This book is an exploration of the economic history of the German Democratic Republic with an emphasis upon its confrontation by and contribution towards economic and military competition on the world stage. Beginning with an analysis of the Soviet bloc as a statecapitalist formation the GDRs economic history is charted with detailed examinations of the challenges to Sovietstyle autarky that were posed by the globalising world market as well as of GDR policymakers attempts to use Western imports and credits as a whip to spur growth. The books central section consists of an exploration of the ambivalent attitudes of East German policymakers and industrialists towards their West German counterparts in the 1980s as the whip was transformed into an evertightening noose of debt. Here a prodigious range of secondary sources as well as hitherto unpublished documents from the archives of the old regime are drawn upon to document the means by which relative economic decline and dependency upon Western institutions came to constrain the options available to the East German nomenklatura. Finally this study analyses the political economy of the 1989 revolution and unification and of postunification Eastern Germany.