Seven days that shook the world.

THE NEW Russian Revolution began in Moscow on Tuesday, September 11, 1990. I know because I was there.

I was in Moscow to attend a Cato Institute conference, "Transition to Freedom's-itself a portent of change, as it was jointly sponsored by the Soviet ,Academy of Sciences. The preceding Sunday I had attended a meeting of two hundred radical deputies. These people were as confident as Bolsheviks in 1917. There was none of that wimpish insecurity that frustrated the Reagan Revolution. The main issue before them was economic reform. Boris Yeltsin, working with Gorbachev's top economists, had produced the Five-Hundred-Day Plan, a/k/a the Shatalin plan, which sets out a timetable for transforming the centralized Soviet economy into a capitalist and free-market system in less than two years. Gorbachev's government had developed a different plan, the Ryzhkov plan, named after the Soviet prime minister, which would maintain state control over the economy. Gorbachev himself favored a combination of the two plans in an effort to please all parties.

This vacillation brought scorn upon his head. "Combining centralized planning and a market is the same as fixing a watch with parts of an hourglass," hooted a delegate amid demands for the resignation of both Ryzhkov and Gorbachev. We have had enough of the old ways. It is time to get on with our future."

On Monday evening, Gavriil Popov, mayor of Moscow, set a similar tone for the Cato/Academy of Sciences conference at the privately catered opening banquet at the Moscow Hotel: "We cannot talk of freedom unless we have private property."

The next day, the conference proper opened with Abel Aganbegyan, the Gorbachev advisor who launched perestroika, saying: The command militaristic system is bankrupt. . . . The social situation is explosive. Trust in government has drastically declined.

A union of sovereign republic states is inevitable."

This was heady stuff from the director of the Academy of National Economy and a full-fledged member of the Soviet establishment. But it was not enough for economist Larisa Piyasheva, who ripped into Aganbegyan. Perestroika, she said, was nothing but a search for Western credits; Aganbegyan had merely called for giving socialism a shot in the arm.

"Our economic system is wrong," she declared. "The principles of socialist economics are wrong. We must translate supply-side texts so that we can teach our students No compromises' is the new slogan." Prolonged applause.

Flattened, Aganbegyan endorsed the Shatalin plan. But he did so only in self-defense. Although he was influential in discrediting central planning, Aganbegyan seems to think that the market economy will be operated under the governmental auspices of a new Minister for the Market.

Word spread among the conferees that the government of the Russian Republic had officially adopted the Shatalin plan, but that the Soviet government, following a different course, had submitted the Ryzhkov plan to the Supreme Soviet. In private conversations at the conference, members of the Supreme Soviet expressed their bewilderment at debating the Ryzhkov plan when the Russian parliament had adopted a contrary one.

Anatoly Sobchak, the radical mayor of Leningrad, rose to report to the group at large. The Supreme Soviet, he said, had responded to the government plan with surprise, having expected a compromise proposal from Gorbachev that would embody the heart of the Shatalin plan. The Supreme Soviet had stood up for real reforms and had instructed Gorbachev's government to put other reform proposals before the body.

Moscow's Mayor Popov, himself a radical, also spoke: "State property is the basis of bureaucratic socialism." Delays in legal privatization were permitting government ministries and the Communist Party to be active in claiming property and acting as its owners.

We no longer have patience for the apparatchiks' game. If no change occurs, we will have to ask people to come into the streets," said Popov, going on to threaten that a demonstration in Red Square on Sunday might give Gorbachev the message. Others said, "It is too late for Gorbachev. Russia has acted."

If Gorbachev had used his powers and quickly privatized on an all-union basis, he might have been able to prevent the political disintegration of the Soviet Union. Now he is a king without a kingdom and cannot rule the republics from Moscow. Not even George Bush, Jim Baker, and German billions can put him back on his throne. The unresolved dispute is between the powerful vested interests that currently control state resources and are conducting a private privatization for their own benefit, and democratic forces led by Boris Yeltsin, Gavriil Popov, and Anatoly Sobchak, who seem determined to stop the plunder and to implement a legal privatization.

Russia's future depends on whether democratic leadership and rule of law can indeed prevent plunder. If the democratic forces fail to subdue the powerful interests, they will be discredited, and the rising anger of the people will be assuaged only with blood.

The Cato Institute, with its full contingent of classical liberal thinkers, was at the right place with the right conference at the right time. The Soviet participants were drawn from both the radicals and the government, and a vast audience of Russians and Ukrainians overflowed the auditorium. Free minds met, and people yearning for a free society tested the mettle of Peter Bauer, James M. Buchanan, Henry Manne, George Gilder, Charles Murray, William Niskanen, Ed Crane, and others of Cato's stable of penetrating thinkers. For the first time in their lives, Soviet intellectuals and politicians met Western intellectuals who were confident of the superiority of a free society. It was good for their morale and fighting spirit.

The day is near when even Western academics will have to acknowledge that Communism is dead and buried in its homeland, and justly so.