Happier New Year

As the big New Year holiday approached in the Soviet Union last week, Russian shoppers crowded stores from Tallinn to Tashkent in search of food, liquor, gifts and winter clothing. What they found was generally more abundant, of better quality--and costlier --than in the past. Stores on Moscow's busy Kalinin Prospekt shopping street carried the first-ever Soviet-made jeans at authentic Western prices: $10 to $20 a pair. In Leningrad, women were snapping up pantyhose imported from East Germany at $10 a pair. Other briskly selling items: Hungarian electric shavers at $35 each and a new line of Soviet-made all-wool overcoats at $250 each --about $50 more than the average Soviet industrial worker's monthly wage.

As those prices suggest, Soviet consumers are beginning to be troubled by the Western disease of the mid-1970s: inflation. That is always hard to measure in the Soviet Union, partly because various forms of "hidden" inflation are so prevalent--goods that decline in quality but not in price, for example. Even so, state-administered prices remain low for such essentials as rent, schooling and books. But with shortages of much-desired consumer goods still the eternal Soviet problem, the planners have moved to sop up excess demand by allowing prices to float up anywhere from 5% to 20% in the past year for such luxury purchases as cars, carpets, and privately owned apartments, as well as for meat, fish and other desirable foods.

The Soviet leaders are not yet seriously worried about Western-style inflation, largely because they do not also have to worry about Western-style recession. At the recent annual economic meeting of the Communist Party Central Committee in Moscow, Party Chief Leonid Brezhnev and other officials reported that the Soviet Union's total output of goods and services had risen by 5% in 1974 and would climb by 6.5% in the new year when most Western economies will stand still or grow much more slowly. The Soviets plan to increase industrial production another 7% in 1975, emphasizing output of heavy machinery and other "steel eaters" as usual, but also stepping up the flow of consumer goods for the fourth year in a row.

Bumper Harvests. The Soviet Union's relative economic well-being is explained in good part by bumper grain harvests in 1973 and '74 and by the increased flow of credits and technology from the West, which have enabled it to step up production in such critical industries as textiles, chemicals and oil. The Russians have also received a sizable windfall from the rise in world oil prices, which has increased the amount of badly needed hard currency they earn from the sale of oil to Western countries. Things are going well enough for the Soviets to again postpone reforms in the way they manage their economy. Last year Brezhnev demanded "serious efforts to improve" planning. This time he apparently did not even mention reforms.

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