THE SOCIAL OVERHAUL OF THE USSR

The Soviet Union is metamorphosing. General Secretary Gorbachev, backed by Russia's post-World-War-II generation, is trying to overhaul Soviet society. It's important for Americans to understand and encourage these changes,

because they may lead to greater freedom of expression and economic welfare in the U.S.S.R. and closer trade relations between the East and West.

The ugly Nicholas Daniloff affair casts a pall over all this. Hopefully it will pass quickly into history without tarnishing long-term progress in Soviet-American relations. Either Mr. Daniloff is guilty (unlikely) or was setup by Soviet secret police (KGB) opponents to Gorbachev's liberalism (possible). Maybe Mr. Daniloff's arrest was motivated by an influential sponsor of Genady Zakharov, the accused Soviet spy who was recently arrested in New York City. If so, he's put personal relationship ahead of his country's interests.The harsh discipline of Soviet culture - stemming from a bloody imperial war with Germany 70 years ago; a turbulent subsequent communist revolution led by Lenin and Trotsky; a totalitarian Stalinist era highlighted by sword- enforced collectivization, migration and industrialization in the 1930s; a grueling, gut-twisting war with Nazi Germany that left over 20 million Russians dead and millions more permanently disabled or psychologically scarred; and more recent transition from Stalinism to a maturer political process - is mellowing as 40 years of domestic peace is having its effect.

Since the Leninist Revolution, the Soviets have been wedded to a simplistic, utopian ideology that assumes too much of man - that people work for the pleasure, taking from the social wellspring only what they need. It never had a chance. It ignored the harsh reality that man, at his best, acts on the basis of intelligent self interest. Capitalism, whatever its flaws, has never lost sight of how personal gain and ownership can motivate hard work and progress.

The current Gorbachev government is more pragmatic. It is working to solve real problems not pursue ideology with theological fervor. The changes are evident.

Those put in power by Gorbachev are better educated and more worldly than their predecessors. Those young Russians about to win power feel opportunities lie ahead for improving life's quality. They may have more in common with their American counterparts than with the older generation that is handing over the decision-making reins. (Both countries have bimodal population distributions, but, because of World War II's harshness, the Soviet curve has a deeper trough around ages 40-45.)

Muscovites are not the drab drones of American fiction. They look like us. They dress colorfully. Denim is plentiful even if designer clothing and lots of dining out are not.

Russians cross against the light. They walk and swing their arms just like any Chicagoan or Minneapolitan. There are almost too many cars (especially mad-cap taxis) hurtling around town. Soon there may even be time-stealing traffic jams. There is even graffiti - but not much.

In the last year or two, the fresh food quality has improved. The Bolshoi fountain works. Street names are being changed back to what they were. Non- revolutionary art is being displayed with greater frequency.

But more important, Soviets are talking more openly - questioning themselves and asking "why" and "how". The State-controlled media appears looser (though you still can't get a copy of The International Herald Tribune at a newsstand). Government officials more frequently respond to citizen complaints. Mr. Gorbachev has set a new tone for the nation. The Russians have responded - and sometimes they themselves aren't aware of how much easier they are today than, say, 18 months ago.

Russia is an industrial society. It's not a consumer society like we're comfortable with. But it has the potential to become one. The Soviet Union currently lacks the plethora of consumer goods we take for granted. The housing stock, especially in Moscow, is inadequate. Salaries, while higher nowadays, remain modest. (A construction worker earns 4-6 rubles a day; a translator makes 150 rubles a month; a good-restaurant dinner can cost 30-50 rubles a person depending on how much vodka is ordered; but a subway ride costs just 5 kopeks, which is something like a nickel.) The people are not unhappy. Despite centuries of pain, there's an air of optimism and an abundance of personal warmth.

The country is rife with bureaucrats. They're like mud, clogging the gears of progress. Theyounger generation is dislodging them. But they have their work cut out.

Soviet industrial output gets bogged down by quotas on the weight of inventory used in production (to maintain employment at the mine mouth or in the fields) and on the number of units produced.

There are few incentives to be creative or quality conscious. Consequently a massive inventory overhang of unneeded products has developed in some sectors of the economy. Shortages are evident in others. To mitigate the disequilibrium, the Soviets ship commodities to Eastern Europe and import sorely needed goods. Oil, for example, flows to Czechoslovakia - where there are fewer rules - and crystal is imported.

The lack of a free-market system has given rise to one based on who you know where. Networks of friends and acquaintances exist in lieu of consumer distribution systems. It's not a barter environment. Rubles change hands. But the hands often know one another or where to find one another. It's an early mercantile system where ingenuity and networking are important. It works a little like Wall Street information networks.

A consumer can't let his fingers do his walking in Soviet yellow pages (telephone books aren't published regularly and yellow pages are anathema). He must do his own walking. But at least the frequent long lines played up by the Western press in the past really don't exist when goods are actually available. When they are not or they're too expensive, it makes no sense to cue up. So the Russians don't bother. They simply become buyers of opportunity or crafty traders. Apartment swapping is an example - especially in Moscow where demand always seems to run ahead of supply.

As for necessities - food, clothing, shelter, medical care, transportation - panic cueing up exist only in old post-war documentaries. This, however, is not true at airports where standbys stand by everywhere. Planes are full but not plentiful.

Sometimes there are shortages. Then the lines grow long, as for vodka today.

Vodka production has been slashed in the Soviet Union by 40 percent-60 percent as the Gorbachev government acts to reduce alcoholism and bring the public to sober senses. Today's Soviet leaders don't want a nation of intoxicants. They have a vision of a new Russian: inventive, robust, healthy. They'd like to see the entire nation doing Jane Fonda workouts.

Mr. Gorbachev is an attorney. He is smart, charming, tough. His ministers frequently are drawn from the elite intelligence services. They're well educated - and not simply in James Bond espionage techniques (although the Daniloff mess makes one wonder).

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