The Crumbling of the Soviet Bloc Squaring the Soviet Circle

The most significant political development of our time-and the chief cause for optimism about the triumph of democracy in the world-is the increasingly evident bankruptcy of the Soviet regime. The Soviets have had to pull back from most of the regions in which they sought to spread communism for so long. We read of Soviet troops leaving Afghanistan, Vietnamese troops being withdrawn from Cambodia, Cuban troops about to be removed from Angola, and other hopeful news about the Third World.

In the past, attempts to transform oppressive and dictatorial political systems into democracies incurred the risk that this delicate and vulnerable process would be hijacked and exploited by communist forces. Today this danger is greatly diminished. Soviet backing for international communist expansion, as well as for international terrorism, has been scaled down.

This is merely one aspect of a wider Soviet retreat. The Soviet Union is not just bankrupt economically; it is also experiencing a political and ideological crisis-a crisis of the very idea of socialism. Two hundred years after it was conceived and 70 years after it was first applied, socialism has been proven by history to be unworkable and unproductive. The pursuit of this ideological fantasy has impoverished and exhausted Russia, potentially one of the richest countries in the world, and inflicted even greater damage on small states like Cuba. As a model for developing countries, socialism is no longer a credible alternative to democracy.

The roots of the current economic crisis, as even the Soviet leadership has been compelled to admit, lie in socialist ideology, according to which individuals are enriched through the common wealth of the society. The socialist system has always been deemed to require collective rewards in the form of social benefits, together with nationalized industry and central planning. The resulting system of incentives inevitably creates an "extensive" economy, with huge capital outlays and a low return on investment. Under these conditions, the only way to increase production is to build more and more low-profit enterprises. Eventually, however, such economic expansion must reach its natural limits, running up against shortages of labor and capital. For a time the Soviet economy was able to continue growing through the plunder of seemingly boundless natural resources, but even this expedient was exhausted by the early 1980s.

Although the Soviet leadership now readily admits that collective labor has proven less productive than labor individually rewarded-a concession tantamount to repudiation of their main ideological tenet-the problem of converting an extensive and inefficient economy into an "intensive" and productive one remains. Such an economic transformation would require dismantling the power of the Soviet Communist Party (CPSU). The time when people joined or obeyed the party out of revolutionary enthusiasm is long past. Once this enthusiasm died, the party fell back on its exclusive power to promote or dismiss, to enrich or impoverish any individual. If people now are to be promoted according to their talents and rewarded according to their merits, who would bother to join or listen to the party? Without such changes, however, economic productivity will not improve.

The Soviet system is thus confronted by a fundamental structural dilemma. It is paradoxical from the standpoint of the leadership: the more they reduce the role of the Communist Party in running the economy, the more they undermine the foundation of their own power. Gorbachev is, after all, the general secretary of the CPSU. By curtailing the role of the party, he diminishes his own power; he is in a sense cutting off the branch on which he sits.

Contrary to what many in the West seem to believe, the Politburo did not suddenly convert to democracy. Glasnost is not freedom of speech, and perestroika is not an attempt to introduce a free market. No, what we are witnessing is still the old attempt to square the circle, to find a variety of socialism that might somehow work-to hope for a miracle. In short, glasnost and peresti.oika are aimed not at changing the system but at salvaging it. The leadership is trying to...