It's become fashionable in recent reviews to disparage the Oscar-nominated The Lives of Others in favor of a new documentary, already open in New York, about the actual interrogation practices of the Stasi—the fearsome secret police arm of the German Democratic Republic, and the subject of Florian Henckel von Donnersmarck's narrative film. Seattle has thus far been spared the reportedly terrifying austerity of The Decomposition of the Soul (yes, that's the doc's actual title), so I'm free to evaluate the fiction on its own terms. The Lives of Others is at once grimy and elegant, earnest and understated. It's all the intrigue and deferred shame you imagined you saw in The Good Shepherd, but with a tight, anxious plot and a devastating trajectory. It's the best German film I've seen in years.

Following in the dubious footsteps of Schindler's List, The Lives of Others locates a noble member among a decidedly rank institution: In this case, Captain Gerd Wiesler (Ulrich Mühe), who works as a respected Stasi officer as the film opens in 1984. Wiesler makes a small, rigid figure in early scenes—he'd be inconspicuous in his beige zip-up and deflecting posture were it not for the voracity of his gaze. Asked by a Stasi compatriot to check out the scene at a new social-realist play, Wiesler impassively surveys the performance, which culminates in the dramatic collapse of a factory worker. Then, with a noticeable uptick in animation, he pulls out opera glasses and hones in on handsome Georg Dreyman (Sebastian Koch), despite being warned the playwright is "our only nonsubversive writer." Harmless or no, Dreyman is in possession of one sexy girlfriend, Christa-Maria Sieland (Martina Gedeck). Somewhere, up in the farthest reaches of the bureaucracy (or perhaps down on the main floor of the theater), a fat man with an appetite for beautiful, preferably unattached women is rubbing his paws over Wiesler's instinct for suspicion, as easily triggered as a mousetrap and just as difficult to detach.

Wiesler and his crew of technicians barge into Dreyman's apartment building, lacing up the walls with wires and sweeping every whisper to the attic, where they install a couple hundred pounds of recording equipment and a little surveillance station, fit for a solitary person and his typewriter. A neighbor notices the operation—the team isn't exactly subtle—but Wiesler shuts her up with aspecially targeted threat and moves on.

Then, alternating with a slightly stupid junior partner, Wiesler listens in on Dreyman's life. There isn't much to hear. Dreyman leads an ordinary existence, chatting with the neighbor (that neighbor, who's understandably terrified), hosting parties (where he tries to cheer up a blacklisted friend), fucking ("they... presumably have intercourse," Wiesler dryly transcribes), and so on. The subject's Marxist ideology appears intact, maybe even a little less battered than the average citizen's, since his government patronage acts as a cushion. Wiesler gets bored, then turns almost imperceptibly sympathetic: He sneaks downstairs to borrow a volume of poetry by Brecht. With virtually no social life, apart from a 20-minute visit from a bossy prostitute, the spy latches on to Dreyman's values as his own. And when personal loyalties lead Dreyman to stray ever so slightly (from the government, of course, not Communism itself), Wiesler makes moves to protect him.

One of the most interesting things about The Lives of Others is how ideologically pure—even naive—its heroes remain. While Christa-Maria turns hard and hungry as she sacrifices her body to preserve her boyfriend's career, he seems almost as crushed by the injury done to the ideal Marxist state as he is by the sexual favors stolen from his lover. It isn't until the tragic finale that Dreyman shakes off his veneer of childish trust and becomes almost human.

The finale, though, isn't the end: The Lives of Others has an extended coda that's so unabashedly humanistic that it flirts with sentimentality. I'm okay with it, though. There's nothing like a couple of hours of grim, colorless oppression to make you clamber for an improbable glimpse of redemption—or even, perhaps, the love of brothers.

Read an interview with the director, in which he bashes his Oscar competition.