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REMAKING THE REVOLUTION : New Soviet System : Perestroika: Bold Shift in Economy

Remaking The Revolution. A Troubled Economy: Second in a Series. Thursday: What glasnost does and doesn't mean.

October 27, 1987|ROBERT GILLETTE | Times Staff Writer

MOSCOW — Woolen tights, and the first blush of economic reform in the Soviet Union, have changed Lydia Petrovna's life.

Only a few months ago, the 42-year-old mother of two was working as a loom operator in a Moscow textile factory, bringing home a paltry 100 rubles (or $160) a month.

Then, with little to lose but her poverty-level income, Petrovna decided to gamble on the success of Soviet leader Mikhail S. Gorbachev's program to reorganize, decentralize and modernize the Soviet economy.

With a 200-ruble membership fee in hand, Petrovna joined 19 other women at her factory in forming a cooperative--a form of semiprivate enterprise permitted under new legislation that the Soviet leadership hopes will breathe life and vigor into the nation's dismally primitive consumer economy.

Rented Knitting Machine

In the new cooperative, sponsored by her factory but managed by the members themselves, Petrovna now works at home in her apartment on an imported Japanese knitting machine rented from the factory, turning out 70 pairs of woolen tights a month.

For each pair of tights, a Soviet version of cold-weather panty hose, she is paid 4.50 rubles. The cooperative then sells them from a booth in one of Moscow's farmers' markets for the exorbitant price of 25 rubles.

"That's a lot, but the fact is you can't buy tights anywhere else in Moscow," Petrovna said the other day. "You should see the women pushing and pulling to get their hands on them."

More important for Petrovna, even after paying taxes to the state, she has nearly tripled her income, to 280 rubles (or $448) a month. And along with her co-workers, she is entertaining thoughts of building up capital, buying the knitting machines and opening a new business selling made-to-order knitwear.

"When I think about it," she said, "I don't know why anyone would want to work in a state factory anymore."

Petrovna's knitting enterprise is one of about 3,000 small cooperatives, most of them cafes and food shops, that have been organized across the country in the last few months. Under legislation that took effect last May 1, several thousand additional family-owned shops with no links to state enterprises have also sprung up, offering services from hair-styling to automobile repair.

These miniature businesses--licensed, taxed and closely watched by the authorities--are more restricted than similar small businesses in Poland and Hungary. But their emergence marks the first tentative blossoming of legal private and semiprivate enterprise in the Soviet Union since Vladimir I. Lenin's comparatively liberal New Economic Policy--instituted in 1921 in the face of widespread discontent amid severe shortages--ended in 1928-29 with the consolidation of Josef Stalin's dictatorship.

By such steps, in its 70th anniversary year, the Soviet leadership has begun a partial dismantling of the rigidly centralized economic structure that Stalin erected half a century ago to carry out his crash program of industrialization.

In its place, Gorbachev and his allies in the ruling Politburo are reaching back and borrowing features of the more benign and flexible New Economic Policy, which mixed elements of a market economy in consumer goods with state control of the "commanding heights" of industry.

Covers 11 Time Zones

With a swiftness remarkable for a country that stretches across 11 time zones and one-sixth of the Earth's land surface, the leadership has begun a process of reorganizing the economy--a process that could bring the most sweeping social changes the Soviet Union has experienced since the end of the 1920s. Among the moves:

-- Starting in January, 1988, under a new Law on State Enterprises, the Soviet Union's 37,000 centrally controlled industrial enterprises are to be given new freedom over the next two years to manage themselves, and the unfamiliar responsibility of paying their own way from profits, rather than living off unlimited government funds.

-- Some state firms have won permission to deal directly with foreign companies to buy and sell goods, rather than working through the bureaucratic morass of government ministries. Under new but still murky guidelines, a small number of Soviet enterprises may also negotiate joint ventures with Western firms, with foreign partners holding up to 49% of the equity.

-- The 49,000 collective and state farms that make up the country's agricultural system are being given a similar but less clearly defined measure of autonomy. Also, for the first time in half a century, collective farms are being encouraged to organize their work around family units that are to cultivate parcels of state land under long-term contracts.

The aim is to raise productivity by restoring a sense of proprietary interest in the land among farmers, who now work essentially as employees paid for their time, not for the fruits of their labor.

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