BadMouseProductions's (I'll just call him "BMP"; I don't know his real name) argument is bad. It relies on premises that are, in fact, tendentious political intepretations of thinly-sourced, carefully cherry-picked evidence, and his omissions (namely, the entirety of the economic policy that he claims to be evaluating) are as revealing as the information he chooses to include.

At the outset, I'll state that I'm not going to address the (many) parts of BMP's video that are only barely related to the main thrust of his argument. He talks about American interference in Japanese electoral politics, the East German justifications for the building of the Berlin Wall, Soviet attitudes toward German rearmanent, the extent of war damage to the Soviet economy, post-Cold War Romanian attitudes towards communism, the effect of market economies on sexual politics, or suicide rates in post-Cold War Eastern Europe. All of this is perhaps interesting, and I'm certainly not going to begrudge him the right to decide when and how to expand the ambit of his argument or go on a tangent. But you can grant or ignore all of the things that he says about those topics while still fairly representing - and rebutting - his primary argument about the economy of the German Democratic Republic. I don't concede any of those arguments - I found the the snide, ill-informed quip about the murder of border guards at the Berlin Wall to be particularly odious, which I'm sure was his intention - but they just don't matter. They are entirely rhetorical, intended to set a background of western perfidy and socialist innocence that suits his primary argument. (If you're interested in a more historically informed description of the Soviet attitude toward German rearmanent and Stalin's approach to the idea of German unification, I would recommend Peter Grieder's The German Democratic Republic, which discusses at length the complicated course taken by the USSR in this respect in the 1940s and 1950s, including the "Stalin Note" of 1952 to which the video alludes.)

Let's start by laying out precisely what BMP's primary argument is. He begins with an explanation of the view he seeks to rebut: that the GDR was "poor" because it was a socialist economy. He argues that socialist economies do not simply pop into existence from a vacuum. They have a pre-history, a context that defines their starting position and profoundly affects their future prospects. What they can do is conditioned by what they have to work with.

He argues, in this vein, that the GDR had a particularly bitter inheritance, especially in comparison with its western neighbor. The GDR was smaller than the Federal Republic of Germany. It had less than half the space and less than half the population. It was primarily agricultural, a "breadbasket" export economy suddenly severed from the industrial regions that had once served both as a market for its crops and a source of imported manufactured and finished goods. And it was heavily war-damaged by Allied bombing, Soviet occupation, and reparations. It had no access to American capital or western markets, with recourse only to the comparatively poor substitute of the Comecon.

From this starting point, he continues, it is understandable that the GDR would not bear comparison to the FRG. The FRG started with a large head start over the GDR, which explains why it "won." Had the GDR possessed the advantages of the West, he claims, it is likely that they would have performed just as well. In fact, he argues that the GDR would have performed even better. As evidence of this last claim, he points to the growth of the GDR's economy: the GDR's overall GDP growth rate vastly outstripped that of the FRG over the forty years of the GDR's existence.

Some of the premises of BMP's argument are plainly true. West Germany really did have more space (though not as much more as he claims) and more people than East Germany. East Germany really was deprived of access to Marshall Plan funds at Stalin's insistence, and a significant portion of its industry was stripped and expropriated by the USSR as war reparations.

Many of the premises of his argument are, however, false. He provides no source for his claim that East Germany was more profoundly affected by war damage ("suffered the most devastation") than West Germany. Economic historian Jaap Sleifer (in his 2006 volume Planning Ahead and Falling Behind: The East German Economy in Comparison with West Germany, 1936-2002) argues that war damage per capita was actually much higher in what would become the FRG than in what would become the GDR. BMP has no source for the claim that East Germany "has always been historically poorer" than the west - in fact, one of his own sources directly contradicts that claim:

Such a pattern of interdependence [between the eastern and other parts of Germany] and specialization had its advantages, particularly in ensuring the population [of eastern Germany] a standard of living comparable with that of West Germany.

BMP seems to equate "agricultural" with "poor" - a serious error. Estimates of regional economic performance have shown that prior to World War Two eastern Germany enjoyed a GDP per capita slightly higher than the German average. Per capita net production in the area that would become the Soviet zone of occupation was higher in 1936 than it was in the area that would become the American zone, the French zone, the Saarland, or in the eastern regions ceded to Poland and the Soviet Union.

BMP's one semi-solid data point is the claim that the GDR "grew" by "upwards of 600 percent" over its national lifetime, while the FRG "grew" by only about 400 percent. His source for this claim is Gerhard Heske's 2009 Volkswirtschaftliche Gesamtrechnung DDR 1950-1989, a 350-page academic economics text written in a language that he does not speak. He doesn't specify where in Heske he's getting these numbers, nor does he specify which numbers he's even talking about ("growth" often refers to GDP, but could easily refer to something else entirely). It appears that he's referring to GDP per capita, which Heske shows increased in the GDR by 617.2 percent from 1950 to 1989 and in the FRG by 430.3 percent over the same period. (See Heske, p. 249, Table 1.1; and p. 267, Table 2.1.) BMP certainly ignores the concept of "growth potential" (high rates of GDP growth can sometimes be a consequence of poor starting GDP), but this argument's central flaw is that it is extremely simplistic: It relies on one economic index to the exclusion of all others, ignoring almost all of the academic literature on the growth of the East German economy and drawing a broad and convenient conclusion about the self-evident superiority of socialist economic planning to free-market capitalism (a false dichotomy that he never bothers to complicate).

And that's ... all. That is literally the entirety of BMP's defense of East German socialism. (Note that this is to be distinguished from his critique of post-Cold War Eastern Europe, which is an entirely different issue.) You'll notice that he says absolutely nothing of detail about what East German socialism actually looked like. You would expect that he might discuss the ways that the East German government planned its economy, and how its strategy evolved over time. He might talk about the New Economic System/Economic System of Socialism that dominated the 1960s under Ulbricht. He might discuss the Five Year Plans. He might talk about the role that Soviet subsidies and trade played in supporting the East German economy. He might discuss the growth and evolution of East Germany's economic relationship with West Germany after the birth of Ostpolitik and Detente in the 1970s. He could talk about Honecker's massive subsidization of popular consumption in the "Actually Existing Socialism" of the post-Ulbricht years, and how this led gradually to a dependence on western credit in the 1980s, turning the GDR into a debtor state hopelessly in hoc to West German bankers. He could talk about the chaotic gluts and shortages that characterized retail and food supply patterns in the GDR. He could even go on a tangent - he seems to like tangents - and discuss how the East German government mortgaged its own environment, polluting its air, rivers, and land in pursuit of cheap energy and consumables, export goods, and foreign cash. But BMP doesn't do any of these things.

Which leaves us with a simple closing question: Why might a defense of East German socialism never actually get around to talking about East German socialism?

I initially posted this as a reply to another comment, but I might as well put it here as well so that OP can see (and reply). In short, I think BMP's video is rather sloppy and poorly argued; however, his essential points do have some validity (albeit with qualifications).

Firstly, there is in fact some evidence that the differing economic systems were not the primary factor in the divergent performance of the two nations (East and West Germany). According to a study in the European Journal of Economic History (published in 2014), "the major factor contributing to this early divergence were disproportions in industrial structure caused by the division of Germany." The study goes on to note:

The "Great Divergence" between East and West in industrial efficiency did not begin in 1948, when the institutional development of the two parts of the country took fundamentally different paths. The main factors contributing to this divergence were already present earlier.

It is also true that the East was starting out poorer and less industrialized. According the US Federal Research Division's study of East Germany (published in 1988):

Before World War II, the area that later became East Germany was not well developed industrially. Because this area lacked raw materials, heavy industry was generally located in other parts of the German state. Compounding the problems for the newly created East German state in 1949 was the massive destruction during World War II of the industrial plant that had existed there and the subsequent Soviet dismantling and removal of factories and equipment that had survived the war.

The study provides a further comment on the effects of war reparations:

The reorientation and restructuring of the East German economy would have been difficult in any case. The substantial reparations costs that the Soviet Union imposed on its occupied zone, and later on East Germany, made the process even more difficult. Payments continued into the early 1950's, ending only with the death of Stalin. According to Western estimates, these payments amounted to about 25 percent of total East German production through 1953.

These factors had an understandably large impact on East Germany's economy. Despite this, the Federal Research Division states that the GDR's economy "developed impressively," further noting that:

The condition of the economy is all the more remarkable when one considers the circumstances under which it has developed. The country was devastated during World War II. Subsequently Soviet occupation of East German territory placed heavy burdens on the population and resources. In addition, the partitioning of the German lands after the war seriously disrupted the economy. East Germany's heavy industry capacity was very low, and its raw material supplies, except for lignite (low-grade) coal and potash, were almost nonexistent. The fact that the country for many years lacked international recognition as a sovereign state certainly did not contribute to economic growth, and its population loss before construction of the Berlin Wall was a significant drain on labor resources.

In addition, East German socialism (while certainly flawed) did have certain advantages. For example, it provided social services of comparable quality at a far lower cost than the FRG. Let us take healthcare as an example. A study published in the Health Care Financing Review (a US government-affiliated publication) in 1991 reports:

In terms of real resources devoted to health services and in terms of health service activities, the two countries [the GDR and FRG] seem to have been fairly similar... If the GDR enjoyed a similar volume of health services to the FRG but had much lower health expenditures per capita, then the prices of health services must have been much lower in the GDR... the former GDR had respectable health statistics for a country with its standard of living... Improvements to health status in eastern Germany seem to have kept up, more or less, with those in western Germany.

Most essential goods and services were also much cheaper in the East than in the West. According to the US Federal Research Division:

In East Germany, the GDR mark can purchase a great number of basic necessities because the state subsidies their production and distribution to the people. Thus housing, which consumes a considerable portion of the earnings of an average family in the West, constituted less than 3 percent of the expenditures of a typical worker family in 1984. Milk, potatoes, bread, and public transportation were also relatively cheap. Many services, such as medical care and education, continued to be available without cost to all but a very few. Even restaurant meals, concerts, and postage stamps were inexpensive by Western standards... In the mid-1980's, East Germans had no difficulty obtaining meat, butter, potatoes, bread, clothing, and most other essentials.

The purchasing power of the GDR mark was also much higher than commonly believed:

In 1983, the Institute for Economic Research in West Berlin undertook one of its periodic studies in which the purchasing power of the GDR mark was measured against that of the West German D-mark... The Institute concluded that, as a whole, the GDR mark should be considered to have 106 percent of the value of the D-mark in purchasing power, an impressive gain over the 76 percent estimated for 1960, 86 percent for 1969, and 100 percent for 1977... the analysis clearly invalidated the view commonly held in the West that the GDR mark had very little purchasing power.

Finally, while they started from a lower position (and could thus be expected to have higher potential growth), it should not be ignored that the GDR (and Eastern Europe in general) experienced more rapid GNP-growth than the capitalist West. According to an article in the Journal of Economic Issues:

Eastern Europe before communism had much lower economic output per capita than Western Europe and was sometimes called the Latin America of Europe [Mead 1994]... Once communism had been established in Eastern Europe, GNP per capita grew significantly faster than the GNP per capita of capitalist countries... Although the rate of growth was slower in the 1970s and 1980s than it had been in prior decades, the Eastern European economies first really collapsed following the removal of communism in the early 1990s, at which time real GNP per capita fell by about 50 percent [International Monetary Fund 1997].

The overall experience in Eastern Europe indicates that communism narrowed the income gap between the poor Eastern European countries and the richest Western countries.

In short, while the video is a bit sloppy in its arguments, there is some evidence to support its basic claims (albeit with important qualifications, such as accounting for potential growth).

I should clarify, I am not attempting to deny the serious issues with the East German system (such as the major debt problem of the 70's and 80's); I merely think there's some nuance to the discussion that deserves to be mentioned, even if BMP didn't do a good job of introducing it.

Sources

• European Review of Economic History | The Roots of Economic Failure: What Explains East Germany's Falling Behind Between 1945 and 1950?
• US Federal Research Division | East Germany: A Country Study
• Health Care Financing Review | Reform of Health Care in Germany
• Journal of Economic Issues | A Note on Economic Growth in Eastern Europe