Civilized people of the world! We implore you ... Our ship is sinking. The shadows grow darker every hour over the soil of Hungary. Listen to our cry ... and act!

-- Radio appeal of freedom fighters during the 1956 Hungarian Revolution

In this elegant city, where street musicians and outdoor cafe's now grace the boulevards, it is easy to view the autumn of 1956 as some distant mirage. Thirty years ago today, 200,000 Soviet troops and hundreds of tanks rolled into Budapest, mowing down thousands in a five-day battle that crushed the largest armed Eastern Bloc uprising against Soviet power.

The revolt had lasted only two weeks but the violence would find its place in history. Soviet soldiers killed unarmed demonstrating civilians. Resistance fighters, including old women and 12-year-old boys, fought back, shooting soldiers, burning tanks with Molotov cocktails, hanging corpses of party officials from trees.

An estimated 25,000 died in the fighting; more than a thousand would be executed and 20,000 imprisoned. And 200,000 Hungarians would begin an exodus to the western world.

The Hungarian dream of independence was no more.

Today there is only hushed acknowledgment of that time. Hungarian officials refer to the revolution as "the counterrevolution." Resistance fighters rest in unmarked graves. Bullet holes from that 1956 uprising still pockmark the faclades of buildings, but Hungarians are wont to attribute them solely to the battles between retreating Germans and advancing Soviet troops in 1945.

Today, in this hybrid economy -- "goulash communism," it has been dubbed -- Soviet socialism and American capitalism cozily coexist. Lenin Square boasts both the huge red Soviet star and a Marlboro cigarette ad. The castlelike Hilton Hotel sits on the Buda side of the Danube and the Hyatt Regency on the Pest. Avis and Hertz compete in airport stalls. On Vaci utsa, the Fifth Avenue of Budapest, a poster for spike-heeled shoes features the longest legged woman in ad land. Rock music floats from radios.

Independence

Dissident intellectuals are few in number, and their lot is to be monitored and censored. Still liberal by other Eastern Bloc standards, the Hungarian government has, however, recently cracked down on underground publishing. But the vast numbers of Hungarians who choose to be studiously apolitical enjoy a comfortable existence and independence markedly different from other communist countries.

Westerners are struck by a zest for life that sometimes takes the form of abrasiveness. Homesick New Yorkers can feel right at home among squabbling cab drivers and surly waiters.

At the Hotel Thermal -- one of the outstanding European spas catering to westerners with hefty wallets and waistlines to match -- the concierge snarls at an American who is complaining about the useless phone. "This is Eastern Europe. If you could read the newspaper," sneers Lajos Molnar, flipping his card across the counter in case the woman wants to complain about him by name, "you would read about our phone system and how it doesn't work."

Last year, Cocom, a Paris-based council that monitors high-tech exports to communist countries, prevented Hungary from joining with ITT to produce modern telephone exchanges. Tamas Revbiro, creative manager for a leading computer software company, Novotrade, ruefully notes that his company is "sharing the telephone line with the woman who lives upstairs." He rails at the restrictive policy.

Still, Novotrade is a prized example of Hungarian entrepreneurship -- one of three Hungarian companies successfully selling software in western markets. Total sales of the three amounted to nearly $ 5 million last year.

Huppies

They are a new breed, these Hungarian urban professionals, who were but children during the 1956 revolution. Many of the "Huppies," like Revbiro, 39, are more familiar with the youth rebellion of the '60s. He wears blue jeans and long hair and learned English listening to Beatles records and once played in a rock band.

A translator-turned-entrepreneur, Revbiro has translated into Hungarian P.G. Wodehouse, Thornton Wilder, Mark Twain, "Alice in Wonderland" and a book on Lennon. "John -- not Vladimir Ilyich," he cracks.

Revbiro views life with pleasant self-mockery. "Our man in America has to be a helluva good talker to get anyone to look at something made by Hungarians. 'Made by who?' People think we're a department of the Soviet Union. But now we have quite a good name in the business."

Novotrade has sold several games -- from chess to a war game series -- to such major western companies as Commodore, Sony and IBM. Its bestselling computer game in the United States is Raiders of the Lost Tomb. He laughs again, "It's just our common sense that we do not do Raid Over Moscow."

Novotrade is one of Hungary's economic experiments that combines state ownership and private initiative. "Several rich cooperatives and four of the largest banks got together and started this limited company," says Revbiro. The major difference from a capitalist system is that the banks are owned by the state.

In Novotrade's headquarters, a floppy disk is put into a computer and up comes a map of the United States. The Hungarian words "Kozpunti Aranyraktar" appear. The cursor is moved to the state of Kentucky. "Helyes!" ("Correct!"). The computer operator has successfully identified the location of "Kozpunti Aranyraktar." To westerners, this obscure language looks like a line on an eye chart, but the words are literally translated as "central gold store" -- otherwise knownas Fort Knox. The educational exercise continues -- from New York to Los Angeles, from the Pentagon to "Sziliciumvolgy" -- Silicon Valley. U.S.-built Commodore 64Gs, redesigned to include the Hungarian alphabet, provide video geography lessons of both the United States and the Soviet Union.

Revbiro notes that the winds of war that swept his country now influence his enterprising life. Novotrade invented a computer game called Spitfire 40. Says Revbiro, "We had some success trying to sell it to the Germans -- until the guy realized it was about shooting Germans." Instead, it became a best seller in England, after Novotrade sold the flight simulation war game, featuring the World War II Spitfire fighter plane, to Britain's Mirrorsoft Inc.

On the way to an outdoor cafe', Revbiro points to one flashy car among a line of parked cars, many of them Russian-made. "You see that red BMW? It belongs to a Hungarian pop singer who made a fortune singing Elvis Presley songs in Hungarian on the 50th anniversary of Elvis' birth." The singer's version was a hot ticket because "you can't get original Elvis records here. RCA refuses to sell to communist countries."

A fascination with rock continues, as it does in many Eastern Bloc countries. A recent tour by the group Queen sold out 70,000 seats in a matter of hours. One recent night even elderly Hungarians stared raptly at the television in the lobby of a state-owned hotel. On the screen was a high-glitz rock contest, complete with leather-clad guitarists and frizzy-haired blonds crooning phonetically to American rock. A massive billboard on Margaret's Island in the Danube advertised the arrival of the musical "Jesus Christ Superstar" ("Jezus Krisztus Szupersztar"). It was banned in the '70s. "Higher-ups in the party thought it was too religious," says Revbiro. "They hadn't read the script."

A Novotrade colleague, Katalin Miklos, joins Revbiro in the conversation. A high-powered 32-year-old, she is indistinguishable from any career woman one would meet in London or New York.

Hungarians have a heightened awareness of outside threats. The Chernobyl disaster made atomic dangers far too real, and also inspired its share of jokes. Example: Russia has all sorts of activists -- from Kiev Party activists to radioactivists. And there is a general desire for Russia and the United States to get on with arms accords. "But," says Miklos, "people are trying to forget about world problems and worry about families and careers."

She, like Revbiro, has no desire to leave. Says Revbiro, "Everybody who goes to the West for the first time ponders the question whether he or she should come back." His first such trip, to London, was a decade ago, and for him, "the question didn't last more than a minute.

"Everything that is personal is here."

The Past

There are many voices, many memories in this cosmopolitan capital of more than 2 million.

For some, like the vivacious Hungarian Jew, now in her sixties, who sits on her balcony overlooking the Danube, post-World War II repressions cannot be compared with the terror of the Nazis.

It is difficult, says the woman, for Americans to understand the perspective of Hungarians. In this small country, overrun for centuries -- by Mongols, Turks and Hapsburgs, Nazis and communists -- "it is something like being a child," she says. "You always have to belong to somebody, to rely on someone else for your survival. You westerners want to make it a democracy, but Hungarians never had a chance to learn what is a democracy."

The woman has a prestigious career and strong opinions, yet asks that neither her name nor her occupation be used. From her apartment, on the Buda side of the Danube, she can see the bridges that had been blown up by the retreating Germans. She was 19, huddled in the cellar, when the Russians came. "It was a fight from house to house. I felt, 'Hitler, you will die but I am living!'

"The first years under Stalin were flourishing. You had the terrible years behind you and had the feeling that 'the world is again for me.' Who wanted to say it was a bad government?"

The war years are recounted with fierce intensity. "In the last months of the war, you couldn't eat because there was nothing." If a bomb came and killed a horse, people would race from the cellars and hack and pull and pick at the fresh carcass. "In a matter of minutes, there was nothing left of the horse."

At the beginning of the war the 800,000 Jews of Hungary were set apart, forced to wear yellow stars. Adolf Eichmann stayed at the Majestic Hotel and personally supervised the transfer of many of the 400,000 Jews who were sent to Auschwitz and Birkenau. "The Swedish and the Swiss helped, but the Nazis came and took people anyway."

With the flair of an actress, she begins to act out some family exploits. "My brother was a very clever boy. He had found an old printing press and could make all the papers we needed. He and a cousin stole some German uniforms and disguised themselves. He made a paper to get me through the lines for bread. He had the nerve to sign it 'Colonel Schmutz.' That means dirt."

She recognizes the repressive life that brought about the revolution, but prefers to dwell on the years after, when she was able to begin a flourishing career. "As a Jew and a woman, I no longer felt like a second-class citizen."

Unterwasser

Budapest has been called a miniature Paris. On a moonlit night, the view from the arched castle walls on the Buda side across the sparkling spanners is addictively romantic. In the middle of the "Blue Danube," which is about as blue as the Potomac, lies Margaret Island, a showcase park, with a mammoth swimming pool and verdant walks.

At one end is the Hotel Thermal, one of several top hotels that feature mineral baths from ancient Roman springs. In a country that invented the Gabor sisters, cosmetics and beauty aids reach ritualized heights. Sparkling mineral water -- much tastier than Perrier -- is ubiquitous and guzzled like tap water.

At the Thermal Spa, warm mud -- smelling of minerals and organic materials that have marinated for thousands of years underground -- is applied by the bucketful for a legendary Hungarian cure-all. Then a heavyset female attendant shouts "Unterwasser!" in German, the second language of a country once ruled by the Hapsburgs. She guides a visitor for an "underwater massage" in a steel tub. A powerful stream from a hose is directed by the attendant, on the theory that this hits more specific spots than a mechanical whirlpool.

But the angst-easing benefits of such treatments are lost on tourists agitated by a pervasive Hungarian indifference to time. A rotund man from New York in a bathing suit and robe, and slippers emblazoned "Hawaii," taps his foot as he waits, already 45 minutes behind schedule. He fled during the revolution and is among the rich who periodically vacation in their homeland. (So do other Americans, drawn in part by the bargains to be found by anyone carrying dollars.) "They could clean up, make a pile of money, if they knew how to run things. And even so, they're into the hustle -- with the hand always out."

The Present

Joke No. 1:

Gorbachev is talking to Janos Kadar, the popular leader of Hungary since the 1956 revolution. "If you had a real election, how much of the vote do you think you would get?" Kadar says, "90 percent." Gorbachev says, "And the other 10 percent -- they are the dissidents?" "No," says Kadar, "the [Communist] party members."

Joke No. 2:

An exasperated supervisor in a state-run business shouts at a worker for being lazy and moonlighting on another job: "Why don't you do real work on your real job?" Replies the worker, "If you paid real wages on my real job, I would."

The jokes underscore Kadar's popularity -- an extraordinary metamorphosis for the man called "the Butcher of Budapest" when he invited in Soviet troops 30 years ago -- as well as the dilemmas of economic reform. Many orthodox communist leaders argue that Kadar's reforms have undermined Hungary's socialist goals by encouraging private greed. And Kadar has said, "We have not yet found the formula for a more effective and lasting improvement of the economy."

Ferenc Mezei, a Hungarian physicist who does scientific research in the West, including Los Alamos, outlines some of the problems. "The problem with a socialist economy is that people are not motivated. The reform introduced financial incentives. It's not perfect, of course, but it was a lot of progress."

The system, however, produces disparities of wages that ignite bitterness among workers. For example, a barber, working alone or in a small cooperative, can earn three times as much as his counterpart in a state-owned shop.

Incentives now include bonuses, franchises run by a manager for profit but still owned by the state and outright private ownership. "To my taste," says Mezei, "there is too much money going under the table. If you want a TV fixed and you call a state company, the workman is quite likely to do it -- only with tips, the handout. A private company, the workman will do it and no tips. We have free health care -- but doctors accept, and expect, private pay. For this, you get special treatment. It's untold amounts because it's under the table and no one pays taxes on it."

But the system has fostered better service, Mezei contends. Ten years ago, when the cab business was virtually all state owned, "you couldn't find a cab," he says. Now there are two state-owned and several privately owned companies. There is no shortage of taxis.

Future

Today, Hungary is struggling with a stalled economy, inflation and a soaring trade deficit. The "freedom" of being able to work as hard as one wants has produced stress and insecurity. A survey of Hungary last spring found that an estimated 15 percent of the work force took sedatives on the job, and half of all workers had trouble falling asleep at night because of financial worries. Hungary's suicide rate now leads the world (43.5 suicides per 100,000 people). Many Hungarians, although they measure their desires and success against the West, believe if they get any more westernized it is just a matter of time before their experiment will be curtailed.

As one says, "We are a very long way from the Stalin period, when there was only one way to read Marx and Lenin, but I think that the Soviet Union feels the Hungarian experiment is something worth studying -- not adopting."

As rock music blares in the restaurant behind him, the man worries about keeping a lid on entrepreneurship. "I see no reason to go faster."

And a young female architect says, "I feel there is too much greed already."

Athird young careerist shrugs and says, "There are problems. Most of us feel we would be better off if Hungary was nonaligned. But we don't think that can happen."

Walking across the square where tanks and machine guns quelled the uprising 30 years ago, he says, "We made a certain bargain.

"A compromise, to have a better life."