Borrowing from the Capitalists

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"The economy," said Lenin, "is the main field of battle for Communism."

In a fashion the old revolutionary could hardly have intended, the Soviet economy has become today a battlefield of explosive ideas that threaten nearly every precept and practice of Communism in the past generation. Whether conservatively toeing their Marx or boldly advocating such heretical Western-style reforms as the primacy of profits, every important planner, apparatchik and economist in Russia is caught up in Communism's greatest debate since Stalin set backward Russia on its cruel—but successful—forced march into the 20th century industrial world.

Russia's flirtation with market mechanisms comes at a time of swift and startling economic change across the whole Communist-bloc spectrum. Hotel lobbies from Warsaw to Bucharest are jammed with Western businessmen scrambling to get into Communist markets. The "imperialist agents" are getting an interested reception in ways unthinkable a few years before. Negotiators for West Germany's giant Krupp empire last week were tidying up a deal to build plants in Poland that will be German-owned but will employ Polish labor, and Hungary and Rumania have expressed lively interest in similar permanent, paying capitalist boarders of their own.

Pepsi-Cola is negotiating with at least four satellite countries, and both Firestone Tire & Rubber and Universal Oil Products will build major plants in Rumania. Hardly a week goes by without the announcement of a new trade agreement between a Western nation and a member of the East bloc, typically for double the amount of previous trade. Last year commerce between East and West soared to $9 billion—a 100% jump in seven years. In his State of the Union address, President Johnson asked the nation to explore new ways "to increase peaceful trade" with Communist countries—a goal that may well multiply twelvefold American exports to Russia alone in the next five years.

Command Economy. As the increasingly independent Eastern European satellites are opening up to the West, so they are boldly opening up their own internal economies to Western techniques. Fortnight ago, Czechoslovakia inaugurated a massive decentralization program drawn up by Prague Economics Professor Ota Sik. Except for general growth goals set by the state and controlled prices in some key sectors, each Czech factory will have wide freedom for its own development. East Germany, too, has relegated planning to groups of enterprises, freed the prices of some raw materials, is toying with profit incentives. Hungary has intro duced a form of profit sharing, and in a deviation from Marxist ideology unique in the bloc, has imposed an interest rate of 5% on capital. To push exports, Poland has permitted three firms to set up their own foreign-trade pipelines, bypassing Warsaw to deal directly abroad. Yugoslavia long ago created a "Socialist market economy"—relatively competitive enterprise under state ownership.