SOVIETS FACE CHALLENG OF MAKING FREE MARKET FROM PILE OF JUNK

In political terms, hard-line Communism is dead in the Soviet Union just as it died in Poland, Hungary and Czechoslovakia. But hundreds of thousands of old Neo-Stalinists linger in the bloated bureaucracy that permeates the Soviet economic system. Removing the apparatchiks and replacing them with talented free marketeers is but one of the colossal challenges facing the Gorbachev/Yeltsin future.

American economists treat the free market system almost like a religion. If everyone pledges his or her faith to the doctrine, they assume that it immediately starts to work. As soon as a free market is proclaimed, by magic there are skilled foremen trained to supervise hard-working, motivated workers. Instantaneously, there are well maintained machine tools in place to turn out modern work products. Suddenly, there are trained clerical personnel to handle inventories and to see that the material is shipped promptly via an efficient delivery system to a destination where the material will be put to prompt and efficient use.

Declaration of a free market, some economists seem to suggest, immediately unleashes a flood of Wharton and Harvard MBAs to manage the free market, to analyze the potential of both domestic and international markets, and to make intelligent and responsive decisions to market demands.

In short, they expect instantaneous creation of everything that the United States, Japan and the rest of the great free marketeers developed over centuries and that the Soviets have never remotely approached under communism or the Czars.

The Soviet economy is a third-world nightmare. While our CIA was still evaluating the Soviet Union as a dangerous enemy with a potent economic base, Gorbachev knew he presided over a basket case. His introduction of perestroika and glasnost came more from pocket-book compulsion than from divine revelation.

The structures of a Soviet free market still exist only in oratory and wishful thinking, not functioning reality. Gorbachev/Yeltsin cannot create this free market out of a junk pile. A modern industrial and transportation system cannot be built by a daily recitation from the Kremlin steps of the commandments of the U.S. Chamber of Commerce. A modern free market system will neither self create nor self start.

German Chancellor Helmut Kohl is right. The Western world must help the Soviet Union extricate itself from the junk pile, not merely watch as the junk is rearranged. We need to help generate a carefully monitored, multi-national program of assistance for the Soviet Union that is specifically directed to technical and production programs where the aid will have the maximum impact and help foster the creation of a viable economic system.

The afterglow of the aborted coup will fade. The decimated Soviet economic system will remain to haunt any semblance of political reform. An economically functioning Soviet Union is our best insurance of a stable geopolitical future. Simple handouts, no matter how massive, will disappear into the Soviet quagmire, but substantial aid targeted to creating a functioning economic infrastructure is in the long-term interest of the entire world.