Can Party Tolerate Power Sharing? : Freer Soviet Economy Has Political Fallout

The Politburo offices in the Central Committee headquarters of the Communist Party of the Soviet Union, the inaccessible seat of all power here, are disappointing to the Western eye. Instead of a bustling, James Bond-style enemy command center, one finds old-1717662568of trays of cookies and tea.

The office occupied by Politburo member and propaganda chief Alexander N. Yakovlev, for example, suggests nothing more imposing than the quarters of a branch manager for Mutual of Omaha, with a large, businesslike desk and credenza at one end and a simple conference table at the other.

Same as Gorbachev’s

It is, one is told, of the same design as the offices of General Secretary Mikhail S. Gorbachev, No. 2 man Yegor K. Ligachev and the other Politburo members down the hall.

But in these unpretentious quarters--entered from the street through an unmarked private doorway guarded by a solitary plainclothes KGB agent--decisions are being made that will determine the fate of 280 million people living in a nation that covers one-sixth of the globe.

The power that these 13 Politburo members wield is at first glance enormous and, within their borders, unchecked. There is no organized opposition, no formal system of checks and balances, no rivals for authority.

But what these Soviet leaders know, perhaps more than anyone, is that they confront an awesome economic and social reality that may mock their best efforts at reform, as it has undermined the best and worst efforts of their predecessors.

Next month, Gorbachev, Ligachev, Yakovlev and their colleagues will formally initiate a series of far-reaching changes designed to leave the Communist Party in fundamental control, while allowing hundreds of thousands of individual enterprises to make their own economic decisions.

“From Jan. 1 next year, enterprises become self-supporting and self-managing. They will be independent and they will act independently,” Yakovlev said during a recent interview with The Times in his Politburo office.

It sounds simple enough, but it represents a wrenching assault on the tightly controlled, overly planned economy cemented into place by Josef Stalin on the ashes of Vladimir I. Lenin’s New Economic Policy.

The new policy is in many ways a return to what existed before Stalin: a meld of state ownership and private initiative. But the intervening years of terror, followed by corruption, have made initiative a dirty word here. Now suddenly, it is declared a good thing, but the transformation of a people’s psychology will not come easily.

“The dead catch the living,” is the way Nikolai P. Shmelev, a leading Soviet economist, recently put it, citing an old Russian proverb on the power of inertia. “Our mentality should be changed, but you cannot change your mentality in any other way than step by step.”

Shmelev, who has written provocative articles in the Soviet media on the need for increasing the pace and scope of economic change--and who has been quoted by Gorbachev--believes that the number of people who fully grasp the crisis that the Soviet economy has fallen into is “as thin as the paper on a cigarette.”

Below this thin, red line of reformers, Shmelev believes, are a substantial number of Soviet citizens who fear that they have something to lose in the new order.

“Of course, people are afraid of some things like price reforms,” he said. “Some are worried that their standard of living will decline.”

Despite his warnings, he is not a pessimist: “A lot of things have changed in our political, spiritual life, and if the market changes go on, in two or three years we will see some substantial results.”

Contrast to China

Shmelev argues that change has come more easily to China because its economy, which was much poorer to begin with, was devastated by the Cultural Revolution of 1966-76.

“They hit rock bottom. We do not live so badly: We have food, we have flats (apartments), we have work and some cultural life,” he said.

“Of course, not everyone is satisfied with the political life, but in a material sense we have an acceptable--but not very good--level of living in our country. We do not feel disaster here.

“And I can understand why some people say, ‘Why all this fuss about perestroika? Why should they change everything in our economy, in our political life and so on? Life was acceptable.”’

This reality is not lost on Politburo member Yakovlev, who remarked that, in discussing reform, “we also have to talk about psychology.” In fact, he concedes the inherent difficulty of developing independent minds in a state that has long insisted on guidance from above rather than initiative from below.

Yakovlev and most, if not all, of his Politburo colleagues, along with the new breed of technicians, like Shmelev, who advise them, seem to accept the notion that significant political freedom is essential in a modern economy.

“It is not possible to be for perestroika (reconstruction) and against glasnost (openness),” Ligachev, reportedly a Politburo conservative, recently told the French newspaper Le Monde. It is, he said, “silly” to divide the two.

It has become an axiom of the Soviet reformers’ new faith that past efforts at change failed precisely because they did not make this linkage. But how far will the new leadership really go down the path toward power sharing?

American Model

Yakovlev, who studied at Columbia University and spent 10 years in Canada as the Soviet ambassador, sees something of a model in local, nonpartisan American politics.

“We have undertaken a number of measures delegating authority to local Soviets and local industries--authority on social issues, distribution of living quarters, land management, influencing the decisions about what is to be built within the city and the area,” he said. “I know that American municipalities have powers of this sort, and this is what creates the basis for independent decisions.”

However, American municipalities operate in a larger political context that includes an independent judiciary, political parties and constitutional limits on government.

And, while Yakovlev insists that glasnost requires rule by law--”We believe that socialist democracy cannot exist without strong and clear laws which are enforced in this society”--he clearly does not have in mind American-style checks and balances.

In place of the guarantees against tyranny that limited government provides, Yakovlev and the other Soviet reformers believe they can substitute direct participation in economic decisions.

But the question persists: Assuming that such control from below can be worked out, and that socialist ownership can be made democratic, what is to keep it that way?

“Of course, all those processes we are talking about now,” Yakovlev answered, “are to be appropriately dressed in legal forms. This is very important. I attach great significance to it. We do make some steps in this direction now.

“For example, at the last session of the Supreme Soviet we adopted a law according to which every individual can apply to a court if his rights were violated by officials,” he said. “Those processes are progressing, but they are still in the very beginning.”

No Check on Rulers

The Soviet constitution always has contained such promises, but there as yet exists no check on the rulers’ ability to ignore them.

Who will hold today’s reformers responsible if they gut the courts by intimidating or replacing judges? And will independent groups be permitted to organize and raise and spend their own funds to publish and otherwise make their views known as a check on the power of the Communist Party?

The Soviet leaders have explicitly rejected any competition between the Communist Party and other political parties. But they have countenanced a gray area of informal organizations that have sprung up throughout the country under the umbrella of glasnost. The legal standing and proper role of such groups are questions avoided in most party commentaries, and Yakovlev follows suit.

“I have read about the informal groups. There must be thousands of them, though I don’t know how many,” he said somewhat disingenuously. “They do not cause too great an interest. Let them exist. If they don’t violate any laws, why not?”

But is it possible to have economic freedom without political pluralism? The answer may begin to emerge with the formal implementation of perestroika next month. Suddenly, 60% of Soviet economic enterprises will, on paper at least, be self-financing and self-managed.

New election processes governing the selection of managers for state farms and industrial enterprises will begin, and new laws aimed at protecting the rights of individuals as they participate in this process will take effect.

If such reforms are unsuccessful, the results could be alarming.

Views on Stalinism

Asked whether a return to Stalinism is possible, Yakovlev immediately said, “No,” citing the revulsion that he and his colleagues have expressed toward a vicious past that claimed members of their families among its victims. (Yakovlev’s father was forced into hiding in one of Stalin’s purges).

But then Yakovlev paused and added in tones more sad than dramatic: “If we fail economically, if we really fail, yes, Stalinism could return.”

Yakovlev is thought to be the Politburo’s leading liberal and is often referred to as the “father of glasnost. “ But he laughed at talk of splits in the Soviet leadership; an outsider is in no position to judge, for despite glasnost, the top echelon operates in continued secrecy.

For example, Yakovlev dismissed Western reports of a split between Ligachev and Gorbachev. That sentiment was echoed by the Soviets’ leading expert on the United States, Georgy A. Arbatov, who sat in on the recent conversation between the Politburo member and an American reporter.

“You need somebody to fear,” Arbatov said. “If you cannot make it the No. 1 leader, you pick out somebody else.”

Yakovlev added, “I recall that (Mikhail) Suslov was depicted as a tough man in (Leonid I.) Brezhnev’s time, and who was it at the time of (Nikita S.) Khrushchev?. . .It was (Frol R.) Kaslov.”

Similarly, Yakovlev said that the recent dismissal of Moscow party chief Boris N. Yeltsin from his position as an alternative member of the Politburo had “nothing to do with glasnost. It is simply not true that this represented a victory of conservatives over the Gorbachev line.”

‘People Should Know’

In Yakovlev’s view, the concept of glasnost does not lend itself to a liberal or conservative interpretation since “ glasnost can have no limits. We are talking not about broader or narrower glasnost but about the same glasnost. People should know everything and about everything.” He continued: “Of course, we do have people who do not want any glasnost and any democracy at all. I would be insincere if I didn’t mention that there are people who say that democracy and glasnost will backfire and they try to scare us. That’s why we need restructuring.”

Ligachev evidently agrees, having told Le Monde earlier this month that “restructuring is democratization plus economic reform.”

Restructuring also requires severe cuts in bloated Soviet military expenditures. On defense and foreign policy, there are no visible signs of differences within the leadership over the content of what Gorbachev calls “the new thinking.”

“I cannot recollect any divergences on foreign policy,” Yakovlev insisted, “There is a very firm consensus, including the military.”

The domestic imperative for limits on Soviet interventionism and for cutbacks in military expenditure is quite clear.

“Our security,” Gen. Yuri Labedev of the armed forces general staff told The Times, “depends on our people finding the same quantity and quality of goods in the stores as your people find.”

Labedev, whom Soviet intellectuals regard as a hard-liner, said that the arms control agreements currently being negotiated with the United States are part of perestroika.

Asked whether there is any resistance in the military to Gorbachev’s new thinking, he replied: “I am always surprised when I am asked such questions. I am deputy chief of the department in the general staff concerned with the elaboration of our position in arms reduction talks. The military in our department were the authors of these new approaches (to arms control).” He continued:

“And, moreover, during recent times we have to take into account that we have very major problems to resolve--the food problem, reconstruction of our economy. . . . We certainly understand that to carry out this task we need resources, and these resources can be obtained through reducing military expenditures.

“We also have a problem with needing more workers, and in reducing weapons systems we will have more workers to be hired in civil enterprises.

“We have to give the people an example that something is being changed, and the first sign of something being changed for a man in the street is goods in the stores--goods that are available in the West. So, we have a big job to do. But, in waging perestroika, we are winning in a political and moral sense, and we are gaining our supporters in the West.”

But while the political mandate for restructuring may be there, the technical problems remain enormous.

“For most of us economists, we only now begin to understand just what a difficult task is before us,” said Shmelev. “We need to reconstruct all of our economic mechanisms, not only organizationally but in a material sense.”

This last is a reference to the fact, fully accepted here, that investment in Soviet technology has fallen off from the pace of the world’s leading economies.

The Soviet economy has been stagnating since its last great growth spurt in the 1960-65 period. Since then, rising world prices for petroleum and other raw materials exported by the Soviets have enabled them to import food stuffs and other commodities from the Western market while their own production floundered.

In Shmelev’s estimation, more than $100 billion gained from Soviet oil exports were wasted on the purchase of foreign grain alone--money that he feels should have been used to purchase high technology equipment for industry instead.

The failure in agriculture has led all other failures, depleting scarce resources in its wake. In fact, the Soviets leave a greater amount of food rotting in the fields than they import.

This waste results from shortages of storage, transportation and marketing techniques. But most of all, there is simply a lack of adequate motivation for farmers belonging to the huge state enterprises to gather the crops.

Potato Crop Disaster

This year’s potato crop provides a good illustration. It was a disaster, and one prominent Moscow editor said that “this winter we will be selling potatoes by the cupful.” Why this shortage when sufficient numbers of potatoes were planted and grown to maturity? Because 40% of the potato crop was left unharvested when the first snows hit.

As so often happens in the Soviet economy, all was going well with potatoes until an unexpected glitch developed. The system exhibits a woeful inability to deal with surprises in a flexible and creative manner.

A big investment was made in potatoes, and then came the unusually harsh and early fall rains, which complicated the harvesting task. In the time-honored fashion, volunteers from the city were recruited to help get the crop in with the usual mixture of show and inefficiency.

It was only in the closing weeks of the harvest that the new ideas of perestroika were tapped and farmers were told that they would get to keep one bag of potatoes out of every six that they brought in.

Suddenly, the crop was gathered with a frenzy, but the solution came too late. In those areas where the new incentive was tried, the potatoes were saved, but elsewhere there was more of the waste that has been endemic to the system.

What is different now, thanks to glasnost, is that the foul-up was widely discussed in the Soviet media.

Challenging Myths

However, changing agriculture requires going up against the most cherished myths and deepest tragedies of Soviet society. It requires coming to grips with the full dimension of the devastating nightmare of Stalin’s forced collectivization and murder of the kulaks (prosperous farmers).

In the process, Stalin managed to enshrine the principle that anyone who is doing well through his own efforts must be at best a crook and at worst a class enemy. Fear of enterprise and innovation and contempt for those who chance it form the mental gulag that is Stalin’s enduring legacy.

Even Gorbachev, for all of his encouragement of a critical re-examination of the Stalin years, has stepped gingerly around this problem. His speech on the 70th anniversary of the Bolshevik Revolution did contain a kind reference to Stalin’s archrival Nikolai I. Bukharin, but it failed to deal with the basic issue that divided them: the role of the individual in the economy, particularly in agriculture.

More to the point, will Gorbachev and the rest of the leadership now move decisively to return decisions about the use of the land back to the people who actually till it? Or will the reforms merely involve tinkering with a cumbersome bureaucracy that farms more paper than crops?

Shmelev and other reformers argue that changes in agriculture have to go deeper and come faster than is contemplated in the new laws, which allow for contract teams in agriculture and require that the various agricultural enterprises become self-sufficient.

They look to the all-important Central Committee plenum session on agriculture expected next April to usher in a revolution in Soviet agriculture, returning control of production to farming families in key areas of the country, particularly in the central Russian grain belt.

‘Paying for the ‘30s’

“Our main headache is our agriculture,” Shmelev noted. “We are paying for the ‘30s just now.”

Gorbachev himself comes from a rich agricultural region, which he administered on his way up through the party ranks. He was also at one point directly responsible for the nation’s entire agricultural output, experiencing both failure and success.

And in the last two years as general secretary, he has presided over a middling record, with two large grain harvests in a row that nonetheless fell short of their planned targets and required costly imports.

There are many reformers who feel that Gorbachev will prove his mettle by how quickly he moves to give individual farming families and teams of such families decisive control over the production and marketing of agricultural goods for profit. Such means already exist in the management of a small fraction of the land. Leased private plots representing 3% of the land now produce 40% of the vegetables that make it to the market.

“In our newspapers, we are talking now about some kind of family leasing,” Shmelev said. “Of course, they will be united in cooperatives, but there will be private enterprise especially in the regions of central European Russia.”

There is no single method for all of Soviet agriculture, he argued.

“In huge regions of our country, kolkhozes (collective farms) and state farms in traditional form are self-supporting and can be very profitable, but not everywhere,” he said. “As I understand the problem in the central regions of traditional Russia, the main form of agriculture should be private leasing of land--family leasing.”

One of the oddities of the Gorbachev era is that it is apparently easier to bring about political freedom than economic efficiency. There is a widespread fear in the Soviet Union that the social safety net which guarantees full employment and a minimal standard of living will be torn by perestroika.

Unemployment Concerns

Gorbachev’s public endorsement of Shmelev’s economic thinking also contained a criticism of the implication that unemployment might be a necessary price to pay for economic progress.

No one, Shmelev included, dares suggest such a thing. “It may be necessary to fire 1% or 2% of the people in an enterprise who are drunkards or just don’t work,” he argued, “but never 10%.”

On the contrary, he said, there is currently much disguised unemployment in the Soviet Union because of under-utilization of labor skills and industrial capacity.

“We have much more vacant capacity than labor force. It’s paradoxical, but in our country 20% of our total industry is unused. In some branches it’s 40% and 50%,” he said. “One of the reasons is lack of labor force, but 25% of workers are not used productively. The task for us is how to bring this potential labor force to join with this unused capacity.

“People shouldn’t be afraid to lose their work. It’s not good.” Shmelev insisted. “I don’t want any capitalism in our country. I don’t want to lose our social net. Lenin’s NEP (New Economic Plan) will be quite enough. I feel that you Americans are some kind of extreme and we Soviets another, and somewhere in between is the truth, maybe in Liechtenstein.”

The truth, understood very well by both a Politburo member and an economic technician, is that to make the economy grow, even an authoritarian society must aim for just the right mix of the carrot and the stick, of fear and greed, of the social net and market forces. And neither knows quite how to do it, but they agree that it must be done.

“I hope that our leaders and the common people now understand that there is no choice for us, no choice,” Shmelev said.

“Everything already has been tried except this thing. Even people who are against perestroika, they have their ‘no,’ but they haven’t any ‘yes.’ They have nothing to propose different from Gorbachev’s ideas. They can grumble; they can shout, ‘What are you doing?’ But what to do they have? Nothing.”

Times researcher Nina Green contributed to this story.