Is Soviet Socialism Reformable?

IS SOVIET SOCIALISM REFORMABLE? Ed A. Hewett The Soviet Union began the 1980s in a state of political paralysis and economic stagnation, both of which posed an unmistakable threat to the basic foundations of the Soviet system. It begins the 1990s in the midst ofa revolution beyond anyone's wildest dreams, and certainly well beyond the hopes of virtually all Soviet citizens, whether they be Russian, Estonian, or Uzbek. And yet, that country's political renaissance—however breathtaking its pace and scope—has left its economy virtually untouched, the result being continued economic stagnation. It has now become clear to all that the fate of Soviet economic reform, perestroïka, and the future course of East-West relations rest on the ability of Soviet leaders to radically, but peacefully, transform their nation's system. It is for this reason that the question—"Is Soviet socialism reformable?"—is what the Soviets like to call the "question of all questions." The conventional wisdom on this question, inside and outside the Soviet Union, is increasingly pessimistic. At the core of what might be called "perestroika-pessimism" is a gloomy assessment ofthe prospects for economic reform which might be summarized in the following way: 1. Mikhail Gorbachev and his advisers have made terrible blunders in underestimating the depth ofthe economic crisis and by introducEd A. Hewett is a senior fellow at the Brookings Institution and the author of Reforming the Soviet Economy: Equality Versus Efficiency (Brookings Institution, 1988). This article is adapted from the Sturc Memorial Lecture he delivered at the Johns Hopkins University Paul H. Nitze School of Advanced International Studies last October. 75 76 SAISREVIEW ing half-hearted, inconsistent, and ultimately counter-productive economic reforms. 2.Now they are coming to their senses, having finally started to appreciate the need to throw away the old system and start over again. 3.But it is too late: the population has lost both its enthusiasm for reform and its faith in Gorbachev. They want immediate results. This pessimism is understandable. It is indeed tempting to give in to it. However, while not without foundation, this pessimism is premature. We are all in poorly charted territory. No country has yet dismantled successfully a Soviet-type system, thus there is no previous experience on which to draw when judging a particular approach. In such unfamiliar territory, assessments are hazardous, based as they must be on weak analogies or on an analysis ofthe process itself, neither ofwhich can support more than tentative conclusions. In this situation even the economics can be tricky. Apparent setbacks to the reform process may in fact be progress, while signs of progress may in fact represent setbacks. A retreat on price reform or a partial crackdown on cooperatives—both taken in conventional wisdom as "bad" signs for Soviet reform—may, for example, be constructive developments. The politics of the economic reform are no easier to gauge. Events which appear at first glance to be retreats from economic reforms—such as statements proclaiming a continued commitment to socialism and opposition to private property —may ultimately be critical to their success by providing a smokescreen for radical change. Mikhail Gorbachev is writing a textbook on the political economy of transitions—the first textbook of its kind. And, given the startling pace and scope ofchanges under his leadership so far, one cannot predict what the last chapters will say. It is clear that our uneven knowledge about what does and does not work in transitions of this sort suggests the need for a large dose of humility. We are in the middle of a political-economic hurricane in which it is difficult to discern backward from forward, up from down. Nevertheless, there is something to be gained from standing back and analyzing the Soviet economic reforms in an effort to sort out the little we do know from the more substantial areas of ignorance. Obvious mistakes can be spotted and some tentative recommendations can be made. This exercise will cast considerable doubt upon the conventional wisdom. Transition to What? One of the most commonly voiced criticisms of Soviet economic reforms is the inability or unwillingness ofthe leadership to articulate the IS SOVIET SOCIALISM REFORMABLE? 77...