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Compensating Historical Injustice: More Than Just Money


Throughout the world nations and peoples are coming to terms with their pasts: Europe with its colonial history, the United States with its dark legacy of slavery, South Africa with apartheid and Germany with the deep scars left from two different totalitarian regimes. Within this evolving process of dealing with the past, the issue of compensating victims has often been at the forefront of the public discourse.

In our paper we focus on two case studies, one dealing with the compensation of forced laborers from the National Socialist (Nazi) regime and the other with compensation for political prisoners from the German Democratic Republic (GDR, East Germany). Both concern the compensation of victims of totalitarian regimes. For each case we will outline the compensation programs in place today, show how they fit compensation theory and draw some judgment on the effectiveness of the programs in addressing the needs of the victims.

A Theoretical Background 

We begin with a definition of compensation and a brief examination of the theoretical approaches to compensation. Compensation generally refers to efforts addressing injustice with the following dimensions: rehabilitation, the legal acknowledgement of injustice; restitution, the returning of property; and indemnification, the payments in the case that restitution is not possible. Generally this is in the case of compensation coming from the perpetrator and going to the victim. 

It is necessary to explore this further.  Our cases will deal with the realm of social responsibility to victims who cannot be compensated by the perpetrator in the traditional sense, either because the perpetrator is no longer identifiable, or because it was the state itself that committed the crime. The case for victim compensation by society has been argued from several theoretical levels. The most effective of these arguments can roughly be divided into two camps. On one side there are those who argue that the state has failed somehow when crime takes place. This camp, influenced by thinkers such as Jeremy Bentham, argues that the government limits the victim’s scope for protecting him/herself by putting that power in the hands of some law enforcement body, thus if the law enforcement fails to prevent a crime, the state is liable. The other camp argues from a more humanitarian standpoint; the government is not legally responsible to the victim but rather morally responsible to ease the burden of the victimized. 

Understanding the theory is helpful for providing context, but as always, the reality on the ground never conforms entirely to the theory. 

Payments withheld: the long road toward compensating forced laborers

Numerous programs of compensation to address the National Socialist regime’s crimes have been implemented since the end of the Second World War. We will briefly mention these, but we focus narrowly on the developments since 2000.

From the 1950’s to 1965, the general compensation laws and the Agreement of Luxemburg with Israel provided the equivalent of around 55 billion euros for compensation of victims. The success of these compensation programs is debatable. Dr. Christian Pross from the Center for the Treatment of Torture Victims in Berlin wrote that these compensations were in the beginning “more an irksome performance of a duty than an effort in awareness of the cruel crimes the Nazis committed.” 


In this process the forced laborers were continually excluded from compensation. By 1944, the number of foreign workers in Germany, which were mainly forced laborers, had reached over 7.6 million. The SS and Army rented prisoners to industries whose work force had been sent to the fronts. The conditions of these workers were terrible and many were worked to death. 

It took until August of 2000 before legislation was passed through the Bundestag to create the “Foundation for Remembrance, Responsibility and Future” and address this dark legacy. The leading German negotiator for the Foundation, Dr. Otto Graf Lambsdorff, gave a speech in 2002 explaining the tardy arrival of this legislation. “Compensation for illegal employment of civilians from occupied territories was and is considered a reparation issue under public international law. Germany has delivered much more in reparations than the Allies ever contemplated at Potsdam and thereafter. Further, how could Germany pay billions of dollars in hard currency to people living in the Soviet Union or its satellites before the end of the Cold War?” 

By 2000 changing times had brought the issue of forced labor to the limelight. The Cold War had ended, opening up the horizon to Eastern Europe. Changing generations in politics and business permitted a renewed perspective on the past. Additionally, pressure from U.S. lawsuits brought against German firms made it necessary to address the past in a tangible way. 

The establishment of the Foundation was a rather complicated affair involving international negotiations, political lobbying and difficult fundraising efforts. As interesting as the negotiations are, the relevant parts for this paper are the results of the Foundation’s efforts. The Foundation raised around 5.3 billion euros—just slightly over half from German businesses and the rest from the German Government. To date, over 1.57 million people have received roughly 2,000 euros each as compensation for their work as forced laborers. Payments will be finalized by the summer of 2005, with roughly 1.75 million people being compensated. 

The compensation scheme of the Foundation fits into compensation theory in that the Federal Republic of Germany (FRG) today sees itself as the legal successor of the National Socialist Government and therefore has both a legal and moral responsibility to the victims. In an interesting twist, the Foundation is really a mix of a private and public initiative. On the public side is the state with legal responsibility; on the private side are the businesses. Susanne-Sophia Spiliotis, who has written on the process of the Foundation, reports that the business side of the initiative was “based on the conviction that the claims against the German business concerning the National Socialism and the Second World War were not judiciable as the state was the main driving force behind that injustice. That meant that the responsibility of German business was not juridical but moral and historic.” 

The Preamble of the Law creating the Foundation states that: “the injustices committed and the human suffering caused [by the National Socialists] cannot be truly compensated by financial payments.”  When we talked to Kai Hennig, the spokesman of the Foundation, he echoed this sentiment. “The payments from the Foundation are not compensation. It was totally clear that one could never find a balance in the distribution of funds to those who were in the labor camps for one day or one year. The payments were to be a financial aide for the people that were forced to work for Germany.”  The payments from the Foundation have not been considered as compensation, as the money given out cannot completely make up for the suffering or losses of the victims. Still, we will continue to refer to it as compensation as we see this work as part of addressing injustices as conceptualized in our framework of compensation defined in the first section.  

From a political and economic standpoint the work of the Foundation has been very successful. Legal peace for German businesses has been established. Under the U.S. Alien Tort Claims Act (ATCA) of 1789, which allows for judgments on violations of international law,  American victims were bringing lawsuits against German businesses. Since the negotiations of the Foundation finished, the U.S. has signed a statement of interest with Germany that has so far been successful in dismissing these lawsuits as covered under a separate international agreement. The establishment of legal peace is a positive outcome, but of more importance in our opinion are the twin aspects of the benefit to the victims of the payments and how effective those payments have been in addressing society’s moral obligation to the victims.

First, how beneficial have the payments been? Kai Hennig told us that the Foundation believes it has reached about 99 percent of those eligible for payments. In Eastern European countries, these payments can be a huge benefit to the victims as many of them are living at or below the poverty line. In the West the money is of relatively lesser value. From a psychological standpoint, “compensation has undoubtedly led to stress reduction with direct relief of financial worries, and in some measure it serves to restore one’s confidence in mankind and provide a sense of getting one’s due.”  We were not able to contact anyone who had received compensation, but we did come across some criticisms and some quotations in the press from victims. Among these were the stories collected by Marina Schubarth, who is a part of the Interest Association of Former Slaved Workers Under the National Socialist Regime. She reported on the difficulty that the elderly had in finding documents to prove their former status as a forced laborer.  One example is Weronika Kogut, who was forced to work eleven-hour days but does not have documents and thus will not receive any payment.  Her story unfortunately seems to be rather common, and it highlights the difficulty in addressing the needs of so many people. Marina Schubarth said, “There is the immanent danger within the work of the Foundation that there will be a feeling of a final line under the compensation issue.” 

The last question of the Foundation’s work is its effectiveness in addressing society’s moral responsibility to the victims. We think it has been effective in two ways. First, many private citizens involved themselves with the work of the fund. Kai Hennig reported that at its inception the Foundation received floods of positive letters from individuals around the country, and many of these letters contained donations. Additionally, over 7,000 businesses, many of which were founded after the National Socialist period, contributed to the fund. The second mark of the Foundation’s moral effectiveness is the political climate that has been generated around it. There seems to be a genuine awareness among politicians of Germany’s responsibility and its need to address its past. Johannes Rau, the former Federal President, best expressed these sentiments: “We all know that no amount of money can really compensate the victims of crime. We all know that the suffering inflicted upon millions of women and men cannot be undone. I know that for many it is not money that matters. What they want is for their suffering to be recognized as suffering and for the injustice done to them to be named injustice. I pay tribute to all those who were subjected to forced or slave labor under German rule and, in the name of the German people, beg forgiveness.”  

Remnants of the Wall?  Reluctant compensation of the victims of the GDR regime

During our time in Berlin, we experienced recent historical changes at almost every corner – monuments dealing with National Socialism, remnants of the wall that divided the city, and the talk of the people on the streets still thinking in categories of East and West. Unification has formally been completed but the wall of prejudices, ignorance and political alienation will only break down slowly. As we have seen, one of the crucial prerequisites—after having overthrown a dictatorship—is that the perpetrators are punished and the victims honored by acknowledging their pain, by rehabilitation, by indemnification, and by commemoration.

In the GDR, 140,000 people received prison terms for political opposition, e.g., for providing help to those trying to leave the country or for publicly criticizing the regime. Prison conditions were terrible and human rights were blatantly ignored.  Trauma from this experience can last a lifetime.  The law was used as a political instrument to impose the will of the Socialist Unity Party (SED) on East German society. The SED influenced all parts of society through an all-embracing system of propaganda, discrimination, denial of access to employment and higher education, imprisonment, and fear.

After the reunification, the issue of compensation was soon on the agenda. In contrast to the National Socialist compensations, which were an issue of international importance, GDR compensation was an internal affair addressing the needs of German citizens and requiring a purely national response. Another difference is that the Federal Republic of Germany (FRG) has never seen itself as the legal successor of the GDR. Thus, unlike our first case study, in terms of theory, the FRG does not have an apparent legal responsibility to the victims.   The GDR case must be fit into the context of the second school of compensation theory: The state has a moral responsibility to ease the burden of the victimized. 

We examined to what extent this responsibility has been fulfilled.  In doing so, we identified three problematic dimensions regarding GDR compensation: deficits in the legal framework, in the victim lobby, and in the society-wide commemoration debate.

The GDR’s first democratically elected Parliament quickly developed a comprehensive compensation framework. After reunification this framework was dismissed and the process started again from scratch.  Apart from a minor law on property questions in 1990, two other laws were passed through the German Parliament addressing and “removing” the injustices of the SED regime: The first law, in 1992, addressed the legal and juridical aspects.  Political prisoners were paid a one-time sum of 300 euros for each month they served in jail, and their criminal records were erased. The second law, in 1994, dealt with issues of professional and administrative persecution. 

Peter Alexander Hussock, who spent two years in prison as a political criminal and now chairs the victim association called Help, told us: “The 1992 law was important because it was financially significant. The other rehabilitations were not as important. They were not able to compensate for even a small part of my complete loss of property.”  In general, we got the impression that there is a huge disappointment concerning the second law. The chairman of another association called BSV (Bund Stalinistisch Verfolgter, or the Alliance for Victims of Stalinist Persecution) Harald Strunz, even claimed that law to be “one of the worst laws ever: Sometimes one has to fight a full year to get a pension increase of 2.50 euros a month. It’s an insult.”  We often heard that one of the main problems is the lack of punishment for former perpetrators and SED elites. Strunz said, “according to a decision by the Federal Constitutional Court, they [the perpetrators and SED elites] haven’t lost a cent of their pension claims, whereas our association members who were prevented from working can only draw low pensions.” 


When we asked Günter Nooke, a member of Parliament who is generally engaged for the victim side, why policy-makers were not able to improve these laws, he identified a structural problem: “In Germany, you often need a consensus of all parties to bring important decisions through, but the current cleavage in Parliament has had the effect of blocking the possibility of passing legislation for these victims – even though there was once a parliamentary consensus in two ‘enquête’ commissions.”  Martin Gutzeit, who is dealing with the consequences of the Stasi (East German secret police) activities in Berlin, added further that budget constraints on public programs and on the victims’ lobby associations have kept the issue from being addressed.   Additionally, it was mentioned quite often in our interviews that the presence of former Stasi employees in positions of power today has kept legislation from fully opening the Stasi archives. One of the central requirements for critical reflection on the past is the transparent access to historical sources. Rehabilitation and punishment are only possible by opening the secret GDR archives. There is still a reluctance to open the files of high ranked civil servants in the GDR system. According to Knabe, the perpetrators have made many efforts to gloss over their activities within the ministry of state security.  After our conversations, it was clear that new legislation was needed to address the three shortcomings: structural problems, budget constraints and lack of transparency. To get new legislation one often needs a strong lobby, though, and we quickly found that element to be missing from the picture as well.  


The underfinanced state of the lobby and their heterogeneity was immediately obvious when we visited their offices. Ironically, they were located in the dilapidated former headquarters of the Stasi. The main income of Help, one of the more active associations, comes from short-term grants and scant Berlin state funding. Hussock complained that they “cannot even employ someone with legal training to give council to the victims. Instead, I am facing trials because of an old law from 1937 that limits the legal advice that can be provided by non-lawyers. In general, our effectiveness is weak due to financial and legal constraints and due to the fragmentation of the victim side.” Strunz added, “It is abhorrent that the politicians say we need a stronger lobby: all these individuals are old and broken and have no financial means for a strong lobby.”


For a strong lobby one needs to have a strong backing in relevant societal structures. This can only come with awareness and education, which in the case of the GDR has been severely lacking and in current debates has continued to be pushed aside. As Knabe put it: “How nice it would be if we could simply forget everything: the dead at the borderline, the prisons in which human beings suffered desperately, the fear to say anything wrong in school or even in private. The GDR has gone – why should we dig into its intestines? The desire to forget is understandable but still it is wrong: it is in the natural interest of each society to analyze critically its mistakes. Only then can you learn from them.”  Knabe’s historical point is well taken, and it serves to illuminate the need for remembrance in society. This debate touches a very important point in the compensation scheme. All the victims’ associations we spoke to emphasized the importance of society’s recognizing and remembering their suffering. An example lauded by the victims’ associations was the work in reconstructing and publicizing the Stasi files. In general, the associations were highly in favor of the transparency seen in that project, and they desired more such conversation and openness regarding the GDR past. In other areas, though, they were very critical of the scant recognition paid to them and they often compared their commemoration to that of the National Socialist victims.

During the course of our research we found a similar debate over commemoration in the public sphere. The conservative party had made a parliamentary demand for more equal funding of National Socialist and GDR memorial sites. This request subsequently drew allegations of tampering with history because of its implicit comparison of the National Socialist and Socialist regimes. Nooke, who was one of the driving forces behind this demand, told us it was anything but a statement reinterpreting history, and he couldn’t understand the international uproar it caused. 

This debate made clear to us two issues. First, the simple comparison highlights the dire situation of the GDR victims. The second issue is the tendency for these victim groups to end up as rivals, each fighting against the others for recognition. From our point of view this rivalry is a dangerous game that can obscure history. In our interview Knabe put this nicely: “If you have two such crimes, one cannot be bigger than the other – they have to be added to each other. If you speak about two dictatorships, you must speak of continuities as one is certainly influenced by the other, and as they used partially the same infrastructure and as the victims share similar experiences. But on the other hand, the two must also be regarded as singularities as it is only then that they can be learned from.” 

In the same way that the resistance against National Socialism was, in the end, one of the founding elements of the democracy in West Germany, unified Germany needs to commemorate the people who fought against the SED dictatorship. In that way, the victims will be honored and the society will learn from the mistakes of the past.

As this case shows, the compensation scheme follows three dimensions: the legal aspects, the lobby group, and the commemoration issue. In all three of them, we could identify significant deficits and a clear lack of effectiveness in addressing the needs of the victims and, thus, there is an obvious need for action on both the public and the private side.

Lessons learned

Based on our short analysis of two quite different cases we can point to a number of important elements in the process of effectively compensating the victims of historical injustice.

The first is the importance of financial compensation. It is clear that the financial aspect is of high priority for the victims; it is a tangible token of recognition that carries with it the weight of societal commitment. 

As the speech of President Johannes Rau shows in the case of the forced laborers, or the importance of transparency with the Stasi archives indicates, financial compensation can never stand alone; it must be combined with a societal recognition and genuine concern for the individual experiences and trauma of the victims. 

Along with recognition of the victim’s trauma must come some measure of punishment for the perpetrators of the crime. This is an important issue not only for the victims but also for society as a whole. 

Unfortunately these elements will not simply happen without significant effort. In our often-politicized world, the importance of a victim’s lobby cannot be underestimated. As we saw in both our cases, a strong financial and political backing from the public side, and a coherent and homogenous structure on the victim’s side, are essential for the compensation process to go forward. 

Lastly, and perhaps of most importance, is the element of lasting moral responsibility. The process of commemorating and rectifying the past wrongs can never be ended by a financial payment. Money can only serve to draw a material line under the past wrongs, but there can never be a final line for moral responsibility. 





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Hussock, Peter Alexander. Help e.V.. Interview, June 23, 2004

Knabe, Hubertus. Memorial Site Hohenschönhausen. Interview, June 30, 2004

Nooke, Günter. Member of the German Parliament. Interview, June 24, 2004. 

Schubarth, Marina. E-mail correspondence, June 25, 2004

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Strunz, Harald. Chairman Bund Stalinistisch Verfolgter (BSV). Interview, June 23, 2004.


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