Turmoil Hides Soviet Economic Shifts

Americans agree that Mikhail S. Gorbachev is a real master of public relations abroad. For some reason, we do not draw the obvious conclusion that he must be even better with public relations at home. We take his various domestic actions and the rumors about them at face value when we should be stepping back and trying to sort out his strategy from his public relations.

In no area is this more necessary than in Gorbachev’s emphasis on democratization and in the way that the pending party conference is being treated in the Soviet press and in the rumor mill. In retrospect the summer of 1988 is likely to be seen as a turning point not in democratization but in economic reform. This is not a paradox, but a deliberate result of Gorbachev’s strategy.

One should, of course, concede the possibility that Gorbachev really is a man who wants to introduce something like constitutional democracy into the Soviet Union and become an elected leader. It is possible that he wants delegates to the party conference to be elected democratically, which naturally would mean from non-Russian areas like Armenia and Azerbaijan, not just from Moscow University. It is possible, but highly improbable. All the evidence suggests that Gorbachev is gaining tighter and tighter control over the party apparatus, and, if so, he surely wants these officials to control the delegation to the party conference.

Why, then, is there all the talk about democratization? Gorbachev is serious about a “democratization” of a type--like looser censorship and greater political participation of the limited sort found in Hungary and Poland.

In part, Gorbachev wants to persuade foreigners and intellectuals that he is for democracy and that he has heavy conservative opposition. That leads people like President Reagan and Andrei D. Sakharov to support him.

But there is a deeper game going on. Radical economic reform has many frightening features for the population. Meat and bread are only the most sensitive of products whose prices must be radically raised; foreign investment means that workers must be supervised by capitalists who have been described as blood-sucking exploiters for 70 years; millions of people will have to change jobs, and some may not find it easy to find new ones.

As radical economic reform has been introduced, the most sensitive steps have hardly been discussed publicly beforehand. For example, the laws permitting individual labor and foreign investment in late 1986 and early 1987 were published almost without prior discussion or even a hint.

Democratization and historical arguments have been useful in distracting attention from forthcoming economic reform. The law permitting foreign investment was published on the same day as a Central Committee session on democratization that opened in January, 1987. As a consequence, the legalization of foreign investment received little attention.

Similarly, Soviet conservatives in the last six months have been feverishly attacking liberal efforts to elect delegates to the conference and to rewrite history. In the process the conservatives have not been focusing on economic-reform issues. Since Gorbachev doesn’t want a free election of delegates or total criticism of the Soviet past, these are areas in which he finds it useful to have conservative attention and in which he finds it easy to “compromise” with them and give them “victories.”

The problem for the West has been that we have consistently taken the lack of forewarning of radical economic steps as evidence that economic reform has been stalled. As a result we have been consistently surprised, and this is likely to be the case now.

The Central Committee position paper on the conference signaled that economic reform will have top priority. A law was just passed accelerating the introduction of private enterprise (“cooperatives”) in the service sector. The new “lease brigade” (a term to describe the private use of collectively owned land) has been emphasized in discussions of agricultural reform. This probably means the introduction of radical reform after this fall’s harvest. June and July are the months when next year’s plans are drafted.

In the past, enterprises operated 100% on the basis of state orders or government contracts. The party has called for a reduction in such state orders. The language is abstract (and therefore not frightening to the layman), but if it is serious, it means the partial introduction of the free market into industry

We should watch the economic aspect of the conference very closely. If Soviet ministries and factories have to seek an increasing proportion of their own orders and sales, even in part, this soon will have a major effect on foreign trade--exports as well as imports--and we will have to decide how to respond. For us in the United States, this is a far more immediate concern than the degree of democratization that does or does not take place.