Capitalism Up Close : Perestroika: Soviet students at Loyola Marymount this summer are puzzled--and excited--about the theory and the practice of U.S.-style free enterprise.
Inside a stuffy U.S. classroom, two dozen shirt-sleeved Soviet managers puzzle over a peculiar capitalist custom: putting products on sale.
“Do they have to sell it at the price advertised?” wonders one of the middle-aged students. Demands another: “How long do they have to keep it at the sale price?”
Welcome to Capitalism 101--or something like it--at Loyola Marymount University in Los Angeles, where a group of Soviets is getting a close-up view of free enterprise this summer. Besides attending lectures on U.S. business, they have trekked to the Glendale Galleria mall, Disneyland, a Lucky’s supermarket, a Ralphs warehouse and other local outposts of free enterprise.
“They want to see how management can be entrepreneurial,” explained John T. Wholihan, dean of the university’s college of business administration. “They want to see how we take risks.”
In one recent class, the Soviets were taught about such exotic Western marketing practices as sweepstakes and discount coupons. Professor Gordon L. Patzer, speaking through a translator, also stressed the importance of understanding the consumer psychologically.
And that prompted a question: “What is the balance between the conscious and subconscious aspects” of reaching the customer? asked Sagit A. Muslimoff, a bearded official with the Russian Center of Plastic Eye Surgery in Moscow. As the Soviets scribbled on yellow legal pads, the teacher responded: “It’s difficult to say which is more important, but we have to say both play an important part.”
The monthlong visit embodies an unusual cultural link, even in an era when perestroika has bulldozed many barriers that separated Soviets and Americans in the past.
Loyola is a Jesuit university, tied to a Catholic order that was banned in the Soviet Union after the Communist revolution of 1917. Yet in today’s changing climate, such history is just that: history. “I don’t think anybody has thought of it, even in the back of their minds,” said Gary P. Sibeck, associate dean at the business school. “The subject has never come up.”
The summer program grew out of contacts between Loyola professors and officials of Sinerghia, an Italian-Soviet venture that sets up management training for Soviets. The students, mostly men in their 30s and 40s, represent a range of industries and regions, including two executives from a Siberian metals factory, one from a television plant north of Moscow and a fabric manufacturer near Gorky.
They spoke enthusiastically about their trip during a break between classes. Yet, to some, the bounty of America’s consumer society appeared downright bizarre.
“I can’t understand where is the sense in having 80 types of bones for dogs,” declared Romik B. Saakijn, president of a Soviet-German joint venture that sells water purification equipment. He added: “I think it happens in a society which has everything.”
That everything also includes greater freedom from officious bureaucrats. When the Soviets arrived in Los Angeles, “one of their first questions was, ‘Do we need to have our passports available for review by your police?’ ” recalled Dean Wholihan. “We said, ‘Why don’t you put your passports in the hotel safe and leave them there?’ ”
The cultural chasm applies to business, as well. Take public relations, a very foreign concept to many of the visitors. The Soviets bristled with questions when two executives from the Hill & Knowlton public relations firm lectured on the topic.
“Can you convince the American public that our products are better than theirs are?” asked a student, somewhat mischievously. Replied Greg LaBrache, a Hill & Knowlton vice president: “If they are.”
A student wanted to know if U.S. public relations firms invest in newspapers that they wish to influence (They don’t). Another wondered if a PR firm could exploit inside information it gets on a client in a way that might harm the client. “The PR firm would lose its reputation and credibility,” LaBrache answered earnestly.
Amid the spirited discussion, one Soviet shouted out with apparent sincerity: “We invite you to set up your office in Siberia!”
Later, the students spoke with a reporter about their goals at a time when the future of the Soviet economy remains murky.
Vladimir A. Ovchinnikov, a manager at a television factory, said he wishes to export his products to America to gain valuable Western currency. Eventually, the Soviet Union “could come to be a similar society and similar economy to the United States,” said the gray-haired official, whose plant is an hour’s drive northwest of Moscow.
But he conceded that in his own republic of Russia, “the Parliament hasn’t got any concrete program yet” to develop a free enterprise system.
Muslimoff--who earlier had asked about the consumer’s subconscious--predicted that the highly centralized Soviet economy will become more amenable to U.S. management know-how, “maybe not right now, but in the near future.”
As Muslimoff spoke, his colleague Leonid I. Berman nodded in agreement. The two seek ties with Westerners in their firm’s technology of transplanting eye tissues. The Soviet Union’s fledgling capitalists might face an uncertain destiny, Berman said, but “if we wouldn’t hope for the better, we wouldn’t come here to America.”
