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For all the discussions among economists about the inefficiencies of pricing mechanisms within a centrally planned economy, in fact it was a different set of monetary problems that marked the end of the GDR. International debt, liquidity crises, an increased role for Western currencies within the domestic economy, and cultural conceptions of money played roles in the state's demise. Zatlin's new book tells the story of East German currency under Honecker. As both economic and cultural history, the book is a great success.

The book's first part narrates the decline of the East German currency under Erich Honecker. When he came to power in 1971, Honecker proclaimed a new ‘Unity of Economic and Social Policy’ that amounted to an increase in spending on consumer items. His policy was problematic in itself, given the continued failure of the East German economy to spur productivity and efficiency and to innovate, and the rough years of the 1970s made the decision even worse. As the oil shock of the early 1970s spread eastward and the Soviet Union was forced to alter terms of trade for oil, it became apparent that the state socialist world was not, in fact, decoupled from the world economy. In response to a growing crisis, the GDR began to build up debt to the West and in particular to the FRG. There were failed attempts in 1977 by Gerhard Schürer, the State Planning Commissioner, and Günter Mittag, the Economic Secretary of the Central Committee, to confront Honecker about his policy. The alternative was, as Honecker realized, some kind of national austerity programme, which would undermine the regime's legitimacy (p. 79). Honecker won the political battle, and Mittag became his servant, seeking ways over the next twelve years to shore up the ailing regime rather than to address its underlying problems.

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