East Europe: The Restless Empire

NO one outside Russia will follow the proceedings of the Soviet Communist Party Congress as closely as the East Europeans, for they are aware that their own chances for progress depend largely upon the guidelines that will be laid down in Moscow. The Soviet Union no longer insists, as it did in Stalin's day, upon total adherence to the Russian model. Nonetheless, as the Soviet-led invasion of Czechoslovakia dramatically demonstrated, Moscow is not prepared to allow its East-bloc allies to engage in any significant political and economic departures that have not been sanctioned by the Kremlin.

Just as the East Europeans are looking to Moscow, the Soviet leaders are watching Eastern Europe. Though a quarter of a century has passed since the victorious Soviet army brought Eastern Europe under Moscow's hegemony, the area is still relatively unstable and potentially explosive. For that reason, 33 Russian divisions, a total of 396,000 combat-ready men, remain. With the exception of Yugoslavia, which is outside the Soviet orbit, it is doubtful whether any East European regime could survive genuinely free elections. This is not to say that the people of the region necessarily reject the concept of a very active form of socialism. With universal education, free medical care and job security, the lot of most people has undeniably improved, and they can no longer conceive of living in a society that fails to guarantee such fundamentals. Before World War II, indoor plumbing, electrification, radios, television sets, autos, motorcycles and even bicycles were beyond the average East European. Now they are at least within reach. Workers and their families enjoy cheap vacations. Still, as in Russia, Eastern Europe seems dominated by the yearning for a better life, for more material goods and comforts.

There is little economic ferment in two of the East European nations aligned with the Soviet Union in the Warsaw Pact. Bulgaria, which regards Russia as the Slavic big brother, remains totally faithful to the Soviet model. Under Reformer Alexander Dubcek, Czechoslovakia attempted to embark on a daring economic experiment before the Moscow-directed invasion snuffed out KOVACZ Prague's "Springtime of Freedom." Today Czechoslovakia, which is occupied by seven Soviet divisions, is comatose, fearful of attempting any departure from economic or political orthodoxy. Resentment of Moscow runs high. When Noel Coward's Blithe Spirit appeared in Prague, audiences applauded wildly whenever the character Ruth asked: "Do you mean to tell me that she is liable to stay here indefinitely?" The situation in Rumania is more ambiguous. Party Chief Nicolae Ceausescu, for all his independence in foreign policy, runs a relatively tight domestic dictatorship. His economic policy seeks expanded relations with Western firms. He has introduced some dynamism into Rumania's internal economic development and relies heavily on economic and technical experts for advice. For Moscow's three other East European allies, the situation is far more dramatic:

POLAND: In December and January, the country was rocked by the first successful consumer revolt in Communist history.

There have been periodic upheavals throughout the East bloc: East Germany in 1953, Poland and Hungary in 1956, Czechoslovakia in 1968. Until Poland's most recent revolt, all such disorders were crushed. But the Polish workers prevailed, and in swift response to public opinion, a Communist regime yielded to the demands of its people. Wladyslaw Gomulka, Poland's longtime party boss, was bounced from office. His successor, Edward Gierek, increased minimum wages, sacked scores of trade-union and party officials, and ultimately rescinded the price hikes that had touched off the rioting. Now the country is tense but quiet, as Gierek attempts to consolidate his position and cope with an appalling economic mess caused by years of overconcentration on heavy industry, overcentralization and postponement of reforms. So far, he has won support among both intellectuals and workers for his deft handling of the crisis. But complaints are beginning to surface that he is not moving fast enough.

As in other East European countries, alcoholism, suicide and divorce rates are rapidly increasing. Each morning, according to the government's own figuring, 500,000 Poles are too hung over to report to work. Even ordinary goods like buttons are often in short supply, and fresh fruits and meat are scarce. Undoubtedly, Gierek would like to give the Polish consumer a better break. But he faces a terrible dilemma. Productivity among Polish workers is low. Inefficiency in the economy is staggering. Not surprisingly, a favorite Polish maxim goes: "We pretend to work and the state pretends to pay us." To solve the economic crisis, Gierek needs to take draconian measures to increase productivity and cut featherbedding and waste. But the workers, who are now conscious of their power, would resist.

He also has very limited political maneuver room. Gomulka's conservative allies have already denounced Gierek as a "rightist deviationist," a phrase that was applied to Dubcek in Czechoslovakia. If Gierek fails to satisfy the workers' long-term demands, new rioting could trigger Soviet intervention--but unlike the Czechoslovaks, the intensely nationalistic Poles would fight. The basic grievances that prompted Poland's laborers to challenge armed police and to put some party headquarters to the torch are shared by workers through the East bloc. Most East European leaders favor certain economic reforms to forestall the sort of unrest that exploded in Gdansk and Szczecin last December. But like Russia's rulers, they fear that any significant loosening of central economic control could lead to demands for political changes.

EAST GERMANY: For the past seven years, Walter Ulbricht's fiefdom has been the East bloc's star performer, running up statistics that many capitalist countries would envy. From 1966 to 1970, foreign trade increased 60%; industrial output rose 37%, making East Germany the ninth greatest industrial power; and the national income gained 29% to reach $29.5 billion. The East German regime is all the more proud of this achievement because it was accomplished without granting an ounce more political freedom to the people, defying the generally accepted thesis that economic reform inevitably reduces political control. The East Germans, of course, may well be a special case because they are an exceptionally disciplined and apolitical people, who have spent the past 38 years under one form or another of totalitarian rule.

In essence, the East German reform has consisted of regrouping factories into large combines, which have been largely freed from strict central planning. Managers are given bonuses for increased productivity. The historical Communist stress on quantity of output has been changed to quality, and in some instances the most modern forms of computer control and systems analysis have been instituted. The Soviets have been so impressed with the East German model that they have sent experts to study it and have invited East Germans to the Soviet Union as instructors. But the Soviets may soon have to look elsewhere. During the past nine months, the East German economy has slowed down, and 1971 goals have been reduced. The main reason is that the leaders feared the political implications of further reform and began to recentralize.

The East German regime keeps the best products out of East German consumers' hands; quality items are strictly for export to the West, second-rate stuff for "fraternal allies," third-rate goods for home consumption. Even though the East Germans are Communism's most efficient workers, they produce only 50% as well as their West German brothers. While take-home wages average about $142 a month, a nylon shirt in East Germany costs $20, a pair of men's quality shoes, $40.

HUNGARY: Under the New Economic Mechanism, launched in 1968 by Party Chief Janos Kadar, Hungarians have encouraged personal initiative and allowed many prices to find their own levels in relatively free markets. The result is easily the most stimulating atmosphere of any East-bloc country. But even Hungary is demoralized by the housing shortage that plagues all of Eastern Europe; 47% of the Hungarian population is crammed into one-room dwellings. Still, executive suites in Hungary hum with excitement as managers pore over computer printouts, circling moneymaking products in green, average earners in yellow, and losers in red. Collective farms operate small handcraft industries. Budapest's fashionable Vaci Utca, now closed to auto traffic, is packed with shoppers who stroll past well-stocked jewelry shops, delicatessens, bookstores and up-to-the-minute boutiques.

Because everything depends on "economic performance" (capitalists call it profit), the manager has wide power to innovate and is highly rewarded for increased productivity. At Budapest's "First of May" clothing factory, Director Sandor Vas, cognac and Coke in hand, says proudly: "To help sell the 1,500,000 coats we produce, we have hired market analysts, learned to package our coats attractively, and visited Paris, London and Munich fashion shows. Before, we always feared competing in the Western market. To our surprise, we tripled our sales westward. We even sell embroidered coats to Japan." A consumer magazine, Nagyito ("Magnifying Glass"), has appeared, examining such products as refrigerators, nylon stockings and canned goulash.

Changes in political style have accompanied the rise of a consumer-oriented economy. Kadar has urged his ministers to make themselves more accessible to the public. Ranking officials appear on a television show, called Forum, and answer questions phoned in by viewers. Potentially the most significant development is Kadar's encouragement of nonparty candidates to run for office. So far, the response in local elections has been poor because Hungarians, not unreasonably, feel uneasy about running against party candidates. Nonetheless, a better turnout is expected in next month's parliamentary elections. Kadar is by no means prepared to sanction the birth of a political opposition, but he does want to create a broader base for consultation within the framework of Communist rule.

Going Out. For the foreseeable future, East Europeans are likely to take either East Germany or Hungary as their economic model. In the long run, however, they cannot help being attracted by Yugoslavia. Originally, the country was a carbon copy of the Soviet system. Before the 1948 split with Stalin, Yugoslavia's central plan spelled out every conceivable detail from production quotas to retail prices; in print, the plan weighed 3,000 lbs. By 1950, President Josip Broz Tito recognized the inefficiency of total central control. Tito allowed workers to participate in running the factories. Elected workers' councils acted like boards of directors, hiring managers to administer the plants. Strict central planning was abolished, and a free market was allowed to develop. Eventually, economic reform led to demands for change in Yugoslavia's political and cultural life.

The early spokesman for wider reforms was Milovan Djilas, who recently told TIME: "I felt that self-management could not develop in parallel with police power. It could not work efficiently without more political freedom." Djilas was imprisoned for nine years. But by the time he was released in 1966, Yugoslavia had achieved nearly all his goals. The power of the secret police was diminished. The press was essentially free to do anything except challenge Communism as a system, criticize Tito or speculate about his successor. The literary and performing arts were liberated from dogmatic strictures. Today Western styles are widely and wildly emulated. Along Belgrade's Terazije, maxicoats and Longuettes, velvet knickers and leather gaucho pants abound, as do swinging discotheques, modish butiks and the most daring skin magazines. A nude and naughty Hair plays in Belgrade, and Producer Mira Trailovic is currently casting an uncensored Oh! Calcutta!

Yugoslavia still faces serious problems, notably a severe inflation and the nagging fear that once Tito is gone (he is now 78), his successor will be hard put to keep the country unified. There is also an occasional throwback to dictatorial methods. Even so, the atmosphere is so free in Yugoslavia that other Eastern Europeans speak of a trip there as "going out."

Eastern Europeans know that Moscow would stop them from making any reforms as fundamental as those in Yugoslavia. Yet, by putting the brakes on change, the Soviet Union is incurring a heavy political cost. It is, in fact, increasing the very tensions that led to the Polish crisis, whose repercussions still reverberate through the East bloc.

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