Soon after taking power, the Derg promoted Ye-Itiopia Hibretesebawinet (Ethiopian Socialism). The concept was embodied in slogans such as "self-reliance," "the dignity of labor," and "the supremacy of the common good." These slogans were devised to combat the widespread disdain of manual labor and a deeply rooted concern with status. A central aspect of socialism was land reform. Although there was common agreement on the need for land reform, the Derg found little agreement on its application. Most proposals-- even those proffered by socialist countries--counseled moderation in order to maintain production. The Derg, however, adopted a radical approach, with the Land Reform Proclamation of March 1975, which nationalized all rural land, abolished tenancy, and put peasants in charge of enforcement. No family was to have a plot larger than ten hectares, and no one could employ farm workers. Farmers were expected to organize peasant associations, one for every 800 hectares, which would be headed by executive committees responsible for enforcement of the new order. Implementation of these measures caused considerable disruption of local administration in rural areas. In July 1975, all urban land, rentable houses, and apartments were also nationalized, with the 3 million urban residents organized into urban dwellers' associations, or kebeles (see Glossary), analogous in function to the rural peasant associations (see Peasant Associations Kebeles, ch. 4).

Although the government took a radical approach to land reform, it exercised some caution with respect to the industrial and commercial sectors. In January and February 1975, the Derg nationalized all banks and insurance firms and seized control of practically every important company in the country. However, retail trade and the wholesale and export-import sectors remained in private hands.

Although the Derg ordered national collective ownership of land, the move was taken with little preparation and met with opposition in some areas, especially Gojam, Welo, and Tigray. The Derg also lost much support from the country's left wing, which had been excluded from power and the decision-making process. Students and teachers were alienated by the government's closure of the university in Addis Ababa and all secondary schools in September 1975 in the face of threatened strikes, as well as the forced mobilization of students in the Development Through Cooperation Campaign (commonly referred to as zemecha--see Glossary) under conditions of military discipline. The elimination of the Confederation of Ethiopian Labor Unions (CELU) in favor of the government-controlled All-Ethiopia Trade Union (AETU) in December 1975 further disillusioned the revolution's early supporters. Numerous officials originally associated with the revolution fled the country.

Data as of 1991