THIRTY years after the bloody Soviet suppression of the Hungarian revolution, Budapest is a serene place. Shops are filled with fresh produce and the latest fashions. Crowds move slowly and cheerfully. No police are in sight. There is no constant sense of tension, of hostility, of being watched, as is prevalent in Moscow. Hungarian officials are a pleasure to talk to. A leader who received me for a ``deep background'' interview in the Socialist Workers Party headquarters was outspoken and relaxed. Even the toughest questions were dealt with seriously, without the customary Soviet polemics. Over Turkish coffee, the host, who is reputed to be one of Janos Kadar's potential successors, was the first to mention recent problems encountered by the Hungarian experiment: economic slowdown, growing social inequality, and difficulties with introducing popular political participation while maintaining strict party control. His openness was disarming and genuine. It was easy to understand why so many Western observers tend to believe that Mr. Kadar may be the one East European leader capable of winning an honest election.
And here lies the problem. Despite the new, more democratic procedures for the election of the members of the Hungarian parliament, party officials, the real rulers of the country, are still appointed by the leadership. It is to the top party bureaucracy rather than to the electorate that they are in reality responsible. Similarly, the news media are tightly controlled. The new liberal press law has expanded the permissible limits of journalistic coverage. But the state, and the state alone, sets those limits. In this respect Hungary is behind Poland with its abundance of unofficial and semiofficial publications.
There seems to be an informal contract between the rulers and the ruled in Hungary. The rulers have decided to allow everything that does not directly challenge the party's monopoly on power. As a result, the Hungarian people are spared consumer shortages, bureaucratic arbitrariness, and cultural drabness. For the average apolitical Hungarian, everyday life is probably freer and more comfortable than anywhere else in Eastern Europe.
In return, the ruled appear to be, for the moment, reconciled to their role as well-treated subjects of the state. With the exception of a few dissidents, most people tend to be satisfied that no Hungarian government could do much better under the circumstances.
But that is the whole key to understanding the Hungarian situation. The circumstances in which the nation has to live are no more of its own choosing than they were in November 1956 when Soviet tanks, contrary to Moscow's promises, entered Budapest to put an end to the Imre Nagy government.
In June 1986, Mikhail S. Gorbachev, addressing the Polish party congress, repeated that the USSR would not tolerate any East European country rejecting the communist system or leaving the Warsaw Pact. The new general secretary sounded like Leonid I. Brezhnev in 1968, when he ordered the crushing of the Prague spring, or Nikita S. Khrushchev in November 1956. A lot has changed during the last three decades. Soviet clients are allowed to enjoy greater domestic autonomy. And the Soviet model of development has been discredited enough for even the Kremlin not to insist that it should be mechanically reproduced throughout Eastern Europe.
The Politburo is prepared to treat its satellites behind the Iron Curtain much better today. But in return for a degree of dignity and economic prosperity, East European nations are forced to surrender their sovereignty, their right to choose their own political systems, and their own alliances. As far as the basic conviction goes that Eastern Europe is destined to live in the shadow of the Soviet empire, Mr. Gorbachev does not act differently from Mr. Brezhnev or Mr. Khrushchev.
Inside the USSR, Khrushchev, by November 1956, was more of a reformer than Gorbachev today. The Stalin ``cult of personality'' had already been denounced at the 20th party congress. Millions of concentration camp inmates had already been released and rehabilitated. Artists had been given a mandate to criticize mistakes and crimes of the past (but, as in 1986, not of the present). Economic reforms had been given momentum. But when push came to shove in Hungary, the Soviet regime had shown its Stalinist heart behind the enlightened fa,cade. Threatened with loss of control over Hungary, Khrushchev and his colleagues decided to rely on force and deception. Nothing in Gorbachev's conduct up to now suggests that, confronted with a similar challenge, he would act any differently.
And here is the dilemma for the United States. Hungary, Poland, and to a lesser extent East Germany have made enough progress both politically and economically not to be treated as Moscow's puppet states. Their newly assertive elites attempt some dialogue with their people and are open to an engagement with the West. Only the Kremlin would benefit if the US failed to respond to these encouraging trends.
Yet on a fundamental level, the East Europeans are still captive nations. One reason Kadar may be well positioned to win a true election is that the Hungarians have learned the hard way that having a genuinely independent government means to trigger Soviet intervention. History and geography of the region make East Europeans painfully aware that being on a long leash is preferable to being whipped.
But the US should never, either in public posture or practical foreign policy, lose sight of this ugly leash in the hands of the Soviet gendarme of Europe. We should remember that when Gorbachev extends to the West his hand with an arms control olive branch, his other hand is keeping its grip over millions of East Europeans.
Dimitri K. Simes is senior associate at the Carnegie Endowment for International Peace.