Soviets Propose Mixed Economy, Private Property

The Soviet government, proposing a major change in the country’s socialist system, presented legislation Thursday that would end the state’s monopoly ownership of all means of production and thus lay the basis for a mixed economy in the future.

Leonid I. Abalkin, the deputy prime minister for economic policy, described the legislation as the foundation for broad reforms of the Soviet economy, introducing much-needed competition through diversified ownership and bringing market forces into what has been a centrally managed economy.

The legislation is aimed primarily at enabling enterprises owned by local governments, by workers and, in some cases, by individuals to compete with those owned by the state, Abalkin told the Supreme Soviet, the country’s Parliament.

“The most important thing is to give the same legal basis to all forms of property, including that of the individual,” Abalkin said. “This is a great step forward. . . . This law has colossal importance.”

The bill looks forward to the privatization of many state enterprises through sale to their workers or to cooperatives or the leasing of their assets to entrepreneurs willing to take over money-losers in the belief that they can be made profitable through better management.

It also would give foreign companies setting up factories here the same rights as Soviet enterprises in the hope of attracting Western investment.

And it would permit, for the first time in more than 60 years, the private ownership of small service firms and capital goods such as farm equipment and professional tools, although initially only in limited forms.

The bill, as presented after months of discussion and drafting, would “recognize, admit and protect the ownership by citizens of the means of production,” Abalkin said, and thus abandon the long-held Marxist principle of public ownership of all enterprises and other means of production.

So radical is this departure from the socialism developed here in both theory and practice since the Bolshevik Revolution in 1917 that the legislation immediately ran into a storm of criticism from members of the Supreme Soviet, who saw it as a return to capitalism--although its principles were endorsed by the Communist Party’s Central Committee in the platform it adopted last week.

“This is nothing other than the legalization of private property,” one deputy, Leonid I. Sukhov, a taxi driver from the Ukrainian city of Kharkov, said, using the phrase that is synonymous here with capitalism in its most exploitative forms.

“Under the present conditions, I will be voting against this bill. . . . I believe, in fact, that the bill should be submitted to all the people in a national referendum. We have to ask the people. The people know better than these academicians what we should do.”

Vavil P. Nosov, a machine operator from Komi in northern Russia, said the bill would allow the many millionaires in the Soviet Union’s illegal “shadow economy” to make even larger profits by putting their money into legitimate businesses and taking them over.

Collective farmers and rural enterprises would be particularly vulnerable, Nosov said, if this bill were followed by other legislation permitting the buying and selling of land. The large amount of money that the “dealers of the cities’ shadow economy” could pay would tempt rural residents who were both poorer and less sophisticated, Nosov argued.

Other deputies expressed concern about the ownership of natural resources, including the water from the mighty Siberian river system. But they were told that these issues will be addressed in companion legislation on the ownership and use of land and natural resources and on the new relationship to be worked out between the central government and the constituent republics.

The real objection to the legislation, however, is ideological. Decades of Marxism have left most people with what one deputy called “an allergy” when there is a reference to “private property.”

Karl Marx and Friedrich Engels, as the ideological founders of socialism, had gone as far in their criticism of capitalism as to sum up their theory of communism in a single phrase--”the abolition of private property.”

“The very term private property has a great emotive force here, as many people associate it with exploitation, unemployment and social insecurity,” the official news agency Tass said in a commentary.

The 35-article bill, as a consequence, never uses that phrase, speaking instead of “the property of citizens.” At its first reading in the autumn, the bill caused such controversy that it underwent substantial revisions, according to Tass, and at least 10,000 changes were written into the legislation.

The bill, more significantly, also avoids defining “means of production,” except to give farmers the specific right to own equipment, such as tractors, that was previously classed as capital goods and thus not available for sale to individuals. This question will be settled later, Abalkin told reporters, so that some republics, notably Estonia, Latvia and Lithuania, could proceed on their own.

The legislation prohibits “exploitation” of workers, but it does not define “exploitation” nor specifically bar the employment of workers, whose salaries and benefits might be such that no one would argue that they were exploited.

The bill did have its defenders in the often emotional debate.

“If we want to have a market economy and participate in the international marketplace, then we need such a law,” Justice Minister Veniamin F. Yakovlev argued.

Alexander A. Korshunov, an aircraft factory employee in the Central Asian city of Tashkent, said that “private property already exists and will develop further--let’s not kid ourselves about that--but, like all forms of property, should be controlled and taxed.”

“We may not like private property, and it may go against what we have thought and been taught for a long time,” he said, “but that is not an argument against it, particularly when we are looking for a way out of the country’s economic crisis.”