America

By Strobe Talbott

CARACAS

The ghost of Karl Marx was even unhappier than usual last week. In Moscow Alan Greenspan, guru of Republican capitalism and chairman of the Federal Reserve, tutored top Soviet officials in remedial economics. In Hungary the country's ruling party shed its Communist label. And in Caracas ranking socialist leaders of the First and Third Worlds -- President Francois Mitterrand of France, 72, on a tour of Latin America, and President Carlos Andres Perez of Venezuela, 66 -- agreed on the virtues of the free market.

Mitterrand's conversion came early in his presidency, during the mid-1980s. His initial attempts to bash the private sector through a program of nationalization and state planning, coupled with a wealth tax, drove capital out of the country and cost workers their jobs. But he learned to make compromises with conservative politicians and alliances with industrialists to promote investment and stimulate employment.

Perez's odyssey has been much more dramatic. Not only is he changing his habits of thinking and governing, but he is trying to change the way his country develops. Like Mitterrand, Perez has been a socialist since his youth. He is still vice president, under Willy Brandt, of the Socialist International. During an earlier presidential term in the '70s, he nationalized Venezuela's oil industry, slapped controls on prices and interest rates, mandated wage boosts, increased regulation of agriculture and made government-subsidized loans to low-income city dwellers, peasants and small businessmen. Perez personified the socialist conviction that the common good can best be bought with public money. But by the time he left office, Venezuela was suffering from a massive deficit and high inflation, which were followed by a recession and crippling foreign debt when the oil boom turned to bust.

During the next ten years, Perez regarded as proteges two young fellow socialists -- Felipe Gonzalez Marquez, who became Prime Minister of Spain in 1982, and Alan Garcia Perez, who has been President of Peru since 1985. Much like his neighbor Mitterrand, Gonzalez has become an apostle of "market socialism," and he is virtually assured of re-election when Spaniards go to the polls later this month. Garcia, by contrast, stuck with policies similar to those Perez had followed in his own first term. Peru now faces economic disaster, and Garcia is almost certain to be defeated next year. After a visit to Lima last year, Perez looked down from his plane at the horrible slums below, shook his head and said, sadly and simply, "This doesn't work."

, "This" was traditional socialism. Shortly after returning to office in January, Perez let most interest rates float and ended almost all price controls. He has now begun privatizing some state-owned industries. He calls the program el Gran Viraje -- the Big Shift -- or sometimes, with a smile, Pereztroika.

The pun hints at a serious truth: the counterrevolution sweeping the Communist world has made possible what Perez calls the "de-ideologization' ' of politics in the Third World. That means Perez, who had to cope with bloody riots sparked by price increases in February, is at least spared having to worry about some Third World minion of the Kremlin accusing him of socialist heresy. The real perestroika makes Perez's version look tame -- and more promising -- by comparison.