Behind Soviet changes: communism's inability to outshine capitalism

A GENERATION ago, Communist Party chairman Nikita Khrushchev boasted: ``Soviet superiority in the rate of production increase will create a real basis for overtaking and surpassing the present US per capita output within approximately five years after 1965.

``Thus,'' Mr. Khrushchev concluded, ``by that time and perhaps sooner the Soviet Union will attain first place in the world in both gross output and per capita output, giving the population the world's highest living standard.''

That prophecy has proved to be a wild dream. Rather, the United States has increased its economic lead over the Soviet Union significantly.

Total production in the US, which in 1975 was already 72 percent greater than in the USSR, became 88 percent greater by 1985. The gap is probably wider now, given the Soviet economy's weak growth last year.

On a per capita basis, the US had about double the output of the Soviet Union in 1975. Five years later, the American margin of superiority was about 115 percent, and in 1985 it reached almost 120 percent.

Moreover, these figures understate the achievement gap, because of the inferior quality of Soviet products.

But it is probably not so much the continued prosperity of the US that troubles Soviet leader Mikhail Gorbachev. It is the fantastic performance of his eastern neighbors.

Japan's success is an old story. It is being followed by Taiwan, South Korea, Hong Kong, and to a degree other East Asian economies.

Worst of all, from the Soviet standpoint, China's economy has taken off under reforms launched by its leaders. If current Chinese growth rates continued uninterrupted beyond the turn of the century - perhaps not too likely, considering the social change such a development would bring - China's economy would be larger than that of the USSR.

According to figures in the annual report of President Reagan's Council of Economic Advisers, economic growth in China has averaged 7.4 percent a year since 1980. That compares with 1.8 percent annually in the Soviet Union, about 1.4 percent in both Eastern and Western Europe, 2.4 percent in the US, and 3.4 percent in Japan.

It's no wonder that Wall Street economist Sam Nakagama says repeatedly that the United States side has already won the cold war. Leaders of nations around the world see that capitalism, free enterprise, and individual initiative produce abundant material goods - and that communism does not. Most developing countries do not look to the Soviet Union any longer for an economic example. They look to the Asian NICs (new industrialized countries), Japan - or even the United States.

In a famous article in Foreign Affairs in 1947, George F. Kennan, then the US ambassador in Moscow, outlined the ``containment policy'' that has largely governed American policy toward the Soviet Union in the postwar years. He held that if the US measured up to ``its own best traditions,'' it would force upon the Kremlin a ``far greater degree of moderation and circumspection,'' and that this would lead to ``either the breakup or the gradual mellowing of Soviet power.''

Mr. Nakagama sees the current economic reforms and arms control proposals of Mr. Gorbachev as a sign of this mellowing. The US, he says, is faced with a ``revolutionary situation.''