxist anthropologists focused
specifically on “means of livelihood,” in an effort to more broadly depict work as a
productive and reproductive application of human energy, which could not be equated
with the narrow concept of “employmen .” A new emphasis was placed upon kinship
and alternative modes of production (e.g. Godelier 1977, Meillassoux 1978). Godelier
and Meillassoux’s move away from the structural determinacy of Althussier was
mirrored by a similar trend within British cultural studies. E.P. Thompson (1966) and
Raymond Williams (1977) wrote about work and class identity as it was shaped and
experienced in everyday life and popular culture. While Althussier had emphasized the

dominance of superstructure, this new trend — which was influenced by the ideas of

20

Bourdieu and Foucault —- focused upon the impact of cultural models, or belief systems,
upon patterns of economic structure and social change. In a collection of essays entitled,
Contesting Markets: A General Introduction to Market Ideology, Imagery and Discourse,
Roy Dilley revived this tradition in economic anthropology with the threefold aim: to
look at “western” market discourses, to consider the role these discourses played in social
practices, and to “grasp the implications of the gap that opens between the limitations of
market discourse and the alternative understandings of trade and exchange that can be
recognized if we attend to the particularity of other times and other places” (1992: 1).
Dilley’s agenda remains current today, but there has been one significant paradigmatic
shift. Fifteen years after the cold war’s end, anthropologists rarely refer to “the west” as
an imagined spatial and cultural entity (e. g. Anderson 1991). When they do, it is usually
with reference to an historic event. While I believe we have retained the bad habit of
often objectan a “folk-other,” this objectification is now less likely to be bound within
a specific geographic range. This trend illustrates the extent to which the cold war’s end,
and the parallel development of new media, has dramatically transformed the
anthropological imagination.

Today, the study of alternative modes of production remains a popular pursuit. In
my own specialization of postsocialist Europe, it has become a central theme of inquiry.
In an effort to illustrate that the arrival of “capitalism” has not deterred people from
employing a mixture of market and non-market strategies, as they struggle to make ends
meet, ethnographies of this region of the world have looked at begging (Stewart 1998,
2002), bartering (Woodruff 1999), “economy of favors,” (Berdahl 1999a, Ledeneva

1998), “women’s wor ” (Pine 2002), the fate of collectivized farming (e. g. Abrahams ed.

21

1996, Creed 1995, Buechler and Buechler 2002, Lampland 2002), “fuzzy property” (eg.
Verdery 1996), and the return of migratory subsistence hunting (e. g. Plumley and
Donahoe 2001, Habeck 2002), among other themes.

The end of “real socialism” and the return of mass unemployment in reunified
eastern Germany leaves us with a great deal to think about with respect humanity’s
relationship to work/labor. Mirroring the experience of deindustrialization that wage
laborers in the “West” had dealt with for more than three decades, with the Berlin Wall’s
collapse East Germans suffered a similarly painfiil enlightenment when their
constitutionally guaranteed “right and duty” to work disappeared. 7 Unemployment
quickly became the most politicized topic in the country, and it remains so today.

In an ethnography of deindustrialization and postsocialism, one must take into
account the fact that labor’s commodification is only one potential route toward
alienation. But within the context of labor’s cormnodification, unemployment, or the
segregation of workers into special programs (e. g. for the “less competitive”), was most
certainly another. In this study I have attempted to incorporate both a population’s
experience of mass unemployment, and its attempts to build a counter-hegemonic
discourse that contests the legitimacy of large export-driven industries and harsh laissez

faire markets. In acknowledging this duality, I avoid the trap into which

 

7 By the time East Germans experienced mass unemployment, most westerners had come
to perceive deindustrialization as an unfortunate, but taken-for-granted reality of
advanced capitalism. From coal-miner closures in Great Britain and Germany’s Ruhr
region, a pattern of across the US. “downsizing,” this was something that had been
“happening all over the place, for years.” In western politics and scholarship, there was
nothing new about deindustrialization.

22

Andre Gorz fell in the early 19805, when he contended that deindustrialization might be a
cause for celebration. Finally, workers were freed from the ideology of the industrial
work ethic, which had clouded their minds and tethered their bodies for a century (Gorz
1982)! This is what Marx had wanted, after all! Deindustrialization was no cause for
celebration. And yet, the return of unsustainable large industries, and the ideology of the
industrial work ethic, was unlikely to provide an adequate solution to the problem of
joblessness and growing social inequality either.

The divided states of the FRG and the GDR took separate paths in attempting to
deal with this issue of alienation. Both of these paths lost at least partial legitimacy
following the cold war’s end. One outcome of this, I argue in this ethnography, is that
people found themselves returning to the very “social question” that had originally
framed political-economic discussions on unemployment, when it first became a social

problem 150 years ago. It is toward this circular polemic that I now turn.

Modernity and the “Social Question”

Textiles, steel and coal, the rise of banking and large business cartels, the boom of
the chemical and electrical industries: at the end of the 19th century Germany had become
Europe’s most industrial country, in a transformation many believe to have been
particularly quick and brutal (see Ritter & Tenfelde 1992). At the time, people referred
to unemployment and the related problem of rising urban poverty as the “social
question,” and debated possible solutions. During the Bismarck Era, unemployment had
come to increasingly be seen as a concern for national governments. Countering this,

church charities and liberal reformers followed a Malthusian line of reasoning, calling for

23

educational programs and a good dose of moral virtue for the poor, as an alternative to
the institutionalization of state mechanisms (Hong 1998; Peukert 1986). From the
opposite end of the political spectrum, Marx said he also mistrusted the idea of national
unemployment insurance, arguing at the Gotha Socialist Worker’s Party meeting in 1875
that all policies of the state would inevitably represent the interests of the bourgeoisie

(Marx l978[l875]).

 

Solving Unemployment

l l I

Private State A Communist
Charity? Welfare? Revolution?

 

 

 

 

Illustration #3: Solving the Social Question

 

But support for state intervention grew in the late 19th century, as joblessness
came increasingly to be seen in a “scientific” light, as the natural outcome of cyclical
market downturns. In an effort to appease a growing and volatile worker’s movement, in
the 18805 Bismarck set up the first national welfare insurances for health, worker injury,
and retirement. Legislation for the Unemployment Insurance Law was passed in 1927, in
line with a similar trend throughout Europe and North America. By the early 20th
century, successful steps toward the rationalization of the welfare state led social
scientists to believe that modernity would eventually offer a solution to the social
ailments that had accompanied economic growth. Hence, when the great depression
brought mass unemployment in 1929, John Maynard Keynes wrote assuredly of a

“temporary phase of maladjustment” (1963[1930]: 364).

24

 

Solving Unemploy-

 

 

 

 

Illustration #4: The Social Question, Solved!

 

In the early 19305 the Weirnar Republic’s fledgling welfare state was
overwhelmed when regional unemployment rose for the very first time in wage labor’s
history, to levels as high as 30%. After seizing the Chancellorship in 1933, Hitler
maintained his popularity largely through the implementation of a series of national
work-creation schemes (Evans and Geary, eds. 1987). As a result, after the war social
upheaval was a danger that even fiscal liberals such as the Austrian School economist, F.
A. Hayek, took seriously. Hayek, the economist whose ideas would inspire Thatcher and
Reagan, believed that no democratic government could remain stable long with
unemployment levels higher than 10% (Hayek 1944). Today, Germans still use the link
between high unemployment and the rise of National Socialism as a political tool to
criticize the popularization of neoliberal economic reform.

Thus, the lessons of the great depression and World War II were enough to
convince state governments in both the socialist East and capitalist West to prioritize
“full-employment,” defined in the West as a 40-hour workweek for a male head-of-
household, and in the East as a week of similar length for a labor force of both sexes.
The perceived equilibrium of full-employment now became a primary goal in the

competitive quest for social prosperity in an escalating “cold war.” In the postwar era,

25

modernization theory was at its height, and there was a degree of shared faith in the
nation-state’s ability to improve “structural” problems, such as joblessness. The “right
and duty to work” for men and women was written into constitutional law throughout
Eastern Europe. And in the United States and western Europe, new labor laws gave
governments the obligation to maximize employment opportunities and protect and aid
citizens without work, as illustrated in documents such as the U.S.’5 1946 Full
Employment Act and in the EEC’s European Social Charter of 1961, or in the United
Nations Human Rights Declaration of 1948 (Article 23, Paragraph 1), which declared:
“Everyone has the right to work, to free choice of employment, to just and favorable
conditions of work and to protection against unemployment.” The postwar strategy of
the West, which assigned the responsibility of finding work to the individual with the
support of the state, was seen as clearly opposing socialism’s road to “firll-employment,”
which emphasized the absolute responsibility of state. Although their paths certainly
differed, both in the East and the West “hill-employment” was a common utopian goal on
the agenda of the nation state.

“Full employment” was also a goal of particular interest for Germans — who had
seen the role unemployment played in the rise of National Socialism, and had lived in a
land split by and enmeshed in a discursive paradigm that revolved around the rights of
labor. In Belonging in the Two Berlins John Bomeman argued that East and West
German dualities represented a microcosm of larger cold war dynamics (1992: 2-3). This
pattern was clearly visible in the FRG and the GDR’s competitive policies to alleviate

joblessness, perceived historically to be the root of poverty. “fithin the first two decades

 

8 The European Economic Community was the precursor to the EU.

26

of the postwar period, the governments of East and West Germany both made claim to
having successfully institutionalized “social progress,” and both assured their citizens
that the harsh economic conditions of the pro-WWII era would never again exist within
their national borders.

Ludwig Erhard and other “ordo” liberals9 from the Freiburg School implemented
a “social market economy” model in West Germany after W H, which (along a
Keynesian line of thinking) was based upon the conviction that “fiee markets” operated
optimally under a wide net of social protections - including health, unemployment,
retirement insurances, and an overall improvement in the social environment of
communities and workplaces (Erhard 1958). The diverging interests of workers and
. entrepreneurs could be solved if all citizens shared in the country’s material well-being,
the Freiburg School argued.

When official unemployment fell below 2% in West Germany in 1956 (despite
immigrants from East Germany and “guest workers” from the Mediterranean), people
who had lived through the war were glad to hear their government announce that poverty
had oflicially been “solv ” (eg. Huster 1994: 33). By 1962, unemployment levels in
West Germany dropped even further, to less than 1%. In 1967, the Law for Promoting
Stability and Growth was passed to ensure that this newly achieved equilibrium of “fill-
employment” (defined as an unemployment rate of less than 0.9%) would be sustained

(Hardach 1976: 201). When joblessness later rose and wage values fell after the 1973 oil

 

9 A school of German liberalism created by jurists and economists (Wilhelm deke,
Walter Eucken, Franz Bohm, Alexander Rustow, Alfred Muller-Armack), who were part
of the Freiburg School during late 19205. They published a journal called Ordo. They
defined themselves as “liberal,” through their belief in the market economy’s ability to
create democracy and material well-being. Their idea of “ordo” referred to the argument
that an economy nwded social order to fimction optimally.

27

crisis, West Germany’s political left began to argue that “social poverty” was the new
problem. But the Christian Democratic Union (CDU)—led government dismissed the
debate, pointing out that social welfare programs guaranteed every citizen an
Existenzminimum (see Hanesch 1994, GeiBler 1976), which included the essentials of
food, clothing, and shelter.

In the GDR and throughout Eastern Europe and the Soviet Union, the “right to
work” had grown to become a central legitirnizing force for Party rule. It was written
into Article 5 of East Germany’s constitution in 1949, and expanded in the Labor Code of
1961, which placed a second emphasis on the duty to work, making the “asocial”
behavior of refusing employment a punishable crime. As the social historian Dorothy
Wierling described, the GDR’s socialist work ethic of the 19505 emphasized: “giv[ing]
one’s best, based on the realization that everyone profits from collective effort and that
every contribution counts. ‘As we work today, so will we eat tomorrow’ was the slogan
on factory posters [...]” (1996: 47).10 Officially, unemployment and poverty were both
eradicated by the early 19605 (Bundesministerium fur innerdeutsche Beziehungen

2000[1985]), making it henceforth a taboo subject for social scientists to research.

After the Cold War: Salvagability and Dismantlement in Leipzig
Originally founded as a Slavic settlement at the intersection of two Roman trade
routes, before WWII Leipzig was one of Germany’s most heavily industrialized cities,

with a famous trade fair, the most banks in the country, and the largest train station in

 

'0 For fiirther reading on the meaning of industrial work in the GDR, see also: Berdahl
(1999b), Bittner (1998), Liidtke (1994, 2001), Roesler (1994), Rottenburg (1991),
Wierling (1996), “freschiolek (1999, 2000).

28

Europe. The triangle formed by the cities of Dresden, Leipzig, and Chemnitz was called
Germany’s “industrial heart,” a tradition that would continue during the GDR (when
Saxony became the “industrial heart” of the GDR). In the 19805, 39.5% of Saxons
labored in industry (Gebhardt 1994), producing 75% of the GDR’s textiles and, together
with Brandenburg, 83% of the country’s primary fuel source of lignite (brown coal).
During socialism most of Leipzig’s half-million residents worked in textile and machine
construction, in the chemical industry, and in the lignite mines on the city's southern belt.
They also worked in government posts, for Karl Marx University, and for the Leipzig
Trade Fair. The largest number of residents held manufacturing jobs (90,000) in one of
city’s 790 plants.

Following Tiananmen Square and Mikhail Gorbachev’s Perestroika reforms, by
the autumn of 1989 thousands of East Germans were fleeing westward through the newly
opened boarder between Hungary and Austria, or seeking asylum at FRG consulates in
East Berlin, Prague, Warsaw, and Budapest. New oppositional groups, such as “New
Forum” and “Democracy Now,” demanded sweeping political reforms. Within this
climate, the Monday evening peace prayers at St. Nicholas’ Church in Leipzig began
attracting thousands of visitors and spilling out onto the market square. By the end of
October, weekly “Monday Demonstrations” were drawing 300,000 participants, and

sparking protests in other cities." On November 9th, three days after a Leipzig Monday

 

1‘ For two detailed English historiographies of the Leipzig demonstrations, see: Wayne
Bartee, A Time to Speak Out: The Leipzig Citizen Protests and the Fall of East Germany
(2000), and Richard Gray and Sabine Wilke, ed., German Unification and Its
Discontents: Documents from the Peacefirl Revolution (1996).

29

demonstration of ‘/2 million participants, a protest of similar size in Berlin culminated in
the Berlin Wall’s destruction. '2

The reform communist Hans Modrow was appointed as the new Prime Minister,
and in a series of “round tables” the leaders of citizens' groups met with state officials to
discuss the possibility of a “third way” government. But under the pressure of a
floundering economy and Chancellor Helmut Kohl’s offer to annex the GDR under
Article 23 of the FRG’s constitution, these discussions were soon pushed to the wayside
by a second debate, on how quickly the two German states should re-unify. Kohl
threatened to withhold economic aid to the East if his ten-step plan was not adopted. A
March 18, 1990 election resulted in an overwhelming majority for the conservative CDU
party, whose rise to power assured political support for Kohl’s plan for rapid annexation.
The West German SPD and Green Parties had both been hesitant to support re-
unification, fearing that it was not be in the best interest of either country. As a result
only the CDU was the only West German party to build a strong political platform in the
East before the election.

With all steps toward re-unification in place, on the 3rd of October 1990 the GDR
officially ceased to exist. The Free State of Saxony, which had been dismantled during
the GDIL was re-established following the October 14, 1990 state elections. Many West
German civil servants were recruited into high-ranking state and city government posts,l3

including the North Rhine-Westphalian Ministerprasident, Kurt Biedenkopf," who

 

'2 See Gray and Wilke’s chronology of German Unification (1996: xxxi — lv).

13 I heard estimates that more than 800 civil servants had been recruited from Saxony’s
official partner state of Bavaria to serve in key positions of state administration. Many
Beamte were also recruited to Saxony from Baden-Wt‘rrttemberg.

‘4 The former Ministerprasident of North Rhine Westphalia, and later General Secretary

30

became Ministerprasident of Saxony, and Leipzig’s new Social Democratic mayor,
Hinrich Lehmann—Grube, who came from Hanover.

The dissolution of East German national sovereignty was finalized with the treaty
of the German Economic, Monetary, and Social Union (GEMSU). After a half century
of separation, the New Federal States, or New Lander, now worked to restructure
themselves in relation to western German and western European markets. The monetary
union exacerbated East Germany’s economic “turnaround,” by making East German
prices suddenly too expensive for old Soviet trading partners. The restructuring was also
reinforced by the dissolution of the Soviet trade network, COMECON, in 1991.

Through the GEMSU, a newly-created Treuhand holding company (THA, or
T reuhandanstalt) was given the task of privatizing or liquidating 8,000 East German
VEBs (large, state-owned corporations, or Volkseigene Betriebe) within a four-year
period. Of Leipzig’s 90,000 manufacturing jobs, following Treuhand only 19,000
remained (OECD 2001). Ironically, Treuhand was originally conceived during the round
table discussions, as a trust for the re-allocation of state-owned (or “people'5”) property,
through a collective share-holding system (Luft 1992). Reversing this original idea that
Treuhand should serve as a safeguard against the takeover of private capital from the
West, the holding company was instead restructured to become the primary instrument in
facilitating this very process (Fischer et a! 1993, Kohler 1994). The state property
Treuhand managed included 8,900 Kombinate (larger work collectives) and at least
45,000 individual factories and work places. Between 1990-1991, the former GDR’s

Gross National Product dropped by two thirds (Institut fi'rr Arbeitsmarkt- und

 

of the CDU.

31

Berufsforschung 1998: 6). Layoffs and restructuring began in 1990, and continued at a
relatively steady pace until September 1993, when the Treuhand holding company
completed its task of privatizing 407 and liquidating 207 collective firms in the greater
Leipzig area (Seidel 1994: 29). The high number of “privatiz ” firms is misleading
here, because at the end of Treuhand’s four-year term, many firms not yet privatized were
rccategorized as “ABS Enterprises” (“Labor Promotion and Structural Development
Enterprises”). Organized with the help of labor union advisors from the Old Federal
States, these “legal entities” allowed former VEB employees to maintain old salaries
while laying their factories to rest (see Wieschiolek 2000), trying to create spin-off
industries, retraining themselves, or remaining in a reserve pool.

Modernization theory, now packaged in a discourse of postsocialist “transition,”
became the driving force behind eastern Germany’s economic restructuring. Reminiscent
of the Marshall Plan’s postwar recasting of western European markets, the economic
discourse of the West German politicians and business consultants who were now
running the show in the East, promoted the image of an idyllic prewar Saxony, while
simultaneously emphasizing the region’s newfound, postsocialist “flexibility.”
Meanwhile, much less attention was being given to the fate of GDR industries and
collective firms, and the struggles of small, local businesses.

In his 1990 re—election campaign, Chancellor Helmut Kohl had promised East

,3

Germans a rapidly “blossoming landscape. Kohl’s platform was the German variant of
“shock therapy” (Sachs 1990), an economic approach to postsocialist development that
dismissed the idea of round table discussions and gradual reform, and instead favored

rapid economic restructuring (Bryant and Mokrzycki 1994: 60-61). The more quickly

32

planned economies could be dismantled, it was argued, the more quickly the regional
economy of eastern Germany could begin to mirror West German patterns of prosperity
and growth.

During socialism, Leipzig was called the “window to the East,” for its
international trade fairs. After re-unification, Chancellor Kohl’s decision to invest DM
1.3 million into a New Leipzig Trade Fair was praised by Christian Democrats, and the
general public, as a means of reinvoking an image of pre-socialist grandeur for the city.
The same symbolism was applied to the migration of more than 100 private banks to
Leipzig in the early 19905. Economic planners advertised that Leipzig was the second-
largest “bank city” in reunified Germany (next to Frankfurt am Main). Though this
banking trend was reversed during the mid-19905, through a series of mergers, for a time
this initial euphoric climate gave people the impression that perhaps with the help of the
FRG Leipzig’s pre-cold war, pre~WW H, pre-depression era heyday might indeed be
quickly reborn. A community center volunteer in her fifties told me she knew Leipzig
would make it (literally that “Leipzig kommt,” the city’s post-re—unification marketing
slogan) after hearing about the banks: “1 went to public meetings and stood at the
microphone, telling people what I thought - Leipzig would be alright because the banks
had come, and they’d bring money.”

The image of a quickly “blossoming landscape” in Leipzig was dashed several
years after re-unification, as it struck people that the trade fair was failing, the lignite
mines had closed, and the city had altogether lost more than 100,000 jobs in industry
(Leipzig Office of Employment 1995). The large majority of the East German VEB’s

and Kombinate had not been successfiilly privatized by Treuhand, and between 1990-

33

1991, the former GDR’s Gross National Product dropped by two thirds (Institut fiir
Arbeitsmarkt- und Berufsforschung 1998: 3). The national Institute for Employment
Research observes a 1/3 reduction in employment during the early 19905 (Institut fiir
Arbeitsmarkt- und Berufsforschung 1998: 2). A more critical estimates argues that by
1992 the GDR's labor force of 9.7 million had been reduced nearly in half (see Lutz and
Grilnert 2001: 139), and that of the 2.47 million men and women employed in Saxony in
1989, by 1994 a mere 412,000 permanent wage labor positions remained (Brarnke 1998).

Residents described the first wave of layoffs as following soon after re-
unification, in the winter of 1990-91. One woman who had been active in Monday
Demonstrations spoke of observing a direct link between the political upheaval before re-
unification, and the economic upheaval thereafter: “On October 9th [1989] I was terrified
of getting shot. My husband said ‘stay home,’ but I told him that wasn’t an option. We
said goodbye to the children, and if we weren’t home by 8 pm. a fiiend should take them
to their grandparents, in the country... And then, so quickly, we were the Federal
Republic of Germany. It was an open field! And the old factories were all shut down,
and boarded up. All you need to do today is drive around Leipzig, and you’ll see them
everywhere, the empty factories.”

Women were hit especially hard by the layoffs, in a pattern that was similar
throughout postsocialist Europe. Socialism had promoted women’s fill] integration into
the workforce, and by the late 19805 91% of East German women were employed. This
contrasted with a 51% employment rate for West German women (Bomeman 1992: 59).
In the FRG, tax incentives and child rearing benefits encouraged women to stay at home

(Hoecklin 1998, Sharp and Flinspach 1995), and working mothers were generally

34

stereotyped as neglectfiil. After re—unification, the luxury of not having to work released
East German women from a “double burden” (Corrin 1992, Kolinsky 1989, Rai et a1.
1992) of housework, childcare, and employment15 (Rudd [in press]), but also took away
the legal employment rights that women in socialist Europe had come to expect (Berdahl
1999a: 193-95; De Soto and Panzig 1995; Gal and Klingman 2000; Rosenberg 1991). As
a Leipzig woman explained: “In GDR times, women worked and took their children to
daycare. No one, and certainly no man, said a thing about it. All women worked, and
now none of them do, but are instead forced to re-orient (umdenken) their thinking.”

Women were twice as likely as men to lose their jobs (European Commission
1995: 15). Socialist countries had promoted women’s fiill—employment as a way of
dealing with labor shortages, but also as an important legitirnization marker for an
ideology that was struggling to “live up to its own pretensions” (Burawoy and Lukas
1992: 139). When the Berlin Wall fell, previously abolished gender divisions in labor
reappeared in full force. In sectors of industry and technology men consistently took
positions formerly occupied by women (Institut fiir Arbeitsmarkt- und Berufsforschung
1998: 8). Older workers were also most likely to be pushed out of the workforce
(especially women). The percentage of employed East Germans between the ages of 55-
59 dropped by two-thirds during the Treuhand restructuring (Institut fiir Arbeitsmarkt-
und Berufsforschung 1998: 8).

During my fieldwork, 65% of Leipzig residents were of working-age (OECD
2001), and the city has an estimated shortfall of between 50,000 (OECD 2001) and

55,000 (Tiefensee 2000) jobs. Afier the construction boom and now that many long-term

 

'5 The socialization of women’s fiJll-employment had not resulted in a more equal
sharing of housework and parenting, between men and women.

35

jobless women have accepted early retirement or slipped into welfare, the official
percentage of unemployed women in Leipzig (18.1%) has fallen to slightly less than that
of unemployed men (23.3%) (City of Leipzig 2004). Unemployed young pe0ple has also
been a serious concern for the region. Re-unified eastern Germany has had an official
unemployment rate for people younger than 25 of roughly 11% percent (OECD 2001),
but this figure excludes welfare recipients and people with lengthened university stays
and in government training programs.

Mass unemployment has subsequently led to an almost 20% decrease in
population size: In 1989, Leipzig had 530,010 residents. By 1998 this number dipped to
43 7.101 (City of Leipzig 2002),“5 becoming the inverse parallel of the industrial boom of
one hundred years before, when Leipzig’s population swung from 215,987 in 1889 to
456,156 in 1900 (City of Leipzig 2002: 23). Official unemployment rates, which swung
between 17-20% in the first decade following re-unification were kept from spiraling
further only through a complex network of expensive federal and EU work-creation
initiatives.

The planned growth sectors of banking, media, trade, and biotechnology remained
a disappointment at the millennium’s end. Roughly 40,000 new service sector jobs were
created in Leipzig during the first decade of the Wende, but these barely compensated for
the GDR jobs lost in nonindustrial sectors such as government, military, and education.
One engineer who supported the city’s reindustrialization, and scoffed at the idea of
focusing economic development efforts around the service sector, joked: “How would

you do it? You cut my hair, and I’ll cut yours?”

 

’6 City boundaries were resized in 1998, recalculating Leipzig’s population at 491,086.
In late 2002, the current population is 493,923, showing a slight growth trend.

36

The first time I visited this old trade city, the abandoned factory plots and gray
empty buildings left a strong visual impression. Still captured in those empty buildings
was the paradigm of industrial production that had framed so many debates on poverty
and self-fulfillment, the role of government and the nature of the market. At the time, I
thought this era may have come to an end for the city. But as it turned out, the engineer’s
criticism of the service sector was shared by the newly elected municipal government:

Leipzig would regain its “industrial base,” after all.

37

CHAPTER TWO: REFLECTIONS OF INDUSTRIAL COLLAPSE

Moving ahead in our story, by the time of my fieldwork the factories that turned
peasant into proletariat and work into wage labor had become empty husks of scrap metal
and old brick. The strange Taylorist practice of competitive production - adjusted in the
GDR to follow the logic of planned markets - had screeched to a halt, bankrupt and
“outdated,” with the same brutal suddenness with which had it all started. The
“deindustrialization” that had occurred in western Europe and North America over
several decades, had taken place in post-re-unification eastern Germany within just a few
short years (Bramke and HeB 1998).

Germans referred to the early years of re-unification as the Wende, a word that
literally meant “turn around,” and was first used in a political context as a campaign
slogan for the Christian Democratic Party, in 1982. It was again coined during
Chancellor Helmut Kohl’s re-unification campaign several years later, and quickly
became associated with the historic demonstrations in Leipzig and Berlin, during the fall
of 1989. Since then, the idea of the Wende has come to represent the complex series of
events surrounding re-unification (see also Buechler and Buechler 2002: 10; Ten Dyke
2001: 217-18). In eastern Germany, people also associated the Wende with a period of
dramatic social and economic upheaval. Leipzig residents frequently grasped at phrases
like “before the Wende,” and “during the Wendezeit” (the “time of the Wende”) when
discussing work, economy, and daily life. “fithout such phrases, those who reached
adulthood in the GDR would lack the basic vocabulary needed to describe key events in

their biographies.

38

Turning our clocks back to the Wendezeit, one thing, as I have noted, was certain:
few residents imagined the disappearance of two-thirds of Leipzig’s industry, not even if
re-unification were to occur. “On November 9, 1989, I’d worked for thirty years in the
mining industry,” a retired engineer explained to me. “Naturally, it hadn’t been obvious
at all. In my company we had the rare luck that our general director worked in a so-
called ‘capitalist country,’ and so we understood what was happening. He told us how it
was going to develop - that everything would be shut down.” A woman in her mid-
thirties reflected, “I thought there’d be democracy first of all, that we’d be able to take
part in decisions, we’d be able to travel. But I never thought we’d even become one
country again. That was a time when everything really hung in the air. Unemployment
had been unthinkable.”

This point was recounted many times. A social work professional told the same
story: “There must have been some who saw it coming, but never in the manner that it
crashed onto us, where the entire industrial base was liquidated, with unemployment
coming at a million-fold intensity. Some unemployment did exist in the GDR, in an
entirely different context. But this mass phenomenon as it’s developed in the last decade
when we started out [in social work] in 1990, this really wasn’t foreseeable.”

Though a number of studies have been written on Treuhand and eastern
Germany’s economic restructuring following re-unification, very little attention has been
paid to local interpretations of economic collapse. A body of ethnographic writings does
exist on daily life and the industrial work ethic in the GDR, but the focus of this literature
has primarily been upon capturing the essence of old socialist worldviews and patterns of

daily life, before their disappearance. My own inquiry was somewhat different, because I

39

did not ask former industry workers to focus upon work life during the GDR, but rather
to describe how they believed the economic collapse occurred, and what they believed
should be done. This placed the focus of inquiry upon the process of social change and
shifting power structures in the post-re-unification period.

This chapter looks at deindustrialization through the subjective narrations of four
Leipzig union representatives. Local interpretations of eastern Germany’s economic
collapse offer a perspective that often sharply contrasts with that of government
documents and official reports. Overwhelmingly, residents described a pattern - which
has not yet been (and may never be) adequately quantified by social scientists - of the
rapid transfer of East German capital into the hands of a business elite, who were often
described as West German. While local interpretations of this process varied, their
stories shared one element in common: I found no East German native resident,
regardless of professional or political background, who had expected factory closures to
take place on such a totalizing scale. This general shock supported an observation
expressed by all four union leaders in the following pages, that the entire process had
been guided by the interests of a political and economic elite, without the consent or
support of most residents.

“Deindustrialization” is not an instantaneous process, devoid of human
participation, after all. As with “industrialization,” it represents a political, social, and
physical endeavor, and a frame for realizing capital interests, at critical point along
modemity’s tirneline. In the context of Leipzig, a small business elite’s interest in
potential economic gain had clearly outweighed the social and economic value of “firll-

employment.” For those who would argue that industrial dismantlement offered the

40

environmental benefits of improved health and quality of life, one must acknowledge the
quick dismantlement of more sustainable sectors, such as the GDR recycling and printing
industries. One must also recognize that this criticism was not voiced when the decision
was to reindustrialize Leipzig was made a decade after re—unification.

The four union representatives were each deeply engaged in struggles to save
large industry during the Wendezeit. The men all held decision-making roles in trade
unions during the Wende, and were therefore able to describe the process of factory
closings with more clarity than many of their peers, though I found that their accounts
still represented popular lines of argumentation. After the Wende, all four became
actively engaged in fighting regional unemployment: through community initiatives,
union-related lobbying, and municipal policy advising. It was through this involvement
that I came to know each. Their engagement in unemployment politics was a
commonality in biographies that were otherwise politically quite dissimilar: Herr Muller
was a West German unionist who came to Leipzig in 1990 to play an advisory role in the
public services trade union, OTV. Herr Pacher was a former East German trade union
(FDGB) representative at the large crane production company, Kirow-Werk, who was
ousted by his colleagues in 1989 and ended up on the management side of his capsizing
VEB. Herr Gellner and Herr Schmidt both experienced workplace discrimination during
the GDR, and both became active in union politics during the Wende. Gellner
unsuccessfully negotiated to save the East German recycling sector, and Schmidt was still
fighting to retain the remnants of his East German hydraulics company, Ostar-Hydraulik.

Together, the interviews offer a glimpse into the complex series of events taking

place during this period of regime change and industrial collapse, and the power struggles

41

that were a part of this process. I begin with Herr Muller, whose description was
peppered with a chronology of political and historical detail. As the only West German
in the group, Muller acknowledged his role as an advisor and outside observer by
withholding usage of the pronoun “we” throughout the narration. He described an
internal revolt within the East German trade union, FDGB, as a political turning point in
1989, and talked about workers’ disbelief at the fact that there was so little demand for
East German industrial products after the Wende, despite the money invested in factory

renovations. The markets had simply changed.

Herr Muller: On May 8, 1989, opposition-minded people were writing ‘no’ and
drawing lines across their ballots. So the SED supervised the polls, and started an
open fight. Everything went quickly from there. In Leipzig and Berlin, groups like
the Arbeitsgruppe Betrieb und “frrtschaft [Workgroup Firm and Economy] tried to
build an opposition from inside of the state enterprises. Before, people had only been
willing to take defensive positions - the unions should protect workers, not question
the system. But now some were also trying and take over the firms. After October
3rd the [East German trade union] FDGB was gone and the OTV [the BRD service
sector trade union] was official. Lots of people stepped in all at once, the unions held
an internal vote. They began setting up new offices. Then in the winter of 1990, the
first wave of layoffs began.

I could give you the example of Kirow-Werk. They belonged to a large combine
called Tagraf, that was in Leipzig, Magdeburg and Wurzen. They produced cranes,
and sold these in the Soviet Union, which sent them to Egypt, Vietnam, sometimes to
Hamburg and Rotterdam. Workers thought they just needed to get over a transition
period, and needed capital so they could keep producing. They figured they just
needed some new production contracts, because they weren’t well known yet in the
West. They never assumed that one day somebody-or-other would come here and
say that on the world market the company was redundant anyway, that they should
find something else to produce. Computer chips or information technology.

Inter-vim: I heard that the Monday demonstrations actually led into
demonstrations against unemployment, and that these were led by the trade unions. ‘7

Herr Miller: Union strikes in early 1991 were organized by IG Metal] when it
became clear that re-unification wasn’t going to bring quick prosperity or production

 

’7 Led by the Saxon metal worker’s union, Saxon IG Metal].

42

contracts. Hungarian, Czechoslovakian, Soviet, and Bulgarian markets broke off
because they couldn’t pay for products that were suddenly five times as expensive.
And for the West, the products didn’t have the right quality, at least not in mass. So
in ‘91 the trade unions tried to follow in the tradition of the Monday demonstrations,
with demos against unemployment. You know, like those that were originally for
democracy and against the SED. They started the Monday demonstrations up again,
demanding work and to retain their firms, and sending a signal to the federal
government - because at the time it looked like the government didn’t want to set up
any special subsidies for the former GDR.

Herr Muller had described the overthrow of the East German trade union 1989, by
workers demanding political change. The revolt was part of a takeover that led to the
GDR’s dissolution. But much to workers’ surprise, in reunified Germany, German
industries were quickly going bankrupt.

Our next narration comes from Herr Pacher, a man who had been one of the East
German FDGB (Freie Deutsche Gewerkschaftsbund) union organizers, ousted from
leadership during the political uprisings that accompanied the Monday Demonstrations in
Leipzig. Pacher had worked for the crane production company, Kirow, which had been
described in Muller’s narration, and described his feeling as if his co-workers thought too
little about the far-reaching consequences of their decision to take control of the
collective firm away from the East German union. During the two years I conducted
fieldwork as a part-time volunteer at the community organization where Herr Pacher later
worked, we had many political discussions and I came to understand how much this man
wished that the GDR had never collapsed - not only perhaps due to his fallen career
prospects, but also because, to him, Germany’s re-unification represented the next phase
in the acceleration of capitalism, as predicted by Marx.

Herr Pacher: In the metallurgy union, we were the ones who closed the tariff
agreement (Betriebskollektivvertrag). That was a waltz with everything in it -

43

vacation days and terms, worker’s safety, etc. I worked in Kirow-Werk, where they
produced steel cranes. It was a weapons factory during the war, so we were renamed
after Sergei M. Kirov - you know the Stalin prote'gé, who was assassinated... In
1989, well, they voted us union leaders (Gewerkschaflsleitung) all out of office. You
know how it was. They said, ‘he needs to go, and he needs to go.’ But I mean you
can’t just let everything fall, go out the door and say, ‘that’s that.’ There were no
replacement candidates. Someone would run into my office and say, ‘Do you know
what’s going to happen now? What’s going to happen now, if you’ve all been voted
out?’ I would say, ‘Well, what do you think is going to happen? Now we need to
find new candidates, and then we’ll have to see.’ That’s how it went... You have to
imagine, people were excited and angry, and acted without thinking. They just said,
‘he needs to go, and him, and him,’ without really thinking what would come next.

Interviewer: What demands were they making?

Herr Pacher: There weren’t really any demands in that sense, just the general
political demands, that you can read about everywhere. As it took root, for instance
they claimed that we were delaying vacation schedules, that we made too much
money, and other silliness. Incredibly silly claims, really. You know, it was like
those films [of the Wende demonstrations] shown on television sometimes. A little
drama, but then when you look beneath, that wasn’t really how things were. If it had
been, they would have locked me up probably. You’d have to visit me in jail.

[vita-viewer And what happened next?

Herr Pacher: Well, after we were voted out. .. I should mention that I had a secure
job contract through the union, and through them a secure position in the company.
It was sometime around December 18, 1989. So in February 1, 1990, I had a new
contract as a researcher for the supply director, a kind of personal assistant. And in
the meanwhile, I helped those interested find new union representative candidates.
Then the Citizen’ 3 Committee (Biirgerkommittee) was founded, and they were
investigating everything and thought they would find whatever secrets within the
Party, the union, etc. But there really weren’t secrets. I have to admit there’d been a
lot of secretiveness, and this had been our fault. But in the end it came out that that’s
not how it was. So now we had new union reps. Meanwhile, the first layoffs were
taking place in preparation for GEMSU [the German Economic, Monetary, and
Social Union], coming up on October 3'“. The Volkskammer decided to reunify
under Article 23. And in clear text that meant everything that existed in the GDR,
including the good things, would be let go. Imagine you want to live with your aunt,
well then you have to do what your aunt says. One really has to look at it at that
mundanely. Then there was the Treuhand holding company that was supposed to sell
off the VEBs. Its successor organizations are still around.

1W Did you stay on at Kirow?

44

Herr Pacher: After I left union representation I was just a regular employee, and
then the joke of the century went loose. I had to let the first group of people - there
were 180 of us in the supplies division, and I had to assist in laying off the first
hundred of them. I was the director’s assistant, and my signature went on the layoff
papers, and I was at the interviews.

Interw’ewer. You organized the layoffs? That must have been hard.

Herr Pacher: It was as if I’d put on another hat, but I was still the same man. That
was the constellation.

After representatives from the FDGB were voted out and Citizen’s Committees
were established within the VEBs to build new unions and find different representatives,
people like Herr Gellner, our next narrator, came into office. These new representatives
did not agree with Herr Pacher’s statement that the claims of corruption had been
“incredibly silly.” They believed strongly in the necessity of political reform - whether
through a revisionist path within the GDR, or through Germany’s re—unification. In the
interview below, Herr Gellner observed that many former SED members (shuflled out of
union jobs, but well-educated and often retaining job security) would find their way into
management positions. Herr Pacher’s story had supported this thesis.

Gellner described how his ideals were dashed when he realized that new
management was apparently uninterested in saving the former-GDR recycling industry,
nor did it seem to support a “fair wage” for the East. From Gellner’s perspective, West
German investors were leaving the important decisions to an East German-based
executive directorship, which was unfortunately now controlled by a corrupted elite of
former Party members, interested only in the bottom-line of profit-making, by turning the
newly-opened East German labor markets into the kind of low-wage labor sector that had

not existed in the postwar FRG before re-unification.

45

Herr Gellner: After the Wende, I was worker’s council chairman
(Betriebsratvorsitzender) and then regional worker’s council chairman
(Gesamtbetriebsratvorsitzender) in the recycling industry. I made the GmbH
management very uncomfortable because I knew their GDR political background,
and this put me in an uncomfortable position too. My demands were unrealistic for
them, wanting the same wage for the same work What’s, after all, a trade union’s
normal objective. Management wanted a 30% wage cut. But I knew that the
supposed business losses were due to bad investments in the double-digit million DM
range, that they’d just thrown into the sand. Then they wanted me, as union
representative for the East region, to agree to sink the tariff wage by 30%. I wouldn’t
take part. That wasn’t my decision, it was the union’s. So we explained this to them
and they said, ‘o.k. then, we’ll just close your shop, and that will be the end of the
story.’ I knew about the past of those people, so we went over their heads and tried to
speak with the executive directors [in western Germany], to tell them and also to ask,
‘why a wage decrease?’ They sent us the report on the proposed shutdown and
alternative outlooks. The union council carefiilly worked through this thing, this
long report, but the director just pushed our work to the side and said, ‘I don’t want
that. I want a 30% tariff wage reduction.’ Ifthat’s the way it was, good then, tough
against tough. We knew that if our firm sank the tariff wage, it would pull the entire
East recycling industry with it. We couldn’t let that happen. So they shut down the
branch where I worked. Twenty-five people let go, because of me. No one officially
said it, but that’s what happened. And since then I’ve been unemployed and fiddling
around with different activities, you could say.

The next narration focuses on Herr Schmidt, who suffered from workplace
discrimination during the GDR, as Herr Gellner had, and who also became a union leader
during the Wendezeit. Schmidt had worked hard to save his Kombinat from
dismantlement, as a union negotiator in the company’s work council. The council’s goal
at Ostar Hydraulik had been to invest in training and new technology, and to adapt the
hydraulics industry for western markets, after they were shut off from East Bloc markets
when the German currency union made prices too high for their old customers. But the
potential West German buyer organized by the privatization company, Treuhand, had not
really been interested in investing, Schmidt believed. After Ostar-Hydraulik opened its
records, and eagerly awaiting assistance in its adaptation to a capitalist market system,

the West German firm turned down the offer for a merger, and instead used its

46

knowledge of Ostar-Hydraulik’s records to underbid them, and steal away their customer

base.

Herr Schmidt: I was raised in a Christian household, and so wasn’t allowed into a
college-preparatory program (Erweiterte Oberschule), where there was only space
for a certain percentage of worker’s and farmer’s children. I wanted to study
biochemistry or technical chemistry, so I went to night school for the Abitur. But
after I enrolled I was ex’ed, that is exmatriculated, from the university for refusing
military duty on religious grounds. They’d accused, ‘he doesn’t want to cooperate
with the state.’ So the alternative now was going to work, and since I already had
some training I got a job in the metal industry in a large firm. Until the Wende I
worked in a drill production plant. With the political Wende came the West German
social system, and I was given the opportunity to become a union representative. My
co-workers said: ‘You do it! You’ve always voiced people’s opinions, and always
stood up for things! ’ Through this avenue I then became the worker’s representative
on the executive work council of the large cooperative, Ostar-Hydraulik. And this
work council had the task of making the massive layofi’s socially tolerable.

Ostar-Hydraqu built the hydraulic navigation systems for everything from cranes to
ships: the machine navigation, the drill machines, the threshing machines, ship
navigation, and fishnets. All of that was done through electro hydraulic motors. Our
market had been the Soviet Union, Poland, Hungary, Romania, Czechoslovakia,
everybody in the East Bloc. But after the German currency union, we had to pay for
things in West German Marks and sell our products for West German Marks. But
our customers hadn’t had this Wende. They were still using rubles, zloty, and
crowns, and couldn’t suddenly pay prices that were five times higher. So Ostar’s
markets were closed, even though the demand was there.18 We had 16,000
employees [nationally] but no longer any turnover. Too many people for the few
things that were still being produced. In the beginning we had the idea that a
company or branch in West Germany would want to take over and help us with the
transition into a market system. But that was an illusion. They had no intention of
doing that, and we realized it too late.

Interviewer. How do you mean?

Herr Schmidt: At the time of re-unification, the economic systems East-West were
completely different. The West German firms wanted to sell their products there,
where we were, and we were simply in the way. Under the illusionary play that they
would take us in and help us like brothers, a firm in our branch used the

 

‘8 In addition to competition from firms in western Germany, in 1991 the Eastern trading
network, COMECON, fell apart. Manufacturing output in eastern Germany dropped to
one-third of its 1989 levels (Dininio 1999: 4).

47

 

Treuhandanstalt to request our revenue files, so they could set themselves up as our
competitors.

Interviewer: So the West German firm never had an interest in buying Ostar-
Hydraulik?

Herr Schmidt: That’s what Treuhand wanted them to do, supposedly. Under the
conditions of the purchase, the buyer was allowed to learn everything, and review all
of our records. When a business said, ‘I’d like to purchase this firm,’ Treuhand made
all of the company files available. The huge machine construction and hydraulics
company, Mannesmam/Rexrodt, came to Treuhand. They took a quarter of a year to
study all of our records, to copy them, review the products and prices, and then to
say, ‘sorry, we’re not interested.’ So we sat there, with our 16,000 people. Treuhand
told us, ‘you’ve got no revenue, and too many people,’ while meanwhile
Mannesmann went into the East-Block and underbid us. All of the Soviet farm
equipment was running on hydraulic navigation, and our team still traveled out to do
the repairs. We were forced, now, to come to them with West prices, and at the same
time Mannesmann came and offered to do the work for 30% less.

BanovenMIEruue

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Illustration #5: Sign reads, “Office Space for

 

Conclusion
More than a decade after Germany’s re-unification, people remained divided in

their opinions about the dismantlement of East German industry. West Germans who

48

lived in the East tended to agree that the dilapidated factories had not been salvageable.
A West German resident might point out, for instance, that soot poured from the stacks at
the lignite refinery in Espenhain“) so thickly that residents in the southern part of the city
needed to clean a residue fiom their windows each week. This example would be used to
make the general statement that all GDR industries were irreparably outdated, and
heavily polluting to the environment.

Those East Germans I spoke with who had experienced discrimination during the
GDR, or had perhaps been called “dissidents” due to the critical political stance they had
taken during the 19805, tended to agree with West Germans that the dismantlement of
VEBs was for the best. However, this group’s critical sentiments usually reflected a
desire to get rid of the organizational structure of GDR workplaces, or to enforce
environmental protections, rather than to dismantle GDR factories entirely. These former
hard-line regime critics, which represented perhaps 20% of population older than thirty-
five, simply saw workplace collectives and other things associated with the hierarchies of
socialism, as an organizational system that was part of a world best forgotten.

As the narrations in this chapter have shown, it was tenuous to draw a clear
dividing line when it came to judging who was to blame for the fact that more East
German businesses were not salvaged. Gellner observed that a cadre of corrupt former
SED members took over the management of the former-GDR recycling industry, but for
Schmidt it was the West German business partner who was to blame. Herr Pacher
blamed the capitalist system in general, but also his co-workers at Kirow-Werk, for

having lost their faith in socialism. By demanding reforms, he thought, his co-workers

 

‘9 For case studies of Espenhain see for instance Michael Hoffmann (1995), Ketzer
(1998), and John Eidson (1998).

49

had opened Pandora’s box, and now everyone was suffering the consequences. Finally,
Herr Muller, the West German union representative who had attempted to give me an
“objective” overview, did not blame West German industry specifically, but described
the dismantlement of GDR industries as the unfortunate, but probable, outcome of
exposure to global markets.

To draw one commonalty from the portrayals depicted in this chapter, I can say
that all four men seemed to agree that industrial collapse in the East was influenced
strongly by a political and business elite’s belief that more could be gained from
dismantling East German factories and VEBs, than from salvaging them.

During fieldwork, I generally observed that former active Party members and
people who had been unemployed for some time (especially older blue-collar workers)
represented the harshest critics of Treuhand. Those most embittered by the economics of
re-unification would say with certainty that collective firms had been sold off, piecemeal,
to West German companies, interested only in subsidy monies, and in shutting down their
competition. In contrast, local residents who had been critical of the GDR system tended
to believe that long-term high unemployment in the East was the fault of an inept cadre of
old Party members, still wedged firmly into key positions in local politics. But again, one
must emphasize that subjective line of such stereotypical groupings. When the Berlin
Wall fell, some Party officials (called Wendeha'lse, or “turn-necks”) were opportunistic
enough to quickly exchange das Kapital for a copy of Adam Smith’s Wealth of Nations,
and many long-term unemployed were still nonetheless happy that they no longer had to

deal with the pressure toward political conformity, that had existed in the GDR.

50

The first decade following re-unification has been a subject of much reflection for
East Germans. Everyone old enough to remember the GDR shares the comparative
perspective of having experienced labor and welfare policies under two quite different
national regimes. Drawing from this comparison, many of my discussion partners
reflexively depicted industrial collapse as an extremely complex process, which had
culminated ad the result of many smaller developments. Though people interpreted
industrial collapse differently, and hence (as we shall see in later chapters) their opinions
about future actions also varied, most local residents shared in common their shock at
Leipzig’s almost complete deindustrialization, and most also remained very sympathetic

toward the situation of the unemployed.

CHAPTER THREE: SECOND MARKETS AND RUBBER BOOK BRIGADES?

During fieldwork, I was fascinated by the interesting classificatory distinction
people made when talking about “work,” and the “labor market.” Leipzig residents
regularly made reference to a “competitive labor market,” which they contrasted with
work that took place outside of this sphere, in a federally subsidized zweiter Arbeitsmarkt
(literally: the “second labor market”). At the Leipzig Unemployment Office social
workers explained to me that one-in-four jobs listed in their database fell into this
category. These were not “rea ” jobs and this was not the real labor market either, they
explained.

Debates about the zweiter Arbeitsmarkr20 in Germany had become symbolic of the
widespread uncertainty people felt toward the direction of labor and welfare reform since
re-unification. During socialism, welfare structures had been interlinked within
workplace collectives, in a regime of fiJll-employment. Socialism’s guarantee of a “right
to work” had been based upon the Marxist belief that under capitalism the sale of labor,
and the subordination of the individual to the division of labor had alienated workers. In
a socialist state, work was supposed to once again become a creative joy, and an activity
that allowed individuals to fulfill their human potential, while also supporting collective
interests.

Reunified Germany’s notion of a “social market economy,” which incorporated a
safety net at its base, was interestingly also seen as a model that contrasted with laissez

faire capitalism. In achieving prosperity through a “social market economy,” West

 

20 I retain the German “zweiler Arbeitsmarkt,” because the translation (literally: second
labor market) may remind readers of the similarly-sounding term, “second economy.”

52

Germans were in effect attempting to prove Marx wrong, by illustrating that it was
possible to take the alienation out of capitalist labor, to humanize work (e.g. Vilmar
1973). Still, unlike socialism the FRG’s “social market economy” was seen as setting
clearing boundaries between the production and redistribution of wealth. Iflabor markets
were not kept separate from social welfare, it was believed, the “invisible hand” of the
market would not fimction.

Especially since the early 19905, economic anthropology has moved more toward
the study of how people conceive of market systems (i.e. Dilley ed. 1992; Carrier ed.
1997, Gudeman 1990, Gudeman 2001). In this chapter, I introduce the zweiter
Arbeitsmarkt as an economic concept that teeters between formal acceptance by experts
and public officials (leading to its incorporation into textbooks and long-term policy
measures), and rejection as a formal economic model, and its concurrent expulsion from
policies. Teetering in this ambiguous space of questionable legitimacy, the zweiter
Arbeitsmarkt became a focal point of political interpretation and assessment. Critics of
the zweiter Arbeitsmarkt said this idea/policy measure had crossed the line, dangerously
blurring the sectors of production and redistribution. Proponents claimed the state had a

duty to support their “right to work.”

Birth of A New Sphere of Labor

The standard definition of the zweiter Arbeitsmarkt was dependent upon the belief
in an erster Arbeitsmarkt (a “first labor market”): this labor market was the “real” one,
and abided by the laws of supply and demand. Within this context, the zweiter

Arbeitsmarki took on the role of social welfare, to become a sector for people who

needed help keeping or obtaining work. The roots of this distinction traced back to West
Germany in the late 19605. During this prosperous time, the unemployment rate was less
than 1% and guest workers were being recruited from the Mediterranean. Worried that
the good fortune of the postwar period might not last, the government passed the Law for
Promoting Stability and Growth in 1967, whose counter-cyclical measures aimed to
support and stabilize firll-employment (meaning an unemployment rate of less than
0.9%). This Keynesian-based policy was followed with the 1969 Labor Promotion Act
(A rbeitsjbrderungsgesetz, or AF G), which provided a legal framework for “active” labor
policy.

As noted in Chapter One, such a perceived equilibrium of “full-employment” had
only been a social goal since the late 19th century, and then only within the context of
industrialization. After WWII, “firll employment” formed a pivotal base for the way
national economies, social security systems, households and daily lives were structured,
and by the 19605 both East and West Germany claimed to have achieved this goal (which ,
they defined it differently). The 1973 economic crisis brought an end to the realization of
“full-employment” in West Germany, however. The unemployment rate climbed above
one million in 1975, and doubled again by 1982, reaching 7.5%. There was a growing
awareness of the speed with which technological change could transform economies and
displace workers (i.e. Bell 1973; Braverman 1974). In 1982, the German Evangelical
Church - which had a tradition of involvement in social issues - published a book on
unemmoyment and social ethics, within which they considered the possible applications
of the new Labor Promotion Act. Because the market's cyclical structure would always

displace some workers, they reasoned, the government should create a space for people

who were more vulnerable to long-term unemployment. They referred to this as the
“zweiter Arbeitsmarkr.”

It was election time and the Social Democrats picked up the term in their
campaign, proposing a “zweiter Arbeitsmarkt nation-wide” and lauding Hamburg's
experimentation with government-subsidized jobs, called ABM (Arbeitsbeschaflungs-
maflnahmen). Ambiguous from the beginning, the idea of the zweiter Arbeitsmarki
gained definition through its use in regional employment generation policy. Those who
rejected the concept placed the term in quotations, referring to a “so-called zweiter
Arbeitsmarkt.” Members of the Evangelical Church claimed that they wanted a work
sphere for people with physical handicaps and learning disabilities, in other words for
those peOple who were by nature “less competitive,” but not a subsidized work sphere
that battled general unemployment (Steinjan 1986). Meanwhile, the labor unions saw
ABM as a low-wage sector threatening job security and subtly introducing “flexibility” to
German markets. They complained that its participants were not counted in
unemployment statistics (Kt‘mig 1987).

Municipal governments welcomed the federal funding, though, and by the arid-
19805 West Germany had more than 100,000 ABM workers (Ehrlich 1997: 54-55).
Supporters of the zweiter Arbeitsmarkt interpreted its firnction in different ways. All
agreed that “useful” (sinnvoll) activities should be supported (from gardening, to
university posts, to retraining firms in Saarland), and that these not compete with the
“real” labor market. But should projects be designed to prepare participants for regular
employment? Taking seriously the “end of wor ” thesis (i.e. Riflcin 1995), programs in

Nilrnberg and Hamburg were set up under the rubric of “alternative economy.” Premised

55

upon the belief that the official labor market was shrinking due to technological change,
these low-tech, ecological projects were designed not to help prepare participants for the

regular labor market, but rather simply to give them something to do.

 

 

 

 
     
 
    

an 'altern ative"
economy?

  

the "real"
labor market

Illustration #6: Black-boxing the “zweiter' Arbeitsmarkt”

The zweiter Arbeimnarkt comes to Leipzig

As one might imagine, this ambiguous economic sphere took on new dimensions
in the context of German re-unification. The remainder of this chapter focuses on
enactments of the zweiter Arbeitsmarkt in Leipzig. From my observations, it appears that
post-re-unification labor politics can be divided into three phases: 1) in the early 19905
this firzzy labor sphere was utilized as a short-term tool for the economic “transition.” 2)
With protests against unemployment mounting, political rhetoric reinterpreted the zweiter
Arbeitsmarkr as uniquely beneficial for regional economic development in the East. 3)

No longer considered innovative, in the late-19903 the zweiter Arbeitsmarkr was seen to

56

 

perpetuate the work culture of socialism. Policy-makers now focused on “de-
centralizing” projects. For most inhabitants of eastern Germany, this decade of
reinterpretations meant that the rules of the market often seemed contradictory, and

sometimes even intentionally evasive.

Phase One: ‘getting them off of the street’

As outlined in Chapter Two, following re-unification Leipzig’s trade fair failed, its lignite
mines shut down, and within three years more than 100,000 industrial jobs had
disappeared (Leipzig Office of Employment 1995). In the early 1990s, one third of the
city's working-age population was looking for a job or in retraining. Residents young and
old filled the city’s new Unemployment Office - housed at the time (as if to symbolize a
changed world order) in the old district headquarters of the Ministry of State Security.
An engineering instructor described the 1990 school year's end, when young people no
longer in apprenticeships crowded the already filled new Unemployment Office. The
man spoke of long evenings in a chaos of paperwork, aligning East and West German
occupations and devising “re-training” programs: “I thought to myself,” he said, “we've
got to at least get them off of the street.”

The zweiter Arbeitsmarkt became one of the main policy tools for “getting them
off of the street.” Planners envisioned it as a “transitional” sphere, into which sections of
the labor force could be temporarily shifted while the regional economy was being
restructured. Niches were earmarked for future Leipzig markets: services, banking, trade
fairs, machine construction, and media. Anthropologists working in post-socialist

Eastern Europe have criticized this evolutionist perspective of “transition” theory

57

(Berdahl 2000; Burawoy and Verdery 1999, Hann 1994). Chancellor Hehnut Kohl had
promised a “blossoming landscape” in eastern Germany, and the zweiter Arbeitsmarkt
was to offer the city's displaced workers a space to conduct “usefirl” (sinnvoll) activities
until the new labor markets matured. Short-term ABM and retraining programs were a
base for the “transitional” labor sector. In addition to the ABM contracts, SAM, or
“structural adjustment measures” (Strukiuranpassungsmaflnahmen), were also introduced
for specific economic development projects in the New Federal States. Workers might be
employed through an SAM contract to complete an environmental cleanup for a factory
that was closing, for instance. The SAM program was phased out by the mid-1990s, and
for the sake of simplification, I will henceforth generally refer to the ABM program,
which was also commonly used as an umbrella term. As a final addition, government
work-creation programs for welfare recipients were also interpreted as falling within the
zweiter Arbeitsmarkt.

At a height in 1992, the federal government supported one-half million ABM
positions, three-quarters of which were in the New Federal States. An additional number
of East German workers were employed through SAM contracts, or were receiving
welfare monies (a figure that would steadily climb, as unemployment insurances began to
run out in the mid-1990s A complex system of transitional economic projects sprang up,
such as the ABS enterprises (Labor Promotion and Structural Development Enterprise),
which were founded with the aid of West German union advisors, during the privatization
of GDR work collectives. West German union representatives, who had begun using
ABM as a tool for dealing with structural adjustment in deindustrializing regions of West

Germany during the 1980s (Muller 1992), helped former VEB employees pool

themselves into these “legal entities,” where they could maintain old salaries while laying
their factories to rest (see Wieschiolek 2000), while trying to create spin-off industries,
retraining themselves, or remaining in a reserve pool. Borrowing fiom this model in a
unique initiative, the City of Leipzig built its own municipal work—creation firm, called
bfb - the Betrieb fiir Beschaftigungstrderung (“the firm for work support”). If the
“transition” went smoothly, by the mid-19905 work-creation subsidies in the East would
be lowered to western German levels, and ABS enterprises would dissolve into the
private sector.

In principle, the zweiter Arbeitsmarkr should lead to, but never compete with, the
commercial sector - this regulation had been applied in West Germany to a small,
supposedly “less competitive,” segment of the population. But in eastern Germany,
where subsidized jobs now made up one quarter of available positions, the rule of
noncompetition caused new problems. Men and women who had imaged and prepared
for work in capitalist markets found themselves instead in a limbo of “usefiil,” but not
“productive,” labor. In the following illustration, this limbo becomes one occupational

trainer's poetry theme:

 

 

Mon weiB es nun, mcrn ist zu alt
lhd auBerdem will man Geholt.
So etwas ist nicht gefragt.-

Erster Arbeitsmarkt - bisl dogehakt!

  
 
 

Es soll ja noch einen
zweiten geben

    
  
  
 
 
 

/Und mach \
' Jahren klappt es
dam, man list mlt
einer Fortb'ildung
dram.

 
 

Illustration #7: The text reads: “Now you know you're too
old, though you still want a wage. No demand for that - the
first labor market - everything's been tried! 'There's
supposed to be a second one.' You strive now for this. And
after years it works, you're in a retraining program.”
Qrinted with permission of Ingrid Sperber)

 

60

 

The stigmatism associated with programs for a “low—skilled” workforce had been
transferred onto a broader context. Unemployed East Germans fended off accusations of
laziness and state dependency, often made by conservatives from the Old Federal States.
However, it was not a lack of skill or desire, in fact, that best characterized zweiter
Arbeitsmarkr participants. It was their belonging to groups discriminated against in
periods of high unemployment: recent immigrants, women, young adults, and older
workers. More often turned down for regular employment, these groups were quickly
over-represented at bfb. Meanwhile, it was difficult to organize a secondary work sphere
when restructured markets showed no clear direction for growth. “[ABM] is supposed to
make people fit for the so-called first labor market,” a woman complained to me, “Only
you can make them as fit as you'd like. There's no work out there, in that first labor
market.”

There were also reasons to support the zweiter Arbeitsmarkt, and these sometimes
appeared to overshadow difficulties, especially in the early years of re—unification. This
sector provided work, after all, and paychecks had government backing - something
valued in a region where the bankruptcy rate of new businesses was very high and pe0ple
were often not paid on time. For the majority of Leipzig's unemployed, the zweiter
Arbeitsmarkr was preferable to no work at all. In September 1996, as ABM funding cuts
drew nearer, 250 thousand protesters mobilized in six different cities. Reminiscent of
and drawing strength from the rebellious Monday demonstrations, thirty-five thousand
people gathered in Leipzig's Johannapark and demanded workplaces. The GDR's
constitution had guaranteed a “right to work,” and many interpreted a similar promise in

the Federal Republic's constitutional law. Germany's largest Trade Union Association,

61

the DGB, now stood firmly behind ABM jobs - the government should encourage work,
and not neoliberal budget cuts. Or had it forgotten the state's obligation to support full-
employment? Heeding to protests, federal work-support funds were extended. From this
point onward the question of how to make the “first” labor market grow and “second”
one shrink has been the echoing Leitmotiv of national politics, and a source for cynicism

among the jobless.

Phase Two: the rubber-boots brigade

I Over the next two years, eastern Germany's allotted ABM quota roller-coastered
up and down, appearing in regional programs in different forms. Leipzig's work-creation
firm, bf’o, gained national recognition in 1997, when it was lauded by the press as an
example for other cities (i.e. Kainer Stadtanzeiger 1998; die iageszeitung 1997; der
Spiegel 1998; Saddeuische Zeitung 1997; Die Zeit 1997). Such models were desperately
sought in a year when the national unemployment rate, concentrated in the East, had
climbed to a WWII record of 4.7 million. At this point, a charismatic figure enters our
story. Matthias von Hermanni, who had been involved in “alternative economy”
programs in Hanover, was the founding director and inspiration of bfb. He had managed
to drop Leipzig's welfare rate to the lowest in the country by enforcing a little-known law
(§19 BSHG) that enabled municipalities to revoke benefits from welfare recipients who
refused a viable work offer. Newspapers across the country quoted von Hermanni, as he
claimed, “I‘ve got work here for everyone, absolutely everyone.” Von Hermanni
presented his municipal work-creation firm at the Christian Democratic Union’s 1997

national party convention, where it was warmly praised. Soon, other cities were

62

establishing similar work—creation programs, and also employing a mixture of ABM and
welfare recipients to work on underfinanced municipal projects.

I first visited the grounds of bfb in the fall of 1998. With about 8,000 workers at
the time, the work-creation firm had become the largest employer in all of Saxony.21 I
knew some people called it a model for new welfare politics, and others lamented that it
was a relic of socialism: a state-owned work collective, affectionately nick-named “the
rubber boots brigade” (die Gummistiefel-Brigade) - what else could it be? On the edge of
the city, a second headquarters of the secret police had been transformed into a work-
creation village: a wood-cutting shop, a printing press and newspaper, horse stables, a
machinery. In other locations, bfb workers maintained a glass recycling center and
botanical gardens, and renovated a camping resort and several farm grounds that dated
back to the seventeenth century.

Von Hermanni had been able to popularize the zweiter Arbeitsmarkr by bringing
together two very different political interests. His use of a “good poor, bad poor” work
ethic (whose roots trace back to Martin Luther in this very region) advertised a “right to
work” and thereby won strong support from the SED's successor, the Party of Democratic
Socialism (PDS). Cutting welfare costs and using ABM and welfare recipients as a
cheap municipal labor force, on the other hand, seemed like a good idea to many West
Germans, and was also strongly supported by the Christian Democratic Party.
“Politicians in the West - the Green Party, the SPD - would call it forced labor,” one

native resident of Bayem told me, “but what they're doing in Leipzig, it's creative.”

 

2‘ The official height of employees at bfb, was the statistic of 8,900 workers, reported by
local media during the spring of 1999. I made occasional visits to speak with staff during
this time, and was told that in the early months of January-Feb 1999, there were up to
9,200 workers.

63

 

 

Illustration #8: This map documents the current worksites of bfb in 1997: the agricultural
and garden sites = green circles, construction projects = green triangles, clinics = red

triangles, recreational grounds = red squares (bfb 1997)._

 

 

 

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Another West German man visiting Leipzig said, “In Berlin we also have the problem
that schools and hospitals are in poor condition, and that there’s no money to renovate
them. It’s terrible to think that people are sitting at home, cashing in on welfare, cashing
in with nothing to do. I find it contagious, the very idea of an operation taking care of
things Leipzig can’t otherwise pay for, while also guaranteeing a workplace for welfare
recipients.”
When I asked bfb’s press speaker to reflect on the firrn’s popularity, she explained
that it needed to be seen as a response to a larger social transformation:
Interest developed from outside [of Leipzig], at a point when we were also
interested in opening a dialogue. Certain questions needed to be thrown out.
‘Where was subsidized work heading?,’ for instance. It had come to the stage
where we said, ‘Good. Everyone come here, then, and take a look around. You
can take part in the discussion.’ Because it really needed to be clear: ‘Is ABM
just a short-term phenomenon?’ ‘Is subsidized work temporary, or is society
transforming?”’
When I asked what she meant by this, the native Leipzig resident clarified:
As we spoke about it, it became more evident. It became clear that the world
really was changing. The transformation, the Wende, had been an East German
problem at first, but not anymore. Conditions for labor were changing all over
the world, and we wanted to discuss how work-creation should fit into this
process. We saw that, in eastern Germany, we had experience in this area.

The press speaker’s explanation, which mirrored that of other bfl) executive
personnel, revealed a broader ideological framework surrounding the application of
zweiter Arbeitsmarkt measures. During bfb orientation programs and in the local press,
von Hermanni went even firrther, to promote the conviction that the ersrer Arbeitsmarkr
(the “real” labor market) was inevitably shrinking, and that a non-competitive sphere of

labor needed to grow, to serve as a kind of resting ground for individuals who could not

keep up with global, competitive markets and flexible specialization. This line of

65

argumentation had become popular in Germany especially through the influence of the
prominent sociologist, Ulrich Beck, whose essays often appeared in newspapers, and who
had served on regional development advisory boards in the East. What bothered me were

the undertones of social Darwinism.

Phase Three: a full circle

In 1999, the Leipzig Chamber of Skilled Trades declared war on Matthias von
Hermanni and his “rubber-boot brigades.” The Union attacked bf’o's ecological
slaughterhouse, saying it competed with the commercial sector. It had the capacity to
prepare 25 pigs, S cows, and 15 sheep or goat for slaughter each day - with the support of
taxpayers! This kind of planned market politics would ruin the city's fledgling small
businesses. Many began to worry about what bfb would grow into after the municipal
properties had been renovated. Tensions mounted, and political parties joined the debate.
In a regional scandal, von Hermanni was accused of using city money to rent
construction equipment for building his home. In November, he was suspended from
duties, and even thrown in jail for a time. Five thousand bfo supporters blocked the road
in fi'ont of city hall and demonstrated for his release. In a rally, they demanded: “von
Hermanni is innocent! The city can't destroy the second job market, what will happen to
bfb?” In the following months bf’o came under new management, and was decreased in
size until ultimately, in February 2002, the work-creation firm's closure was announced.

Municipal and federal labor policies in Germany became critical of what was now
referred to as the “normal,” or “traditional,” ABM program. A new variant of the policy

was supported, called “Contract-ABM.” In this model, federally subsidized, short-term

66

jobs were offered to private commercial enterprises that fulfilled certain criteria. With
these revisions it was argued that the state's commitment to social welfare could be
maintained without creating competition with the “productive” sector - the commercial
sphere. In Leipzig, “traditional” ABM was still supported, but now only for “nonprofit”
sector positions. In post-reunification eastern Germany, elderly and disabled care and
counciling services have been heavily dependent upon short-term, ABM positions.
Officials at the Chamber of Commerce (who now have veto power over individual
zweiter Arbeitsmarkr applications) felt that the business community should continue to
allow nonprofit sector ABM jobs. Reflecting on this, two East German businessmen did
speak critically with me about the brutality of markets like those in the U. S., which “run
on their own.” But they were also very critical of the zweiter Arbeitsmarki, and ideally
wished there was a feasible way to make this work sector disappear. They maintained
that it would have to be carefirlly regulated - because this “gray market” of post-
socialism endangered small business growth, and it was this vicious circle that caused the
region's high unemployment.

I was given copies of charts and reports documenting the Chamber of
Commerce’s (IHK) efforts to rework the proper roles and boundaries of the zweirer
Arbeitsmarkt. In the future, when a community organization applied for an ABM post, a
new list of criteria, drawn up by the Chamber of Commerce, would be used to determine

whether the proposed position was in competition with the erster Arbeitsmw'kr:

67

Conclusion

The West German work-creation programs that were developed during the early
1980s promoted social equality through a classic postwar model of fiill-employment.
This model contrasted with the response of some other capitalist countries to the
economic crisis of the 1970s In Great Britain and the United States, rising
unemployment and social welfare costs were resolved through the structuring of low-
wage labor sectors, decreased benefits, and the expansion of “nonpro ” or “Third
Sector” activities. Another fuzzy labor sphere (see Chapters Six), the “Third Sector,”
represented the growth of private social welfare services, often in alignment with the
dismantlement of state social welfare programs.

In the early 19905, West Germany's use of the zweiter Arbeitsmarkt as a
preventative safety net was transferred to the New Federal States. There, it was
influenced both by the ideology of “transition” politics, and by the conviction of many
residents that it was the state’s responsibility to provide work for the unemployed. In the
mid-1990s, dissatisfaction with work-creation politics culminated on both ends of the
political spectrum - leading economic liberals to appeal for an end to interventionism, and
trade unions and the PDS to demand more workplaces. The two polarized perspectives
merged to create such hybrid structures as Leipzig's work-creation firm, bfl), which
integrated neoliberal labor reform with elements of socialist workplace nostalgia.

Debates on the zweiter Arbeitsmarkt in Leipzig were a discursive part of a larger
ongoing discussion: on how to balance production with the redistribution of local and

global wealth, and whether markets could be “social.”

68

CHAPTER FOUR: A SAFETY NET
In this chapter, I concentrate on the flip side of industrial dismantlement: the
changing dynamics of social welfare. While the rapid privatization and factory closures

l,22 on a municipal level

was something over which most East Germans had little contro
people were able to exert some influence over social welfare. In the absence of shop
floors and factories, institutions that provided welfare and training also became new
points of orientation. They provided activities for people (in the “zweiter Arbeitsmarkt”
and through education), and offered social venues where they could discuss social
welfare and labor reform, and to become politically involved. Power over the
organization and the redistribution of available social welfare resources in Leipzig was
divided, fivefold, between: the municipal government (ran the welfare ofice, bib, and
other programs), the unemployment office (the local branch of a federally centralized
Bundesanstalt fi’rr Arbeit), an interlinking network of church and community groups, the
chamber of commerce (whose lobby represented local business interests), and
occupational training organizations (run on both a for-profit and non-profit basis).

The corruption and poor organization of job training and social welfare
expenditure was cited as a main reason for the continued existence of long-term, high
unemployment. And just as Marx had theorized the alienation of the individual through
the rise of wage labor, Weber had feared the dehumanizing character of modern
bureaucracies. During their quest to find work, unemployed East Germans were coming

into contact, and learning a great deal, about such bureaucracy. And by the late 1990s,

many had lost patience with a system that offered a limbo of temporary work contracts,

 

22 This was a process guided by a (predominantly West German) political and business
elite.

69

but had not managed to lower unemployment or create any sense of long-term economic
stability. They lamented Chancellor Helmut Kohl’s false promise of a “blossoming
landscape,” and a “quick transition.” In the fall of 2000, as the country celebrated the
tenth anniversary of its re-unification, Wolfgang Thierse, one of the few East German
Parliamentary members, warned that unequal regional economic development threatened
to create a permanent mezzogiorno between the East and West.23 At a meeting of the
Leipzig Network Against Unemployment, the words of one community center social
worker captured the growing sense of exhaustion and uncertainty. “Do we even know
that the ABM program is helping?,” she asked. “Sometimes I feel as if ABM is doing the
opposite of helping. Things seem to be spiraling downward, and people have all become
somehow broken. They all need psychiatrists. I do, too. [...] The East has no future,
without employment.”

The millennium’s end encouraged experts at City Hall and the Chamber of
Commerce to present the last decade as “phase of learning,” and to reflect positively on
the establishment of new policies in the next decade. Saying that he felt more certain

about policy changes than he had in the past, one Leipzig Department of Economic

 

23 During visits to western Germany, I was amazed to see the extent to which people
lacked interest or sympathy for developments in the former GDR. Even younger West
Germans, who had only experienced the last decade or two of the cold war, often related
the belief that West Germans heavily subsidized the East, with little gratitude in return.
Increasingly, West Germans cited re-unification as the main source of social, political
and economic problems (East German support for the right-wing political party, the NPD,
during the 1998 elections was given as a popular example). Polls revealed that 2/3 of
West Germans had never visited the New Federal States (with the exception of former
East Berlin). When I became a Chancellor Scholar with the Alexander von Humboldt
Foundation, I was able to discuss current politics with a number of high-ranking officials,
as part of a small group of young American scholars. When meeting with members of
Parliament and the SPD cabinet in Berlin, 1 was surprised by the conservative distance
with which they approached topics relating to eastern Germany. Despite re-unification,
they continued to refer to the region as if it were a foreign country.

70

Development planner added that there was also a necessity: “We began with the ABS
enterprises. They had the task of cleaning up the factory grounds, and of retraining. The
second phase was when ABM became a special niche. By 1993-94, it had expanded into
its own autonomous zweiter Arbeitsmarkr. .. which leads us to the third phase. It now
becomes clear that this pattern can’t continue, the zweiter Arbeitsmarki can’t be allowed
to develop its own momentum. We have to make sure that we return to the competitive
job market (the erster Arbeitsmarkt), and that’s the point we’ve reached today: In the

long-temr, going in the other direction isn’t economically feasible.”

The Failed Rationalization of Welfare

By the early 1960s the GDR had officially “solved” unemployment and poverty,
which were seen as two structural effects of capitalism (Bundesministerium fiir
innerdeutsche Beziehungen 2000 [1985]: 856). Leipzig’s Unemployment Oflice, or
Arbeitsamt, was dissolved in the early 1950s (Leipzig Office of Employment 2000).
Seen as superfluous, welfare oflices nationwide were dismantled in 1978
(Bundesministerium fiir innerdeutsche Beziehungen 2000 [1985]: 857). The SED did
establish an “Office for Work” (Amtfiir Arbeit), but this served a fiinction quite different
from that of the Arbeitsamt. Rather than helping unemployed people find work, at the
Amtfiir Arbeit government employees made sure Leipzig’s VEBs had an adequate supply
of labor, and that everyone’s “right to wor ” was recognized. They also kept record of
the “asocial,” and illegal, behavior of individuals who chose to drop out of the workforce.

Konrad Jarausch uses the term “welfare dictatorship” (F firsorgedikrarur) to describe the

71

“basic contradiction between care and coercion” characterizing SED social welfare
policies (Jarausch 1999: 60).

Aside from the institutionalization of standard social security measures - such as
retirement, maternity leave, childcare, health insurance, and worker’s compensation -
many aspects of the GDR’s safety net were informally woven within the workplace. In
the patchwork manner in which problem-solving took place under budgetary constraints
and a socialist tradition of favor exchange and networking, many of the social needs of
individual workers were dealt with informally. One woman described being allowed to
work part-time (with firll-time pay) at her food preparation job with the Leipzig Trade
Fair, while taking care of her elderly mother. When her mother died, the woman’s part-
time social work activities (“helping out” the elderly) continued. She described finding
fiilfillment in this work, and being remorseful when she had to give it up after re-
unification, due to the lack of proper formal training. Her story was an example of one of
the many negative descriptions I heard about the poor organization of occupational
training in the early 1990s: “After re-unification, I continued helping the elderly, through
Volkssolidan‘tat.24 But we were told that we needed qualifications. So, for two hours in
the evening, after work, I took an elderly care class. But at the end of the year we were

told that our qualification wouldn’t be recognized, and we wouldn’t receive certificates.”

 

2" The Volkssolidarita'l began when volunteers offered meals and shelter for war refiigees
in Saxony, to support “das grofle Aufbauwerk” (the great rebuilding task) of the socialist
state. During the GDR period, it operated under a centralized leadership, primarily
offering cultural and social activities for youth and seniors. After re-unification, its
membership dwindled from two million to ‘/2 million. Today, the Saxon chapter of the
Volkssolidaritat (106,000 members) negotiates commercial discounts for senior citizens,
coordinates social and cultural activities, and offers inexpensive group insurances for the
seniors. Due to its older membership, and reputation of being a social space for the
nostalgic, the group is targeted by the East German Communist successor party, the PDS,
as an important constituency.

72

In another example, an unemployed building engineer illustrated the GDR’s
work-based safety net by telling me of how she had been required to pick up her
colleague, a heavy alcoholic, on her way to work each morning. The colleague had tried
to bribe her so that she could be left home. And this would have been a lot easier, the
engineer said. But in the GDR, everyone needed to be carried along. “After re-
unification, those troubled cases were the first to be let go,” she reflected.

Indeed, care stations and welfare and unemployment offices quickly re-appeared,
becoming new points of orientation. During two weeks of fieldwork at the Welfare
Oflice in April 1999, I asked the caseworker I was assigned to tag along with whether she
and her colleagues had also been engaged in social work during the GDR No, the entire
profession of “social work” had been seen as extinct in the GDR, she explained. Most of
the women currently working at the Welfare Office (more than ninety percent of the staff
were female) had formerly worked in the field of health care (Gesumflieitsdiemt), and
“social health care” (Sozialgesuncflreitsdienst). Retraining programs were organized to
transfer workers from these occupations into the field of social work.

The air of complete control that the Welfare Oflice supervisor held over her staff
made me wonder what her position had been before the Wende. In later interviews, I
heard complaints from a number of unemployed residents who believed that too many
former career Party members now worked at the Unemployment and Welfare Offices.
Those who had suffered discrimination or been supporters of regime change were most
likely to observe the perseverance of old power hierarchies, and to claim that ABM and
occupational training positions were now being handed out following the same pattern of

networking and favoritism that had existed during socialism, whereas those unemployed

73

who had not suffered discrimination during the GDR often complained of unhelpful
caseworkers and poor organization, but not of the existence of old power hierarchies.

“It’s like falling into a wasp’s nest,” an unemployed schoolteacher and New
Forum” member described. “I go to the Unemployment Office, and tell them my
biography. I tell them all of the details, and then watch the curtains fall... I can sense it
immediately, when someone was rooted in the Party. And they always say, ‘we can’t
type that into the computer, that won’t go in.’ I say, ‘so take out a piece of paper, and
write it down. You have to, that’s my biography, and you have to acknowledge it.’ They
ask me why I’ve applied for a position. For ten years I’ve applied, for ten years I’ve gone
through that psycho terror, and never had a chance. You understand, don’t you, about
who has a chance at the Arbeitsamt?”

A resident who wished to bring awareness to the under-researched history of the
Unemployment Office in eastern Germany presented me with a copy of the salvaged
November 1989 minutes of a General Party Meeting in Karl-Marx-Stadt (now Chemnitz),
recorded a few weeks following the Berlin Wall’s collapse.26 The transcript documented
Party members’ worries about the direction of political change following the New
Forum’s rise to power, and their discussion of how SED comrades might gain positions
of power in the new regime. It documented their discussion of the possible return of
unemployment under the reformed government, and mentioned “Comrade X’s”

application for the directorship opening at the Office for Work. A governmental review

 

2’ An East German political group founded in the late 19805, which was responsible for
leading protests, and demanding fiindamental reforms.

AKG/Kontrollgruppe Karl-Marx-Stadt. Bandabschrift. Praia/roll zur
Dienslversammlung des Leiters der BV vom 23.11.1989. Courtesy of Helen Jannsen,
Forum Verlag Leipzig, who obtained it through the German Freedom of Information Act
request fiom the BStU, Bundesbeauftragte fi'rr die Stasi-Unterlagen.

74

process in the early 19905 purged many high-ranking Party members who had obtained
such posts.

Until 1997, when a new structure was built, Leipzig’s Unemployment Office
resided in the rooms of the old GDR Ofiice for Work, which was housed, in the old
district headquarters of the Ministry of State Security (the Stasi, or GDR secret police).
Interestingly, I could find no chronology documenting the Unemployment Office’s re-
establishment after the Wende, and so I submitted a written request for more information.
Several weeks later a Leipzig Arbeitsamt research stafl’ member replied to my letter,
explaining that unfortunately there was no documentation of the bureaucratic
restructuring that had taken place during this chaotic period. The researcher was able to
confirm that 214 employees (or 90%) of the staff fiom the old Leipzig Office for Work
were given positions in the Unemployment Office, following background checks.

Entrusted with the task of ensuring that the GDR labor force was properly
organized, and that its “full-employment” policy was enforced, most employees at the
Office for Work had been Party members who strongly supported the GDR’s labor
policies. One notable effect of this transfer of staff was that social workers during the
early years of the Wende continued to feel it was their duty to focus on every citizen’s
“right to work,” and on getting the unemployed “off of the street,” rather than considering
the quality or appropriateness of the apprenticeships, retraining, and work-creation
programs to which people were assigned. While this pattern was a natural response to the
combined variables of rapid industrial dismantlement and the availability of billions of
EURO in social welfare subsidies, it could also be aligned with GDR’s interpretation of

workplace social inclusion. Those who were shuffled into retraining, subsidized

75

apprenticeships, ABS enterprises, and SAM and ABM posts were technically no longer
“unemployed,” and above all, this was what mattered.

Despite the investment of more than 500 billion EURO into eastern Germany’s
economic development by the millennium’s end, unemployment levels continued to
reach record heights and temporary, low-status positions (such as those in the zweiter
Arbeitsmarkt) had become commonplace. Leading figures in the Leipzig business
community complained that the zweiter Arbeitsmarkt was much too large, and that the
heavy burden this placed upon the competitive labor market was creating a downward-
spiraling economic trend. A city oflicial whose job it was to help businesses relocate to
Leipzig, argued: “One has to move away from this insanely inspired system of
subventions in Germany. Soon a business owner won’t be able to make any money
without receiving subventions, and an employee won’t be able to do anything, without
having a hammock somewhere, to lie in. That leads us, summa summarum, to a
fiightening level of immobility.”

Although I never came across a Leipzig resident who shared the neoliberal belief
that the country’s welfare state should be reduced to the extent that it had been in my own
country, the United States (“we’re not barbaric,” was the reply of one Chamber of
Commerce representative to my suggestion of the American social security system as a
possible role model), there were many who complained about corruption and poor
organization. The business community and local government were concerned with
limiting a reportedly corrupted zweiter Arbeitsmarkr, for example, and many unemployed
were convinced that the Arbeitsamt ’s organizational structure was not working in their

favor.

76

The Limits of Flexibility

Complaints about poor organization were often directed toward occupational
training firms. Subsidies for training made up a significant portion of the EU, federal and
municipal financial support available to individuals, and this placed occupational trainers
in a position to profit greatly. During the GDR, occupational training had taken place
directly at the workplace. But when Leipzig factories closed down all at once, the GDR’s
occupational training tradition went with them, replaced by a flurry of independent firms.
During a high point in the early 19905, there were more than 1,200 registered
occupational training firms in Saxony. By 2001, this figure had sunk to 360-400 (Brauer
2001: personal interview). The firms came mainly from the West, but were also
established locally, and during the Wende the majority of the city’s working-age
population went through their doors. Their contracts often came directly fiom the
Unemployment and Welfare Offices. The firms proposed programs and, if approved,
these were offered at no cost to qualified unemployed residents and welfare recipients.
There were good firms and bad ones, I was told, and unfortunately a system of oversight
had only recently been implemented. People related stories of unprofessional instructors
and no assistance in job placement. They also accused firms of knowingly “over-
flooding” the market, by training too many individuals in certain popular occupations.

The apprenticeship tradition in Germany, Austria, and Luxembourg, required
formal training and certification to practice almost every profession: from florist, to
computer technician. Training usually took several years, and (in the absence of
subsidies) could be quite expensive. Unemployed residents described rnisguidance in

choosing an occupation as a point of great frustration during the early 19903 as they

77

struggled to imagine what occupations would be in demand in the new, market economy.
They soon discovered that a significant percentage of the new occupational training firms
were structured with a bottom line of profit, and not necessarily their own best interest, in
mind. Before the Wende training programs had always led into permanent positions, and
it had also been common for a person to work at the same kollektiv his or her entire adult
life. Coming from this social environment, a system in which one was trained by an
independent contractor and given no assurance (and sometimes no likelihood) of
employment seemed both illogical, and unjust. People complained that occupational
training should have been better aligned with labor market demands. After the Wende,
people had wasted too much energy learning things they would never be able to apply in
an employment context.

In the early to mid-1990s, there was a surplus in the number of Leipzig residents
retrained in retail sales, for example. This occupation had held a high social status during
the GDR, I was told, and people also expected a dramatic increase in the number of
shops. Unfortunately, this was not enough to absorb the thousands of women and men
who decided to train in this profession. A woman described taking part in a two-year
retail sales training and apprenticeship program, after being laid off from a printing press
job in 1991. She spoke of poor instruction and authoritative abuse from her trainers, and
said she had been unable to find employment afterwards (citing a flooding of salespeople
into the market as the reason): “The program was offered by the Unemployment Office
through one of those dubious firms from the West, and the apprenticeships were all at
large department stores, like Horten, where I ended up. There was never any question of

hiring us, the store already had its own personnel-in-training. They received money from

78

the Unemployment Office to take us in, and sent their own trainees on unpaid vacation
[...]. And we were supposed to be trained in the different areas [of sales], but I was never
even let onto the cash register. If we complained, [the training firm] threatened to
withhold our certificates.” The flooding of the retail sales labor market impacted
unemployed women especially.

In the late 19903, a more severe case of market flooding affected men and women
in construction work occupations. When I first visited Leipzig, in 1997, it seemed
already clear that the city’s construction boom was waning (most of the inner-city had
been renovated, many new buildings had been built, and government real estate subsidies
were running out). But the Unemployment Office Job Center continued to offer a variety
of training program in construction work.” As a result, in 2001 there were twice as many
(7,000) unemployed construction workers (Leipzig Office of Employment 2001) than
unemployed in any other single occupation. A former ABS enterprise manager - a
woman who saw herself as a social activist and who was involved in several work-
creation projects, especially with unemployed youth - gave the following description of
her attempts to forecast the labor market, and deal with this crisis:

There were some 300 occupational training firms in Leipzig. They came from
the Old Federal States, and made a quick buck [sic] here, by no serious means.
But we had thousands of people who needed to begin doing something, and at the
time we thought, ‘what should we do?’ So we advised our engineers to become

construction engineers. The draftsmen became building draftsmen. Everyone
went in that direction, and now a few years later, we stand here and the

 

27 It was explained to me by a retired employee that the Unemployment Office staff was
so overwhelmed by its workload that it tended to give autonomy to the occupational
training firms with which it contracted, and ofi’er whatever apprenticeships they made
available. In 2002, when Leipzig became the first model city for the 2003 national
welfare reform, Agenda 2001, the availability of appropriate (and requested) retraining
from the Unemployment and Welfare Offices was one of the central policies to be
implemented.

79

construction industry has sunken completely into the ground. Our locksrniths
have meanwhile retrained themselves as drywallers, and now we don’t have
enough locksmiths. And except for the most talented they won’t find their way
back... It’s a crime... we had so much machine industry here, we had the very
best people. They had hands like gold, our peOple, they were very well-trained.
True, they worked for thirty years in the same [metallurgy] firm — I did too —
that’s how it was. But whenever new technology came in, they were always
trained. When the industry crashed, the young people said, ‘I’m not going to
learn drill making, or cutting, I’m going into something else.’ That something
else was construction, but how could we have imagined the direction things
were moving?

The people over fifty, they’ve grown smaller, but they’ll make it around the
bend. But the worst part for me is, what if nothing is done for the young people?
That’s why I’ve done this. That’s why I’ve hired [the young secretary]. My
God, we do have a responsibility, I thought. Those few Marks she earns, they’ll
just have to come from somewhere. This is how we have to think. The young
people who end up on welfare, it’s horrible. So many come here, looking for
help finding a job. They’ve studied, but find nowhere to put their knowledge to
practice [. . .]. So we’re proposing a project to the Unemployment Office, to
retrain long-term unemployed construction workers, young people, as industry
machinists — as welders and locksmiths. It would start in two years. BMW is
coming, and I think our proposal has a good chance.

At the two occupational training firms in which I conducted fieldwork, staff admitted
that corruption had sometimes been a problem during the early 1990s. But regulations
had been set in place, and things were improving, they argued. The problem today lie not
with them, but with the Welfare and Unemployment Offices. At the first firm, located on
the grounds of the old GDR crane factory, Kirow, a multimedia instructor shared her
puzzlement at the Unemployment Office’s seemingly random selection of students for
her class. Upon closer observation, she noticed that all of their last names began with
“R” or “S.” Obviously, the two caseworkers responsible for these letters of the alphabet
had gotten together and decided to clear out their inbox, she complained.

Like the first occupational training firm, the second one, IBIS, had received multiple
EU and municipal grants, and defined itself as socially engaged. The firm was originally

from the Old Federal States, but its Leipzig personnel were from the region. When I

80

wandered into IBIS’ computer lab during my first visit, 1 found a group of men talking
and using the intemet. One sipped from a bottle of Jagermeister. “Is there anyone who
works here?” I asked, not thinking of double meaning of my question. “Here, nobody
works,” replied a man at the back of the room. It was a somber statement, and no one
laughed.

Later that day two IBIS occupational trainers told me the story of a young woman
they knew who had applied for a secretary apprenticeship at the Welfare Office, through
the federal youth ABM program, “JUMP.” JUMP was funded entirely by the federal
government (interested employers had access to a free labor pool of 7,500 unemployed
Leipzig residents under the age of twenty-five) and designed to help unemployed young
people move into new careers. The trainers described Welfare Office caseworkers as
often disinterested in the dreams of young people. Rather than assigning this woman a
secretarial job, the caseworker assigned her a minimum wage job cleaning toilets, a
position the trainers felt should never have been offered through the JUMP program. But
some case workers thought unemployed young people were in need of discipline, they
said. The young woman soon quit, and her welfare benefits were revoked. She moved
into an abandoned apartment, bought a dog, and slept with men for pocket money.

Parallel to the many younger unemployed who became disillusioned and chose to exit
the system, I was impressed with the equally stressfirl determination of many older
residents to refashion themselves for the new labor market, and prove they could handle
anything. I think for instance of Maria, a petite sixty-year-old woman in my English
class at the Leipzig Center for the Unemployed (LEZ). Maria dyed her hair neon red, and

spoke energetically. In the GDR, she had been a saleswoman at the Leipzig Trade Fair.

81

After re-unification, she held an ABM post at city hall, in a project to reimburse Jewish
families for property lost during National Socialism. Most recently, Maria was
unemployed, and was taking my English course to prepare herself for an upcoming two-
year European Social Funds “EUROPA Secretary” training program. When it began, she
would study intensive English and Spanish. Maria made it clear that this would not be a
leisure activity for her. At sixty, she was prepared to throw all of her energy into a new

career.

The Birth of Leipzig’s “Nonprofit Sector”

Community church groups and youth clubs for the unemployed sprang up rapidly
after the Wende. These many small organizations defined themselves as “filling in the
gap,” by ofi’ering advice and services the jobless would not otherwise receive from the
government. They provided free counseling, job training and volunteer programs,
zweiter Arbeitsmarkt jobs, lobby work on behalf of the unemployed, and social activities.
They varied somewhat in character and offerings, but served many parallel firnctions and
competed for the same subsidy monies.

So many care stations for the jobless and needy sprang up in the first decade
following the Wende that even staff members at the organizations could not keep track of
them. Typically, the community groups and youth clubs had between 1-3 permanent
staff members and additional support staff in ABM posts. The result was the emergence
of a temporal class of professional workers doing administrative and counseling work on
renewable two-year contracts. Wanting to change this instability, community

organization staff often argued that the government should make some of their ABM

82

posts permanent. Leipzig community organization staff were also becoming very curious
about the money-raising potential of the US. “nonprofit sector.” I was sometimes asked
to explain how nonprofit organizations in the US. worked, and whether all Americans
were involved in “volunteer work,” as people had heard. In reunified Germany the legal
entity most closely resembling the small non-profit organization was the Verein, or
“association.” Garden clubs, sports groups, community choirs and related organizations
usually obtained the status of an “association” (gemeinm‘r‘tziger Verein) in order to keep a
nontaxable bank account for membership dues. In the Old Federal States the vast
majority of Vereine were not primarily associated with social welfare or charity-related
activities. Since the Weimar Republic, when social welfare was definitely established as
the responsibility of a rationalized, state-led system of “social services,” or
Sozialflirsorge, and not private or individual charity (J arausch 1999: 59), there had been
little need in the FRG for private welfare charities.

But after re-unification, Vereine were established throughout eastern Germany
with the specific purpose of doing social and charity work. ABM contracts and available
EU and federal grants led to the development of semi-privatized sphere of social services.
But rather than drawing firnds from private charities (in what Leipzig professionals
referred to as the “Anglo-American” tradition), the eastern German “nonprofit sector”
drew its support almost entirely from the state. The fact that most staff members were
hired on temporary ABM contracts illustrated the significant limits of this sphere’s
autonomy. While an organization could apply for the renewal of an ABM position, there
was no guarantee the contract would go to the same individual, for example. The

Unemployment Office argued that if this were done, the individual might feel as if he or

83

she held a “regular” job. The zweirer Arbeitsmarkr was not supposed to offer permanent
employment. As a result, at the time of my fieldwork the organizations doing community
and charity work in Leipzig were all working with a constantly rotational staff. In many
places, such as at the Leipzig Center for the Unemployed (LEZ), the director’s position

was also fimded as an ABM post. This made it difficult for the staff to create an agenda,

and to plan projects.

 

. .7 7 r _ ' l :‘f‘u - 7
o i . a 2.1 r u. .,
Illustration #9: A Leipzig Coffee Shop and Job Club

Leipzig’s many small community groups had begun to network, however, and in
the late 19905 they set out to categorize their activities, and create a detailed directory.

They knew that federal and EU subsidies would decline in the next decade,28 as European

 

28 Eastern Germany will for instance lose its priority status for European Social Funds in
2006.

84

Social Fund grants were redirected toward EU expansion. Through fimding cuts,
Leipzig’s chaotic emergency safety net was being gradually streamlined. Recognizing "
this, but also recognizing the govemment’s increasing support for the idea of a “third
sector,” community groups in Leipzig began to more aggressively study the “Anglo-

American” nonprofit model.

CHAPTER FIVE: THE UNEMPLOYMENT OFFICE

Regardless of the important social role and lobby function community groups
played, the municipal government in close connection with the Unemployment Office
retained control over the allocation of most of the financial resources available for social
welfare. And for the unemployed, no institution carried more symbolic weight than the
Unemployment Office. A body of anthropological research conducted inside of state
unemployment and welfare institutions has consistently described the impersonal and
bureaucratic environment of these institutions (eg. Andersson [in press], Haney 1999,
Rehn 1988, Susser 1982, Susser 1993). And yet, beneath the guise of rationalism,
personal relationships and particularistic rules often guide social workers’ decisions on
the allocation of resources (e. g. Kingfisher 2001, Lloyd 1998, Piven and Richard
Cloward 1993[1971], Wadel 1979). Drawing from my experiences as a visiting “intern”
at Leipzig’s unemployment office, or Arbeitsamt, in this chapter I focus my attention on
the rules of inclusion and exclusion surrounding the bureaucratic allocation of resources.
In Chapter Four I argued that the transfer of caseworkers from the GDR Office of Work
to the new Unemployment Office, following re-unification, resulted in a continued
emphasis upon the official work values that had been promoted by the GDR state (i.e. the
“right” and “duty” to work). In the following pages, I will illustrate how clients who
embodied these appeared to be favored by social workers. In the second section of the
chapter, I argue that this pattern of favoritism began to shift in the late 19905. Following
the business community’s criticism that the ABM program and the municipal work-
creation firm supported a work culture of “socialism,” the city government began to draw

resources away from these old networks. We see the dynamics of this restructuring in the

86

following glimpse into activities at the Arbeitsamt.

A Bucket of Old Rivets

In February 1999, after asking a member of bfb management to place me in
contact with the Arbeitsamt, I received a call from Frau Wolf,29 one of the social workers
who supervised the ABM program. She had called to invite me to an orientation program
for new ABM workers, to be held on the grounds of bfb. The administration of the
municipal work-creation firm was tightly interlinked with that of the Unemployment and
Welfare Offices, and oddly enough my interest in the Unemployment Office was leading
me now, back to the work-creation program. Much to my surprise, I was told that a
private van would be sent to pick me up at 7:30 am. the next morning. A number of
ABM workers had been retrained as drivers, in the service of mid-level Arbeitsamt
employees who needed to travel.

The apartment my husband and I lived in at the time was in an unrenovated
Altbau (literally “old building”), in a largely abandoned section of the working-class
neighborhood of Schonefeld. I was on my way to the basement for coal (which many
people in this quarter still used for heat) when the Unemployment Office van arrived, ten
minutes early. The GDR workday had begun 7 am, and earlier, and older residents still
liked to rise with the sun, and get started. The driver waited as I carried my bucket of
lignite bricks up to our apartment, and returned with my coat and bag. Stuffed animals
sat on the van’s dashboard, and folk music (Schlagermusik) played on the stereo. Herr

Hardach’s fiiendly, professional composure made me initially take for granted that he

 

29 All names have been changed in this chapter, and the dialogue has been re-organized,
in a manner as to preserve the anonymity of my discussion partners.

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was a regular employee at the Unemployment Office. But no, he had once been a
machinist and now had a two—year ABM contract. This was his fourth ABM, he said, and
after this, “we’ll see.”

We drove to the Unemployment Office to pick up an apprentice social worker,
who would join us. A commercial for the Unemployment Office’s youth work-creation
program, “JUMP,” played on the radio, and we fell into the joking dialogue that I would
learn was an important communication pattern among Unemployment Office staff.
Taking things light-heartedly shielded caseworkers from the earnest gaze of the jobless,
and was an effective method of displaying power and enforcing social control. The van
arrived at bfo’s main grounds. We entered the administrative building, and went into a
room where Frau Wolf and other caseworkers excitedly passed around files and spoke on
the phone. There would be 200 new ABM-“Kra'fie” today, I was told, down from 300 the
month before.

We went to the cafeteria building, where the new recruits were watching a video
orientation. In it, former bfb workers gave testimonials, affirming that it was “useful
work, we do here.” When the film ended bfb’s director, Matthias von Hermanni, entered
to address the group. “If you’re a woman older than 44 or a man older than 54,” he said,
“You need to come to terms with the fact that you aren’t going to work in the enter
Arbeitsmarkr again.” There were educational opportunities at bfb, he continued, but they
should be realistic enough to know that these would not likely lead to new careers.
Instead, women might wish to take a sewing class, in order to have something to teach
their grandchildren, for example. Von Hermanni said he knew that hearing this was

difficult, but thought honesty was important.

88

He said that most importantly the new recruits should know not to play around. If
they choose to act irnmaturely, they should realize that their co-workers were watching
them. Everyday he received complaints (mimicking a woman’s voice: “The lanky one,
the big woman. She stands around all day, doing nothing”), and did not enjoy such
phone calls. Those who did not wish to work should leave now, he said. Two women
stood up and left.

The new ABM workers were given four work sites to choose from, and truck
drivers, electricians, and interior construction workers were recnrited for special
assignment. The botanical gardens might be an interesting place for women to work, von
Hermanni noted. Everyone was then asked to take their paperwork to the Unemployment
Office table, for processing. I sat at the far end of this table, observing their shy,
respectful approach. Although there were asylum-seekers and college graduates at bfb,
from their clothing and accents this group of applicants seemed distinctly working—class,
and distinctly Sachsisch. Some people ran into friends, and chatted while waiting in line.
Many had actually worked here before, I learned, and were returning after a year-long
pause. Some obviously suffered from substance abuse. Their sentences were slurred,
their eyes distant.

The Unemployment Office staff returned to the administration building, where
one of the social workers received a call from a woman who had missed the orientation.
“You’ll have to apply again,” she told her. “There are no ABM left.” She had exercised
one of the more important unwritten rules of social work: separate the “hard-working”

from the “lazy.”

89

Anthropologists studying unemployment have often noted the important
categorical strategy of modern welfare states to divide the “good poor” from the “bad”
(Howe 1990, Hall 2003, Pappas 1989, Susser 1996). The “bad poor” included rule-
breakers, and among these were sometimes “foreigners” and “outsiders,” who were
unfamiliar with the rules. Indeed, after hanging up the phone this woman joked that the
caller must have been a Wessie (i.e. West German). Only a Wessie would ignore a letter
telling her to show up at 8 am, and think she could simply telephone instead. Soon after
this exchange, a man entered the office with a similar request. He had received his letter
from the Arbeitsamt only yesterday, and had even brought his former employer to vouch
for his generally strong work ethic. The caseworker at the front desk said she
sympathized, but the man should not have come late, because now there were “no jobs
left.” When I later asked whether this were truly the case, the caseworker replied this
was their only way of dealing with the many illegitimate excuses. They would check and
see whether this man’s letter had really been printed just yesterday, she said.

Throughout the day, I noted with disturbance that the caseworkers’ jokes were
often at their clients’ expense. This atmosphere of joking was obviously something to
which they felt entitled, as compensation for having to deal with the jobless, day in and
day out. It was their small bit of comic relief, and their most strategic tool of informal
power. A woman now entered the room, laughing loudly and holding a letter. “You will
not believe this one!,” she exclaimed. She read aloud a man’s complaint that his teeth
had become so rotten, he could only eat soup and wet bread. He asked the

Unemployment Office for dental insurance. The caseworkers agreed that the letter

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should be forwarded to the Welfare Office. The man’s spelling and grammatical errors
continued to entertain them for several minutes.

With the paperwork on file, Frau Wolf said we could now take a trip to visit
several of bfb’s Giiter (the old municipal agricultural estates, placed in the work-creation
firrn’s care for restoration). We piled into the Arbeitsamt van, and drove first to Herr
Hardach’s home, to pick up his wife. The Hardachs were old fiiends of Frau Wolf, I
realized, and this was going be a pleasant outing rather than a stressful day of orientation
and paperwork. An American guest should be entertained. We arrived at Molkau Gut, at
the northern edge of the city. A cluster of restored 17th century farm buildings
surrounded a long rectangular courtyard. I was told that the restoration of these buildings
was being done by individuals with substance abuse problems, and that this was proof
that these people were not “useless.” Look at the wonderfiil work they had
accomplished, after all!

We were given a tour of the Molkau metallurgy, where four men worked with
traditional tools and methods, dating back to when the farm estate was built. A bucket of
metal rivets salvaged from a demolished building was being reworked into an iron gate.
On the second floor, a man used blacksmith’s tools and a stone hearth to craft the rods. I
joined Herr Hardach, who stood eyeing a manual blade-sharper, and asked whether he
knew how to run the machine. “You put the rod in here, and turn this crank [. . .].” Yes,
he said, this was the kind of work he used to do. At the end of the tour an old man
wearing the traditional uniform of his trade, came to ask a favor of Frau Wolf. Their
handshake and jovial small talk preserved a style of networking that was clearly distinct

from the way either might behave toward a West German colleague. In the East German

91

tradition, being at work was not only about producing a product, but also about building
social relationships. The craftsman wanted to ask Frau Wolf for another worker. But he
wanted a hard-working one, and not some one from the Welfare Office.

We returned to the van, and as we drove on, other bfb projects were described to
me. I was asked to observe the wonderful craftsmanship of renovations, and the overall
“usefulness” of completed projects. This discourse was certainly meant to reassure the
unemployed of their good work, though it was admittedly patronizing and unaccepting of
criticism. But it also represented the deep sense of insecurity East Germans continued to
feel in relation to “the West.” So much had been demolished, so rapidly, and so many
jokes had been made at their expense, that there appeared to be a collective psychological
need to prove that the stereotypes lain upon them were wrong. Countless times, people

pointed out, ‘Not everything in the GDR had been terrible.’

 

     

Illustration #10: Gut Molkau

   

 

 

As we arrived at the bfb greenhouse entrance, in PlauBig, we interrupted the work

of a woman who was sweeping the driveway. Observing the Arbeitsamt van, she

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scowled. To my surprise, my companions observed this frown and laughed. “Oh, but
she does really look sour, don’t you think?” one person explained. Circling the grounds
and returning to the front gate, my hosts were given a second opportunity to poke fun, for
we had interrupted the woman’s work once more. She must have been assigned by the
Welfare Office, and could not be one of theirs. “Look at her now! Now she’s really
mean! Look at that face!”

Finally, we drove on to Molkau Gut, where an ecological restaurant and a small
petting zoo were run by bfo workers. In the entranceway leading into a large dining hall,
glass cabinets displayed small handicrafts that had been made by bfb workers. We took a
tour around the petting zoo (working with animals was therapeutic for the unemployed, I

was told), and ended our day with lunch.

Purposeful Work

Because I spoke of wishing to learn more about the selection criteria for those
who received ABM positions, Frau Wolf told me that she would have her driver pick me
up again, next Thursday. That morning in her busy office her colleague, Frau Schmidt,
gave me a five-minute overview of their official criteria. To qualify for an ABM position
a person needed to be unemployed for at least one year, and could not be receiving
welfare money. Each unemployed person was assigned a caseworker, Frau Schmidt
explained, and each caseworker was responsible for ABM in a specific area of the city.
She said that she was currently working to remedy the problem that a person living in the
far north might be assigned to an ABM position in the far south, simply because this was

the area his or her caseworker handled. It seemed more logical to me that an ABM

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position would be assigned in relation to a person’s interests and abilities. Marx, after all,
had argued that human beings needed work that suited their personalities and talents, in
order to be happy and firlfill their potential. But this ideal had not been realized during
“real socialism,” nor in any other political economy. And at the Unemployment Office it
certainly seemed only a peripheral objective. As the saying goes, beggars cannot be
choosers. I told Frau Schmidt that I had spoken with middle-aged women who had
previously done ofiice work, but were now being assigned to manual labor outdoors,
even work such as moving rocks to clear the grounds of the old stadium. I wondered
whether this was the best utilization of their skills. She explained that welfare recipients
were given preference for jobs at bfb,30 and that mostly outdoor work remained for ABM
workers. What this meant, she said, was that the people who avoided working the longest
were then given the best jobs. Obviously, there was a degree of open hostility between
the bureaucracy of the Welfare and Unemployment Offices. Because the work—creation
firm was in the business of finding work where none had existed before, I wondered why
they did not simply develop more office or archival projects. In von Hermanni’s vision,
the unemployed industrial or office worker seemed best-suited to ecological farm work
and simple manual labor.

It had been my hope to spend the day, observing caseworkers at the
Unemployment Ofiice. But Frau Wolf had ideas for more interesting engagement. We

were in her office perhaps a mere half-hour when I learned that another field trip had

 

30 Following a revision of Saxon law in 1996, any welfare recipient who refirsed a valid
job offer fi'om the government could be denied benefits. During the late 1990s, this law
was used to make many of Leipzig’s welfare recipient’s work at bfb. Because they were
forced to work at the municipal work-creation firm (as opposed to ABM reciepients, who
applied for work), they were also given ‘first pick,’ from the available jobs.

94

been planned. Frau Wolf, Frau Schmidt, the secretary, the intern, two employment
control officers, and myself piled into the van with Herr Hardach, and set off to one of
Leipzig’s most popular tourist attractions, the Volkerschlachtdenkmal, a war memorial
celebrating Napoleon’s defeat. The structure was in desperate need of repair due to water
damage, they said, but because the city had no funds, bfb workers had completed the first
stage of restorations. We took the stairwell down into the monument’s three-level
basement, which went 250 feet into the ground, and it was explained that this entire space
had not long ago been filled with mud. be workers had worked by torchlight,
transporting filled buckets up the slippery stone stairs, and had sealed the cracks in the
memorial’s foundation. It had been “purposeful work,” of which they could feel proud,
the caseworkers said.

After this, the group spontaneously decided to visit the Kongresshalle, a
municipal building bf’o workers were currently renovating. As the van drove up, workers
scattered to find the project director, and we were asked to wait for a few minutes, while
the site was prepared for us. We were then given a tour of the large building, from
basement to attic. Some of the walls were being ripped down and rebuilt by unemployed
young men, receiving apprentice training in woodwork and construction. Our guide
showed us the hay and wood shavings used as insulation. “And they say the GDR didn’t
make anything good! This stuff kept the buildings really warm. It was great.” One of the
Arbeitsamt controllers drew me aside, and pointed toward a group of women sanding
down doors, in the main hall. She wanted me to observe how exceptional it was that
women were willing to do this work -— work that West German women would not be

caught dead doing! I asked whether they were also working toward a skilled trades

95

certification, and whether she thought many would go on to work in construction. They
would need formal training before being allowed to do this work professionally, I knew.
No, they were not in apprenticeships, the controller explained, because there were
unfortunately few job openings for women in construction work. The law required
construction companies to provide separate toilet and shower facilities for women, and
because this was expensive the companies tended to save money by not hiring any female
workers. Ironically, East German women were being portrayed as tough enough for
manual labor, yet due to high unemployment and the lax enforcement of anti-
discrimination laws, they were only able to do such manual labor on a non-skilled,
zweiter Arbeitsmwkt basis [similar in the GDR]. The inexpensive renovation of the
Kongresshalle saved the city expenses on a short-term basis, but what long-term
prospects did it offer for the thirty-year-old woman who stood in front of me,

unenthusiastically sanding this door?

A Tightening Belt

Over the next few weeks, I was invited back to the Arbeitsamt whenever special
events were planned. ABM management liked to accompany the Arbeitsamt’s public
exhibits at different local trade fairs, and they often invited me to join them. At the “Free
Time and Sport” trade fair, I was invited into a backroom for shots of Campari, and this
together with the large glass of beer I was offered with lunch left me rather inebriated. I
accompanied the Unemployment Office staff to the neighboring bowling alley exhibit,
for a game of ten pins. On another occasion, I felt particularly guilty when we opened

the door of the ABM office, to see a long line of people sitting on the floor in the

96

hallway. Several stood and came toward us, but the supervising caseworker dodged them
curtly, explaining that she was on “field duty” (A uflendienst). A group of social work
management, the favorite secretary, and I then piled into the van, made several stops to
pick up children and spouses, and spent the day at the zoo (where many of the animal
attendants were bfb workers). My presence was light-heartedly mentioned as a good
excuse for the trip.

When I returned to continue dissertation fieldwork in the Fall of 2000, I realized it
was difficult to understand what to make of these adventures with the Arbeitsamt staff.
By this time, I had interviewed many unemployed individuals, and a number of
caseworkers. But my attempts to observe daily office work had failed, leading me only on
these “field duty” trips where, as the “American intern,” I appeared to be something of a
status marker. While these trips had been educational for me, they did not seem like an
effective use of state resources. Still, I was also unsure how typical they were, and
decided to contact Frau Wolf once more, to see if she might allow me to return for a

followup visit. In early January 2001, she invited me for a “surprise engagement.”

97

 

 

',~

 

Illustration #11: The Leipzig Arbeiflamt

I offered to take the streetcar this time, rather than being picked up. Full buses
and streetcars always emptied out, at the stop in front of the Arbeitsamt. The new
building with its large windows, white walls, and shiny steel staircases, was the
destination of all of the passengers on this route. I made my way through the crowded
hallway to Frau Wolf’s office. Much as I remembered it, the phone was ringing, and
caseworkers were walking in and out, carrying files and joking with one another. As in
Erving Goffinan’s “fi‘ontstage”/“backstage” dramaturgical model (1959), the jovial
atmosphere contrasted with the depressive mood of the unemployed, standing and sitting ,
outside in the hallway. Similarly, the internal exchange of favors between caseworkers

contrasted with the “no excuses” handling of clients. Frau Wolf‘s driver (no longer Herr

98

Hardach) was showing off several “furbies” (stuffed animals), he had recently bought for
his nephew, and the secretary was asking for assistance in writing a request for a
telephone bill subsidy to compensate the work-related calls she made from home. The
telephone rang, and rang, and the staff grumbled, because we were supposed to be
preparing to leave for “field duty.”

Just then, a man knocked, and entered the room. His broken German and clothing
suggested that he was a recent immigrant, perhaps from Kazakhstan or Albania.
Although the man was middle-aged, Frau Schmidt asked, “What can I do for you young
man?” Interrupting his answer, a colleague who had also just entered drew the social
worker’s attention, “Ah, young woman, what do you think of these!,” she asked, referring
to the firrbies. The talking dolls were designed to mimic the human voice, and this noise
added to the sound of a repeatedly ringing telephone. Frau Schmidt turned to the visitor
again, and asked what he wanted. But again before he had a chance to speak, she told
him to come back later. He should visit his caseworker, she said. Struggling with
German, the man hesitantly replied that he had been sent to speak with Frau Schmidt.
Was she Frau Schmidt? “If you’re looking for an ABM job, there aren’t any right now,”
Frau Schmidt replied. “That’s the problem,” she whispered to me.

The act of seeking welfare assistance places one within the lowest social ranking,
and the act of being a less articulate foreigner makes it even less likely that one’s voice
will be acknowledged. But, as I would learn over the course of the day, this group of
social workers’ access to ABM firnds was indeed more limited than it had been a year

before.

99

As it turned out, Frau Wolf, her secretary, and I were to be judges for a cooks’
apprenticeship exam at bfb. We drove to the main bfb grounds, which I noted were more
run-down than they had been previously. This was due to firnding cuts, Frau Wolf
explained. At the educational center we were met by the occupational training director,
Frau Lehmann, who remembered me from my earlier fieldwork. According to rumor, she
said, bfb’s new directors were going to lay off the entire social workand administrative
staff. At City Hall, the work firm was now increasingly seen as contributing to the
municipal debt, and the professional employees were their largest expense. Frau
Lehmann did not think they could run bfb without social workers and teachers. Those
who ended up here were usually so depressed and far gone that they would otherwise fall
apart, she said.

We went into the dinning area of an adjacent building, for lunch. A display of the
youth-ABM cook training program hung on the wall. Frau Lehmann related the history
behind the pictures, pointing out that the apprentices now finishing the program had only
recently received their uniforms, and that they had passed a hat around to buy the food
needed to give this exam. The cooks here today had completed two years at bfb, '/4 of
which had been in training. The remainder of the time they had worked either in the
main canteen, or at the Molkau Gut restaurant. But because these were not certified
restaurants, only their “theoretical” apprenticeship training would count. They would
need an additional 1-‘/2 years of “practical” training in certified restaurants before being
qualified to work as cooks. Unfortunately, said Lehmann, not enough restaurants were

willing to take on apprentices.

100

Three of the four women preparing our lunch today were in the federal youth-
ABM program, JUMP, one of whom would soon go on maternity leave. The fourth was
in her forties, and starting a new career. The cooks’ trainer commented that he was proud
of this woman, for being a true role model and inspiration for the young people. Upon
hearing that the woman was a welfare recipient, Frau Wolf laughed and said she must be
an exceptional case, but then thanked her for the good work. Over the course of the next
hour I was treated to a shrimp cocktail, chicken and mango strips, mushroom soup, a pork
entree, and crepes for dessert. I am a vegetarian, and had not eaten meat in more than a
decade. But as one of six judges, I could think of no easy way out of the situation, and
decided to smile, and make an effort to eat the food.

An empty plate was set at the head of the table, for bfb’s absent co—director. He
had sent word that we should begin without him, and this gave the others an opportunity
for open gossip. One of the two new co-directors was praised for making an effort to
learn people’s names, and greet them in passing. The other, the one who was late for
lunch, was supposedly aloof.

The training staff spoke of having received a 20% pay reduction during sick
leave, and Frau Wolf agreed that something fishy was going on with ABM wage
adjustments. Not long ago she had received a pile of applications for employees whose
professional status she was supposed to adjust to lower levels. But they had been hired at
one professional level, so how could this change? This would permanently affect their
careers, after all. She said she had refused to sign the papers. Another trainer asked Frau
Wolf for help in securing his colleagues’ jobs. Teachers in their mid—fifties would not be

able to find anything else if their ABMs were not renewed, he worried. A few things

101

could still be done, Frau Wolf assured, mentioning that anyone 55 or older with a one-
year ABM could automatically have it renewed for a second year. The man seemed
relieved, but Frau Lehmann said she was sure the entire system was breaking apart,
noting that she now received people with six-month ABM contracts. Since when had
these existed? Frau Wolf had never heard of these, either. In several months, I would
interview an assistant manager who had already (at this time) been hired to assist in
organizing bfl)’s dismantlement. Ten months from this lunchtime gathering, bfb will
have been shut down, and prepared for auction. For the moment, however, this
information was unknown to everyone present, though it was knowledge to the absent co-
director.

Frau Lehmann reflected that she would like to learn more about acquiring EU
money for her apprenticeship program. She read all the time in the newspaper that there
was “more money available than there was to spen ,” and felt that it was a shame they
were scrapping pennies together to buy material for their aprons. She said she
understood teaching, but not firndraising, and felt that her hands were tied, without the
administrative power to push the needed paperwork through. She had a million ideas,
which she wrote onto memos, Frau Lehmann said, but these just sat on the director’s
desk, ignored. Frau Wolf assured her that the Arbeitsamt was willing to help improve
this situation if they could, and suggested they meet for coffee.

As we ate dessert, the co-director finally came, but said he could only stay a few
minutes. His colleagues moved him encouragingly into his seat, saying that he should

“really eat something.” After a few bites of pork, the cooks were invited out and praised

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for the meal. The director was then off to his next meeting, and the pedagogical and

social work staff spoke of how impolite he had acted, considering the “girls’ hard work.”

Conclusion

In this portrayal of the bureaucracy of social welfare in an everyday context, I
have focused on power hierarchies, and access to resources. Those unemployed who
were denied assistance were frequently categorized as “lazy,” and as rule-breakers. In
their day-to-day interaction with the unemployed, social workers seemed more likely to
share their access to federal work-creation firnds with those with whom they shared social
networks, and common values regarding the rights and duties of workers. Frau Wolf had
acted as a special advocate for the employment rights of people who appeared to be
“hard-working,” and to follow certain rules. In a postsocialist context, the depiction of
welfare recipients as being especially “lazy” reflected the assumption that anyone who
tried hard enough to find a job would at least receive an ABM position. Those who
received welfare money (paid by the city government), were seen as contributing to the
municipal debt, and as not firlfilling their “duty” to work. Whereas those who received
unemployment (redistributed fiom federal rather than municipal cofi’ers) were seen as
getting back what they had already paid into social security taxes. Following this logic,
they were receiving ABM posts and financial compensation as part of the state’s
acknowledgement of their “right to work.”

In an interesting assessment of the rationality within the administrative
redistribution of social welfare relief, Frances Fox Piven and Richard Cloward (1993

[1971]: 147-48) argued that public agencies catered especially to the clientele who more

103

likely to represent “a supporting (or threatening) constituency,” citing, for example, those
constituents who had links to organized labor. In line with this argumentation, those
unemployed workers who received ABM posts at bfo seemed more likely to be residents
with active ties to labor unions, the PDS, and the Leipzig Center For the Unemployed.
Thus, ABM positions were being distributed in a manner that appeased the “right to
work” lobby, and many caseworkers - having themselves been transferred from the GDR
Office of Work (whose purpose it had been to enforce this right) - were also supportive of
this cause and its proponents.

As we saw in Chapter Three, during the early 19905 city officials from western
Germany made use of the GDR ethic of a “right” and “duty” to work, in the
administrative policies at the municipal work-creation firm, bfb. In a hybridization of
regulatory bureaucracy, the ideological force of the GDR work ethic was mixed with
neoliberal welfare theory, which was only recently becoming popular in the FRG,
following re-unification. Together, this merger of old and new bureaucracies of welfare
regulation successfirlly kept unemployed workers from revolting, despite their experience
of the most rapid and large-scale process of deindustrialization ever orchestrated in the
absence of warfare. By the end of the 19905, the regulatory power of the socialist work
ethic was of fading value, and its enforcers - administrators like Frau Wolf - were losing

access to knowledge and resources, and their social networks were losing strength.

104

CHAPTER SIX: BEING ‘FOR WORK-CREATION,’ VS. ‘AGAINST
UNEMPLOYMENT’

This chapter contrasts two lobby fractions in Leipzig. Structured by the discourse
of the PDS (the successor party to the Communist SED), small community groups, the
trade unions (to some extent), and the Saxony chapter of the National Union for the
Unemployed, the first lobby defined itself as being against unemployment, and
representing the voice of the unemployed. Its political-economic model represented a
mixture of Marxist and Keynesian standpoints, and its main objective was to pressure the
state into fulfilling its duty of providing citizens’ with their “right to wor .” The
networking power of this lobby lay in its ability to successfully mobilize large numbers
of people, and create a lasting public awareness for the situation of the unemployed. The
“right to wor ” lobby also maintained connections with the local media, and its activities
were usually covered by the city’s daily newspaper, the Leipziger Volkszeitung.

Headed by the business community and the Social Democratic-led municipal
government, the second lobby defined its purpose as being for work-creation. To solve
the city’s economic problems, the “Work Circle for Municipal Employment Policy”
(Arbeitskreis fir kommunale Beschaftigungspolitik) 7 believed attention should not be
focused “unproductively” upon the negative discourse of the unemployed, but rather on
the needs of potential new businesses and investors (although they argued that by
supporting business growth, they had the unemployed’s interests in mind). The “right to
work” lobby was seen by this camp as belonging to a dying school. It was the business
community that was ultimately being asked to create jobs, after all. And counter to what
socialism might have led anyone to believe, jobs did not grow on trees. The work-

creation lobby’s power lie at the heart of the city’s political-economic nexus: in city hall,

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in the Chamber of Commerce and in the Chamber of Skilled Trades. The trade unions

also had a presence.

Some Political Context: Europe’s Most Dangerous Man

From mid-1998, when my fieldwork began, until December 2001 when I left
Leipzig, I observed the “right to work” lobby’s gradual exclusion from city government
initiatives. Rather than fading from mainstream political consciousness altogether,
however, its members found footing in a network of community groups. By building a
network of educational, recreational, and social welfare resources for residents, the
worker’s lobby moved gradually into a grassroots, oppositional role. It is difficult to
estimate how long it will retain this lobbying strength, because its most active
participants in 2000-01 were in their fifties and sixties. When the City of Leipzig won its
bid with BMW in the summer of 2001, the “right to wor ” lobby’s attempts to gain the
ear of local politicians was effectively sealed off. The municipal government’s
“business-fiiendly” self-presentation had paid off, and Mayor Wolfgang Tiefensee gained
a reputation as a player, and a golden boy for the Social Democratic Party in the new,
Berliner Republic. The “right to wor ” lobby became a bad connection for the municipal
government to have.

To understand the dynamic between the “Network Against Unemployment” and
the “Work Circle for Municipal Employment Policy,” it is usefiil to turn our clocks back
several years, to the mid-903, when western Europe was debating the European Union
Maastricht Treaty and the currency union’s belt-tightening budget criteria, and trying to

decide whether the economic benefits of implementing neoliberal reforms were going to

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outweigh the social costs. Political parties to the left blamed neoliberalism for causing
Europe’s unemployment crisis, and political parties on the right saw neoliberal policies as
the cure.

To give a few examples of the discourse being played out: In 1996 the German
National Bank president, Hans Tietmeyer, made a public call for market flexibility and
deregulation, warning that Europe’s currency union would otherwise surely fail.
Stabbing back, the French sociologist Pierre Bourdieu deconstructed Tietmeyer’s
argument in an essay published in French and German newspapers (Die Zeit 1996),
stating that “flexibility” was a step backwards, a step away from democracy. Countering
such leftist critiques in a public address in April 1997, the German President Roman
Herzog insisted that deregulation and economic restructuring were desperately necessary:
“What’s wrong with our country?,” Herzog asked. “A comparison with America shows
[...], Germany is at risk of falling behind (Sfiddeutsche Zeinmg 1997):"1 That same
month, “Everyone Else is Creating Jobs, But not Us” was the cover title of Germany’s
most popular political magazine, Der Spiegel. In 1997, the FRG’s official unemployment
rate, concentrated in the East, climbed to a WWII record of 4.7, and the country’s labor
policy received the worst ratings of the OECD.

Debates over how the crisis of unemployment should be dealt with were taking
place locally, regionally, nationally, and internationally. In Leipzig, public
demonstrations against unemployment, attracting thousands of participants, had become
commonplace. People clearly decided that some kind of change was inevitable. And in

an interesting development, rather than electing those who supported deregulation, in

 

3‘ Translated by author.

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September 1998 Germans voted a Social Democratic/Green Party coalition into federal
office, and an East German Social Democrat as the new mayor of Leipzig. Angry that
Chancellor Kohl’s promise of a “blossoming landscape” had not materialized, East
Germans voted for the opposition. Germany’s new Chancellor, Gerhard Schroder, had
been active in the SDS during the sixties. His more radical fiiend, Green Party member
Joschka Fischer, a former streetfighter with ties to the anarchist Red Army Fraction, was
Germany’s new Foreign Minister. The former trade union leader, Walter Riester was the
new Minister of Economy. Finally, one of the SPD’s most prominent voices from the
“Old Left,” Oskar Lafontaine, was the new Minister of Finance. Placed in a key position
to influence EU finance policies, Lafontaine set out to impose new regulations on
European corporations, and heavier taxes on the upper-middle class. A British boulevard
newspaper soon labeled Lafontaine “the most dangerous man in Europe” (The Sun 1998).

This overview of national and EU developments illustrates the political volatility
of the decade immediately following the cold war’s end. Germany’s newly-elected
political network was unstable, we would soon learn. But political and economic
developments that in retrospect seemed clear, were at the time not obvious at all (“Is it
real or is it fabricated?” the French anthropologist Bruno Latour asks. “You have to
choose, you fools!” [Latour 2000: 267]). What had seemed like the beginning of a new
“black box,” a new red-green political economy, and a state that protected its citizens
from corporate greed, and emphasized social responsibility in politics - turned out to be a
move in the wrong direction.

In the first year-and-a—half of the new regime, the Social Democrats and the

Greens were no more successful at lowering Germany’s unemployment rate than their

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Christian Democrat/FDP predecessors had been. In the fall of 1999 it became public that
Schroder and Lafontaine did not agree nearly as much as they had appeared to when they
stood on election day, hand in hand on the podium. One day in early January 2000, after
a private meeting with the Chancellor, Lafontaine announced his resignation as Finance
Minister and also as head of the Social Democratic Party, citing irreconcilable differences
and a desire to spend more time with his family. The “Old Leftist” was retreating into the
private sphere, where he subsequently disappeared from view.

Back in Leipzig, people began to speak of this as a sign of a changed political
climate. The “right to work” that this politician from the deindustrialized mining region

of Saarland had championed, was perhaps really no “right,” after all.

A “Right” Becomes A “Wrong”

On September 21, 2000, the Leipziger Volkszeitung (LVZ) published an article
announcing that the Leipzig Center for the Unemployed (LEZ) was inviting “Trade Fair
City residents, politicians, and business people” to a conference, for the purpose of
establishing a network “in the fight against unemployment” (Leipziger Volkszeitung
2000). The LEZ director was quoted stating that she expected a “clear response” from
government and business on this proposal.

A social scientist at the small Leipzig research institute, ZAROF, bragged about
her organization’s role in offering guidance for the network: “The Network Against
Unemployment came into existence in large part through us, in that we assisted them
with the activities that needed to take place, and what they should be concerned with.

And we knew this very concretely. We knew that there was an initiative in Dresden [a

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city hall taskforce against unemployment], and so we brought together the community
actors from Dresden with the potential community actors from Leipzig.”

At LEZ, the community advisor placed in charge of the Network confirmed that
they had spent the last 1 ‘/2 years trying to create a Taskforce (Beirat) at city hall,
modeled after initiatives in Thuringen and in Dresden. The Taskforce would have needed
the support of all political parties, however, and the CDU and the SPD refirsed to take
part. Only the smaller parties, the Greens and the PDS, had agreed. Following their
failure, LEZ decided to organize a Network Against Unemployment instead.

The ZAROF social scientist explained that when she went to Leipzig city hall
with news of LEZ’s proposal, municipal officials decided to hire her think-tank to write a
report documenting the activities of Leipzig community groups involved in
unemployment issues. After reading the report, the city decided against the Taskforce,
she explained. How, then, would it respond to LEZ’s request for a Network? A Leipziger
Volkszeitung article published in September 2000 answered this question. The City of
Leipzig would create its own “Work Circle for Municipal Employment Policy,” with a

special “Taskforce for Economy.”

110

 

 

 

 

Illustration #12: At city hall an
official shares a brainstorming
chart for the new Work Circle

 

I had written to the Office of Economic Development at city hall, requesting an
opportunity to visit. After calling a second time to follow up on the letter, in mid-
February I received a telephone call from a city hall official who said that my inquiry had
come at just the right time, and I could join him in making the rounds to discuss the new
Work Circle with some of its invited participants. Herr Braun’s office was dusty, and his
desk was piled high with books. Scattered among them were English andRussian
dictionaries from a recent business trip to Poland, where he had needed to juggle several
languages. Unfortunately, people were forgetting Russian, but they had not yet learned
English well, he said. Herr Braun gave me a copy of the organizational chart they had
drawn up for the new Work Circle. There would be five branches: one for the general

municipal administration, one for the department of youth and recreation, one for the

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office of health and welfare, one for representatives from the business community, and
made up of labor market experts and representatives and advocates of the unemployed.

With the model for the new organization in hand, we headed off to meet our first
discussion partner, a social worker from the occupational training firm, IBIS. In the
street car, Herr Braun told me he understood what it felt like to be unemployed. His wife
was currently unemployed and it was extremely hard for her. He had also been
unemployed for several months during the Wende, and could tell me the exact dates, he
said. To make ends meet, he had even filled soda machines. Imagine, a city
administrative planning oflicial, filling soda machines! We spoke about Herr Braun’s
expectations of the new Work Circle. It would only work if people decided to act
together rather than just talking and arguing, like they often did, he thought. But one has
to try, regardless. Under Mayor Lehmann-Grube, the old city administration had created
bfb and then just left employment policy alone, said Herr Braun. This had been a
mistake.

On the administrative side, Herr Braun said there were definitely some things that
needed to be dealt with. At the moment, a person receiving welfare assistance and living
subsidies earned as much as a person with a minimum wage job, for instance. This
needed to change, because otherwise there was no incentive for people to work. What
one really needed to do was to divide the unemployed into two groups: those who could
be usefirl for the erster Arbeitsmarkt, and those whose labor was not competitive. In
2002, this very idea would be incorporated into a new package of policy measures,
designed to revise the entire German social welfare system. The Harz Commission

proposal, co-authored by Leipzig’s Mayor Wolfgang Tiefensee, would begin as a Leipzig

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pilot in 2002, and later be implemented in stages throughout Germany, beginning in
2003.

Yes the problem, said Herr Braun, was figuring out what to do with those who
were left over. He gave the example of a fiiend he had who worked at a library, a man
with “certain limitations.” There were things this friend could do, and obvious limits to
what he could do. The question was whether the zweiter Arbeitsmarkt was really a
feasible long-term solution for “such people.” Herr Braun thought the Anglo-American
volunteering tradition was something to think about, but recognized that it could only be
applied in Germany after certain modifications. He had been to Holland and England, he
said, and had seen volunteer work there done by people who did not need money,
because they were independently wealthy. But here, there would definitely have to be
some kind of financial compensation, he thought, because in eastern Germany there was
no class of independently wealthy people. But this kind of policy would probably be
decided on the federal level. Herr Braun was not sure whether the municipal government
was powerfirl enough to have an impact on such trends.

At the meeting with the IBIS social worker, our discussion returned to the Work
Circle. Herr Braun asked the occupational trainer some of the same questions I had
posed to him earlier. The two agreed that the firture of the zweiter Arbeitsmarkt was an
important topic for the Work Circle to discuss. They agreed that statistics on specific
employment and unemployment trends were needed. But when Herr Braun asked how
much additional literature fiom experts should be gathered, the social worker sighed and
said she already had large stacks of such reports on her desk. There were too many such

reports, and the problem was implementing the ideas in them, she thought. Turning to

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me, she asked: “Don’t you think so too?” I agreed. Back at home, I also had stacks of
quantitative reports on East German labor market trends, and worker skill assessments. It
was an excess of information largely unapplied, and largely premised upon “shock
therapy” modernization theory.

Herr Braun said he thought the Work Circle needed to build a more cooperative
relationship with the Unemployment Office. Some of what they were doing over there
was counter-productive at present. This might be so, the social worker agreed, but a good
caseworker could help a jobless person bridge the gaps between unemployment and
ABM, without slipping into welfare. They began to discuss the Circle’s five branches.
Upon reaching the fifth branch, which included advocates and representatives of the
unemployed, the two organizers agreed that they would need to carefully consider how
the participation of this group should be orchestrated. When it was the unemployed’s
turn to speak at a conference on employment policy last year, they had dominated the
conversation, made the business community representatives uncomfortable, and not
contributed anything constructive. The focus, the two agreed, should be on making sure

that something constructive came from the meetings.

The Network Against Unemployment

Just a few days after this discussion, I attended the monthly meeting of the
Network Against Unemployment, which was also in an early stage of its organization.
There were about thirty people present, with an average age of 55. In opening the
meeting, a man reported on the Network’s activities during the Labor Day celebration last

week, on May 1. After walking in from the south of the city, they had followed a post-re-

114

unification annual tradition of demonstrating against unemployment in Clara Zetkin Park.
Finally, between 3,500-4,000 people had gathered to demonstrate for worker’s rights on
the market square. There had been another 2,000 onlookers. Pastor Wolf from St.
Thomas’ Church had given a speech, but the man complained that this had been of little
content. “It was the same old thing,” he said. So this had been a success. The group
decided they would have to work more closely with the labor unions next year, to
organize something more dynamic. They also noted that the mayor had been notably
absent from the demo. Was he no longer concerned about the plight of the unemployed?

Flyers were passed around announcing upcoming lectures. Someone also
announced that a new Rosa Luxembourg Foundation scholarship (funded by the PDS),
would be awarded for the most original idea for a zweiter Arbeitsmarkt or Third Sector
project.

The discussion turned to more serious matters. The Leipzig Center for the
Unemployed (LEZ) representative, Who was the acting chair, defined the Network as
equaling the combined experience of its participants, and complained that they needed to
be taken more seriously in local politics. But one question still on the agenda from the
last meeting, he said, was whether they should call themselves a “Network Against
Unemployment” or a “Network for Work.” It was quickly agreed that because they were
the only organization whose purpose it was to represent the voice of the unemployed,
they should define themselves as being “against unemployment.”

A man to the acting chair’s left considered how the collective force of the
unemployed might be harnessed for their lobby efforts. This would not work, another

man thought, because it was too difficult for the unemployed to identify themselves as

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such. Their psychological struggle with their condition was too great, and because of this
they usually did not wish to become politically involved. Unemployment was not like a
club, one could join voluntarily. It was an involuntary condition. The unemployed
needed the Network to represent their interests. For the next forty minutes, Network
members spoke about the economic and psychological problems with which the jobless
patrons, at their various community organizations, were dealing. One woman said she
believed the reason for the loss of solidarity with the unemployed, and the falling
attendance at demonstrations was due to the fact that many residents could no longer
afford the price of the streetcar. She suggested offering paid streetcar tickets to the
unemployed, to increase their attendance at demos.

At the end of the meeting, some suggested changing the format of the Network
gatherings into something more informal, perhaps with food. A few people complained
of becoming depressed, and having headaches, after discussing so many sad stories.
They also complained about the fact that none of the city administrators had shown up to

their meeting.

There’s No Excuse for Laziness

In April 2001, when asked to comment on Germany’s decadelong high jobless
rate, Chancellor Gerhard Schroder told the boulevard newspaper, BiId-Zeitung, that
unemployment was “no excuse for laziness" ("Es gibt keine Recht auf Faulheit.") (Bild-
Zeitung 2001: 2). His comment immediately became a theme of public discussion. At
the Leipzig Center for the Unemployed, where I worked as a volunteer English teacher at

the Job Club, my students complained strongly about this quote. Obviously, the

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Chancellor knew nothing about eastern Germany, and shared no sympathy for their
situation. If there were no jobs, how could one be lazy for not working?

Soon trade unions, the PDS, the Network Against Unemployment had rented
busses to go to Dresden, where they joined unions and community organizations from

across eastern Germany were demonstrating against the “laziness of state and business.”

A New Social Contract

In 2001, after offering one half billion Euro in municipal, federal, and EU
subsidies, the municipal government managed to outbid other worldwide finalists, to
become the location for BMW’s new four-plant production center. On July 18, 2001,
when BMW’s decision, residents hugged strangers, cried, and danced in the streets. The
mayor had announced: “Free beer for everyone!” Between Porsche’s recent decision to
build a small plant for a line of luxury SUVs (produced almost exclusively for American
markets), BMW’s new production center, and the related supply industry that was
expected to develop around it, officials said that up to 30,0000 new jobs would be

created. The municipality’s efforts to be “business fiiendly” had paid off.

117

 

 

Eryt"%‘ . - “' ... I ‘9-
Illustration #13: Leipzig welcomes BMW

 

With the momentum that followed BMW’s decision, it was time to seriously set
about reforming what planners perceived to be a stagnant situation for social welfare. A
draft of the 2002 Harz Plan, a proposal to reform the German social welfare system (and
which became the basis of Schroeder’s Agenda 2010 plan), was already circulating
through the Chamber of Commerce and the Department of Economic Development

during the final months of my fieldwork. I was given a copy of the draft by Chamber of

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Commerce representatives, together with a list of proposed revisions that the Chamber
was sending to the State Ministry in Dresden.

Not far away, “Right to Work” lobbyists at the Leipzig Community Center for the
Unemployed had heard of the draft but not seen it, and were generally suspicious of its
contents. It would be the first major labor policy reform for the FRG since 1969 Labor
Promotion Act, after all. The 1969 Act had made it the state’s responsibility to support
the unemployed and promote stable labor markets. Under the reform, government
programs would place a stronger emphasis upon individual responsibility, and measures
aiming to improve the state’s effectiveness in assisting the unemployed to find work
would be introduced. F ordern undfordern, or “support and demand,“ was the slogan of
the package designed to remedy post-re-unification labor problems, specifically the

problem of high unemployment.

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CHAPTER SEVEN: THE OLD DRILL-MAKER’S SOLUTION

Due to its practical utility for municipal coffers, and its appeal both to supporters
of the “right to work” lobby, and supporters of neoliberal welfare reform, Leipzig’s
hybrid Betrieb fiir Beschaftigungstrderung had received widespread political backing
for a decade. But what of other models for work and social welfare? And what had
become of the citizens groups who had participated in the “round table” discussions, and
their interest in the idea of a Third Way?

Part of the process of black-boxing a chosen protocol or policy involves the
hegemonic decision not to accept certain beliefs, proposals, figures, and standpoints.
There were many Leipzig residents who favored neither the PDS-led “right to work”
lobby, nor the city hall/Chamber of Commerce “pro-business” lobby, after all, and whose
models for the future of work and social welfare were not reflected in mainstream
politics. In the first part of this chapter I depict some of the general solutions residents
suggested, when asked how they would deal with the problem of unemployment.
Turning to the question of what happened to the roundtable networks, in the second
section I consider the role that class may have played in shaping the long-term
effectiveness of their movement. I conclude with a polemical interview with a resident,
who reflects on the macro-economic issues that he sees as an inherent part of the

problem.
“Solving Unemployment”: An Overview

Most Leipzig residents 1 spoke with were passively interested in reforms. When I

asked people how they might like to influence labor politics, many responded by saying

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they were “not political.” Politics had been corrupted in the GDR, and it was corrupted
now. After making this statement, a resident might clarify that she had actually been an
active Party member in the past, but had since become disillusioned with politics.
Another might recall that he had in fact marched in the Monday demonstrations. But
what had this accomplished? Saying that one was “not political” also suggested a second
meaning: that it was the government’s and the business sector’s job to create work. It was
not theirs.

Social workers, policy makers, and unemployed individuals all frequently
shrugged their shoulders when asked what they would do. “You see how it is here,”
people often said. Interestingly, among business owners and managers this pessimism
was sometimes tied to a reflexive description of what it meant to be German. Other
countries were creating jobs, but not Germany. “In Germany we never act, we just talk
ourselves into the ground,” told a business woman at the Chamber for Skilled Trades. A
West German manager at bfb said he believed the country’s “lack of innovation”
stemmed from National Socialism, when universities and businesses had been controlled
by the Nazis, and intellectuals and artists were killed or forced to emigrate. The country
had never recovered. A man and woman at the Business and Innovation Center (BIC)
were pessimistic about the country’s problem with pessimism: “It’s really a problem for
all Germans. When we hosted the World Expo [in Hanover], we made sure to sabotage
the event, by only reporting on it negatively. When Leipzig applies for the Olympic
games, we’re already sure that we won’t get them. The same thing goes for BMW.
‘Why should BMW come here?,’ people ask.” A woman who owned a floral shop and

argued that Germans’ closed-mindedness kept them fiom figuring out how to create

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work, reflected on her recent vacation in Austria: “At the campsite in the Alps, there were
people from all over the world. And there was this one family who brought a metal fence
with them, and put it up around their camp site, to mark it off from other tents. Who else
can you imagine doing that, if not Germans?”

When I asked younger East Germans (in their twenties and early thirties) how
they would solve unemployment, roughly 1/4 did not suggest policy changes but instead
responded to their own situation, and the probable need to move elsewhere. This was not
something they had often concretely planned, but rather an action they believed that they
should eventually take if they wanted to find employment. Several female fiiends
prodded me, half-jokingly, for information on how to get a job in the United States. Was
there a way for non-students to emigrate? One man in his early thirties with strong
regional ties and a keen hatred of the West, said he often thought of leaving in order to
find work, but that he never wanted to step foot in western Germany. He would also
never consider going to the US.32 However, he had thought of moving to Spain. “I don’t
really know what I want to do. But most of all, I’d like to live normally. That means
waking up, going to work, and coming back home again. And a person who works
should be paid, and it should be something enjoyable.”

For those who did chose to physically “exit” the system (Hirshman 1981), i.e. to
emigrate in order to find work, it was not often an easy road. Culture shock was a serious
problem, as was the problem of discrimination against East Germans. A chemist with a
doctoral degree spoke emotionally of having had to quit the job she found in Bayem

because her colleagues had treated her like a lab technician. They had assumed that

 

32 I did not ask him if he wished to go to there, but my own nationality might have
encouraged the response.

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because she was East German, she could not be properly educated. Migrations split up
families. I knew of many couples in which one spouse traveled to a city in western
Germany during the week, and returned each weekend.

For many women, the solution to high unemployment could be found in the
creation of more part-time work. Germany had few part-time jobs, and most of these
were held by women. A single mother with whom I had many conversations, explained
her fi'ustration: “I’d love to have a job where I could work six or seven hours, or four
days a week. But it doesn’t work. Sometimes, I think business owners are really
unflexible. After all, why can’t they stand up for a move toward job sharing!” The
reason there were not more part-time jobs was that businesses paid high taxes that for
social welfare insurances, and they paid the same amount regardless of whether a worker
was employed part-time. In addition to supporting part-time work, people frequently
suggested that the weekly hours for all workers be decreased, so that employment could
be fairly “shared.” This solution was promoted by the labor unions. At the Initiative for
the Unemployed at the St. Nicholas’ Church, two social workers explained that they had
been travelling to Berlin once a month, since 1998, and demonstrating in favor of the fair
sharing of work. Everyone on their staff had accepted 90% employment, in order to
create one additional social work position. They also supported a second approach: “We
are a bit different from other initiatives. We make the same effort to help the
unemployed find jobs, and eventually find footing in the erster Arbeitsrnwh. But as a
church, we also have a spiritual fimction. Often people search us out, for spiritual advise.

We take a great deal of time for this. It’s something no Unemployment Ofiice can offer.”

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Unemployed and employed people — engaged in both blue collar work and office
jobs — complained that one serious problem in East German workplaces was “mobbing,”
or “bossing.” The woman who initially described this problem to me was fascinated that
I had not heard of it, because she was sure it came from America:

Annette: My boss, she’d been an SED Secretary, Party Secretary. You know, the
kind that always lands on their feet. [...] Because they know how to scratch
upwards, and trample downwards. I’d been retrained in data entry, and we were
told that keeping our jobs depended on how quickly we could type. I was too
curious, and asked about my speed. I was fired. Today, we would call it
“bossing.”
Interviewer: Bossing?
Annette: Yes, bossing. You know, like mobbing, except it’s done by the boss
rather than the co-workers. She was abusive, she didn’t even let us take our
morning coffee break. We had to work through it. Isn’t it an English word?
Interviewer: I’m not sure. I don’t know the word.
Annette: The important part is that it sounds English. In school, in GDR times, we
learned that capitalism was really bad. And now, now that the competition is so
extreme for every job, those who have the right ‘character,’ and the right position,
let’s say, realized that their power was so great now, they could get away with
anything they wanted to. I once read the phrase in a book, where they defined it as
‘sadism in daily life’!
People who were perceived to be outsiders were especially susceptible to
“mobbing”/“bossing”. Take the story of one fiiend from Peru, who had lived in eastern
Germany for fifteen years, but still wore the long braid of his indigenous heritage.
During my fieldwork, this man was in danger of losing his second job, due to “mobbing.”
Going through lengths to make fiiends at his new job, as a streetcar controller, he
described an attempt to even take up smoking in order to join his colleagues during

breaks. But a few weeks into the job, one colleague accused him of “stealing” a

newspaper, and others supported the claim (which he fervently denied). A week later, he

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was again accused, this time of stealing DM 60,00 fiom a colleague’s purse. This man
was initially fired, but then transferred after he filed a complaint with a civil rights group.
As residents competed for a limited number of jobs, and employers tried to cut back on
the costs of labor, “mobbing” and “bossing” were perceived as very real social problems.
There are several support groups in Leipzig, for victims of this abusive behavior.

When asked about the problem of joblessness, a few residents (most likely older,
long-term unemployed) argued that there were too many foreigners in the country. Some
clarified that they “did not mean to be racist,” but that there were simply too many illegal
workers in manual labor jobs, especially in construction. Less than 4% of Leipzig’s
population were listed as “foreigners” in 1989, and housing for foreign visitors and guest
workers was usually segregated. During the three years I lived in eastern Germany, I
retained the impression that many people were intimidated by the idea of all foreigners,
fi'om outside of the former Soviet Bloc, due to their extreme isolation during the GDR.
Native residents described the experience of seeing a person with darker skin for the first
time, after the Wende. And residents with dark skin described more incidents of racism
than the foreigners I knew who had light skin, regardless of national origin. The good
intentions of the many residents who preferred the idea of living in more multicultural
city were easily be toppled by the bad intentions of a few. I remember scenes such as
when Neo-nazi youth boarded my streetcar with German flags tied around their waists,
carrying firecrackers, and looking for targets. And on Prager Street, two blocks from my
second apartment, Neo-Nazis organized a national march in the spring of 2001. They
tried to make it to the Napoleon memorial, the Volkerschlachtdenkmal, where Hitler had

once addressed an audience. But a larger group of “anti-fascist” youth blocked their path.

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Eventually the police set ofi’ smoke bombs. Two cars were the targets of molotof
cocktails, and several bank and restaurant windows were destroyed.

Nostalgia (or Ostalgie) (Berdahl 1999a, 1999b) also cannot be ignored as a
response to the inquiry of joblessness and social inequality. One older woman told me
she wished there were some way to turn back the clock, and keep the chasm between rich
and poor from growing. Laughing ironically, she reflected: “But it has to be this way,
doesn’t it? One reads and hears all the time that someone has jumped. Young people
too. Because they can’t adjust to the situation. A lot of people jump from the
Volkerschlachtdenkmal.” Older people engaged in unemployment politics, who were
also nostalgic of the GDR often framed their opposition to unemployment as if it were a
very concrete struggle against an imposed discourse. It was their duty to get the facts
right, and set the record straight. They collected newspaper articles, they went to the
mayor’s office hour in to complain about faked unemployment statistics, and they spent a

lot of time writing newspaper editorials and letters to politicians.

126

 

 

Illustration #14: A woman shares her collection of newspaper articles
and reports on unemployment.

 

 

 

Having limited options, other unemployed - especially young people fiom
working-class backgrounds - responded to work’s absence by defining themselves
entirely against the “system.” In their youth, at least, they could renounce interest in the
mainstream life of normal jobs, waking up early, and excessive consumerism. In sharp
contrast to the fashionable university students, they dressed down and worried little about
style. They lived in inexpensive co-ops, in Altbau (uh-renovated) buildings, with coal
heating. Some followed the bohemian travelling music scene and embraced
multiculturalism at klezma concerts or the popular disco club, Basarno, owned by a
Mozambique drummer. Most subsisted from the welfare minimum of DM 1200 (roughly
$600), plus housing and child subsidies. Some did not receive this, however, either

because they refused to take a job at the work-creation firm, they were an illegal

127

foreigner,33 or they chose not to. For example, I knew one a single mother who worked
informally, at odd jobs. She borrowed money from friends when she needed it, but
adamantly refused welfare. She had lived in abandoned apartments in the past, and
idealized this “alternative” lifestyle. She bragged that children did not need many toys,
when they could enjoy playing with twigs and grass! But she also sometimes spoke of
wishing she could find a part-time job. The material circumstances of her condition had
not been an “alternative.” But her conscious interpretation of these circumstances had

been.

Citizens’ Groups, Class Interests, and Round Tables

In this section, I will focus on the segment of Leipzig’s population which defined
itself as interested in alternative political and economic models as a primary political
goal. Here we find the old networks of New Forum, Democracy Now!, and the other
citizen’s groups formed during the late 19805. These old networks had limited access to
city hall at the time of my fieldwork, and had had little impact upon mainstream politics
during the last decade. Individuals were usually at least in their late-30$ (having reached
adulthood during the GDR), and they were likely to describe experiences of social
alienation in their biographies, both during and after the GDR and to lament the failure

of the Round Table discussions, in 1989-90.

 

’3 I am unsure whether any estimate exists on how many young illegal foreigners there
were in Leipzig, but I contact with several networks, from different nationalities. If my
informal social interactions led to meet many young international people in Leipzig’s
underground economy, there must have been many more networks. It seemed to me that
the rate of foreigners was closer to 8-10%, rather than the official 4%. However, unless a
research group wished to provide economic or health services to this population,
collecting more demographic information would probably only place them at risk.

128

In Where Was the Working Class? (1999), Linda Fuller makes the argument that
the citizens’ movement of the GDR was almost entirely a “middle-class” movement. In
the GDR, class was “firndamentally bipolar in nature,” she argued, with a social fissure
“between the intelligentsia and the working class” (1999: 10). Furthermore, Fuller states
that the round tables ultimately failed because they had not gained the interest or support
of the working-class. The movement was “long on ideology, theory, philosophical calls
for abstract rights and freedoms, and dense academic language and short on concrete
programs and practical ideas for implementing them, expressed in a straight-forward
fashion” (1999: 101). This is an intriguing statement, and there was also validity in the
argument that “middle-class values” were prevalent among the church groups and
citizens’ groups. However, I believe Fuller gives a simplified definition of class in the
GDR and also a purified portrayal of the characteristics of the “working-class” and
“intelligentsia.” She stereotypes the “intelligentsia” as being a rudely elitist and
impractical group, and the “working-class” as a group that was unable to understand
abstract thinking.

It is inaccurate to speak of a “middle-class elite” in the GDR, as a way of
categorizing everyone who were not manual laborers, or service sector and ofiice stafi’.
Such a grouping denies recognition of the ideological rift that existed between the
“intelligentsia” that led the grassroots citizens’ movement, and the Party and
technical/managerial elite that ran the government and the economy. Individuals in both
groups were more likely to have had a higher education and to work at a professional or
supervisory post, but otherwise they were adamantly opposed. The SED and

technical/managerial elite (who often headed the unions) were the oficial representatives

129

of the “workers.” The technical and managerial elite, for example, shared an appreciation
of blue-collar values that usually contrasted with the middle-class values of the
“intelligentsia” who led the church movement and founded the citizens’ groups. Having
often not had access to a formal university education, many citizens’ groups members I
knew could be described as self-taught intellectuals, although often with middle-class
and/or religious backgrounds. Having been blocked from university posts and placed in
technical and factory jobs, some (like the drill-maker in the last section of this chapter)
now also identified more with blue-collar than middle-class tastes. Most importantly, one
should point out that the political and managerial leaders of the SED had authority and
privileges that were not usually shared with members of the GDR intelligentsia. In
contrast, the intelligentsia was most likely to have been denied vacation permits, access
to higher education, to have been subject to surveillance, and sometimes arrest and
interrogation.

What truth is there in the argument that the grassroots movement of the late 19803
was “too intellectual,” and that that the reason the Third Way discussed during the round
tables was not successful, was that it had failed to represent the “bread-and-butter”
interests of workers? It was my observation that a sense of class conflict continued to
exist between the former citizen group organizers and the workers, during the period of
my fieldwork. Moreover, the former SED and technical/managerial elite tended to side
with workers, in placing a value-judgement on the citizen group organizers, as having
ideas which were too “middle-class,” or “intellectual.” However, I also believe that this
judgement best reflected the lasting emotional strain people felt, when remembering

overbearing state controls imposed upon them, or alternatively remembering the life (or

130

jobs) they had enjoyed before the GDR’s demise. In other words, I think it is accurate to
point out that the workers and intelligentsia were not communicating well, but it would
be extremely inaccurate to say that workers essentially lack an interest in “abstract” and
“ideological” goals such as human rights, ecology, and sustainability. These stereotypes
were facilitated in a discussion atmosphere of residual tension, rather than one of trust.

In an article entitled, “Contesting Landscapes: Reconstructing Environment and
Memory in Postsocialist Saxony-Anhalt,” Hermine G. De Soto (2000) documented a
comparable situation 25 miles northwest of Leipzig, in the environmentally devastated
chemical industry region of Dessau-Bitterfield-Wittenberg. After the Wende, two
networks formed. The first, which was called “the Circle,” represented a mixture of East
German administrators and city officials, and West German industry leaders and
politicians interested in building an environmental renewal project. The second group,
the Reformed Bauhaus School, organized by East German planners and academics
drawing from a progressive intellectual tradition that had been exiled by the Nazis and
denounced by the Communist Party, had ideas for a kind of different renewal program.
The Reformed Bauhaus group wanted to utilize the ruins of chemical and mining industry
(rather than fill them with water, as the Circle planned), and to turn Saxony-Anhalt’s
postindustrial landscape into an “Industrial Garden Empire” (Industrielles Gartenreich),

into a project de Soto describes as being34 “

a challenge to both capitalist and socialist
rationalities, industrialization, and modernization.” In the image of sustainable society
that the Reformed Bauhaus project wished to create “consumption needs should be

balanced according to the limited availability of natural resources, and technology should

 

34 See also Stiftung Bauhaus Dessau/ Europaisches Netzwerk 1996.

131

 

be used for promotion and improvement of small-scale economics. Further, such a
society should be legitimized with new institutions that favor the development of
personal fulfillment and self-expression in which citizens direct the course of society”
(2000: 105).35 De Soto argued that neither of the competing projects included a focus on
unemployment, and both had excluded the community entirely from their dialogue.
These were important points.

In a final exploration into class tensions in the context of a postsocialist
discussion of sustainability and alternative economy, I return to my fieldwork in Leipzig.
A number of small, scattered alternative economy projects scattered throughout the city -
the Connewitz neighborhood “time—share store,” the Agenda 21 bartering ring, a
community gardening project for asylum seekers, a green building project — were
depicted in by the media interesting, but not “serious” from an “economic” standpoint.
They did not firlfill the primary agenda of strengthening the erster Arbeitsmarkt. The co-
founder of the local grassroots project, Agenda 21 (who cited her attendance at the 1992
Conference for Ecology and Development in Rio de Janeiro as an inspiration for building
the initiative), described the difficulty she and her colleague had encountered when they
decided to establish a bartering ring in Leipzig:

Rolf gave a talk at the Leipzig Center for the Unemployed, saying, ‘we have a
bartering ring, and you can all take part.’ And they would say, ‘Yeah, but we
wouldn’t receive any money!’ ‘Certainly, you don’t receive money, but you do
spare money. And whoever has the time and the incentive, has something to take
advantage of. But no, you don’t receive regular currency.’ You wouldn’t believe

it. For this group, our idea seemed completely absurd. They thought we were
there to present them with jobs. And that’s not what it was about.

 

3’ Today the Industrial Garden Empire is a major tourist attraction, and a project that is
widely supported and frequently visited by residents.

132

 

The woman went on to explain that the bartering ring became successful after they ceased
to market it to the unemployed, but presented it instead as an enrichment activity for the
general public. She felt disappointed that their idea had not gone over well at LEZ, and
went on to describe how other Agenda 21 initiatives and community forums had also
been boycotted by the business community, the city government, and the- trade unions.
Agenda 21’s unorthodox approach of dealing with economic problems had been funded
by an EU sustainable economies campaign, but it was still not seen as a serious avenue
toward wage labor. When the municipal government formed the Work Circle for
Municipal Employment Policy, Agenda 21 (an organization that claimed to have 250
active members, including a workgroup that dealt with work and unemployment issues)
was not invited to join.

In all of these examples, conflict did appear to have its base in experiences of
class, as defined through their experiences of labor. Central in this, the almost taboo
subject of “deindustrialization” was at the heart of the miscommunication and distrust
between the intelligentsia, on the one side, and workers on the other. For this group of
professionals, including many environmentalists, the idea of industrial work was
unfarnilar, and was often liked to images of pollution. The inability to begin an inclusive
dialogue on the subject of deindustrialization, and its social and economic effects, kept
intellectuals from properly communicating with workers on the important issue of
unemployment. In the meanwhile, the municipal government’s promise to bring back
large industry (to re-industrialize!) encouraged unemployed workers to trust the city
government. Considering that large export industries were the very motor that

accelerated global competition, high unemployment, and increasing economic inequality,

133

it seemed a shame if works would quickly begin to embrace BMW. It also seemed a
shame that more time and resources had not been invested into figuring out how to
building the alternative economy projects that could create more work for the city.
Creating such a discourse necessitated the presence of mediators, people who
understood industrial labor and did not talk down to workers, but who also understood
the Third Way model that was being promoted by the citizens’ groups. Such people were
rare, but did in fact exist. The reader may remember Herr Schmidt, the drill-maker who
shared his story of Ostar-Hydraulik’s dismantlement in Chapter Two. This is Herr

Schmidt’s solution to unemployment, and other social ailments of modernity:

The Old Drill-Maker’s Solution"
Herr Schmidt: In the entire East Bloc the logic for production was difi’erent than it was in
capitalist countries. In capitalist countries, and this means us now too, one focuses on the
profits one gains, from production and investments [. . . ]. In East Bloc countries, it was at
the very basis of our economy that everyone would be employed. That wasn’t
economical, it was heavily subsidized, but the idea of private property, for private use,
was also very much in the background. And this is really the key point of the inversion.
Today, in this Germany, private property for private use is now seen as a social right.
Sometimes I fear things will never improve, and that the needs of increasingly
less people will be fulfilled [...]. After the Wende, many East Germans were trained in
the construction business, although it was well-known that the market for new buildings

was limited. Many were retrained for positions in the service sector, although we also

 

3" This interview has been translated by the author.

134

knew that only a few people with such qualifications were needed, because large parts of
the work process had been rationalized, with the economic transition. We also didn’t
know for what jobs people should be retrained. What kinds of jobs did we really need
now? How many bakers did we need per city, according to the population density? How
many bakers were there already? Could we guarantee jobs for the 200 bakers we were
retraining? People were sent into retraining programs for the sole purpose of reducing
the unemployment statistic.

During the 1950s and 1960s, West Germany’s economy was hit hard by a series
of layoffs in deep coal-mining. Collieries were shut down, and some 4-5,000 employees
had to find jobs in other sectors, in the local agriculture industry, or in manufacturing. A
few years later, when the steel industry was in a similar crisis, they merged some of those
steel corporations and shut down one steel plant. The employees who had worked for
this one plant were paid high severance pays by the remaining factories, and there were
no social uproars, because people could still make a living. But during the transition fiom
East to West it wasn’t one single company that was hit, but the entire industrial sector,
the entire agricultural sector, and the entire social welfare system in East Germany.
There weren’t only 4,500 employees laid ofl’, but in Ostar-Hydraulik alone, for example,

tens of thousands lost their jobs.

Interviewer: What can the local government do to fix the problem?

Herr Schmidt: Local governments can only appropriate money that’s covered by their tax
intake, to use for welfare assistance and firnding for schools, for example. But if the city
doesn’t have any industry and doesn’t receive enough tax money, it becomes a vicious

circle. Community leaders theorized for a long time that Leipzig should diversify its

135

 

economy after 80% of the industry disappeared. They suggested the city invest more in
media technology, and in banking, but his was wrong... You also have to closely look at
the kind of jobs that are created. Take services, for instance. There’s a perception in the
United States that unemployment is low. But a person sometimes needs not one, but
three jobs, in order to make a living. After delivering the newspaper from 6 am. until 10
am. he or she washes dishes from 11 am. to lunch, and then polishes shoes in the
evening. [...] An American once asked me how Germany was able to deal with the
sudden increase of unemployment during the 19905 without any social unrest. I think the
United States will probably face a similar situation in coming years. When I think of the
large car plants in the Detroit/Great Lakes region, I’m sure they’ll have to deal with the
same problem soon, that you will produce goods with fewer and fewer people. Some
people will be left behind.

If you happen to have a lot of money today, you won’t have a lot of trouble when
you’re old. But if you don’t, people won’t give a shit. You can find the best example
when you look at people’s teeth. You can clearly see who has good teeth and who has
bad teeth. The GDR social welfare system provided universal health care, from a
collective fund. But today, if you can’t pay for dental care you will keep that hole in your
tooth. But does it make sense that only the rich should have these basic needs taken care
of? It’s a false logic, and it’s up to social politics to change this false logic. But it

doesn’t seem like we will accomplish this, with this market system.

Interviewer. During the Wende, people seemed more willing to take the streets, and make
their social demands known. Do you have a sense to what extent this momentum

continues?

136

Herr Schmidt: Initially, people believed there could be a level playing field, and thought
the state was required to level it. That’s why so many were willing to take to the streets.
And it was this visible pressure that eventually led to the possibility of political change.
But only a minority has actually profited. The majority hasn’t. Those who have been
without a job for more than five years have now lost the energy to send out applications.
At this point people totally stall, and no longer keep trying to reach beyond the condition
they’ve been in, for so long. This experience leads to political passivism. People realize
they were betrayed in many ways, and that their dreams and hopes weren’t firlfilled.
Although they could have accomplished their objectives if they had only continued to be
politically active. In 1990, the CDU promised us “blossoming landscapes.” People took
in this political slogan with enthusiasm, but it was only used in order to establish the
political system of the West. The political parties that made these promises only wanted
the votes, and to gain legitimacy. And after the elections were over, and the parties had
gained control and security for four years, they immediately backed down on their
political goals.

Realizing this was the way they’d be treated, people said: “They’re cheating on
us. They’re poking fun at us. Next time, we won’t go to the polls anymore.” And then
there was Oskar Lafontaine, the SPD’s candidate for chancellor [in 1990], and Helmut
Kohl’s opponent. As the Governor of Saarland, which was annexed to France for a time,
after WW II, Lafontaine had first-hand experience with structural unemployment and
deindustrialization, because when Saarland rejoined West Germany [in 1957] there were
economic challenges similar to the ones in 1990. Lafontaine advised East Germans,

“don’t trust the promises. I’ve experienced them myself. It will take much longer -

137

prosperity, jobs, and money in your bank account - and it will cost much more than you
will expect it to.” Nobody wanted to hear this. That’s why his approach of a more
socially responsible politics didn’t become reality. They didn’t want to listen to
Lafontaine, they preferred Kohl’s promises, and hailed to the chancellor.

The result of this you can see today. People have become politically tired. And
as a result of these negative experiences, a dangerous trend has gained momentum, which
one finds in countries all over the world. I’m talking about the kind of nationalist
thinking, of people who feel threatened by “otherness,” and it stems back to Nazi
Germany. There are Nazis in Germany again, today, particularly in Leipzig and Saxony.
The NPD (Nationale Partei Deutschlands) has already set up one of those insane
September 1 rallies, where people from across Germany will gather in Leipzig. You
know, September 1, 1939 was when Germany began Word War II with its invasion of
Poland.

Young men and women, who’ve just graduated from school and can’t find a job
or an apprenticeship, are told that even with college degrees and training they might not
be able to get a job. On the other hand, they see that thousands of foreigners here in East
Germany now, who often have work permits.37 What those young people hear fi'om the
nationalists is: “We have to stop this now. The foreigners are taking our jobs. They are
to be blamed for the high unemployment, and they have to be kicked out of the country.”
How will a young person without a job, and without any knowledge of the historical
context, react to such statements? And then, there are the Polish immigrants on the

construction sites. They don’t get DM 10—1 2 per hour, which is the negotiated hourly

 

37 The oflical rate of foreign residents in Leipzig during the period of my fieldwork was 4
%.

138

wage, but work on the black market for DM 2.50 and no benefits. I’ve heard of accidents
at construction sites, where the employer doesn’t call the ambulance, but takes the injured
employee across the border in his car, and gets rid of him. This happened on a regular

basis. This is why national socialist thinking has gained momentum in the East. [. . .]

Interviewer: Yes, I worry that I may not have focused enough on the situation of young

people, during my fieldwork.

Herr Schmidt: ...perhaps you feel personally threatened by the idea that there is no
firture perspective for the young. Especially the youth are caught by the ideology of pure

7

consumption. They’re told, “you have to be so and so.’ That’s why younger people in
the East tend to more obedient, and you can also more easily manipulate them [. . .].
I think that Saxony’s Department for Labor and Economy is mistaken when it provides
extra fimding for young people, to go West for their training. This logic is based upon a
belief in profit and privatization. Many other countries are facing similar problems, and
they’re also discussing “how do we deal with all these unemployed people, who are all in
the same region?”

In the City of Mondragon, in Spain, something similar to this happened 40 years

ago. And a local Catholic priest with a sense for social responsibility decided to

reorganize all of the area businesses into a type of collective, community economy.38

 

38 In the 19505 in Mondragon, Spain, a priest named Don José Maria Arrnendiarrieta
organized local Steelworkers to form a technical school (Shuman 2000: 84). With money
raised from friends, he and five students bought used equipment from a bankrupt
company, and opened their own factory to manufacture paraffin stoves. Today,
Mondragon has a network of 160 affiliated cooperatives, 90 of which are industrial
producers. This includes Spain’s biggest refiigerator and machine-tool manufacturers,
and its only producer of computer chips (Morris 1992: 2). In The Myth of Mondragon

139

This has developed into a worker-owned corporation that operates worldwide, where
employees receive a guaranteed minimum wage, and the business owner is not allowed to
make so much more than the lowest paid employee. In a fair way, they’ve dealt with the
question, “How much money do we really need to make a living, and what would be too
much?” Subsequently, they have both a minimum and a maxim wage. Since the early
years of industrialization, this idea of cooperative economy has existed, but has never
succeeded worldwide. 1, for one, believe that this idea ofi’ers a great opportunity to make
our lives and our economies, more sustainable. If we adopt concepts like the one in
Spain, people could bring their money to community credit unions and banks, and receive
loans for small local enterprises. This is sustainable economy, and it really exists. I
brought a book with me I wanted to share with you. I just recently finished reading it

[points to Jeremy Rifldn’s The End Of Work]. It’s been published in the United States.

Interview Ahja. ..
Herr Schmidt: You’ve heard of it?

Interviewer: Yes, and I think it’s had a larger influence in Germany than in the US,
perhaps.

Herr Schmidt: I don’t know for certain, but I doubt it was influential in the early 1990s
It describes the state of industrialization, the technological improvement of production
methods, and structural unemployment. But it doesn’t show any alternatives. How are
we going to work in the firture? It indicates that there may be possibilities to set up
sustainable economics at the local level. That’s all there is. The book described the

duties the state still has, and shows what private sector companies have done, on the other

 

(1996), anthropologist Sharryn Kasmir writes a critrical portrayal of the work
cooperative, arguing that class conflict still exists on the factory shop floors.

140

hand, and why they’re so profitable. And then there’s the growing number of people who
don’t belong to any sector, making up the anonymous “third sector.” Rifldn raises the
big question of what the third sector is all about. One concrete example he gives matches
the description of Mondragon. And there’s another model called “social economy,”

which Kari Birkholzer from Technische Universitat Berlin talks about.

Interviewer: What’s your larger impression of the “third sector”?

Herr Schmidt: There needs to be a balance between state duties, the profit-oriented
sector, and the nonprofit sector, which is growing rapidly because people’s labor is no
longer needed. Actually, it’s not correct to say that it’s no longer needed, but more to say
that people are needed for duties that cannot be accomplished by the erster Arbeitsmarkt.
What’s going to happen to all those people, who are without a job, or who won’t be
needed by the market in the near firture? What will happen to those left behind? There’s
high unemployment, and on the other hand there are areas the private companies won’t
get involved with, because there aren’t any profits. And those sectors can’t be financed
by the state either, because there’s no money left. These nonprofit sectors are very
important for the health of a society, for example, for education and elderly care.

But they also require a socially responsive attitude, which is definitely not the basis of
our current, capitalist economy.

There are other models, too. The IG-Metall lobbied to reduce the average work-
time, so that profits can be spread more equally, for example. The idea is to organize
work in such a way that you spend less time individually, but still manage to get the job
done. You can still employ 4 or 5 designers, if you cut their work hours from 8 or 10

hours down to 2 or 3. The profit is the same. But the company must be willing to share

141

 

its profit with the employees. That’s not the case today. Only those employees that have

stocks can get their small share back.

Interviewer: The “third sector” means something entirely different in the United States,

you know. There, it’s mainly firnded not by government grants, but by private donations.

Herr Schmidt. Yes, but there’s no legal way to force companies to share their surplus
profits. It’s totally up to them if they want to, or not. I for one think that companies
should be legally required to share their profits with others as soon as they reach a
negotiated maximum. Unfortunately, such rules don’t exist. I’m sure the market
economy as we know it, with its political lobby groups and powers, will never allow this
to happen, because it would limit the access to political power for those few wealthy and

politically influential players. And the last thing those people want, is to lose power.

Interviewer: I think it’s interesting that you spend so much time gathering information

about alternative work-creation models.

Herr Schmidt: It’s a little bit strange, I know. I was hired by Ostar-Hydraulik, as a
negotiator, and I was also laid off by the same firm, which by then was an ABS
enterprise. Everything began in 1990, and the political pressure to lay people off in order
to save the few supposedly “healthy” businesses that still existed. That was the excuse.
The layofi's began in 1990, cutting down from 16,000 employees to 8,000. In 1992, after
the second round of layoffs, there were only 4,000 workers left. The same thing
happened in 1993. In 1994 I was laid of too, because the company was shut down and

there was no need for a work council (Betriebsrat) any more. Shortly before the end, we

142

formed an ABS enterprise [work-creation firm]. The trade unions had experienced similar
tactics in the West, and immediately notified the East German workers’ councils: “Don’t
accept these offers, such as laying-off people with a mere DM 5,000 severance pay.
Force the federal government, or the T reuhandanstalt, to show more social
responsibility.”

This included rallies, pressuring T reuhand with massive lobby work, and asking
them to provide more funding for the ABS enterprises. We united the work-creation of
different branches into one group, sharing the same negotiated wage contract. This new
association negotiated contracts with the employer associations and unions, and this
standard wage contract was ”the basis for our pay, at the Arbeitsamt. Thus we
accomplished it that our people weren’t paid less than they deserved.

The ABS firms were heavily criticized because our society favors the idea of
profit making, and every private company, from craftsman to corporation executive, only
thinks in terms of competition. [. . .] Private companies came forward to attack this form
of publicly-firnded occupation, saying: “They’re taking away our jobs.” The same
dilemma exists today. I don’t believe that this kind of market—economy thinking makes
sense. I believe we need to move away from the idea that all that counts are profits, and
that our perception of social responsibility equals the right for an individual to make a
profit. I think humankind can only thrive in the absence of this type of profit-oriented,

market economy. [. . .]

Interw’ewer: What would you like to see changed in local politics?
Herr Schmidt: I think changes will have to start in the society overall, and then locally.

Maybe the local communities could start making a difference if they would put more

' 143

money into education and apprenticeships. There should be more of a sense of
responsibility for kids and young people, in the local communities. We should hire more
teachers, rather than firing them. And we should stop closing pre-schools, because
mothers will otherwise have to quit their jobs. Those are all vicious circles, because they
depend on limited financial resources.

After the Wende, people were initially enthusiastic about the possibility of
change. But now they have become desperate. Many have this attitude that since they
can’t change their reality, they might as well wait and see what happens. This “in god we
trust” attitude has put pe0ple in a mood where they more easily give up if things don’t
work out the way they want them to. One lesson I’ve learned while reflecting on the last
10 years is that politicians should take their power and responsibilities more seriously,
and that we should start to work out a new social contract, which isn’t solely based on the
idea of making profits. It shouldn’t be a voluntary decision for the corporate giants to
donate some of their huge profits to nonprofit organizations, but we should create laws
that say: “Whereas every company needs to make some profit, to be reinvested back into
the company, we also need to recognize everything that’s beyond this immediate need for
economic stability should be funneled back into the state’s budget, so that the state can
firlfill its social duties.”

Unfortunately, statements like these have the bad aftertaste of socialism, and
Germans are now rather unwilling to be reminded of this part of our history. It is,
however, still the only viable alternative to the idea of a profit-oriented, market driven

economy, under which so many people are suffering.

144

Interviewer: How would a system like the one you propose be influenced by global

markets? Would it need to be shielded from them?

Herr Schmidt: Clinton wanted to introduce the social security system with universal

health care, but he failed.

Interviewer: Do you think one has to chose between a system that supports

individualism and “free markets” and one that supports the common good?

Herr Schmidt: This is a dangerous assumption, to link the idea of freedom with
individualism. Freedom without a sense of responsibility doesn’t work, because it will
always oppress someone else’s freedom. Freedom without limits is not really fi'eedom at
all. Because real freedom means that I can only exercise my own when I allow others to
also enjoy their individual freedom. If this other person acts ruthlessly and ignores my
individual freedom for his own benefit, I’m the one who suffers. The American dream of

unlimited freedom doesn’t work.

Interviewer. Let me take an economic example, though. My two brothers, in America,
they have no formal training, no high school diplomas, but they have found out about a
deli that’s for sale, and they might try to buy it. In Germany, they wouldn’t be certified
to open such a shop, and it would be more difficult for them to get credit. Could this be

seen as a positive aspect of the “Free Market?”

Herr Schmidt: But isn’t this a false scenario? Let’s assume the shop is a financial
success. The money you make with the deli is enough to make a decent living for you

and your family, and you can even pay for heath insurance. So far everything seems o.k.

 

But what if your customers run out of money? What if your customers, who usually eat
at the deli and buy their newspapers there, become unemployed one day? In this case,
many will stop coming to your deli, and they will stop eating out. Subsequently, your
brothers won’t be able to make a living anymore, and they won’t be able to pay the health
insurance bills. This is wrong in my view, because this is the kind of situation where
there should always be a social security system financed by the state, so there will be
someone who can take care of you. If there isn’t a minimum level of social security in
place the situation becomes like the scenario I witnessed in New York - in Harlem
Harbor, across from the Brooklyn Bridge - where I saw how the garbage men picked up a
dead person’s body and drove away!

I don’t think men can live in isolation, only to pursue personal profit interests. In
my view this is irresponsible. I believe that a “social market economy,” if it wants to
present an alternative model other than the capitalist model, must be highly committed to
social values, and it also must adopt rules to monitor this commitment. Right now,
however, it’s only 10% “social,” and it’s 90% “market.” A society has to be
ideologically prepared for this sort of commitment. I don’t think this commitment exists
in Germany, or anywhere else within the framework of the European Union. I don’t
think that people in this society are mature enough to reduce their own material needs so
that others far away from prosperity can make a living. To the contrary, I believe there’s
a strong political machine in the process of marketing the “free market” ideal, so that you
can achieve whatever you want if you’re only privileged and clever enough. This

ideology acts irresponsibly toward those who are not willing or able to pursue these

146

goals. But those people have the same rights as the men and women with millions in

their bank accounts.

Interviewer. I actually came to Germany because I thought I might find solutions there

that were missing in the United States.

Herr Schmidt. Yes, a social security system is missing in America. It’s sad that Clinton
wasn’t able to implement a social, health care, and retirement system similar to the one in

Germany.

Interviewer. If he had been more successfirl, do you think this would have changed world

politics?

Herr Schmidt. I think so. Yes. But isn’t it interesting that even the systems of capitalism
and social market economy both rely heavily on planning? 1 had to think about this
because you said earlier that the planned economy during socialism and the social market
economy were two different systems. That’ 5 true, but they have also many things in
common. I think that Germany’s social security system has significantly contributed to
the overall success story of market economy in Germany. The economic grth of
Germany’s businesses was surely based on utilizing resources and people’s labor to
create profits, and revenues. But at the same time, businesses have also been required to
give a part of their profits back to the workers and they have also been committed to the
idea of the social contract.

Interviewer: How would you describe your own political activities?

147

Herr Schmidt. In the union our objective was to provide jobs for the pe0ple, and we also
wanted to give an opportunity for political activism. I’ve publicized ideas related to this.
I’ve also attempted to educate workers, that the money they earn doesn’t fall down from
heaven, but is a product of union negotiations. And that you have to struggle for your
rights. We’ve also formed several clubs - for example the Halle 5 e.V, which is located
in the social activities’ venue, Werk II, in Leipzig-Connewitz. The idea was to ofl’er
something like a test workshop for those young men and women who didn’t have an
apprenticeship, so they could go there and find out whether they preferred working with
wood or with metal. The idea of forming youth clubs was sometimes more like a
contingency program, though, and we were aware that we wouldn’t be able to change the
broader picture with them. Such clubs receive ABM grant money for two years, because
they tell the Arbeitsamt they would like to take care of unemployed youth. “We would
like to form a ceramic club, or we offer something else so the kids won’t be on the
streets, causing trouble. We offer the opportunity for them to paint, to weld, or tinker.”
We needed social workers, craft instructors, and someone who knew about the
book-keeping, and an accountant so we could offer four full-time jobs. They were
struggling for existence, trying to justify the legitimacy of their projects, so they would be
eligible for followup grants. Many of those kids are impacted by leftist ideas, without
being politically active themselves. We have one club that works with youth who’ve
committed crimes. It provides training for those kids so they can do socially responsible
things, and rehabilitate. They restore pieces of firrniture, build bird cages, and learn how
to work with machines and do wood-working. Sometimes they manage to be recruited

by real companies, in the competitive labor market.

148

Unfortunately, those projects are all not really oriented towards the future. They
deal with the symptoms, but don’t deal with the root causes of unemployment. Social
clubs, initiatives, and organizations have been inflationary since the Wende. They are
always and everywhere, and everyone ~of those organizations is somehow fiddling
around. I don’t want to diminish their importance. But I don’t think it should be up to
individuals to take care of other people, while they themselves depend on Arbeitsamt

assistance.

149

Chapter Eight: Luther’s Legacy. Unemployment Politics and
the Protestant Ethic

A century ago the rapidly industrializing city of Leipzig was a cultural hub both
for a Protestant middle-class, and for the German labor movement. The two groups were
sharply divided in their opinions on the “social question,” of how to deal with the poverty
and unemployment that had accompanied urbanization and industrial growth.39 Rejecting
the idea of a national social welfare system (c. g. Lepsius 1973), middle-class Protestant
industrialists, bureaucrats and intellectuals supported private charities and the idea of
“civil society” (Burgergesellschafi) instead (Hong 1998: 21). The worker’s movement,
in contrast, was split between wanting to reform capitalism from within through the
Social Democratic Party and a strong “welfare state,” and supporting a firll blown
proletariat revolution — for Marx (1971[1845/46]: 409-10) had argued that the political
bureaucracy of a capitalist nation state would inevitably serve the interests of the
bourgeoisie. This debate ended in 1924, with the Weimar Republic’s adoption of a
secular, government-driven model for soziale F ursorge, or “social service” (i.e. J arausch
1999: 59-60).

In a post-cold war era, rapid deindustrialization and mass unemployment inspired
debates in Leipzig that were remarkably reminiscent of those of a century ago, with
regard to social concerns about the role of the state, the moral bearings of community,
and the logic of the market. To explore the circular continuation of this polemical

discourse, and the impact of forty years of socialism upon it, I turn in this chapter to an

 

3” It was while living in this very region of Saxony during this period that rapid
industrialization inspired Max Weber to describe modernity as an “iron cage” (Weber
1958[l920]).

150

 

evening of fieldwork at a public forum held St. Thomas Church in Leipzig, where
residents have gathered to discuss the problem of mass unemployment. Forums such as
this one took place almost daily during my research, and were sponsored by one of

several dozen different political parties, think-tanks, foundations, and community groups.

Societies with Walls

The date was August 13, 2001, the fortieth anniversary of the Berlin Wall’s
construction. The newly renovated community room of St. Thomas’ Church smelled like
fresh paint, and Pastor Christian Wolf thanked the drywallers for having gotten the job
done on time, despite the “summer holiday.” I took a seat at a large table, and allowed
my eyes to drift to the unobtrusive crucifix mounted on the back wall, the only religious
symbol in the room. Seventeen men and twelve women were present. Most were
congregation members, but others included the familiar faces of the politically engaged
residents who always attended such meetings.

People settled into their seats and Pastor Wolf welcomed the group. Since 1992,
the gray-haired pastor from the West German city of Mannheim had been working to
strengthen a congregation which had suffered under the GDR’s discriminatory religious
policies.40 To gain toleration from the SED, East German Protestants would need to
formally renounce all ties with capitalism, and firndamentally re-define their church.
Protestantism, after all, had been a cultural motor for the rise of modern capitalism,

according to Max Weber (1958 [1920]). Defying this categorization, in 1969 East

 

4° The Evangelical Church’s membership in the GDR slipped from 80% of the population
in 1949, to just 25% in 1989. Protestants represented by far the largest religious group in
this region. To make a comparison, 11% of GDR citizens were Catholic in 1949, but
only 4-5% in 1989 (Pollack 1994: 271-2).

German Protestants had separated themselves from the Evangelical Church of Germany
(EKD) and created their own League of Evangelical Churches in the GDR (BEK),
recognizing the SED state and establishing themselves as the Protestant “Church in
Socialism” (Luchterhandt 1982: 59-60), in the process. Over the next two decades
leading GDR Protestant theologians, including many Party members, worked to define a
“third way” balancing the broader humanitarian goals of socialism with the liberal
philosophical traditions of Martin Luther. After re-unification, the East German church
accused West German congregation members of having pro-establishment values, and
participating uncritically in western consumer society. Two years would pass before East
German Protestants agreed to re-join the EKD.

But such debates now seemed to have occurred in the distant past. This evening,
Pastor Wolf opened the discussion by telling us that the 40th anniversary of the Berlin
Wall’s construction (Tag des Mauerbaus) had brought an appropriate symbolism to the
forum. In 1961, a physical wall had been built, dividing the country. He hoped that post-
re-unification Germany would not also become a society that built walls separating
people - walls, such as the symbolic one created by unemployment. Over the next hour,
people would bring to the table their interpretations of the interrelationship between work
and social justice in the GDR and after socialism, and would discuss how their
expectations of the nation-state and the economy related to utopian and personal moral

beliefs about social inclusion and exclusion.

152

Without Action, Talk does Nothing

Wolf turned to introduce a man sitting to his left, who was our guest moderator
for the evening. Walter Christian Steinbach was Regierungsprasident (Council
President) for Leipzig County, as well as a respected former “dissident,” pastor, and
environmental activist from the GDR era. During the 19805, Steinbach had joined St.
Thomas in protesting against the GDR’s environmental policies, and the dangerous
working conditions at the lignite (brown coal) mines in Espenhain, on Leipzig’s southern
belt. This evening the well-known politician was invited back to lead a discussion he
entitled: “Initiatives for work - concrete action instead of a lot of talk.”

The politician explained that he wished to begin by reflecting on what it meant to
be “an actor.” In a slow, respectful voice, resting his folded arms in float of him (sleeves
rolled), he began: “For me, being a Christian means saying ‘what can I do as a singular
person?”’ “We’re not just victims,” he continued. “We are also participants.” The
audience of weathered social workers, bearded activists, and unemployed industry and
office workers, looked back with some skepticism. Taking in the doubtful expressions,
Steinbach elaborated. “Our firture isn’t something that just happens to us. In the GDR,
they had always let us hold meetings. But before we took action, talk did nothing.”

He followed with a few examples. “You remember ‘One Mark for Espenhain’
still, don’t you?” This was a political action Steinbach had led in the late 19805.
Thousands had signed petitions and contributed one East German Mark each, in protest
of the dangerous Espenhain lignite mines, whose thick soot polluted miners’ lungs, and
left a black residue on the windowpanes of houses in southern Leipzig. In the end,

100,000 Marks had been raised. Members of the Protestant Church led the way in

153

making demands for reform and taking part in political actions during the last decade of
the GDR, culminating — for all the world to see - in the Leipzig Monday demonstrations
and candlelight vigils for peace at St. Nikolai Church (just down the street from St.
Thomas),'“ and ultimately in the collapse of the Berlin Wall. Drawing from the church’s
struggle against Catholicism during the Reformation, GDR Protestants had used Luther’s
philosophy of revolutionary liberalism, to build an alternative discourse that emphasized
the need for individual freedom from the oppression of earthly authorities (Graf 1994,
Jones 2000, Pollack 1994).

After re-unification Steinbach became Regierungspra'sident, and in this capacity
set out to help the 30,000 miners who were out of work, following Espenhain’s closure
(see Hofinann 1995). He acquired EU funding for a regional development project that
used groundwater to fill up the lignite mines, turning them into lakes. “When the first
lake was finished, in 1999,” he told us, “sand was brought in for a beach, and fish for the
water. Trees were planted, and a boardwalk was built - complete with fish restaurants
and surf shops, even a boardwalk amusement park.” Those former miners still in good
health were now able to rent out holiday bungalows, make surfboards, and manage
amusement park rides. Steinbach also mentioned his “Regionalforurn,” which had been
founded as a network for people with ideas for economic development and
entrepreneurship. But pausing to look at people’s expressions, he seemed to realize these
examples were too grandiose, and went on to present a few smaller projects, such as the
man who had established a metallurgy network, or the University of Leipzig professor

who had patented a stairway elevator for the elderly, amusingly named the Volkslift.

 

4‘ For a recent historical study of church activism in Leipzig during the Wende, see
Wayne Bartee’s A Time To Speak Out (2000).

154

“Being an actor means being someone who can move something, and also
someone who wants to,” Steinbach concluded. He then added a final point: “This
evening we aren’t here to complain. We’re really here to turn the status of ‘victim’ into

that of ‘actor.”’

Actors Without Structure

After Steinbach had done his best to inspire the group, it was time to hear their
responses. Just as the Protestant calling of the Lutheran Reformation had emphasized the
moral obligation of the individual to fiilfill his (or her) earthly affairs, Steinbach had
asked people to be “actors,” and successful ones at that. But being an accomplished
“actor” in a collapsed economy was no easy task, especially not when one’s life and work
experiences no longer appeared to be in demand. In addition to this, Steinbach’s call to
action ran counter to the strategies for dealing with unemployment with which people
were familiar. In the past, these had always been initiated by the state.

During the cold war, “the right to work” was written into Article 5 of the GDR’s
constitution, in 1949, and expanded in the Labor Code of 1961, making the “asocial”
behavior of refilsing employment a punishable crime. And in the FRG following Ludwig
Erhard’s postwar economic philosophy of a “social market economy,” markets were seen
to operate best within a wide net of social protections (Erhard 1958). In 1967, the Law
For Promoting Stability and Growth was passed, whose counter-cyclical measures were
aimed at permanently stabilizing “hill-employment.” Hence, overwhelmingly, the
neoliberal political-economic reforms introduced by Thatcher and Reagan during the

19805 had never been seen as an appropriate model for West Germany either. Now, a

decade after re—unification, East Germans had come to terms with the fact that it was now
their individual responsibility to go to the Unemployment Office and apply for work.
However, they argued that it was still the state’s responsibility to make sure that work
existed for which to apply. A social market economy was one thing, but laissez faire
markets were quite another.

After a noticeable pause following Steinbach’s advice, a hesitant question came
from the left corner of the room. “Well, where are you supposed to go if you have an
idea?” a man asked, curious and suspicious about this Regionalforum that was supposed
to help people succeed in the market. He worried that - similar to what had happened
when GDR collective firms opened their files to West German companies after re-
unification - the Regionalforum might just steal his idea if he shared it with them. Then
another man pitched in, more negatively: “You know, in the last year or so 15,000 more
jobs have disappeared, what, with the layoffs at Siemens. BMW says it will bring 10,000
jobs to the region, but what we really need is 60,000. We need 60,000 jobs. To tell you
the truth, I know we can’t accomplish that.”

This complaint sparked others to begin discussing government cutbacks in the
subsidized job program, ABM (Arbeitsbeschaffimgsmafinahmen). For fear that this talk
would lead them astray, Pastor Wolf interrupted, warning everyone that by demanding
that the state offer a large number of jobs, all at once, the man was really asking for the
return of socialism, and an oppressive GDR state: “It would be terrible if we got 60,000
jobs tomorrow. We need to take entirely new steps, to build entirely new structures, and

not to rebuild the old system.” Steinbach affirmed, saying that jobs needed to be created

156

 

 

 

that were competitive, and not “am T ropf’ (“on the drip”) — a metaphor of state
dependence.

A fellow wishing to share his knowledge of a great source of credit snatched the
moment of silence that followed. Anyone trying to go into business should talk with him
after the discussion, he said. Some looked interested, but most rolled their eyes, sure that
this was just another shady business deal. The first time East Germans had experienced
people selling things that no one needed, merely for the sake of making a profit, was after
the Wende. They still had a relatively low tolerance for such behavior. The dishonest

salesperson was - across the board — one of the most socially despised individuals.

Having Your Own Plan

Having had time to digest Wolf and Steinbach’s remarks, an unemployed
computer programmer now took his turn to speak. Until recently, the man held a
contracting job at a small firm, where he said he had been happy, and had even offered to
continue working for free when the contract ended. But the business owner said he was
afraid of becoming dependent on a worker he could not afford to pay. The man paused to
clarify that both he and his employer had been helpless in this situation. Surely, this must
show that the economy could not create jobs without the help of politics? “And
politicians can’t just depend on the ideas of the unemployed,” he said, avoiding eye
contact with Steinbach. “They need to have their own plan, too.”

An older woman nodded to Steinbach, remarking that she liked his idea of victims
becoming actors and that this was the first time she had heard of such a thing, really. It

made sense, however, because politicians were not representative in most democratic

157

lands, and one really could not trust businesses, after all. She guessed that there was no
choice in the end, but “to depend on ourselves.” The woman asked whether Steinbach
could recommend any publications on business financing, or books written to help an
older person gain re-entry into the erster Arbeitsmarkt. She had tried to start a business
after re-unification, but had gone into debt. Then she had found a job, but her employer
went bankrupt. After that she had received an ABM position, in a sports project, but
tomorrow would be her last day. “I hope that I can live through the experience, and that
there’s some positive outcome in all of this,” she said.

Steinbach seemed troubled by the woman’s story, and passed his business card
across the table to her, as he would to others throughout the evening. She should call his
office, he said, and he would help her figure something out. The troubling story opened a
rush of dialogue, and several others related their failed attempts at being “actors,” and the
shared feeling that someone out there, perhaps in government, should be looking out for

them.

The “Community Economy” .

“Herr Steinbach,” said a woman in her forties seated next to me. “I see a lot of
possibilities in the field of social welfare. And I have to tell you, I am an actor in this
field, at the youth center at Dobeln Castle. Finding a way to stay above water is almost
impossible. Just paying the bills takes so much time, there’s none left for practical
work.” The man seated behind her confirmed that care-giving was in a precarious
position. He worked in a home for the handicapped, where residents did their own

laundry and cleaned their own toilets, because there was absolutely no extra financial

158

 

support. He hoped that once BMW arrived, they would begin making donations to
organizations that cared for people with disabilities.

This interest in private philanthropy represented an increasingly popular trend.
Without necessarily linking the idea of a “nonprofit” or “third sector” with neoliberal
politics and privatization, many social workers and local public oflicials in Leipzig were
fascinated with this “Anglo—American” sphere of social welfare. In the United States and
Great Britain, where neoliberal political-economic reforms began in the early 19803, the
importance of “the nonprofit sector” had grown rapidly, and in direct correlation with
governmental welfare cuts and the expansion of low-wage labor. The nonprofit sector
also quickly gained popularity throughout Eastern Europe following 1989, but not
initially in reunified Germany, where the country’s strong state welfare programs made
non-governmental organizations less necessary. However, as the demand for care-giving
services has grown over in the last decade. So has the interest in corporate sponsorship
and nonprofit organizations.

State and private social welfare systems are classically seen to exist in opposition
to one another. During tum-of-the-century debates on the “social question,” in Leipzig,
they had been perceived as oppositional models for the redistribution of wealth. In her
ethnographic research on poverty and welfare reform in the United States and Great
Britain, Susan Hyatt (1997, 2001a, 2001b; Lyon-Callo and Hyatt 2003) interprets
contemporary discourse on “civil society” and “volunteerism” as clearly symptomatic of
the neoliberal transformation of social welfare. Anthropologists working in postsocialist
Europe have also been critical of the link between “civil society” and Western

neoliberalism, but have often observed a possibility for the concept’s rehabilitation,

through its adaptation to regional context (De Soto and Anderson 1993, Hann 1992, Harm
2002, Harm and Dunn 1996, Kligrnan 1990). When troubled by Hungarian intellectuals’
use of the term Burgergesellschafl, or “civil society,” to express a general opposition to
state socialism, for example, Chris Harm encouraged scholars to consider the 18th century
idea of burgerliche Gesellschaft, or “citizen’s society,” instead. In this earlier definition,
an educated and land-owning elite of citizens, or “Burger,” had acted out their moral
obligation in relation to the small farmers and servants beneath them, in a Lockean social
contract that did not stand in direct opposition to the state (Harm 2000: 85-109).

Michael Burawoy most aptly captures civil society’s “Janus-faced” meaning, by
returning to Antonio Gramsci’s interpretation of the term. While civil society’s false
appearance of autonomy represented hegemony, Gramsci recognized that it
simultaneously also created “a terrain for challenging that hegemony” (Burawoy 2001:
149). While German discussions of “civil society” placed an increasing emphasis upon
entrepreneurship and were influenced by neoliberal political-economic beliefs, a counter-
hegemonic discourse continued to reinforce the popular argument that there was a
constitutional guarantee of an “existence minimum” (of shelter, food, health care, free
education, and a basic income) for all legal residents. In contrast to laissez faire
capitalism, Germany’s still legally framed “social market” model was premised upon the
thesis that the stability, prosperity, and grth of the national economy could best be
achieved in an environment of minimal class conflict, and thus, in the absence of absolute
poverty within national borders. The concept of “civil society” was a conceptual terrain

within which this guarantee might either be reinforced, or subverted.

160

 

 

Back at St. Thomas Church, forum participants (with the possible exception of the
two moderators) seemed unaware of any linkage between their current interest in the
“nonprofit sector,” and Protestantism’s historical support for a sphere of religious charity
work, as an alternative to a strong system of national social welfare insurances. As had
been my observation elsewhere during fieldwork, a small minority would support
voluntarism, charity work, and “civil society” specifically because they remembered how
diflicult autonomous action had been during the GDR But those who were strong
advocates of state welfare and of the Party also jumped onto the bandwagon of voluntary
work and charitable giving, recognizing that the “nonprofit sector” offered opportunities
to acquire fimding and political influence. The result, as we see played out here, is an
intense competition for control over the definition of an ambiguous, and “Janus-faced,”
political sphere.

Pastor Wolf now spoke up to say that he found the notion of a “nonprofit sector”
intriguing, and thought it might be worthwhile to consider its applications. He had
recently been introduced to the concept of “community economy”
(Gemeinschaftsokonomie), which had been described to him as a way of building
economic projects that strengthened communities, rather than wearing them down. He
wondered whether this might be a good concept for the church to utilize, and whether
anyone had ideas or experience in this field. As the “Church in Socialism,” Evangelical
Protestants had balanced between philosophies of socialism and philosophical
liberalism.42 The pastor’s interest showed a similar negotiation today, between

capitalism and Christian humanitarianism. Wolf believed the church’s solution to

 

’2 Detlef Pollack argued that it was the East German Protestant Church’s strategy of
simultaneous conformity and resistance that had made it so attractive. (1994: 285).

161

 

 

unemployment should be framed within a moral, “community-based” market, ‘which
nonetheless defined itself in strict opposition to anything resembling “socialism.”
Throughout the evening, he showed his mastery of this carefirl distinction by switching
from a rhetoric of anti-socialism, to one that lauded this notion of “community
economy.”

An awkward silence followed when no one had a suggestion. Some members of
the group were probably experiencing a feeling of role reversal, upon hearing two figures
of authority ask for their opinions on economic development. During the GDR, political
figures had been more authoritarian, and the fiiture much less open-ended (Burawoy and
Lukacs 1992). Steinbach stepped in to assist, offering neighborhood revitalization
projects as a good example for a “community economy.” The City of Colditz had had no
tourism until some residents started a project six months ago. Now they have regular
meetings, and have created a nice pamphlet, he explained. They had built this up
themselves, and that was the main point. A community economy meant developing small
projects, where people could bring their lives into their own hands, in the context of a
market economy, and build new independence. He drew a second example from the
Espenhain lakes project: “Are the surfboards used there made in Saxony? We need to
make sure that everything down there needed for the water, is created here. We need to
start doing that now.”

Pastor Wolf wondered about the community economy’s limitations. Such
projects might be able to create 10, -15,000 jobs over time, he believed, but few of these
would go to people curremly unemployed. One thing that was clear, however, Steinbach

reiterated, was that one could not gain the attention of politicians simply by lobbying

162

 

 

 

against unemployment. He had been down that road. Local efl‘orts needed to be made to
create new jobs, and simply demanding work from the state was not the right way. Of
course, sometimes community economy projects were not a part of the erster
Arbeitsmarkt, but were rather a part of the “third sector.” They could be used for special
projects, such as programs for people with disabilities. And a possible way to fund such
initiatives was through donations, he said. But in the long run, third sector activities were
certainly not the best way to fight unemployment. Their main goal should always be to
bring more productive employment to the region.

With sincerity, the politician tried to share his knowledge of market principles
with the group. In a market economy, companies like BMW always looked for the best
business opportunities and workers changed jobs fi'equently, he explained. But as
Steinbach evoked the market and voiced his criticism of participants’ belief in their “right
to work,” listeners grew fiustrated. The mood in the room was shifting.

Several people complained that creating permanent jobs was no easy task. How
was the local economy supposed to sustain itself, and grow, when it was at odds with a
global economy that cared nothing for the community? The construction supervisor who
had made this observation went on to describe how outside contractors from western
Germany always underbid local businesses, and then allowed their East German branches
to go bankrupt. They then left the region, taking federal subsidies with them, and not
even paying worker’s wages. They simply took the money and jobs with them, back
West, he said.

Feeling inspired by the construction supervisor’s vivid description, others in the

room began to speak about sending out resumes, going into debt with business start-ups,

163

 

 

 

and about the low social ranking of the unemployed, which they found unacceptable.43
An older skilled tradesman shared his concerns. “Since the Wende, many projects for the
skilled trades have disappeared, and now many trades peOple have migrated West.” He
thought that BMW would need people with experience when the company came to
Leipzig. But the city’s existing projects for the skilled trades - the Central Stadium, the
Tunnel, laying groundwork for the new BMW plants - were all headed by outside
contractors, because the bids were too large for local firms. “Either the project is always
too big, or the person doesn’t want you because you’re unemployed. How are we
supposed to gain the experience we need? There’s no support for smaller projects. There
needs to be a chance to start small, and build up slowly.” In this and other statements,
forum participants rejected Steinbach and Wolf 5 attempts to present the market as a
logical system whose rules must be learned, and not contested. Instead, they pointed out
what seemed to them to be obvious irrationalities and injustices, and repeatedly

emphasized their interest in state regulations.

It’s the State’s Role to Create Protections!

No one during the forum had asked for a return of the centrally planned markets
that had existed during “real socialism” (Kornai 1980, Verdery 1996). Overwhelmingly,
however, they were demanding fairness in market activity. And Herr Steinbach’s request
for more individual initiative, and talk of market practices, was taken as a sign of his

support for neoliberalism’s darker side. The communication in the room grew heated.

 

’3 In her ethnography of an East German border town, Daphne Berdahl described the
egalitarianizing act of “being able to sit together” as being an important part of people’s
nostalgic memory of work and social life in the GDR (1999: 135).

164

 

Someone demanded: “We’ve got to force the city!”

And someone replied: “Exactly! !”

Steinbach: For the last five years we’ve been talking about this. If the city takes the' best
offer, local businesses complain. But it would be inappropriate to force the city
government to work with a local contractor, instead of taking the lowest bid. That would
not follow market rules.

Mtan (interrupted) — You’ve lost your courage!

Steinbach: I’ve spoken with many trades people...

M: So many of our contracts just aren’t paid, you know. As long as the employer is
not based here, on location, they really don’t have to pay us. It’s a vicious circle!

The Woman from Dobeln Castle: and it ends in violence!

Steinbach paused to sigh, and responded that he had led discussions like this one
quite often. Sometimes one firm was simply a better organized than another. Support for
the lowest bidder could not just be ignored in order to give the contract to a local firm.
That would not be following the rules of the market.

The Older Trafiesman: But local skilled trades people will never get enough experience
then, what, with globalization.

Another man: And, you know, supermarkets don’t create jobs.

Steinbach: There is the possibility of building up communities through neighborhood
organization. This is a good opportunity. But you can’t ignore bidding laws. There
really isn’t any power in the world that can stand up against the rules of the market.

A Wm responded: The City of Leipzig has an inner strength, too.

165

One woman worried that a community economy would never work effectively,
because too many untrustworthy people ran the nonprofit organizations. “Sie wissen, ja,”
(“You know, of course”), she said, hinting to the presence of former Party members. A
member of the GDR dissident party, New Forum, a man in his late thirties with a long
brown beard, responded that although no one trusted city officials, on the other hand they
still expected a lot from them. He thought they should continue lobbying against big
business, keep discussions open, and be careful not to end up like America.

Under the mood of this heated exchange, Steinbach gave up his efi‘ort to
encourage ideas for local business projects. In a final attempt to assist, he suggested that
congregation members apply for an ABM work-creation program available to nonprofit
groups. “As a church group we are able to apply for ABM fimds,” he said. “I’d like to
offer this as a possibility, and if you have ideas for a project we can talk about it.” He
seemed troubled by the pattern the forum discussion had taken. Bringing the evening to a
close, the politician thanked everyone for the controversial debate. “As long as one lives,
there’s hope for humankind,” he said, before inviting us to the next forum. “On Thurs,

Aug. 16’”, as our next theme, we’re going to talk about the Future.”

Conclusion

The East German political leader had begun the evening attempting to promote
entrepreneurship as a solution to unemployment, but his audience had reacted negatively
to the suggestion. They had come to this meeting seeking answers, affirmation, and
reassurance, and had interpreted Steinbach’s presence as an opportunity to share their

personal experiences of unemployment with a politician. Instead, they had been told to

166

 

 

look inward, and find solutions on their own. The immediate response to this suggestion
had been frustration, because the state representative had not acknowledged their “right
to wor Still, in the end he had at least offered the possibility of creating a church
ABM program, and there were a number of people in the room who depended on
utilizing such available government resources, in building semi-autonomous community
programs.

Most forum participants had disagreed with the County Council President’s
promotion of entrepreneurship and individual initiative as the only real way to combat
unemployment. Throughout the discussion, they had given examples of their failed
attempts to be successful “actors,” and had repeatedly mentioned the state’s duty to bring
jobs to the region, and assure fairness in the redistribution of national wealth.
Steinbach’s suggestion to set up a zweiter Arbeitsmarkt program illustrated his
willingness, in the end, to be practical, and use whatever resources were available to help
the region. And he had never spoken down to his audience. The discussion had been
about tearing down walls, and not about separating the “deserving” from the
“undeserving” poor. And long before the Protestant Ethic came to be associated with
support for “market liberalization,” it had stood for autonomy against authoritarian rule.
When Martin Luther tacked his 95 theses onto a Wittenberg church door in 1517, he was
making a revolutionary break from the centralized authority of a powerfiil Catholic
church. State welfare policies, whether neoliberal, Keynesian, or Marxist, were based
upon a dual rationality of security and control. It was a rare moment that pe0ple would
speak with a politician who said he wanted to collect their ideas, and attempt to

implement them.

167

 

 

The idea of “community economy” had emerged from the discussion as one
interpretation of the nonprofit sphere. The concept’s novelty and ambiguity had been.
appealing. For the idealists in the group, and the steadfast supporters of the notion of a
“third way,” it opened the possibility for a path toward sustainability and locally
regulated markets. But in a second interpretation, the concept was in danger of
supporting an ideology of local autonomy, which undermined the influence of national
and global markets and gave the impression that state welfare protections may be
unnecessary. The “community economy” became a marketing tool for neoliberal
economic reform (see Lyon-Callo and Hyatt 2003). But for the time being — that is, as
long as unemployed Germans and legal immigrants continued to receive income
subsidies for their basic economic needs - “community economy” projects appeared to
offer the potential to accomplish more good, than harm. More than anything, after all,
unemployed East Germans struggled with a sense of lost social purpose. Young and old,
the unemployed had too much time on their hands, and no longer a clear sense of

orientation.

168

IX. CONCLUSION: AFTER THE RIGHT TO WORK

In this ethnography I have focused on individual and collective struggles to
redefine the meaning and political-economy of work in one eastern German city, a
decade after socialism. I have begun with the premise that in its ideal form, work is a
generative and naturally fulfilling activity, and an act through which people define
themselves as human beings (Marx 1978[1847]).

The dehumanizing social effects of high unemployment and urban poverty in 19lh
century Europe was recognized by statesmen, capitalists, and workers alike. This
problem was called “the social question,” and three possible solutions were argued: 1) A
charity sector could be created, as part of “civil society,” and private groups and churches
could use this sector to care for the needs of the poor. This solution allowed a growing
Protestant middle-class to retain control over their capital, and redistribute to charity in
the amount and manner in which they so chose. 2) To satiate an increasingly
uncontrollable worker’s movement, Otto von Bismarck offered a compromise to the
Social Democratic Party, a package of national welfare securities that would represent the
earliest form of a welfare state (a model to be copied by other countries over the next two
decades). This model would make it the state’s responsibility to regulate labor, and care
for the needs of the unemployed. 3) Some members of the German worker’s movement
did not trust Bismarck. Marx had argued that any policy of the state would ultimately
represent the interests of the bourgeoisie. They called for a communist revolution.

I have argued that the end of socialism, the re-unification of Germany, and the
resulting problem of mass unemployment in the East led to a collapse of legitimacy for

both East and West German models for dealing with unemployment. Neither the socialist

169

constitutional guarantee of “fiill-employment” for all men and women, nor the social
market economy promise of a male-breadwinner model and a broad safety net seemed to
fimction anymore. And similar to the commodification of labor within laissez faire
markets, mass unemployment was also a source of alienation. A new black box for work
and social welfare was needed! In this ethnography, I have documented the open-ended
debates and individual and collective struggles, which were a part of this search.

In Chapter Two, I related the stories of four union men who witnessed and took
part in the traumatizing experience of deindustrialization. They described a liquidation of
property and capital flight from the East. The four men had different interpretations
about who had been responsible (the Wessies, the old Party elite, or both?), but agreed
that the liquidation of East German industry and collective property had not been
something over which they had had any control, nor something from which the region
had benefited. The result had been mass and long-term unemployment.

When I first arrived in Leipzig for fieldwork, in 1998, people talked about the
West German guru Matthias von Hermanni, and his Rubber Boots Brigade, as if this
model could offer a solution for eastern Germany, and even for the rest of Europe. At the
work-creation firm, sociologists were reading the work of two social theorists, Jeremy
Riflcin (1995) and Ulrich Beck (1999). Both theorists argued that technological change in
advanced capitalism would lead to an ever-decreasing number of jobs, but their models
for the future of work differed. Rifldn explored cooperative labor as a possible solution.
Beck, on the other hand, was suspiciously optimistic about work’s reinvention in a

“globalizing” world. He envisioned (and fervently promoted) the idea of a new Third

170

 

 

Sector, where no longer needed by an ever shrinking and more competitive labor force
could go, in order to make useful contributions to “civil society.”

Matthias von Hermanni, the innovative West German who had managed to create
work for “everyone, just everyone,” in Leipzig, had borrowed from Beck’s ideas, rather
than Rifkin’s. Work in the zweiter Arbeitsmarkt should be useful, but not productive, he
argued. Productive work belonged in the competitive labor market, in context. The
zweiter Arbeitsmarkt quickly became a common idea, used by both young and old, and a
phrase that was often cited in newspapers. But by the end of the decade, the Rubber
Boots Brigade seemed no longer a useful solution for local business and government, and
von Herrnanni’s program folded.

I have also discussed the bureaucracy of social welfare in Leipzig. The Welfare
Office, Occupational Training Centers, and the Unemployment Oflice: these are the
places in which the unemployed now spent their time. In a country where everyone was
guaranteed an existence minimum by the state, the absence of work did not mean the
absence of subsistence needs. But not needing to work for material needs could not be
equated with freedom. For work was an essential social activity. For the jobless, the
dehumanizing bureaucracies of the welfare state system were a further burden.

In Chapter Six, Being “For Work” or “Against Unemployment,” I described the
political networks that had built up over the last decade in Leipzig. The “right to work”
lobby insisted that it was the state and the economy’s duty to provide people with work.
This group represented the old socialist elite, the labor movement, and many unemployed
industrial workers. This “right to work lobby” was competing with the “pro-business”

lobby, a group that was made-up of municipal government and local businesses who

171

lobby, a group that was made—up of municipal government and local businesses who
wanted sweeping welfare reforms and a more “business-fiiendly” local government.

In my chapter on the old drill-maker’s legacy, I turned to the faded political
networks of the citizens groups, who had led the peaceful revolution. These groups had
taken part .in the “round table” discussions of the interim government, where they had
discussed the possibility of a Third Way. I argued that the revival of the old networks of
citizen’s groups - who represented more inclusive and sustainable ideas for the firture of
work — would be dependent upon their ability to communicate more successfirlly with
workers. The subject of deindustrialization has remained too often a taboo theme.

If the working class is not incorporated into these discussions, and if their
concerns about unemployment are not addressed, residents will not be in a position to
define their own idea of a “Third Way.” Instead, it will most likely be defined for them.
For in November 2003, soon after the BMW production line in Leipzig opened, the
municipal government had already announced plans to negotiate of an “Auto Region
Greencard,” that would bring lower-paid Czech and Polish workers to Leipzig. The
tradition of a 35-hour workweek for German auto-industry workers has also been
reversed. Such policy proposals suggest that Leipzig’s re—industrialization will not solve
the problem of joblessness. For Porsche and BMW wished to have their cake, and eat it

I00.

172

Appendix 1

Formal Interviews: Breakdown of Participants

 

lllllnterviewsl

I SSMen |--—| SfiWomen l

 

 

 

 

 

 

 

4049 yrs. .0 59 yrs 60 69 ml I70 79 yrs.
(25) .39) (15) (3)

20 29 yrs. 30 39 yrs.
(1)8 (20) (19)

 

 

173

 

 

 

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