Soviet Bloc to Hear Plug for Capitalism : Emigre Hopes to Alter Socialist System

It may not be an Iceland summit meeting, but Cypress resident Andrew J. Erdely is hoping to influence a few officials’ minds when he travels to the Soviet bloc in September.

As Erdely sees it, translation is the key.

But the translation has nothing to do with language. Erdely is a Hungarian emigre and a fluent speaker of Russian: He spent three years in a Siberian labor camp during World War II as a captured Hungarian army officer.

Rather, Erdely seeks a willingness by managers of the Soviet bloc’s economy to translate certain capitalist ideals into socialist economic practice.

Now a U.S. citizen, the former McDonnell Douglas consultant has been invited to speak at two economic and business management conferences in September--one in Budapest, Hungary, and the other in Warsaw, Poland.

Erdely, who holds a doctorate in economics from a university in Hungary, assisted in the development of his native country’s five-year economic plans in 1950 and 1955 before immigrating to the United States in 1956 during Hungary’s failed revolt against its Soviet-controlled government. He brought his wife, son and mother-in-law with him when he immigrated. A daughter, now 28, was born in the United States.

Individual Talent Stressed

A stout 66-year-old with a silver slash of a mustache, Erdely, reading from a prepared text during a recent interview, said his message to the socialist officials who manage government-owned production shops throughout the Soviet bloc will be that “the so-called means of production will not be able to generate progress without the creative talent of individuals.”

In other words, Erdely said, he hopes to persuade the Eastern bloc business managers to introduce some of the more individualistic aspects of capitalism into the framework of a socialist-oriented operation.

“I am not attacking the (socialist) system. I would like to see the system (sustain) the nation, to put some initiative and possibilities in for the individual who likes to think.” Erdely said his advice is derived from an economic philosophy that puts more emphasis on the value of land--and man’s capabilities to exploit it--than what he considers to be the “extremes” of either communism or capitalism.

The emphasis on labor in the communist system, he said, enslaves the worker because laboring for the state is the only source of income.

But Erdely also believes that under capitalism’s emphasis on capital, the investor is at the mercy of regulatory agencies and unpredictable factors that influence the rise and fall of stock prices and the value of the dollar.

An individual living under the current versions of socialism would find more security, plus a resource for financial gain, under a system that gives the laborer the opportunity to own and exploit land as well as to work in government-controlled enterprises, Erdely said.

Tradition of Independence

Julius Margolis, an economics professor at UC Irvine, said Erdely’s invitations to speak at the economic conferences, while not common, are not unheard of.

“They (Eastern bloc countries) are not terribly open, but they’re not closed,” said Margolis, adding that in the past he has been asked to present his work in Poland.

The people of both Poland and Hungary have a tradition of asserting what little independence they have won from their Soviet-controlled governments or from the Soviets themselves.

In Poland, an illegally organized workers’ union temporarily won concessions from the heavily militarized government in 1981, and in Hungary, an economic reformation program was instituted in 1968 and has increased the scope of private, small-scale enterprise in trade and industry, although land ownership, Erdely’s pet project, still is largely taboo except for the private garden plots of the members of agricultural cooperatives.

Industry and the economy advanced more in Hungary than in the rest of the Soviet bloc after the failed 1956 revolution, Erdely said, because the government saw that private enterprise was too deeply embedded in the character of the nation to be replaced entirely by Soviet-style socialism.

Still, an article published in the Wall Street Journal last month reported the results of a government-sponsored poll in Hungary showing that nearly a third of the citizens there believe that the small amount of free enterprise allowed is part of a scheme to help a few already-privileged citizens get richer. The same poll, however, also showed that two-thirds of Hungary’s college graduates believe that socialist economies are characterized mainly by problems.

Limits on Action

Still, while Erdely said that Hungarians are more interested than ever in market research and in creating demand for products, there is a limit to how far communist ideals will allow them to incorporate the capitalist-oriented practices the economist will be suggesting.

When he spoke uninvited at a computer-related business conference in Budapest 18 months ago, Erdely said, he commented that “we in the capitalist system, we say the profit is the freedom.”

He said the audience applauded that remark but that his presentation was ended when the Russian official chairing the conference “called a break and invited everyone for coffee.”