RUSSIAN SCHOOLCHILDREN GET CUDDLY COURSE IN CAPITALISM.

Byline: Sarah Koenig The New York Times

In Nadezhda Shilyayeva's first-grade class, the words of the day are ``profit'' and ``inventory.'' As the kindly teacher bounces her pointer along the curly blackboard script, her 26 students at School 139 sing the syllables in unison.

``Now what do we call the money left over in Misha's wallet after all his expenses are paid?'' Shilyayeva said. ``Profit

'' shouted a pigtailed 7-year-old girl named Dasha. The teacher continued, ``And why does Misha need this profit?''

Silence. Then a small voice ventured, ``So he can'' - a pause - ``expand his store?''

``Excellent, Andrusha!'' boomed the teacher's voice.

Ten years ago, this kind of aggressive attempt to plant a seed of capitalism in her young students would have landed Shilyayeva in the gulag. Today she is among a growing number of elementary school teachers in Russia who have seen the future and know that in order to survive in it, her students will need to be able to compute interest rates.

``If we don't teach children about the market economy from an early age,'' said Shilyayeva, 57, ``they will end up like us. The older generation knew nothing about economics. We never gave it a thought. As a result, we are like blind kittens bumping into walls, looking for a way out.''

Her chief tool is a new textbook, published this year. ``Economics for Little Ones, or How Misha Became a Businessman'' tells the story of a simple but industrious bear who opens a honey, berry and nut store in his forest. His sole competitor is described as Winnie the Pooh's overpriced Golden Beehive Cooperative, and Misha soon trades his apron for a three-piece suit and a cellular phone to become the forest's first tycoon.

After outsmarting a crude wart hog monopolist, Misha - now an industrialist, banker and marketing consultant - eventually becomes forest finance minister.

The book's three authors have collaborated on other texts for slightly older children, like ``Tales of Queen Economy, Evil Inflation, the Magical Computer and Their Trusty Friends'' and ``Enterprise for Everyone,'' which reads like an anti-Communist handbook.

The authors work for the International Fund for Economic and Social Reform, a Russian organization run in part by Martin Shakkum, a wealthy businessman who ran for president in June.

``Economics used to bore people,'' said Alexander Kuzyakin, a spokesman for the Ministry of Education. ``It was all propaganda and five-year plans. Now it's fashionable.''

When universities and colleges were freed from strict government controls in 1991, almost all of them, even technical schools with little or no connection to the field, rushed to update or create economics departments. Economics has now become one of the most popular majors. Advertisements for questionable private business schools are even broadcast in subway stations, hawking studies in ``markyeting'' and ``menedzhment.''

The trend trickled down. Middle and high schools all over Russia now use a translation of the American Junior Achievement system of applied economics, which teaches American young people about business, sometimes by having them form small businesses, since a Russian academic carried it across the Atlantic like a rare spice in 1991. Videos and computer games like 100 Steps to the Market Economy have made the study of money a multimedia discipline here.

This year, some of the nation's tiniest residents are being indoctrinated. If capitalism cannot yet be drunk with mother's milk, the theory goes, it can at least be spoon-fed from first grade on.

``I am against teaching economic theory to young children, but the sooner they can understand the basic elements, the better,'' said Boris Mishin, who heads the economics studies department for primary and secondary schools at the Ministry of Education. ``I don't know, maybe by kindergarten it's already too late.''

Few dispute the need for Russian children to learn market principles. The debate is about how.

``The most effective way to get it into the bloodstream,'' said Marvin Zonis, a professor of international political economy at the University of Chicago's Graduate School of Business, ``is by living with the institutions that are dominated by market principles. Nobody sat us down in second grade and told us about profit and loss. We just picked it up. In Russia, you have to counter the absence of these institutions.''

These days many Western companies are spreading the word. First-graders are learning to write in workbooks decorated with the logo bunny of Nesquik, the Nestle chocolate powder. And Coca-Cola has started a Coca-Shkola program (``shkola'' means school in Russian), which offers tours of its Moscow plant and plenty of product samples.

The object, explained the company's spokesman here, Dmitri Chukseyev, is to ``introduce them to Coca-Cola culture and give them a professional orientation.''

``We will certainly have them talking to businesspeople, and yes, in a way this is bringing them closer and closer to the capitalist system,'' he said.

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Photo

Photo: First-graders at a Moscow school volunteer to answer questions in an economics lesson on capitalism.

The New York Times