U.S.-Style Capitalism May Not Be Model for East Bloc

With shocking speed, Soviet-style communism has vanished as an example for other nations to follow. But does that clear the way for U.S.-style capitalism to prevail in the world?

Not necessarily. The social protections of Western Europe, the industrial conquests of Japan and the economic opportunities of America all have appeal. Fledgling governments in Eastern Europe, many believe, may select traits from each.

“I think they’ll pick and choose,” predicts Robert B. Reich, a professor at Harvard University’s John F. Kennedy School of Government. “I don’t think they could or would tolerate the same degree of homelessness, crime and sheer poverty in their populations that we manage to tolerate in the United States.”

Liberal critics of U.S. policy contend that the social democracies of Western Europe--marked by strong safety nets, often at the expense of growth--will hold more allure for Eastern Europe than bare-knuckles capitalism, with its winners and losers.

Others say the world’s future role model will be based on economic performance and that neither America nor Western Europe will be the first choice.

“Forty years ago, clearly the United States was the economic model,” said Bruce R. Scott, a Harvard economist. “But if you look at the last 40 years and ask who’s been the most successful in raising their standard of living, it’s got to be the Japanese.”

Whoever is right, fundamental American principles may deeply influence Eastern Europeans struggling to veer away from communism--whatever examples they choose to follow. That is because all leading industrial democracies adhere to such time-honored U.S. values as the belief in private property and the rule of law.

Eastern Europeans “should go back to Jefferson and Madison; there’s nothing new since then,” declared Jerry Jordan, chief economist at First Interstate Bancorp.

Certainly, the world’s leading industrial democracies have much in common: They all rely on the profit motive, private ownership and competition in the marketplace, at least to some degree. For Eastern Europeans desperately seeking to revive their own economies, the right role model may prove to be whatever works for the moment.

Said Jordan: “I think the message they’ve been sending--to the people they kicked out and to the people who are jockeying to replace them is: ‘We want results, dramatically better results. And we want to see them fast’.”