Wishful Thinking Is Not a New Reality : East Europe: It is not so much democracy on the rise as communism in the decline. Free markets and economic independence from Moscow are still out of reach.

So impressed has been President Bush by the rapid transformation of Eastern Europe that he agreed to an early summit with Mikhail S. Gorbachev in December. “I just did not want to, in this time of dynamic change, miss something,” he explained. This was a timely decision indeed.

It took just several weeks after a non-Communist prime minister came to power in Poland for Hungary to also break ranks with communism. Influenced by these developments, people in Czechoslovakia and Bulgaria took to the streets demanding radical domestic reforms, while a new exodus of East Germans to West Germany--as well as repeated demonstrations by those who stayed home--forced radical changes that even tore open the Berlin Wall. About the same time, the conservative leader of Bulgaria, Todor Zhivkov, lost his job.

If anything is certain in Eastern Europe these days, it is that we haven’t heard the end of this story.

There is no doubt that reforms in what has been known as the Soviet Bloc are truly revolutionary. And yet, some of these events might have sharply divergent meanings. It is at times tempting to take wishful thinking for a new reality. These problems must be addressed anew as the Bush Administration ponders its strategy.

We applaud the victory of democracy in Eastern Europe, for example, while it is mostly the demise of communism that has been on center stage there.

Democracy in the United States and other Western countries is firmly rooted in the diversified interests of the population, defined by everybody’s place in a well-organized and functioning economy and society. In Poland and Hungary, however, the situation is still radically different. There the property is mainly state-owned, while the economy and society are in a state of flux.

While we applaud the defeat of Communists and predict the success of their opponents, it is the many former members of the party who are adapting faster to an emerging free market. Making use of their personal contacts as well as resources they often illegally amassed, for example, former Communists in Poland and Hungary started buying state-owned property with such enthusiasm that non-Communist politicians demanded a temporary stop to such sales.

We talk about impending victory of private ownership and a free market when, in fact, the most visible process in the region thus far has been the rapid growth of prices accompanied by disappearance of many goods from shops.

We talk about greater independence of Poland from the Soviet Union, while the Polish economy could not survive this winter if the Soviets suddenly stopped their deliveries of oil. A new non-Communist minister of the Polish Central Planning Office, Jerzy Osiatynski, said that Poland has no alternative to huge imports of Soviet oil because it has “no money.”

We rightly criticize orthodox Communists in Eastern Europe who resist the notion that democratization is a precondition for economic improvement in Eastern Europe. On the other hand, however, there seems to be a Catch-22 hanging over the Soviet Union and Eastern Europe. In order to function effectively, democracy has to be based on a free-market economy. Yet, a functioning free-market economy can be created in Eastern Europe only by strong governments capable of eliminating vast subsidies, closing ineffective enterprises and withstanding huge unemployment. There is not much to suggest that wavering reformist governments in the Soviet Union, Poland and Hungary will be able to achieve this soon.

Reforms in Eastern Europe seem to have gone past a point of no return. Yet the situation in Eastern Europe continues to deteriorate.

U.S. policy in Eastern Europe has always been relatively easy to define: Support for human rights, democracy, private property and a free market as well as for greater independence of those countries from Moscow. The Administration and Congress have also shown their willingness recently to support this policy with substantial assistance. The problem is, however, that neither reformers nor the West have been able to figure out how to put these goals into practice before emotions in Eastern Europe might take over reason. As Lech Walesa warned recently, Poland is “sitting on a powder keg of social discontent and the fuse is already burning.”

Well-functioning communication and a large dose of understanding between Washington and Moscow might make the final difference between success and failure of the ferment in Eastern Europe.