The Union: A Long, Mighty Struggle

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This reintroduction of what Gorbachev delicately referred to as "individual property" could cause the most sweeping overhaul in Soviet agriculture since Stalin began to collectivize the farms in 1929, a process that resulted in more than 10 million deaths and wiped out the kulaks, or landed farmers, as a class. Since then the land has been unable to feed its people; the U.S.S.R. spends $105 billion, roughly 15% of its budget, subsidizing food, and it imported 36 million tons of grain last year. One Soviet collective farmer feeds only seven to nine people, in contrast to a Dutch farmer, who can feed at least 112.

^ To breed a new class of entrepreneurs, Gorbachev has allowed individuals to start cooperatives and share the profits. At first the program was limited mainly to high-visibility services such as taxis and cafes. Now more than 2 million people are employed in co-ops and private businesses. Privately operated pay toilets are set up all over Moscow. But most co-ops are still harassed by reform-resistant bureaucrats and have trouble securing permits and supplies.

Reaching beyond the country's borders, Gorbachev has attempted to start joint ventures with foreign investors. The Soviets have proved flexible: the original plan, which insisted on majority Soviet ownership, has been revised to accommodate the demands of Western companies. Last Thursday at a Kremlin ceremony, executives of a consortium of six U.S. firms -- including Chevron, Eastman Kodak and Johnson & Johnson -- signed an agreement for as many as 25 joint ventures involving about $10 billion over the next 20 years. Although the agreement specified ways that profits could be taken out of the Soviet Union in hard currency and not just held in worthless rubles, joint ventures still face enormous difficulties. Ford Motor Co. pulled out of the consortium because, a spokesman said, it was unable to persuade "the Soviets to adopt new and innovative financial arrangements."

Gorbachev's economic reforms, while radical, are nonetheless carefully circumscribed. He is not marching headlong to capitalism but is attempting to reinvent Marxism by creating socialist markets, socialist competition and cooperative ventures. Private ownership of the means of production (land, factories) is still prohibited. Individuals cannot hire workers with a view to profiting from their labor but rather must form cooperative arrangements. There is a noncompetitive banking system, and no stock market for financing private ventures. Most important of all, there is no rational price system: thousands of prices are still set by state fiat rather than supply and demand, which means that supply never seems to equal demand.

Despite what the election indicated, there is significant resistance to Gorbachev's reforms. While managers and workers realize that the present system has its flaws, they are not eager to take a leap into the unknown. Many are satisfied with a social contract in which, as Soviets cynically joke, "they pretend to pay us, and we pretend to work." The probability, nevertheless, is that Gorbachev will become more, not less, impatient. "Shortages exist because we are moving too slowly, halting and stepping off the road too often," says Abel Aganbegyan, an economist who helped shape Gorbachev's ideas.