Guns and Butter--and Rubles : Gorbachev May Have Raised Consumer Hopes Too High

Although the Soviet Union is a world power with highly advanced capabilities in some areas of industry and technology, the country has not progressed much beyond Third World status in some important respects.

Soviet leader Mikhail S. Gorbachev is determined to change that, but events in Moscow last week suggest that it will be a long, slow process. Maybe too slow for the good of the Soviet system.

A major challenge facing Gorbachev is to square his seemingly cautious approach to economic resuscitation with the Soviet people’s rising expectations.

At a meeting of the Central Committee last week, Gorbachev unveiled a new party program--to be presented formally to the 27th Communist Party Congress in late February--that calls for almost doubling economic output by the turn of the century.

“We are planning in the next 15 years,” he said, “to create an economic potential approximately equal in scale to what has been accumulated throughout the previous (68) years of Soviet rule. . . . “

That translates into an annual economic growth rate of almost 5% a year--a pace that the ailing Soviet economy has not met in 15 years. But while pledging to raise the “life of the Soviet people to a new qualitative level,” Gorbachev avoided pie-in-the-sky promises of the sort made by Nikita S. Khrushchev when the last party program was laid down 24 years ago.

The 1961 document promised that by 1970 Soviet industrial output would exceed that of the United States, and by 1980 the Soviet people would enjoy the world’s highest standard of living--including the world’s shortest workweek and an end to hard manual labor.

Things didn’t work out that way. The Soviet economy grew at an impressive 5% a year in the 1960s, but slowed to 3.7% in the early 1970s and to an average of about 2.6% later in the decade. The sluggish performance has continued into the 1980s.

Strictly speaking, Americans are in a poor position to cast aspersions on Soviet economic performance, given the problems of slow growth in our own economy. But it is one thing to stagnate at a high level and quite another to stagnate in a position of severe inferiority.

The Soviet economy is still less than two-thirds the size of the American. Worker productivity is only half the level in West Germany and less than half that in the United States or Italy.

Judging by the improving quality and technological sophistication of Soviet weapons, the military-industrial complex is in fair shape. In the civilian economy, however, computers are in their infancy. The planning and management system has a built-in resistance to technological innovation. The Soviet Union is in danger of being left hopelessly behind Western Europe, as well as the United States, in the information revolution.

As for consumer goods, Russians are better dressed and have more cars and TV sets than in Khrushchev’s day. But the same system that produces nuclear missiles can’t seem to produce a decent pair of shoes, durable phonograph recordings, Western-class housing or a full dinner pail.

Forty years after World War II, an estimated 20% of urban dwellers still share kitchen and toilet facilities with other families. The average housewife spends two hours a day shopping for the basic necessities of life, and food is actually rationed in some cities. Waiting time for telephones is up to 12 years. The quality of health care has actually deteriorated.

All in all, Western experts figure that the Soviet standard of living is the lowest of any developed non-communist country.

The Soviet people are an amazingly patient lot. But by the time Gorbachev became leader last March, cynicism and corruption were rife in Soviet society--and the need for rejuvenation was clear.

Gorbachev’s rapid thinning out of the old guard, his stated determination to modernize the economy and his talk about more emphasis on consumer goods have aroused great hopes among the Soviet people that here at last is a leader who will get things moving again.

This positive mood, however, won’t last long in the absence of concrete results. And therein may lie the problem.

When the party blueprint for the next 15 years is discussed in detail at the February party congress, it may turn out that Gorbachev is preparing to move with bold strokes. However, there was nothing in his speech last week to suggest the shift of resources from guns to butter that outsiders would like to see. Nor was there any evidence that reform of economic planning will go much beyond tinkering with worker and management incentives and calls for greater discipline in the workplace.

Indeed, Gorbachev pledged that no economic sector would suffer at the expense of another; the need for maintaining defense capabilities at a “proper level” was pointedly mentioned.

The specific setting of targets for the year 2000--production of 1 billion pairs of shoes, for example, along with 8 million refrigerators and 120,000 videocassette recorders--hardly suggests an impending retreat from the present system of trying to run everything from Moscow.

Certainly a lot more performance can be squeezed out of the Soviet economy with the half measures that Gorbachev seems to have in mind. And even if the rising expectations of the Soviet people are disappointed, Gorbachev doesn’t have to worry about being voted out of office.

But the Soviet leader knows that the present mood of optimism and hope is one of the best things he has going for him; the Soviet people are more likely to heed his call for hard work if they believe they will share in the benefits.

If these expectations fall flat, the result will surely be an even deeper abyss of disillusionment and frustrations, a still greater crisis in worker morale and productivity--and indefinite prolongation of the economic inferiority that Soviet leaders find so galling.