Those Clever Capitalists

As Nikita Khrushchev remembered it last week, Stalin warned his colleagues: "If I die, you will all perish; the imperialists will strangle you." But, added Khrushchev with somewhat muted optimism, "We aren't dead; we are living and working and even pressing on imperialism."

Khrushchev's audience was the plenum of the party's Central Committee, gathered in Moscow to discuss the mess in the Soviet economy. As usual when he needs support, Khrushchev revived memories of the awful Stalin. He was, said Khrushchev, "afraid of the people and locked himself in an armored box." He also shut himself off from the outside world. "The idea was vigorously inculcated that everything of ours is utterly ideal and everything foreign is utterly bad. We should remember Lenin's advice to be able, if necessary, to learn from the capitalists, to imitate the clever and useful things they have."

Divided Authority. The present Communist Party organization, complained Khrushchev in a 5 1/2-hour speech, is "a drag" on production. To stop the drag, he proposed still another major reorganization, this one to divide the entire party apparatus and each of the Soviet Union's 15 federated republics into two parallel chains of command. One set of committees will supervise agriculture; the other will supervise industry. This runs counter to Communist dogma that divisions between city and country should be erased, but Khrushchev obviously hopes that it will make for greater efficiency.

While up to now the Russian economy was organized horizontally by territories, it will henceforth be organized vertically by functions. Thus the Kremlin intends to squelch remaining nationalistic rivalries within Russia. For example, a new Central Asiatic Bureau will be set up in Moscow to plan economic development in four primitive regions, in one more attempt to take away the vestiges of autonomy they still enjoy.

Khrushchev also drastically reduced the powers of Gosplan, the government planning body that he blames for most of Russia's economic failures, and established a new agency, the Council of the National Economy, headed by Economic Boss Veniamin E. Dymshits. Khrushchev also set up a new national construction monopoly designed to eliminate the squandering of money and labor in regional building projects. Almost equally wasteful, complained Khrushchev, are bribery and theft by "leading officials," who stole $61 million in money and materials during the first six months of the year. To fight such economic crimes, Khrushchev ordered the creation of a top-level committee staffed by trained inspectors and volunteer snoops.

Melting Copper. To save money, Khrushchev seemed ready to start a modern wave of iconoclasm: "You know how irrationally we use metal on various monuments to satisfy philistine tastes. We pay gold to buy copper abroad. If Lenin would rise up he would say: 'Our great cause is not ennobled by monuments.' Let us issue a call for removing copper where it is unnecessary, and let us melt it down for more important things."

To inject fresh money into ailing agriculture, next year's budget will allocate $4.4 billion for farm investment, a 30% increase. Even so, economic priorities, said Khrushchev, will remain the same: heavy industry, armaments, the space race.

Though Khrushchev was aiming his attack at unnecessary and inefficient administration, the overall result of his measures should be a sharp increase in bureaucracy. That, many economists think, is precisely the opposite of what Russia needs to achieve a modern and efficient economy. Kharkov's Professor Evsey Liberman has been arguing for months for a new plan that would give local plant managers more autonomy and would in effect give Russian industry a profit incentive. In his speech, Khrushchev referred to the plan without condemning or endorsing it. which means that it will go back to the experts for more study. Khrushchev obviously is not ready to go all out in embracing the profit motive, however much he is ready to learn from the capitalists.

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