Gorbachev: ‘We Are Not Asking for a Free Ride’

Excerpts of an exchange between Soviet President Mikhail S. Gorbachev and U.S. congressional leaders at the Soviet Embassy:

On Trade

GORBACHEV: The American press is saying, “Gorbachev, compared to any other Soviet leader, has come to Washington very weak and he will not get anything.” But I am not going to ask for anything, to beg for anything, even when I, for example, raise important matters such as trade, and it’s important for us now to expand trade because we are moving toward a market economy and it’s important for us to have the Americans participating in that process, but certainly we are not asking for a free ride. We will be asking for normal credits and, of course, we will be paying and paying the interest. For us it would be humiliating if we were to . . . beg for something from you, and, of course, hopeless. . . .

In Congress . . . you should do some rethinking of how to act so as not to impede trade. . . .

Economic Reform

SENATE MAJORITY LEADER GEORGE J. MITCHELL (D-Me.): Since our meeting (in Moscow recently), you, of course, announced the change in policy that will result in price increases beginning July 1. . . . I wonder if you could tell us what further steps you anticipate taking with respect to the economy and when. . . ?

GORBACHEV: We have dismantled the old system but we have not yet put in place a working system, a new system, and our ship has lost anchor and therefore we’re all a little sick.. . . If that process takes too much time, it can create the kind of instability . . . that will just disorganize our entire society. So, we decided that we have to radicalize our reform. . . .

We have not yet lived in a society which regulates everything economically and legally. It used to be that everything was regulated by fiat, by dictate from the center, and of course that is a crimp on our society and on people. . . . And so freedom is what we focus on. Freedom is the key pivotal element of perestroika --freedom politically, freedom intellectually, freedom in deciding what a person wants to do with his life. So we have this now. . . .

We’re going to have a system of various forms of property, which will have state property, collective property, comparative property, lease property and private property. All those elements will be phasing out state property. We will be introducing shareholders’ societies, leaseholds, private initiative and entrepreneurship. . . .

We are discussing now the law on taxes. . . . We need anti-monopoly legislation. We need competitiveness in our economy, and that is why we will be adopting laws on entrepreneurship, on small and medium-size business. . . . We do not have systems of stock exchanges, monetary or labor exchanges. So it’s really something that we have to be developing, an entire infrastructure for the market. . . . We will have created the entire infrastructure in order to begin the transition to a regulated market economy on Jan. 1. . . .

We also need to address the question of prices, because it is only in our country that we have such a skewed system of prices that do not reflect anything other than chaos and other than the inertia of the old command system. They do not reflect real costs. They do not take into account demand. They reflect just the dictates of the producers who do not want to increase their productivity. . . .

On the first of July, the price of bread is to be raised. Bread is too cheap in the Soviet Union. One kilo of bread costs two dollars here, and in the Soviet Union, the best bread costs . . . just one-tenth of your price. . . . The kids play football with loaves of bread, feed bread to cattle, and it’s really outrageous, and our people are asking that this be changed. . . .

In order to really get the people to understand what . . . the market means, . . . but to do that without pain, . . . we’ll compensate (for) price rises for bread fully. The entire subsidy for bread will be transferred to the people. . . . We have to begin this change of direction which is very dramatic, and some people are scared . . . about price increases. What can I say? Well, we have to respond to . . . people’s concerns. And the academics have to think about that, and the government has to think about that. . . .

We will introduce social protection measures with regard to pensioners, families with many children, students, all those with fixed incomes. And, of course, it applies to workers. . . . Society is still unprepared to live under market conditions. A lot of things may seem funny to you, and even ridiculous and surprising. What are these Russians up to? you may think. Well, you who have lived all your lives in market conditions may be surprised by that, but . . . we have to turn around our brains, as it were, to adapt ourselves to this new kind of situation. . . .

We hope very much that . . . we will find mutual understanding, and that you will be able to find certain ways of supporting us. . . . Yesterday we discussed (with President Bush) . . . the possibility of creating some kind of a Soviet-American brain trust composed of economic people, scientists, scholars. . . .

This is a genuine revolution. . . . Please don’t be frightened, because it can frighten us, too, if you get frightened. . . . We’re not just putting paint on the wall. We’re doing real restructuring, overhaul. . . Otherwise, it would be a fraud, not real perestroika . . . .

On the Baltic States

SENATE MINORITY LEADER BOB DOLE (R-Kan.): When it comes to trade . . . there’ll be certain questions raised in Congress about the Baltic states, about Lithuania, Latvia, Estonia independence if it comes to, say, most-favored-nation (trade status) or whatever it might be. . . .

GORBACHEV: When you link trade and the Baltic factor, this commits me to taking greater action. . . .

We have found ourselves, as a result of the actions of a certain group of people (Lithuanians)--they are no politicians, they’re musicians who may be good musicians, I don’t know (Lithuanian President Vytautas Landsbergis is a music professor)--but we have found ourselves in a trap. In fact, they themselves got themselves trapped and put us into a trap, too, by breaking the rules of the game (in trying to secede from the Soviet Union), as if no realities of the constitution exist, either for them or for us. . . . (Lithuania’s leaders) do not believe that their own people will support them (in a referendum). I am personally sure that their people will not support them. . . .I’m accused that I remain idle, I’m not taking action. . . . It is for the sake of perestroika itself that we wish to avoid taking action that might lead to serious repercussions. . . . We will be trying to use every opportunity in order to find a solution without extreme measures within the framework of the constitutional process . . . because this is the key to resolving similar issues with other republics. . . .

Ask (French) President Mitterrand why it took him 10 years to decide a similar question . . . about the secession of (New) Caledonia from France. So we are entitled to ask for a normal discussion for a normal orderly process. . . . I would like to ask the two leaders of the Senate here, why do you allow, for example, your own government . . . to invade Panama, which is a sovereign country, if you love freedom so much. . . ? Why that double standard?

SEN. MITCHELL: I think there are very significant differences in the two situations in that . . . the overwhelming majority of the Panamanian people received gratefully American forces which liberated them. And while you expressed your opinion that you don’t think that the majority of the Lithuanian people favor independence, I think most of us have a different opinion. . . . I think that a vote in Lithuania would produce an overwhelming result in favor of an independent Lithuania.