Kremlin loosens reins on economy

Debate is intensifying in Moscow over how far the Kremlin should move to ease central control of the nation's vast, inefficient economy. The outcome will be crucial to the political, not just economic, future of the Soviet Union.

Yuri Andropov, Soviet leader since last November, has yet to back clearly either side in the debate, paying lip service to each and generally encouraging them to go on arguing.

The clearest sign of which way the wind is blowing should come within the next six months or so - consisting of how, when, or whether the leadership convenes a long-scheduled session of the full party Central Committee on economic planning.

The nature of the Soviet system, the power and ingrained conservatism of the bureaucracy, and the vastness of the economy all suggest even a ''reformist victory'' would not involve radical, rapid overhaul of the status quo. But the stakes are still high: a choice between mere tinkering with the system and change that, over the long run, could be substantial and perhaps assume a dynamic of its own.

Mr. Andropov himself has stressed careful experimentation. In line with this, the leadership has recently announced test introduction in several industries of greater leeway for local managers in awarding bonuses, introducing new technology, and reinvesting profits. Initially, the experiments would be tested in only three of the country's smaller regions, il10l,0,13l,6pand in two out of more than 60 national ministries.

On one side of the Soviet debate are various economists and other specialists who have long sensed the command economy just isn't working right. They favor giving managers nationwide far more elbow room, and allowing a generally greater role for free-market forces.

On the other side sit two different groups.

The first group, probably the less important, embraces more conservative academics, some of them economists, but most of them specialists in Marxist ideology and socialist theory.

The second group involves powerful party and government figures who in varying degrees seem to accept the reformist academics' argument but - quite correctly - see the question of economic reform as a primarily political one.

As actors in the Soviet power system - a system as deeply conservative in practice as it is radical in rhetoric - they are edgy about risking the possible trimming of political control implied in any major economic change.

The current debate predates Mr. Andropov's accession, having begun in earnest near the end of Leonid Brezhnev's 17-year tenure as party chief. Increasingly in the late 1970s, it became clear that prominent Soviet economists felt major change was needed in the nation's economy. Central planning, effective in the Soviet's prewar push for rapid industrialization, had come, in these economists' view, to reward inefficiency and corruption, and to slight innovation and initative.

The impression gained even from reading the official Soviet media - and certainly the specialized economic press - was of a widening consensus among economists in favor of some unshackling of central control. Privately, economists gave this impression yet more strongly.

But the key issue in economic reform was, then as now, political.

The result: a series of only halting moves toward change, typified by a 1979 shift in some industries to meet government targets by measuring the value added in producing products from raw materials. Even these were winnowed down by the bureaucracy; by the Pavlovian response of Soviets to opt for comfortable inefficiency over bothersome innovation; by that faceless beast both Brezhnev and Andropov labeled ''inertia.''

An even more definitive demise had greeted the bold experiments pushed in the mid-1960s by then-Premier Alexei Kosygin.

Yet interestingly, some quite senior ''political'' actors in the Soviet system seemed by the time of Brezhnev's passing to have come to accept at least some portion of their economists' wisdom. More than a few such officials were, after all, more aware, sophisticated, less rhetorically straitjacketed, and better educated than their counterparts of years earlier. Thus through mere common sense they evidently felt the need for some kind of repair in the economy.

Mr. Brezhnev himself called publicly for a close look at Hungarian planning experiments. Under him, a top-level committee was set up in 1981 to look into East European examples of economic reform.

Mr. Andropov, while focusing mainly on the need for economic ''discipline'' in most statements, has also cited East European experience. And he gave his own strong endorsement to the internal debate on ''economic-management'' options begun in the last Brezhnev years - thus paving the way for increased talk recently in the official press of new economic-management options. One article, by a reputedly reformist economist who fell from official grace in the 1970s, went so far as to suggest it was high time to put the nation's enormous force of mere regulatory paper-pushers to more productive use.

Senior officials, in remarks to the Monitor, portrayed Mr. Andropov's approach as two-pronged. There would be, first, much tighter discipline on farms and in factories, more work and less talk in government ministries; and second, a cautious, measured, well-prepared, but ultimately serious effort to update the ''management mechanism.''

This, said one prominent Central Committee member, was likely to involve ''borrowing aspects . . . in one way or another'' of the economic decentralization experiments tried in other East-bloc states.

The official said there would also likely be a move toward ensuring that individual economic units paid for themselves. Other officials spoke of at least some eventual change in the nation's expensive and inefficient system of subsidized consumer prices, in which bread, for instance, is squandered by buyers who get it at a fraction of production cost.

At least one ''free-market'' option, it should be said, seems utterly out of the question. This is the notion of using unemployment to prod initiative and productivity among workers. For one thing, the Kremlin will surely rule out this option on political grounds. For another, the Soviet economy already suffers from labor shortages that make managers reluctant to lay off inefficient, even inebriated, workers.

Other senior officials, meanwhile, stressed in interviews that any change would have to stay firmly within the confines of ''central'' planning, and that the focus should be on improving the criteria for such plans.

More tellingly perhaps, a prominent economic expert, reputedly with the personal trust of both the late Mr. Brezhnev and Mr. Andropov, highlighted in an interview last year the potential conflict between economics and politics in any reform move.

He said the aim must be to combine central planning with ''maximum autonomy for local initiative in implementing these plans.'' One aspect would be the removal of needless intermediate regulations posed by various government ministries.

Discussing subsidized pricing, he remarked that, yes, prices of milk and meat , for instance, far understated production costs at a time when both commodities had been in short supply. He said there were two ways of coping with the problem: either raise prices ''as in Hungary,'' or ''retain a system financed by the state.''

''As a specialist (in economic matters), I think the first option is more rational. Although, one must remember it carries with it political problems, as Poland shows,'' he said. ''I do think the general tendency will be to end price subsidies. I think there will be considerable changes and, although there is evidently political concern, the tendency is to look for a better economic mechanism.''

Perhaps more typical of the ''reformist'' group among Soviet economists, if less reflective of those with direct influence in decisionmaking, is the Siberian branch of the Soviet Academy of Sciences. The economic section there, and its journal Eko, became more visible in the later Brezhnev years.

And it was Eko staffers who wrote a frank report obtained earlier this month by an American journalist. Its leakage is generally viewed by diplomats here as reflecting a bid by the reformists for greater leverage in the internal debate here.

The head of the Siberian Economic Institute, Abel Aganbegyan, told a Hungarian radio interviewer last October that preparations and ''working out of drafts'' were under way for a party Central Committee session, ''the agenda of which features modernization of the economic mechanism.''

''I agree,'' he told the interviewer, ''that excessive regulation does occur, particularly on the part of (government) ministries. . . . Our objective is to create an incentive-and-management mechanism which provides scope for individual local initiatives.''

Senior officials, in remarks to the Monitor since Mr. Andropov's elevation to party chief, have said the Central Committee management session is still planned. But, at least as of early summer, its exact shape and timing had not yet been worked out.