Pointedly set in the East Germany of 1984, five years before the collapse of Iron Curtain communism, The Lives of Others is the story of three people set on a collision course by rank abuse of power. Gerd Wiesler (Ulrich Muehe) is a Communist Party true believer. He is a proud captain in the Stasi, the Gestapo-like secret police organization charged with squashing dissent. The picture opens with Wiesler relentlessly interrogating a man for the crime of knowing a neighbor who escaped to the West. Wiesler lives for his work. His dreary Spartan apartment is filled with cheap furniture and a grainy TV that drones on about agricultural reports. He occasionally hires a prostitute, but can't get her to linger after their perfunctory sexual encounters are hastily concluded. Obviously miserable, Wiesler finds his calling in bringing fear, intimidation and despair into the lives of others.
Wiesler's newest target is Georg Dreyman, (Sebastian Koch) the country's premier playwright. Tall, ruggedly handsome and cosmopolitan, Dreyman lives a life of privileged comfort few East Germans enjoy. He has a nice apartment and an income sizable enough to host lavish parties. He is said to have powerful political friends, and yet he's no toady. The fundamental humanity of his work is widely respected, and he counts many dissidents among his friends and admirers. But somehow Georg has managed to walk a tightrope, remaining a forthright supporter of socialism who avoids direct criticism of his government without surrendering his humanist credentials.
Georg lives with Christa-Maria Sieland (Martina Gedeck), the nation's foremost actress who often stars in Georg's plays. Together they are East Germany's power couple in matters artistic and cultural. Yet, despite their artistic acclaim, they remain vulnerable to the whims of the Communist Party leadership. A social misstep or a careless statement could lead to their blacklisting, as it has to their director friend Albert Jerska (Volkmar Kleinert), who has not been allowed to work in seven years. However, Georg is targeted by the Stasi not because of his complicated politics, but because of his private romantic life. Christa-Maria is desired by Bruno Hempf (Thomas Thieme), a high-ranking government minister. In fact, Hempf has already begun to force Christa-Maria into unwanted sexual liaisons in the backseats of state limousines and other sordid locations. These encounters, though not overtly violent, are nonetheless rapes. Hempf threatens to blacklist the actress and keep her from working if she does not surrender to his demands for sex. Now, Hempf wants Georg out of the picture entirely and, through an intermediary, orders Wiesler to gather information so that Georg can be charged with treason. Though happiness is not an emotion with which Wiesler is familiar, he embraces his charge with the relish of a starving man invited to a buffet.
What follows is a shocking invasion of privacy as Wiesler wires Georg's apartment so that he can listen and record every word spoken there. And it is hardly difficult to utter a comment for which one can be arrested. As Wiesler taunts the man in his early interrogation, just the suggestion that the state might prosecute an innocent man is itself a transgression for which one might be prosecuted. But Wiesler's eavesdropping reveals more than the policeman expects. Wiesler hears a life full of decent concern for the welfare of friends, a life that celebrates art and artistry, the shared life of a couple in love. Moreover, his investigation brings to light that Georg is not really suspected to be an enemy of the state. Confronted with Hempf's perfidy, Wiesler's fundamentalist convictions are shattered. So now what's he supposed to do? And more complicated still, how is he to act when Hempf tries to pressure Christa-Maria to betray Georg as the ultimate cost of saving her career?
Early in the picture, Hempf and Georg have a tense discussion about human nature. The communist maintains that people don't change while the artist believes that they can and do. The artist is right, but the change is not always for the better. Hempf, for instance, makes a perfect communist for the 1980s, but he would have been just as successful a Nazi in the 1930s. Georg changes by ultimately embracing the kind of dissent he earlier eschews. The other characters change in ways that surprise, shock, sadden and encourage us to reconsider all that we think we know of them and, for that matter, what we think we know of ourselves and those around us we presume to know well.