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Next Step : Killing Off Soviet Socialism: A Look at the Plan and Its Creator : Economist Stanislav Shatalin's vision would replace the present economic system, based on state ownership, with one that looks surprisingly like private enterprise. The political stakes are huge.


MOSCOW — His thin figure is hunched, his face is wrinkled with worries, his words are half-swallowed, his manner that of a distracted professor. But Stanislav S. Shatalin commands attention when he speaks, for his is the vision that promises to reshape the Soviet Union.

"You are not right," Shatalin boldly told Prime Minister Nikolai I. Ryzhkov during a September debate on economic reform. "What you say we must do, we must not. That course you have laid out we must not pursue. Here, in my opinion, is the way we should proceed. . . . "

And the Soviet Union, in a change so momentous that nothing here will remain the same, appears ready to follow Shatalin's recommendations.

The Shatalin Program, as it has become known, is the controversial blueprint for the overhaul of the Soviet economy. It aims not at reforming the present system--built on state ownership, central planning and administrative management of the economy as a branch of the government--but at replacing it with private property, market forces and entrepreneurship.

Within a year and a half of its inception, the program envisions the privatization of 70% of industry, an even greater proportion of agriculture, virtually all of commerce and the whole service sector of the Soviet economy.

It provides, stage by stage, for the introduction of the market forces of supply and demand to bring growth where decades of central planning led to economic stagnation. Prices will be freed from state controls, state subsidies will be eliminated and true costs--some higher, others lower--will begin to govern.

Capital will come from investors, not the state; and unprofitable, uncompetitive enterprises will face closure. Workers will be able to negotiate their own salaries--and face dismissal if they do not earn them.

The changes go even further: A new political system, extending the democratization undertaken by President Mikhail S. Gorbachev over the last five years, will be needed to implement them.

But the fundamental transformation will come in the country's social philosophy--an end to the collectivism that has ruled here for so long.

"Sooner or later, the time will come when we shall have to return to the basic fact that the greatest sovereignty is that possessed by a person, an individual person," Shatalin said in an interview. "Any attempt to put us ahead of myself is flawed, essentially and fatally flawed. Its failure is preordained.

"Only by putting I in the first place can we hope to develop a normal we. This is an I that does not function at the expense of another I, and it is an I that finds strength and comfort in the alliance we know as we. But the I must come first."

This is a philosophy that Shatalin's opponents criticize as a negation of all Marxism-Leninism, the Soviet ideology for seven decades, and he acknowledged that, in fact, he shares much of the trenchant anti-socialist criticism of Friedrich A. von Hayek, the Austrian economist and social thinker who was awarded the Nobel Prize for Economics in 1974.

"People simply cannot continue to live as they do now in our country," Shatalin explained. "It is not just that the conditions are bad, though they truly are, but people cannot live in such monstrous and unnatural forms, economically, politically, psychologically, morally, as we have created.

"Economically, we have been living in a world of crooked mirrors, and their distortions have spread to all spheres of our life. . . . Such is my conviction, such is my motivation."

To those who fear--and they are not few here--that this means abandoning socialism, Shatalin replies: "It is perhaps a pity, but we never had socialism. Almost no one has, and depending on what is meant by socialism, probably no one will."

To those who accuse him of leading the Soviet Union down the "road to capitalism," a phrase that still conjures up cartoon images of sweatshops, big-bellied bankers and long lines of the unemployed, Shatalin cheerfully replies, "Maybe, but who wouldn't prefer the quality of life enjoyed in America or Sweden or Italy or France?"

And to those who argue that his proposals will create millionaires, maybe even billionaires, and end the dream of total equality and classlessness by encouraging free enterprise based on private ownership, Shatalin answers, "If our program results in the appearance of millionaires, I will believe my life was not wasted.

"Frankly, I am not really interested in these arguments, these quibbles," Shatalin said. "I am just interested in seeing my people living better, living normally, having decent clothes and cars, buying apartments, traveling to Europe and America if they want.

"If you call this capitalism, if you want to hang Shatalin for introducing this way of life, go ahead."

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