The Häftlingsfreikauf ("ransom of prisoners") was one of a number of infamous economic manouevers performed by the East German government to accomplish a few distinct but related economic goals - obtaining foreign currency or scarce commodities, paying the interest on the German Democratic Republic's prodigious debt, ensuring liquidity as a prerequisite for future credit, and building a cash reserve to finance the discretionary spending and rather lush lifestyle GDR's political elite. It was enormous and profitable - netting the Volksrepublik approximately 3.4 billion Deutschmarks in exchange for relieving them of more than 33,000 prisoners between 1963 and 1989. The GDR was not really "on the verge of economic collapse for all of its existence," and the claim the the Freikauf was "one of the GDR's main sources of income" is at best legally colorable. But it is undeniable that the Freikauf provided a crucial source of money and goods during most of the GDR's existence, particularly in the lean years of the early 1960s and 1980s.

Every trade, however, requires at least two parties. Since the end of the Cold War, the Freikauf is often portrayed as a unilateral decision on the part of the GDR to capitalize on its own political repression. The East German government no longer around to dispute the characterization, so the memory of the Freikauf has been warped: The GDR is accused of having conceived of the Freikauf system, taking advantage of Western sympathy for prisoners in their desperate search for cash. The blame for the entire seedy system is placed squarely on the Easterners. Little thought is given to why or how Western politicians and businessmen could have been so thoroughly manipulated for so long. One need not be a true believer in East German socialism to recognize how convenient that argument is for the Westerners who participated in the trade and now must explain why.

The truth, of course, is more complicated. Though there are multiple contradictory accounts of the birth of the Freikauf, it was almost certainly not originally an initiative of the GDR. It grew, in fact, out of three separate Western initiatives - by the city of West Berlin, the government of the Federal Republic, and the German protestant Church - all of which began in 1962-63 and culminated in the first regular prisoner releases in August 1964. The fact that the Freikauf was a Western idea is not, in itself, a damning revelation, but it throws doubt upon the characterization of Westerners as grudging participants in the trade.

Western motives were mixed. For sure, there was a degree of humanitarian sentiment involved. The Federal Republic claimed to be the only legitimate German government, offered citizenship to all people living in the GDR, generously subsidized efforts to re-settle millions of refugees from the East, and condemned the East German system of political repression.

But for all of its anti-communist invective, West Germany was also in search of a modus vivendi with the GDR, especially after it became clear in the 1950s that the post-war division of Germany was a long-term reality to which all Germans would have to acclimate themselves. Ties of kinship, culture, language, history, religion, and economy bound the Germanies to one another in an inescapable relationship not unlike that of rival siblings. A relationship of pure, unadulterated hostility - no concessions, no communication, no recognition - was neither practically possible nor politically advantageous for even the most strident anti-communists in the Federal Republic. (A dramatic example of the complexity of this relationship is Franz Josef Strauß, the arch-conservative Minister-President of Bavaria, who helped to negotiate loans to the GDR worth billions of DMs in the 1980s.)

There was also a growing recognition in the West that the wisest way to improve the lives of GDR citizens and relations between the two Germanies was not through hostility, but through active engagement. This idea - called Wandel durch Annäherung ("change through rapprochement") - was a principle element of the Ostpolitik of West German chancellor Willy Brandt (1969-74) and the détente that characterized the Cold War more generally in this era. More for all parties could be accomplished with negotiation, trade, limited diplomatic recognition, and strategic concessions than had previously been accomplished with a cold shoulder and the looming threat of war. The power of this policy is perhaps best revealed by the GDR's fear of it. East German Foreign Minister Otto Winzer once allegedly described it as "aggression in felt slippers."

(Continued in a comment below.)