MOSCOW — Mikhail S. Gorbachev's report to the June plenum of the Communist Party's Central Committee repre sented the severest criticism of the Soviet economy heard here since the beginning of the 1920s.
The law concerning government enterprises approved by the Central Committee, and the main theses of the radical perestroika (reconstruction) of the management of the economy endorsed by the Central Committee, can be viewed as an important, if not decisive, victory of the reform wing of the party leadership. The personnel changes in the Politburo can also be considered as strengthening party reformers and bolstering Gorbachev's personal, political base.
Nikolai P. Slyunkov, promoted to full membership in the Politburo, is known as a strong supporter of the economic reforms. Alexander N. Yakovlev, also promoted to full Politburo membership, is known as a supporter of progressive reforms in ideology and culture. Viktor P. Nikonov, named a full member of the Politburo, will now have a better opportunity for conducting reforms in agriculture. Marshal Dmitri T. Yazov, named a candidate member of the Politburo, undoubtedly will support the economic reforms from the military side.
The materials of the plenum require careful study, especially because they are only the beginning of the new and extremely important stage of perestroika of the Soviet economy. We know about the West German, Japanese, Brazilian and Chinese "economic miracles." We may be standing at the threshold of a "Soviet miracle." It raises hopes of our friends, satisfaction of our constant partners and anxiety of those who consider themselves our adversaries.
General Secretary Gorbachev spoke at the plenum about the "pre-crisis" state of the Soviet economy. I would say, more sharply, that since the middle of the 1970s, we have been in a period of real crisis. Even though statistics declared a 3%-4% yearly increase in production (which diminished in 1981-82 to 2%-3%), the extensive report-padding of which we learned recently and losses from bad management evidently exceeded these insignificant increases.
During these years we were selling oil and gas to the West so we could buy their grain, meat and butter--items that, according to plan, were supposed to be provided by our agriculture, not Canada's.
The Soviet economy was saved from a crash only by huge natural resources and a monopoly of foreign trade that isolated the Soviet Union from the world economy. The state of things began to improve slowly in 1983-86 but gains remained small and almost vanished. The statistics again report a 3% to 4% increase; however those statistics include much of the expense for the Chernobyl nuclear accident.
In reality, Soviet economic losses are still exceeding gains in production. The number of industrial, office and professional workers and collective farmers whose lives became better during the last two years is still smaller than those whose lives became harder.
Why is there no acceleration in the economy? And why didn't reorganization start in many regions and branches of industry? One can find a convincing answer to these questions in Gorbachev's speech.
The contemplated reforms can be compared with V. I. Lenin's New Economic Policy (NEP) of 1921-22. At that time, the country was ruined and the question facing Lenin was how to build a new socialist economy quickly. Construction sites were available, rivers and lakes were clean and filled with fish, woods stood untouched, soil was not exhausted and new cities were not yet built. Today we do not need to build but reconstruct, to correct the huge economic mechanism while it's operating, to destroy habitual methods of work. This requires fighting stereotypes formed during the decades that touch the interest of bureaucratic groups and sometimes of wide masses of population, accustomed to more and more cheap vodka and less incentive for honest and effective work.
It is not surprising that reconstruction has found not only support but resistance. Many leaders and ordinary workers openly and secretly have sabotaged top-level decisions. The majority was waiting, and it regarded the slogan of perestroika as just another in a long series of campaigns they had experienced during the past generation.
It was not only inertia of conscience, but also inertia of the enormous economic system formed since the end of the 1920s as a monopoly, where enterprises had to operate under rigid controls from the top.
Marxist literature has convincing criticism of monopolies and super-monopolies, said to cause stagnation and to hamper innovation. Such monopolies abolish the role of competition and reasonable prices and work by administrative methods rather than economics.