The lessons of Yugoslavia.

YUGOSLAVIA, long regarded as the most advanced nation in Central Europe, suddenly finds itself, because it has done no advancing over the last six months, left vrey far behind. So the problems it faces [see "Slouching toward Sarajevo?" "On the Scene," March 191 have not gotten much ink. This is a mistake, for Yugoslavia is in many ways a small-scale laboratory for the Soviet Union: a multiethnic society run by "reform Communists." Interestingly, they have made a botch of things.

Tito originally promised that, by downplaying national identities and suppressing them when necessary, socialism would produce a New Man. Serbs and Croats would he down as ethnic lions and rise up as proletarian lambs. But Yugoslavia abandoned this strict Communist theory very early in the game, by erecting a truly Byzantine system of multi-regional government and by encouraging all manner of folk festivals and what not-all the while swiftly squelching any genuinely centrifugal tendencies. Even so, the compromise failed. The unhappy component peoples hate each other as much as they did in 1945.

Only in a free society, where people encounter each other in a multiple array of economic and social contacts, while still being free to maintain private ethnic institutions of their own, does ethnicity take a back seat. There are no pogroms in America or Canada, even though there are lots of ethnics. Communism is incapable of managing this problem, whether it arises in the Balkans or in the Caucasus.

A second lesson of Yugoslavia is that reform Communism is a failure. What Gorbachev has tried for five years, Belgrade has been experimenting with for decades: perestroika (worker-managed factories), glasnost (small, and fluctuating, instances of intellectual freedom). It doesn't work. The symbol of the Yugoslavian economy is the Yugo, a tin can masquerading as a car. The symbols of Yugoslavian liberty are the crackdowns that occur whenever dissatisfaction is expressed too bluntly. Tito and his heirs had smaller problems than Gorbachev, and more time to solve them. Their failure bodes ill for him.

In the short run, as the party breaks up, it is hard to see how Yugoslavia will avoid becoming at least three separate countries-Slovenia, Croatia, Serbia -and perhaps more. This prospect should lead us to the third Yugoslavian lesson: that the borders of the postwar world are not inscribed in stone.

Diplomats insist that they are, for the obvious reason that previous tussles over borders led to two world wars. And indeed, it still seems wise to insist that no European nation should expect to acquire new territory. Since there is no equitable way to draw a border through Transylvania, Hungary and Rumania should simply accept the border that exists. But there is no just reason for insisting that every nation of Central and Eastern Europe stay in one piece. Yugoslavia is a failure. So is the Soviet Union.

If a real European confederation-not the bureaucrats' playground dreamed of in Brussels, but a free-trade European home ever becomes a reality, potentially independent nations like Slovenia, or Armenia, will find a benign economic and political framework into which to fit themselves. More benign, surely, than the multinational prisons in which they now languish.