The guard held the passport up to the traveler's face, his eyes jumping from one to the other, then called a superior. Jointly they continued scrutiny of the document for some time before stamping it and handing it back.

With the exception of this ritual of suspicion that is common on all Soviet Bloc countries, Hungary seems to have created a world that is distinct in Eastern Europe.

There is an abundance of things here that are missing elsewhere in the region -- the shops are full of consumer goods and there is plenty of food. But there is also a spirit of tolerence in Hungary's political and social life and officials tend to display a degree of candor virtually unknown elsewhere in the bloc.

As a result, Hungary seems an oasis of stability in Eastern Europe to somewhat embarrassed Hungarian officials who watch with mounting concern the unfolding crisis in Poland and food shortages and internal difficulties in other Warsaw Pact countries.

At the same time, the Hungarians see their economic prosperity and social stability as a vindication of their "path to socialism" on which policies are bent to fit local conditions without violating ideological taboos and without making dramatic changes.

Expecting hard economic times in the 1980s, Hungary is now preparing to expand on reforms that include provision for unemployment as a means of improving labor efficiency.

Another innovation is a planned curtailment of industrial growth.

Both amount to virtually revolutionary changes within the socialist world, particularly the introduction of unemployment which, according to senior government economist Bela Czikos-Nagy, would eliminiate "absolute job security" and induce workers to increase productivity.

"The people have the right to work," Czikos-Nagy said in an interview, "not the right to hold jobs without performing."

For the first time, authorities have begun firing inefficient workers this year. The most dramatic instance of this new trend in labor-management relations was the firing of about 300 workers at an export-oriented factory in Gyor, in western Hungary.

Czikos-Nagy and Janos Fekete, deputy director of the Hungarian National Bank, both conceded that the Gyor workers have been "shifted" from their jobs to other plants. Thus far, they said, the new policy has not produced unemployment because the dismissed workers are picked up by other firms. But, they said, the authorities are planning on "relatively low unemployment levels" in this decade.

"We are seeing a new phenomenon in Hungary," said Czikos-Nagy. "People are showing a far greater interest in their jobs because now they have to keep them. We can see that they are now working better."

The Hungarian government has insisted that greater efficiency and scaled-down capital investments are essential steps if this country is to maintain its present living standard. Unlike previous years, nobody now expects that life here is going to get better in the 1980s.

"You can't imagine how difficult these things are in a socialist country," Czikos-Nagy said. "We are used to expect more and more, and the entire system is geared for rapid economic development. It is not popular to tell the people that our middle-range goal is to keep the current standard of living. But we are compelled to do it. It is our great success that we were able to bring this about without social tensions."

The main source of Hungary's economic well-being is its strong agriculture.

With about 3 percent of land in private hands, Hungary's agriculture is organized in cooperatives run on a profit-sharing basis and including financial incentives for high performance. Unlike most other Warsaw Pact countries, Hungary is able to provide plentiful food supplies for its population without imports.

Agricultural exports account for roughly half of Hungary's $5 billion annual exports and are the principal source of hard currency.

The strong agricultural performance has enabled Hungarian authorities to mount an effort to reorient their state-owned industries. The government, for instance, has abandoned shipbuilding in favor of the production of containers for cargo-carrying ships. Unable to compete with the Japanese and Germans, the Hungarians stopped their production of motorcycles.

"We'll have to shut other inefficient factories," said Fekete.

The current changes came in the wake of earlier Hungarian efforts to adopt a pricing system that takes into account world prices. Unlike the Poles and other East Europeans, the Hungarians have a flexible pricing system.

"Watching the situation in world markets, "a senior member of the Hungarian Communist Party Central Committee said, "we concluded that it would be impossible for us to stabilize prices at their previous levels.

"The population, of course, was not happy about price increases in Hungary. But we have done this cautiously, gradually, explaining each step to the people. At the same time we are telling the workers, 'You must work better if you want to maintain your living standard,' for the question of improved productivity is crucial for us.

"We are not afraid to move in this direction despite the Polish events. We are going to give enterprises greater autonomy and we are going to have to differentiate between those workers who perform better and those who don't which means tensions in the society.

"There is some worker discontent here now. Some people are saying this is not a workers' state but a peasants' state because the farmers' income is growing much faster than that of the rest of the labor force. But we need agricultural exports and we are going to provide additional incentive and investments to agriculture and to those industries that are export-oriented. We have no other way."

Although Hungary's loyalty to Moscow is not questioned, the new reforms may in the long run be seen by the Russians are posing a substantial deviation from the Soviet economic model. The Hungarians, however, privately hope for precisely the opposite -- expecting their changes to provide a model for reforms within the entire Soviet Bloc that they say are long overdue.