Gorbachev Fends Off Conservatives, Vows to Broaden Economic Reform

MOSCOW —  President Mikhail S. Gorbachev, defending his political and economic reforms against conservative criticism, declared Tuesday that perestroika will not be slowed but accelerated and broadened into a sweeping redefinition of Soviet socialism.

Gorbachev, speaking to the Congress of People’s Deputies, said that “wrenching the economy from its quagmire is unfeasible without radical economic reform,” although that will break sharply with seven decades of Soviet socialism.

In a landmark 95-minute speech that took perestroika, or restructuring, far beyond simple reform, Gorbachev laid the foundation for a substantially new economic system, one based more on entrepreneurship and market socialism and far less on state ownership and central planning.

Gorbachev also outlined a number of important political changes--including jury trials, the right to legal representation while under investigation and laws ensuring freedom of conscience and freedom of the press--that would be put to the congress and to the Supreme Soviet, the new full-time legislature.

And he said that local elections scheduled for this fall will be postponed until spring to allow to the congress to draft a new election law.

Rely on Market Forces

On the economic front, as outlined by Gorbachev, virtually all forms of Soviet enterprises--state-owned companies, publicly held firms, joint ventures, cooperatives and even privately owned concerns--will be allowed to compete on equal terms in the marketplace, and market forces will replace central planning.

“The market, of course, is not omnipotent, but mankind has not been able to devise a different, more effective and democratic mechanism of market management,” Gorbachev said. “A socialist, plan-based economy cannot do without it. We should acknowledge this.”

Retreating from the Marxist precept of the “common ownership of the means of production” as the basis of socialism, the government will encourage each form of enterprise to “prove its vitality and right to exist in real and fair competition,” Gorbachev said.

“The only condition that should be made is that there be no exploitation of workers and their alienation from the means of production,” he said, making clear that this would be achieved through legislation and economic measures to ensure fair wages and community benefits from the profits of such enterprises.

Central planning, another key element of classic socialism but already diminished here, will be confined to strategic industries and long-term needs, Gorbachev said. The state will use a variety of economic levers, such as fiscal controls, taxes, a wage-and-price policy and government investments to guide the economy.

A major step toward these goals will be taken later this week, according to informed Soviet sources, when Premier Nikolai I. Ryzhkov outlines plans for the further reorganization of the government, including the restructuring of those ministries that now manage most of Soviet industry and the elimination of about half of them.

“The key figures in the economy should be enterprises, concerns, joint-stock societies and cooperatives,” Gorbachev said. “To deal with common problems and coordinate efforts, they will form voluntary alliances, unions and associations, which will take over the economic management functions currently performed by ministries.”

But he stressed that he did not intend for market forces to supplant central planning and state management immediately or across the board, as some radical Soviet economists have urged as a solution to the country’s severe economic crisis. “That would blow up the social situation and disrupt all economic process in the country,” Gorbachev said.

“Experience demonstrates that reform cannot be effected at one fell swoop,” he told the deputies. “Switching the economy over from one mode of operation to another is a complex matter. To cope with it successfully, it is essential to speed up the development of a number of interrelated steps, including updating of planning methods, financial levers, prices, taxation, the pay system and all other components of the economic mechanism.”

Sense of Caution

There was both a vision of a new economic system for the country and also a sense of caution, unusual for Gorbachev, who had outlined his plans with greater energy to the party’s policy-making Central Committee last week.

Gorbachev assured the congress that its 2,250 deputies will debate all major laws, though the Supreme Soviet would be the normal legislative body, and fundamental questions could be put to the public in national referendums. A constitutional court would be established to ensure the rule of law, and a new constitution would be drafted when the country’s political, economic and social reforms are sufficiently defined.

Many deputies, however, expressed dissatisfaction with Gorbachev’s address, saying that they had hoped for a bolder vision or a plan to get the country out of its acute economic problems more quickly.

Gorbachev scornfully rejected conservative critics who contend that his reforms are responsible for the country’s deep economic crisis.

Although the party leadership is convinced of the correctness of the reform strategy, there have been “a lot of inconsistencies, indecision, halfheartedness, zigzagging and even backpedaling” in its implementation, he complained.