Limited Private Enterprise Approved by Soviets

The Soviet Union on Wednesday adopted a new law designed to encourage the growth of small private enterprise in the consumer sector for the first time since the 1920s.

The new law provides a legal framework for individual and family-owned shops and services. It was adopted unanimously at the closing of session of the Supreme Soviet, the nominal parliament.

An important feature of Soviet leader Mikhail S. Gorbachev’s drive to revitalize the economy, the law is designed to fill large gaps in the consumer economy that have been a hallmark of Soviet life for more than half a century.

Introducing the law to the Supreme Soviet, Ivan I. Gladky, chairman of the state committee for labor and social issues, said it gives legal sanction to workers who have long provided repair and other services on their own, outside the law.

But, he insisted, the new law does not create a system of private enterprise in the Soviet Union. “This does not mean we are reverting to private enterprise activities, and the allegations of certain bourgeoise leaders on that score are groundless,” he said.

Few Details Disclosed

Few details of the new legislation have been disclosed, but the Tass news agency said that as of May 1, 1987, the law will allow individual and family businesses to operate under government license in 29 areas of the consumer economy.

These include tailoring, shoemaking and small-scale manufacture of knitwear, furniture, toys, souvenirs, fishing tackle and other consumer products.

The list of permitted services includes household repairs, tutoring and construction.

Tass said the law explicitly prohibits a number of activities such as making weapons, selling narcotics, running public baths and gambling operations as well as operating “duplication and copying machines.”

Soviet law already strictly controls access to photocopying machines, to prevent the spread of banned literature and uncensored political discussion.

Bureaucratic Obstacles

Technically, Soviet law has long allowed private citizens to work for themselves in a limited number of occupations, such a tutoring, law, small crafts and repairs. But heavy taxation and a labyrinth of bureaucratic obstacles have held this form of legal private enterprise to a tiny minority.

Soviet economists estimate that between 17 million and 20 million other workers moonlight illegally from their jobs to provide a variety of consumer services, and it is this huge area that the new legislation seeks to put on a legal--and state-regulated--footing.

“In the absence of national legislation, local authorities . . . were for the most part prohibitive,” Tass said in a report on the new law Wednesday. “This, naturally, fettered the initiative of those who would like to put in some work in their free time and had a negative effect on services to the population.”

“Government-owned services, though not adequately developed, were in a monopoly situation, dictating to consumers the kinds and range of services, their quality and cost,” Tass observed, predicting that “the situation is now likely to change.

“The new law will stipulate the status, rights and duties of people willing to render services individually. They will become serious competitors of the government-owned system of services and make it improve faster,” Tass added.

Key Points Left Unclear

The law stipulates that only individuals and “families” may operate small enterprises and that other workers cannot be hired. Official reports on the law, however, leave a number of key points unclear, among them the legal definition of a family. Tass said only “jointly residing family members” are to be allowed to work in a private enterprise, which seems to suggest that even immediate relatives who live in separate apartments would not qualify to work together.