The Scariest Word to Soviets? It May Be 'Privatization' : Reform: Concepts of private property and free enterprise violate everything they have been taught.

TIMES STAFF WRITER

"My father and grandfather shed blood for this land defending this heroic city," said Lydia, a 55-year-old pensioner. "I don't understand why I should have to buy land now."

Nikolai, 52, former chief of philosophy of the local Communist Party school, agrees. "Our society is just not ready for this," he says.

Like many others, he'd like a third way between socialism and capitalism. "Instead of private property, and instead of state property, let's have common property," he proposes.

They are apprehensive--even indignant--about the idea of "privatization"--the term for transfering the land and factories from state ownership to private hands as part of the former East Bloc's move toward a more free-market economy.

No issue is more important to the effort to rescue the Soviet economy. Economists say that aside from obtaining massive foreign loans, selling off state property is the only way for the countries of East and Central Europe to pull themselves up by their own bootstraps.

No issue is more volatile because the concepts of private property and free enterprise violate everything that Soviet citizens have been taught by communism for seven decades--not only ideologically, but practically and psychologically as well.

Yet discussions here among two dozen residents, in connection with an extensive opinion survey by the Times Mirror Center for the People and the Press, poignantly illustrate the doubts and fears of Soviet citizens from the Atlantic to the Urals struggling to understand what privatization will mean.

Similar talks with another 125 people in six other cities in the European part of the Soviet Union last month turned up similar concerns--sometimes plaintive, sometimes ignorant about free-market forces, but usually fearful that capitalism will mean less job security and more hard work.

Soviet citizens have been unnerved at finding out that entrepreneurs who buy low and sell high--traditionally despised in the Soviet Union as black-marketeers and speculators--actually are performing functions that are vital to making a free market work.

For example, Viktoria, a Leningrad woman, complains about a new cooperative factory that is selling dresses for 150 rubles while state-owned shops are selling similar items for only 15 rubles.

Viktoria admits that the state shops often are bare, that the dresses sold by the cooperative are more stylish and readily available and even that no one is forcing her to buy the more expensive clothes. Unlike food, for instance, they are not a necessity.

"But it's not fair," she insists. "It's speculation, profiteering. They shouldn't be allowed to price the dresses so high." A moment later, apparently without recognizing the contradiction, she says she favors "free prices that are state-regulated."

"We really aren't prepared for these things," explains a Moscow sociologist. "As just a small example, you in the West give children a small allowance, to teach them how to manage a budget. That is a totally foreign idea here. Here, parents take care of children, and the state takes care of parents."

Several other themes, not all discouraging, emerged from the discussion groups and interviews:

* Soviet society appears to be in free fall, the people disoriented. "We can talk about anything today," Alexander, 35, a Leningrad police officer, says, "but it has a hollow sound." Many express a severe loss of national self-esteem, speaking of shame that the former superpower in which they live is now a "Third World" country. Katrina, 50, a literature teacher in Lugansk, says she feels that "the Soviet Union has betrayed me."

* Personal relations are suffering as a result of the tension, with complaints that Soviets are ruder, angrier and more aggressive than before. "When I think about economic problems, I get scared," says Nina, a 42-year-old homemaker and economist. "Fright dominates my life."

* The notion of returning to private property is also scary to many. Even those who accept private property as the wave of the future say they are afraid to take the risk of allowing private ownership of shops. "I'm not going to open any enterprise," says Alexander, 27, a Kiev lawyer. "Psychologically, I'm not ready for it."

A postgraduate engineering student says that if he earned a million rubles, "people would talk about me as if I were a robber." Sergei, 26, a physicist, says it would be "a big risk to be a pioneer in this today; a very risky thing." Adds Ludmilla, 58, a schoolteacher: "I'm against private property; I couldn't handle it."

* Even so, women's business clubs are springing up around the Soviet Union, from Volgograd to Leningrad, as women seek greater outlets. A collective farm village, Orechovshy, outside of Uzgorod, recently refused to allot land along the river to a large state-owned factory that in previous years would have been too powerful to refuse.

* While most people interviewed were pessimistic about short-term prospects, they were optimistic about the future five to 10 years away.

And perestroika has had profound subjective effects on attitudes. Natalya, 25, says she was astonished to find the girls at her old school no longer walking in disciplined pairs, "wearing no uniforms, even playing with a rubber band." This is "real reform," she added.

"You can't talk seriously about privatization yet," says Alexander, 60. "None of us can buy anything for big money. Only speculators have big money now, corrupt (Communist Party) officials or mafia criminals (black-marketeers)."

This is a real obstacle, but there are others, as well.

At the Volgograd tractor factory, deputy director Igor Zhirnov explains a plan that would give shares in the factory to each of its 30,000 workers, depending on length of service, as the factory strives for greater independence from the Soviet Agriculture Ministry and for ways to diversify, such as producing refrigerators as a secondary product.

But the ministry took 80% of the factory's profits for decades without returning anything for investment, and today, the tractors produced here break down 10 to 15 times sooner than a comparable Caterpillar tractor, Zhirnov admits.

An even more immediate problem, he says, is getting material from distant Soviet factories to make tractors to guarantee that food reaches this city. Unless some tractors are given to farmers in the region, he says, Volgograd will go hungry.

WHAT IS PRIVATIZATION?

After seven decades in which the state or the "collective" owned everything--houses, stores, farms and factories--the term "private property" carries only the vaguest meaning for most Soviet citizens. The concept of "privatization" as a means of economic reform--through which the state would sell off, give away, even abandon what it owns--means immense riches for some, dire poverty for others. No subject provokes greater debate over not just whether but how, with radicals urging all-out privatization, including the sale of Soviet enterprises to foreign investors to establish a market economy. Conservatives counsel a step-by-step process over several years, with workers getting most of the shares. Moscow, Leningrad and other major cities have already begun to sell and lease stores and small enterprises to private owners. The Russian Federation is about to enact legislation allowing big enterprises to go private.

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