LABOR : Deja Vu Again as Workers Arise

Workers, 2; wonks, zip.

That was the score last week in the contest between Europe’s pro-free-market elites and its skeptical workers. It’s beginning to look like a trend.

In France, weeks of strikes involving communist-led unions forced the conservative government of Prime Minister Alain Juppe to back down on a program of budget and social- benefit cuts.

In Russia, popular dissatisfaction with Boris N. Yeltsin’s economic reforms propelled the Russian Communist Party to a first-place finish in parliamentary elections, and gave Hitler sympathizer Vladimir V. Zhirinovsky an unexpectedly strong second-place finish. Our Home is Russia, the party closest to Yeltsin and Russia’s free-market reformers, came in a distant third.

From one end of Europe to the other, Europe’s surviving communists are showing signs of life. As voters lose faith in promises of free-market economists, former communist parties have come to power in free elections in Bulgaria, Poland and Hungary. In Slovakia and Serbia, not-very-ex-Communists are firmly in control. In Ukraine, Belarus and the Baltic republics, politicians representing renamed but only slightly reformed communist parties are picking up strength.

Even in Germany, where the East German Communist Party won international renown for shooting its own citizens who tried to escape over the notorious Berlin Wall, the East German communists are winning votes--so many that the Social Democrats are beginning to talk about a coalition with the communists as the only way to gain power.

For the North Atlantic Treaty Organization and the United States, the results could be ironic. If Communists and ex-Communists continue to win elections in Germany and Eastern Europe, and if Eastern Europe joins NATO, we could have life-long Communists and collaborators with the Soviet Union planning NATO strategy and leading its military exercises.

Of course, the communists now coming back to power in Europe aren’t quite the same breed as the communists we opposed in the Cold War. Neither Vladimir I. Lenin nor Josef Stalin would give the time of day to the mushy, watered-down versions of communist ideology now being peddled from Italy to Irkutsk.

Russian Communist leader Gennady A. Zyuganov spent much of his time during the campaign meeting with foreign investors to assure them that his party would look out for their interests. His international colleagues have the same idea. Slovakia is thrilled to be receiving major investments from Volkswagon, and Poland’s communists claim to be more qualified to manage a capitalist economy than it capitalists.

But if Europe’s new-fashioned communists aren’t as totalitarian and bloody minded as they used to be, that doesn’t mean we can ignore this international swing to the left. There is an important message here that the Americas and Asia, as well as Europe, must heed.

That message is simple: If free-market capitalism doesn’t work for ordinary people, ordinary people won’t support the free market.

From Russia and Eastern Europe to such developing countries as Mexico and the Philippines, the international wonks have spread the message that free-market reforms and downsizing the state will improve living standards of all the people.

This works well in theory. But, in practice, there are still a few bugs in the system. Ask Carlos Salinas de Gortari.

Though many Eastern European economies have begun to turn the corner, and many individuals are doing well in these countries, most East Europeans feel they are less well off today than under communism. The same thing is true for most Mexicans: They aren’t any better off than they were 15 years ago, before Mexico began its laborious and still unfinished reform process.

As the recent strikes in France show, it isn’t only communist and developing countries where this problem makes itself felt. The French policy establishment, perhaps the best educated in the world, laid careful plans to reform the French social safety net, to reduce government spending and to improve efficiency in state-owned corporations.

The French people didn’t buy it. They are determined to keep their mandatory six-week vacations, free medical care and systems of public transportation and education that Americans can only dream about. They will never give up these hard-won benefits because a handful of policy wonks, however well-intentioned, tell them the system isn’t efficient.

What, the French ask, is the point of efficiency if the only way to achieve it is to take a cut in your living standard?

The French unions, and the two-thirds of public opinion that supported the strikers, didn’t believe the whiz kids in the ivory tower knew what they were talking about. After all, the reformers promised results they could not deliver in Mexico and Russia. Margaret Thatcher put Britain through 10 agonizing years of “reforms” and “restructuring,” but the British economy--despite oil revenues from the North Sea--lost ground to the lazy, unreformed Italians, who muddled through as usual.

This isn’t just a problem overseas. Since 1973, the United States has progressively deregulated more and more of its economy, opened its markets wider and wider to international trade, cut back welfare and reduced the real value of the minimum wage. In theory, this should have made the United States far richer.

In fact, nothing of the kind has happened. As deregulation spread through the economy and unions lost their clout, real wages fell, household incomes stagnated and millions of Americans live with a new kind of uncertainty about the future. As corporations continue to downsize in the name of efficiency, and as economic competition between companies and countries intensifies, the payoff still seems far away.

So far, the new international protest against free markets is negative, not positive. People know what they don’t like, but they don’t know what else to do. The communists now winning elections and strikes across Europe know communism failed; neither the leaders nor the followers of this protest movement want to turn the clock back to the Brezhnev years.

The truth is that, for all its faults, capitalism still works better than any of the alternatives. But policy wonks and political leaders alike are failing in their basic duty to make capitalism work for the average person. The market must work for human beings, not against them. The wealth that markets create must be spread around a bit. The average worker, the ordinary household, must have a real and visible stake in prosperity.

If policy elites in the United States and abroad continue to turn their backs on the wants and needs of ordinary people, they will find that ordinary people will turn their backs on them, and reject their economic policies--however elegant and, in the long run, even how smart.

Not just in Eastern Europe and not just in France, stable democracy and free markets ultimately depend on the consent and faith of ordinary citizens. That faith has to be earned. The elections in Russia, the riots in France and the cynicism and alienation here in the United States tell us that the workers don’t think the wonks are considering their interests. If this doesn’t change soon, there could be mass strikes in more countries than France, and radical deputies elected to parliaments and congresses in more countries than Russia.