Demagoguery Zeroes in on Enterprise : Soviet Union: The new legislature targets a political scapegoat for the country’s economic woes: the cooperatives offering alternatives to state-produced goods.

MOSCOW — If a foreign visitor wandered into the Supreme Soviet, our national legislature, and monitored its opening debate earlier this month, he might have concluded that this huge country had solved all of its pressing problems except one--what to do about the country’s new cooperative enterprises.

Those 3 million people, about one-100th of the nation’s population, who call themselves “cooperators” were portrayed as our deadliest enemy, breaking through all our defenses to destroy the country. Among the deputies, the only point of disagreement seemed to be how to kill them off.

As the Supreme Soviet debated the future of the young cooperative movement, it appeared as if there were no problems in Nagorno-Karabakh, no blockade of Armenia. From the debate, one would think that our galloping inflation, the crumbling consumer goods market and the fundamental problems of the strategy and tactics of our economic development had all been resolved.

Of all the bills scheduled for discussion--on property, on land ownership, on taxation--the most urgent and important was the one amending the law on cooperatives. Even before tackling next year’s economic development plan and budget, the legislators pounced on the cooperatives with unusual passion and vigor.

The amendments, sponsored by the government, restrict the activities of the cooperatives and put them in a very difficult economic situation. In the process, they contradict one of the fundamental principles of our economic reform: All that is not forbidden is permitted.

The amendments require registration of all cooperatives, both those already active and those still being formed. But registration will come only after the cooperative’s plans are approved by a special commission of local deputies or people operating other cooperatives in the same or a similar business. Thus the government proposes to return to the principle of permission, and that cannot be seen as other than as a large and hasty step backward.

A fundamental idea in the creation of the cooperative movement was the ending of the state’s monopoly with the establishment of a competitive counterweight to state factories. Yet the amendments will infect the cooperative movement with that same virus that state production suffers from--monopoly. Would a regional cooperative union, headed by, say, the chairman of a shoe-making venture, agree to the appearance of fresh local competition? Hardly.

At the same time, the amendments open wide opportunities for illegal and biased decisions, which is another way of saying corruption. The possibility of permitting or closing a cooperative on grounds of its “feasibility” creates ideal conditions for selling and buying the “right” decision.

The amendments constitute the legal foundation for illegal actions in a “desirable” direction. Cooperatives may be closed, it is said, on the request from trade union, public and other organizations by the act of the local Soviet, but not by a court decision.

It was odd to hear the chairman of the Supreme Soviet’s committee on legislation attacking the cooperatives not because they are operating outside the law but because of the “need to account for ethical and psychological considerations”--that is, what people think about the co-ops.

The very first statements in the course of the debate showed, in fact, that we need to worry about this entire new sector of the economy, not just the amendments to the legislation regulating it.

Many speakers demanded the closure of all cooperatives or, failing that, those engaged in retail and wholesale trade and brokering. Each new argument looked more impressive than the last. The cooperatives were said to be robbing the people, to be luring the cream of the work force away from the state industries, to be encouraging people to live by cheating and speculation.

The cooperatives might not be run by angels, but neither are they operated by gangsters. Criminal situations do occur, but these are the inescapable problems of something so new.

In the end, just a tiny majority of 15 votes stood between the retail cooperatives and their death.

Characteristically, as soon as the first signs of trouble appeared, all the banks, either of their own accord, or on secret orders from Moscow, immediately suspended all the cooperatives’ money transfers. Contrast this with the first successes of the cooperative movement, which were so important for the local authorities that there were cases when cooperatives were set up under Communist Party committees.

Now the film seems to be running through the projector backwards, and the local Soviets are closing cooperatives under their jurisdiction without even waiting for the final word from the Supreme Soviet.

What causes all this? Is it just envy of the high incomes that members of cooperatives receive? To many people, it is true, an extra 10 rubles in a neighbor’s pocket is worse than a terminal disease of a close relative. But this is not the root of the problem.

Is it the independence of the cooperatives from the state and those who exercise its power? This is closer, but the independence, although much praised, has barely emerged. It is only beginning to take shape and certainly cannot generate so much hostility. Besides, it is difficult for many to give up total dependence on the state, their existence under its all-embracing patronage. They cannot even imagine themselves outside of the state structures.

Or is it that the cooperatives are the ideal target for those seeking the guilty parties responsible for the country’s mounting problems? This explanation comes very close. Such a search has a long historical tradition here. In the past, there were “counterrevolutionaries,” “imperialists,” “cosmopolitans,” “saboteurs.” . . . Who is next? Well, the cooperatives, of course! It is quite convenient to point at them when explaining what happened to all those disappearing consumer goods--the sugar, the tea, the soap.

This trick not only shifts responsibility onto someone else, it indicates the remedy: Take what we need from the nouveaux riches of the cooperative movement!

The cooperatives have become the currency of our current political struggles. That is what really brought about their predicament, and it happened almost accidentally and without connection to their activities.

The elections last spring to the Congress of People’s Deputies, our new Parliament, dramatized the new power of public opinion and how difficult it is to win voters’ sympathy. So how in these new conditions does one get the reputation of being the champion of the ordinary people? Quite simply. Defend their interests from the cooperatives’ “thieving” and, if there is a chance, put as many cooperatives out of business as you can. Since those in the cooperatives are still relatively few, they cannot fight back effectively.

Public opinion is still undecided about the cooperative movement. Studies show that 85% of the population never uses the cooperatives’ services, and therefore these people are particularly susceptible to others’ opinions and biases. Voters, frightened by tales of “those cooperative speculators” and not familiar with what might be called “political speculators,” can be swayed by the steady stream of demagoguery.

If we are to talk, however, about the true reasons for the antagonism between the cooperatives and the people, the key is that the cooperatives are still an extension of the administrative command system that has run our economy for so many years.

The cooperatives are totally dependent on the parent that brought them to life, and by themselves they cannot change their nature. But can they be helped to do this? It is a matter of life and death for them.

Sixty years ago, closure of retail and wholesale cooperatives was the forerunner of the so-called rollback of the New Economic Policy, which had encouraged entrepreneurs in the 1920s, and the beginning of the collectivization. Then, as today, the justifying slogan was of helping the “truly productive cooperatives.” One would hate to draw any parallels between the fate of those cooperatives of the 1920s and what followed and the current circumstances--the thought is too frightening.