Economic System of Socialism

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The Economic System of Socialism (ESS) was an economic policy implemented in East Germany between 1968 and 1970, which was introduced and led by the country's leader, Walter Ulbricht. It focused on high technology sectors in an attempt to make self-sufficient growth possible. Overall, centralized planning was reintroduced in the so-called structure-determining areas, which included electronics, chemicals, and plastics. Industrial combines were formed to vertically integrate industries involved in the manufacture of vital final products. Price subsidies were restored to accelerate growth in favored sectors.

The annual plan for 1968 set production quotas 2.6% higher in the structure-determining areas than in the remaining sectors in order to achieve industrial growth in these areas. The state set the 1969–1970 goals for high-technology sectors even higher still. Failure to meet the ESS's goals resulted in the termination of the reform effort in 1970.