Waiting Out Gorbachev’s Reforms : It’s Too Soon to Conclude They Are a Link to Arms Control

Tass, the Soviet news agency, reported the other day that a Leningrad construction trust had gone out of business after having been declared bankrupt. As a result, 2,000 employees are temporarily out of work.

The enterprise, it seems, was failing to meet deadlines for completion of work. It was guilty of cost overruns. And the quality of work was shoddy.

The demise of a troubled company would hardly be news in the West. But it was a first in the Soviet Union, where state-owned enterprises have never had to worry about bankruptcy and workers have had virtually air-tight job security.

Western analysts read the bankruptcy story as a stern warning to complacent managers and bureaucrats that Soviet leader Mikhail S. Gorbachev is very serious about economic reform. And, in the view of a growing body of outside experts, this preoccupation with internal reform-- if it stays on track--will increase the likelihood that U.S.-Soviet arms competition can be moderated in the years ahead.

The “if” is important, because there is also a body of opinion that Gorbachev’s reform efforts are doomed to failure.

In his latest major pronouncement concerning arms control, Gorbachev accepted President Reagan’s “zero option” proposal for the withdrawal by both sides of all medium-range nuclear missiles from Europe with almost no strings attached.

There are two ways to interpret the Soviet leader’s “concession.”

One view is that Gorbachev is playing a clever game aimed at splitting Washington from its allies. Withdrawal of all medium-range missiles from Europe would leave the Soviets with a big edge in short-range nuclear missiles, chemical arms and numbers of conventional weapons.

Thus the signing of a zero-option treaty on medium-range missiles could leave the Soviet Union with a residual destabilizing edge in Europe-based nuclear and conventional weapons. It could also set the stage for acrimonious arguments within the Western alliance as to whether the Europeans are spending enough for their own defense, and whether a larger U.S. withdrawal from Europe is in prospect.

The other interpretation is that Gorbachev genuinely wants and needs agreements imposing significant restraints on the U.S.-Soviet military competition, especially in space-based strategic defenses, and is anxious to negotiate a Euromissile agreement as a step toward that goal.

The optimistic view is supported by the Kremlin’s repeated statements that it wants to do business with Ronald Reagan, not wait for his successor to take office in 1989. Instead of taking raw advantage of Reagan’s weakened position as a result of the Iran- contra affair, Gorbachev actually seems to be throwing him a lifeline.

Even more important is the evidence that Gorbachev has made internal rejuvenation of the Soviet system his top priority. And to have much hope of succeeding, he needs a period of relative quiet in U.S.-Soviet relations.

U.S. intelligence agencies reported last week that the long-sluggish Soviet economy grew by 4.2% in 1986--the best overall performance in a decade. However, they also predicted that Gorbachev won’t be able to keep it up.

The fact is that the traditional style of Soviet economic management is capable of producing impressive weapons but condemns the Soviet Union to permanent and increasingly serious economic inferiority unless drastic changes are made.

The outlook was explored at the recent Arden House Conference on U.S.-Soviet Relations, sponsored by Harvard’s Russian Research Center and the Harriman Institute at Columbia. Many of the assembled experts doubted that Gorbachev himself fully comprehends the depth of the need for reform. But he is showing an impressive determination to get on with the job.

Gorbachev, now three years in office, is moving to decentralize some aspects of economic decision-making and encourage the integration of information-age technologies into the economy.

A system of family-run, small-scale private enterprise is being inaugurated. Western companies are being invited to consider joint ventures in the Soviet Union. Factories are being warned that they must gear up to world standards, and that enterprises remaining uncompetitive may be allowed to perish.

From the first, however, Gorbachev recognized that accumulated social rot is part of the problem. He declared war against nepotism, cronyism, corruption and complacency among bureaucrats and enterprise managers. Zeroing in on absenteeism and low motivation among workers, he launched a campaign against alcoholism and promised (or threatened) to inaugurate new incentive programs that would reward good workers and penalize the slothful.

Despite some energetic housecleaning, however, he complains that his “reconstruction” program has encountered stubborn resistance among party and industrial bureaucrats who fear an erosion of their power and perks.

As some participants at Arden House pointed out, there are signs that ordinary Russians have their own doubts about reforms.

So far military men do not seem seriously out of step, possibly because they recognize the importance to the armed forces of building a more technologically competent society. But this could change.

Gorbachev’s chances of failure obviously are significant. Some U.S. experts predict that he will be out of office within three or four years because he won’t be able to move Soviet society, which is essentially conservative, out of its rut. Others think it more likely that his reform effort, in the face of opposition, will simply run out of steam. And still others argue that a more successful Soviet economy will not necessarily translate into a more accommodating Soviet Union anyway.

The truth is that we don’t know. Adam Ulam, director of the Russian Research Center at Harvard, urges that we give “two cheers for Gorbachev”--but wait another year or two before accepting as gospel the linkage between Soviet economic problems and progress in arms control. It’s probably good advice.