Looking Backward

Some two years ago, Kharkov Professor of Economics Evsei Liberman startled the Soviet establishment with a Pravda piece urging a switch from rigid, centralized Marxist planning to Western-style profit guidelines for factories. As Liberman saw it, factories would produce only what retail stores could sell. The proposal was more pre-revolutionary than revolutionary, and it touched off a storm of protest from orthodox Marxists.

But Nikita Khrushchev was impressed and decided to give Libermanism a chance. One factory in Moscow and another in Gorky were put on the profit and free-market system on a trial basis six months ago. Not surprisingly, they demonstrated a vast improvement in efficiency over the old Marxist bureaucratic model. When Khrushchev was ousted, some Soviet experts suspected that his revisionist experiments with Libermanism were at least partly to blame. On the contrary, the new leadership moved quickly to make Libermanism a prime element of their domestic policy.

In unveiling the 1965 Soviet budget last month, Premier Aleksei Kosygin--himself a savvy economist--announced that by the end of the year one-third of Russia's consumer-goods factories were to switch to the Liberman system. Then, three weeks ago, Moscow disclosed an "area" trial of Libermanism in Lvov where, significantly, not only the town's consumer industries but also its heavy industries, including a coal mine, were to go on a supply-and-demand basis.

Last week, hailing "this new form of planning" as "profitable for industry and the population," Moscow announced that it already had approved the conversion to Libermanism of nearly 400 consumer-goods factories from Moscow and Leningrad to Minsk and Kazakhstan. Trade ministries have until Jan. 31 to draw up a list of retail outlets authorized to place orders directly to the factories. Factory managers in turn will be given the authority to set production schedules based on retail-store orders, and to determine the size and wages of the work force needed to fill them at a profit.

In addition, 76 textile mills, 20 leather factories and a number of other suppliers of raw materials will switch to producing to the demand of the converted consumer-goods factories. Though Liberman is not likely to replace Lenin in the hierarchy of Communist saints, and though both the professor and Moscow protest too much that Libermanism is not capitalism, Russia is clearly looking backward in its most important economic experiment in several decades.

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