MIKHAIL GORBACHEV has come to power in Moscow at a time of grave crisis in the Soviet Union. The situation cries out for creative and forceful leadership. But will Gorbachev be able to provide it? Will a new Soviet leader really be able to make a difference?

Gorbachev has inherited a non-competitive Soviet economy that is in a terrible state. A cumbersome system of central planning produces shoddy goods, and discourages any sort of creativity or technological innovation. The Soviet economy is simply incapable of participating in the high-tech, electronic age.

The economic crisis is compounded by a social crisis, manifest in a catastrophic decline of the work ethic and of discipline among Soviet workers and managers. Corruption and drunkenness are rampant. Upward mobility for the children of the Soviet working classes, once a major stabilizing factor in society, is declining precipitously. Workers' children no longer can expect to get higher education and better jobs than their parents.

A political crisis has also been obvious in the paralysis of leadership of the last half dozen years, when old leaders have proven incapable of meeting the many challenges before them. Crisis is also evident in ideology. Marxism-Leninism has degenerated into familiar, but irrelevant, sloganeering. With rare exceptions, Soviet books, movies and plays are dreary representations of a make-believe world of heroic workers and selfless officials that few citizens even pretend to recognize as real.

The most intriguing option available to Gorbachev and his colleagues under these circumstances would be radical reform -- a broad and thorough overhaul of the economy and political institutions that would change the fundamental operating principles of the Soviet system. It would involve not a change in the system but of the system.

But logical as such an initiative might seem to Western eyes -- and tempting as it may be for the new leadership in Moscow -- such sweeping change would face formidable opposition from within the system. Radical reforms can be attempted only by a brave, self-confident leader who is ready to assume major risks, and can convince his coalition that these risks are necessary.

To enter on such a road Gorbachev would have to be as ruthless and single-minded as Joseph Stalin was with his "revolution from above" in the 1930s, and as adroit a politician as was Nikita Khrushchev in the first seven years of his anti-Stalin campaign. For while almost everyone in Russia speaks about the urgent need for reform, a radical reform program in fact lacks a constituency from below.

Nevertheless, the possibility that Gorbachev and his closest collaborators will attempt radical changes cannot be excluded.

In the event they do, their policies are likely to borrow from Hungary's successful "new economic mechanism" or Yugoslavia's "market socialism." Those countries are now ahead of other communist societies in overall economic performance, consumer satisfaction, ability to absorb Western technology and ability to adjust to changes in the international marketplace.

The most recent and highly dramatic example of a radical reform in progress is the People's Republic of China, where collective farms have been dissolved and peasants are working on their own farms, and where industry is being reformed to give more independence to factory managers, make prices more realistic, reduce government subsidies and invite in more foreign capital for investment.

However, domestic and international conditions in the Soviet Union are different from those in Hungary or China, where non- Hungarian or non-Chinese minorities compose only a small percentage of the population. The Soviet Union, by contrast, is a collection of diverse non-Russian nationalities. These minorities make up almost half of the population. They have never been easy to control from Moscow and could be expected to take advantage of any economic decentralization to gain more political independence. The possibility of such loss of central control over the Soviet Union's non-Russian people raises risks few Russians are prepared to entertain.

Often in the West the foes of reform are identified as the top apparatchiki, the high- level party leaders, while the supporters of reform are identified as the managers of factories and collective farms, and the professionals within the system. The theory is that this latter group want to see the system work better.

It is my opinion that such a picture is greatly distorted. As Gertrude Schroeder, a leading U.S. expert on the Soviet economic system, has remarked: "After 60 years of experience with the socialist economy run by government agencies . . . nearly everyone seems to have found ways to turn its shortcomings to individual advantage."

The managers of Soviet enterprises can hardly be described as supporters of radical reform. Their entire education, experience and expertise has prepared them to work within the system as it is and to exploit for personal benefit its loopholes and irrationalities. A change of the system would nullify their entire expertise and put into jeopardy their very jobs in favor of the younger, the better-educated and the more adroit.

The government bureaucracies and their local units would lose their reason to exist and would shrink in size. They would be reduced to the role of accounting rather than leadership. The lower and middle level bureaucrats would see their power diminished in favor of the power of the "invisible hand" of the economic market.

Moreover, the experts who advocate economic reforms are divided about the kind of reform they would like to see, a fact that could neutralize their influence. If the professional groups continue to speak in a divided voice, both proponents and opponents of radical reform within the leadership will be able to find and mobilize experts for their respective positions.

The most serious obstacles to radical reform are political. To adjust the prices of goods and services to realistic levels, for example, the enormous state subsidies of basic food items, apartment rents and transportation will have to be abolished or cut drastically.

This would requires the imposition of a harsh austerity regimen on the Soviet people long before any major beneficial results of the reform would be tangible. The lessons of Poland and its free-trade union "Solidarity" movement -- which arose when the government tried to raise prices of basic goods such as food to realistic levels -- probably teach the Soviet leadership to be extremely wary of such changes. The Soviets will not invite worker discontent.

Finally, radical reform would not only encourage separatist nationalism among various Soviet ethnic groups, but could affect the Soviets' East European empire. Radical changes in the Soviet Union would encourage all reform-minded and liberal forces in Eastern Europe to press for even greater (and politically more dangerous) changes in their own countries.

Even if he is determined to do something radical, Gorbachev could only act after painstaking and time-consuming preparations to overcome political and bureaucratic resistance. Thus, sweeping changes would be more likely in the 1990s than in the remainder of this decade.

Considering all these barriers, a revolution may well be easier than a reform -- or a radical reform might become the equivalent of a revolution. Recognizing this, many in the West and in the Soviet Union who are skeptical about the chances that even a new, young and energetic leadership will embark on such a potentially dangerous enterprise, often speak of a "partial" radical reform.

But a radical reform cannot be partial; it cannot be successful when introduced in small, gradual steps. Small-scale experiments cannot be successful in providing a bridgehead for further, larger-scale reform actions. Small experiments, such as ones undertaken in one or two factories, can succeed, but cannot be easily transferred to the economy as a whole because special conditions were created for the experiments. The courage -- and the wisdom -- of the present Chinese leadership is reflected in their decision not to plan a piecemeal reform but to opt for comprehensive change of the economic system as a whole.

The magnitude and variety of domestic problems besieging the Soviet Union lead some Western commentators to proclaim if not the imminent demise of the Soviet system, then at least the growing probability of a revolutionary crisis. But they exaggerate immensely the ability of the West to coordinate a denial of such things as technology to the Soviet Union. And they exaggerate the effectiveness of economic sanctions. I am deeply convinced that their judgment about the nature of the Soviet domestic crisis is faulty.

The Soviet Union is not threatened with collapse. Soviet survival is not in doubt; Soviet effectiveness is. Decline can still be slowed or even reversed. This is a far cry from recapturing a new and lasting Soviet dynamism, but it is also far removed from any danger of disintegration.

The Soviet Union is not, and will not soon be, in a prerevolutionary situation. The Russian working class will not create a "Solidarity" movement. The non-Russian nations of the Soviet Union will not rebel. The Soviet professional and middle classes will not endanger their careers by dissent. The Soviet party will not abdicate its dominant role. The Soviet military will not plot to take over power. Yet the crisis of the Soviet system is very real and if the trend is not reversed it may lead in the future to an authentic crisis of survival.

Assuming that a radical reform is not in the cards for the 1980s, how much can the Soviet domestic system improve under Gorbachev? Gorbachev need not transform the Soviet Union to be a successful leader, at least in the short term. For the last seven or eight years, Russia has been muddling down. Gorbachev will be a success if he can merely get the Soviet behemoth to muddle up.

Outside of radical new policies, there are at least four other approaches that Gorbachev can consider.

The first is the easiest -- to shake up the system by reinstituting strong, vigorous, demanding central leadership. This is already happening. The top decision-making and executive bodies, the politburo, the Communist Party secretariat and the council of ministers will be purged of the old or inefficient, who will be replaced by the younger and energetic of proven talent.

The authorities will crack down on lax work habits and appeal to patriotism and pride to cajole a better performance out of the workforce. They will revive the policy initiated in the short-lived regime of Yuri Andropov of prosecuting cases of brazen and large-scale corruption. And they will try to teach modern managerial techniques to many of the nation's managers. The goal of these steps will be to wring from the Soviet system the waste that may cost it a large percentage of its potential production in agriculture.

The second option is to reorder national priorities and redistribute existing resources.

Tinkering of this kind could have a significant impact, as one example -- that of energy -- suggests. The major thrust of the existing Soviet energy program is to increase (despite soaring costs) petroleum production in the forbidding conditions of western Siberia, and to convert Soviet industrial consumers from oil to gas.

But, as we have learned in the industrial West, the most promising and least costly way to deal with the energy problem is to promote conservation. During his short rule, Andropov was inclined toward such a policy. It was all but abandoned under Chernenko.

Effective conservation would require rewarding managers of individual enterprises for using less energy. Such an incentive would be almost a contradiction in terms for the Soviets, for whom more has always meant better. It would require reeducating and controlling managers, both of which would meet with resistance.

Changes in policy are also likely in agriculture. Chernenko announced an extensive program to reclaim vast areas of marginal farmland. But there is good reason to doubt the effectiveness of this policy, and Gorbachev could radically alter it in favor of intensifying production on existing farmland.

For years the Soviets have invested huge sums in agriculture, but production and efficiency have stagnated. Gorbachev is likely to concentrate on agricultural efficiency. As much as 20 percent of the average Soviet harvest is wasted for want of adequate roads, trucks, railroad facilities, grain silos and fertilizer storage. I expect Gorbachev to concentrate on measures that would reduce the resulting waste, including spending more money on rural infrastructure.

A third option would be to make changes in Soviet organizations and the bureaucracy. Near the end of his career, Khrushchev tried to radically reorganize the Communist Party's huge bureaucracy. Other party officials resisted, and Khrushchev's tinkering was used against him by those who removed him from power in 1964. Khrushcehv's "harebrained schemes" are now famous in the Soviet Union, and their bad reputation will discourage Gorbachev from doing much in this realm.

If Gorbachev does tinker, he might concentrate on the agencies and organizations that deal with new technology and foreign trade. The Soviets have never been able to get branches of the Academy of Science that are concerned with new technology to work closely with governments ministries concerned with running the economy. Gorbachev will be tempted to experiment with new incentives to enterprises to apply new technology. As matters stand, an intelligent factory manager actually resists introducing new technology, because he can fulfill his quotas with the equipment and the introduction of new and more efficient technology or machinery would just mean higher quotas.

Gorbachev may also try to break down the the sharp divisions between the civilian and military economies, so the better-organized military sector can help the civilian side become more efficient. Gorbachev could use military factories to increase production of consumer durables such as appliances. Or he could try to cut through the secrecy surrounding the military enterprises, so that their more talented managers can help civilian factories.

Gorbachev could also use incentives to boost food production. Andropov introduced a systemof agricultural contract brigades that are now active on many collective farms, particularly in the important farming areas of Georgia and Armenia. Relatively small groups of collective farmers are assigned plots of land and agricultural implements. They sign production contracts with the government and are guaranteed rewards when they exceed quotas. This system could be improved and expanded.

A fourth option is to allow a little private enterprise.

Farmers might be allowed to work larger private plots than the present maximum of one acre, or to keep more livestock. The government could make more credit available to them or let them buy their own farm machinery. The farmers could get tax breaks to encourage more private production.

Inadequate services in cities, from plumbing to shoe repair to small restaurants, could also use a dose of private enterprise. The poor quality of these services, which has given rise to a large illegal (or semilegal) "second economy," contributes to inflationary pressures and frustrations in everyday life. Allowing private services would depart from traditional communist ideologically. But such businesses would only exist at the margins of the economy, and would not endanger the party and state's political control over the economy as a whole, as Hungarian experiments along these lines show.

The timidity of Soviet leaders has prevented such reforms in the past. This failure is an example of the psychology of Soviet functionaries for whom the concept of "spontaneity" is still a taboo, and who are aghast at the idea that anything could exist in Russia which is not entirely under their control. Breaking out from these psychological restrictions is a necessary precondition for reform.

Nevertheless, I would not dismiss all the reform steps that the new leader may undertake as mere cosmetic changes. Their cumulative effect may improve the Soviet domestic situation and even arrest the declining performance.

To a decisive degree, their effectiveness will depend on the strength of will, persistence and vision of Gorbachev himself, and particularly on his ability to shape a coalition within the Soviet hierarchy that is committed to reforms, both because of its loyalty to Gorbachev and because of its conviction that change is what Russia needs.

The new leader must be steadfast in purging from the state and party apparatus the active enemies of reforms and promoting good administrators and innovators. He must build credibility among the populace and convince Soviet citizens that he means business. The outcome of Gorbachev's battle with bureaucratic inertia, political conservatism, ideological exhaustion and the present mood of pessimism will define to a large degree not only the Soviet domestic situation but also its international standing and aspirations.