The grand bailout.

The Washington conference to coordinate assistance to the former Soviet Union was a sad spectacle, with depressing implications for the future. Unlike the Poles, who had a Western aid and stabilization package in place when they took the plunge, the Russians and their Commonwealth partners have launched ambitious and risky liberalization programs with the hope but not the assurance that they will get the outside help without which they are unlikely to succeed. The American commitment to the new effort - a $645-million request to Congress - is not impressive, inhibited as it is by our budgetary crisis and election-year timidity. The performance of the Europeans (especially the Germans) is disgraceful, however. Having wasted billions on Gorbachev, who clung tenaciously to the wrong economic system, they now plead that they have already given more than their fair share. The U.S. was correct to hold back while Gorbachev and his wrong-headed policies held sway. Now, democratic leaders and gutsy reformers are determined on real marketization. Their failure could lead to chaos and take much of the outside world with them.

It is already clear that the first attempt to introduce price liberalization in Russia is failing. As Moscow's "independent newspaper" pointed out, the "freeing" of prices before the monopolistic state distribution structures were dismantled led to a repetition of the bureaucratic price increases of former Soviet Prime Minister Valentin Pavlov, differing from them only in their scale and chaotic character: prices rose, but there has been as yet no discernible improvement in the availability of goods in stores. The result was to drop living standards to levels not experienced since the Second World War.

Meanwhile, the real threat to emerging democracy in the former Soviet Union is the specter of mass unemployment. For the moment, Russia has only about sixty thousand registered unemployed. It will take another six to eight months for factory directors to decide how many workers they need in the new conditions, and lay-offs will begin in a country where the ability to guarantee a job to everyone was the previous regime's greatest source of pride. Many of the seven to eight million who can be expected to be thrown out of work may be drawn to authoritarian political parties, and among their ranks will be some of the 700,000 officers soon to be laid off by the army. Pyotr Chadayev, the nineteenth-century Russian philosopher, compared Russian to an illegitimate child without inheritance or ties to the past: "We need to have driven into our heads with a hammer what for others has become habitual, instinctive."

The West - and that includes Germany - must ensure that any aid goes only to economies in which state enterprises are being quickly privatized into a genuinely free-market economy. Even then, largescale aid from the West will not be an unmixed blessing. It will initiate a new and unhealthy relationship of dependence between the West and the former Soviet republics. In the years ahead, the United States will have the opportunity to drive new ideas into Russian heads and to pay for the privilege while an angry and impoverished people is inevitably tempted to ascribe its failures to us. A gloomy prospect.