To what extent can projected declines in military outlays and the conversion of the defense sector be expected to promote economic recovery in the Soviet Union? For some earlier articles on this theme, readers may wish to check Problems of Economics, May 1990 and January 1991. V. Fal'tsman continues the discussion in the lead article of our current issue ("Conversion and Economic Reform"). On the whole, Fal'tsman's appraisal of the prospects for economic expansion on the basis of existing plans for conversion of the defense sector is not very optimistic, to put it mildly. The principal problem is that the conversion process is being implemented by relying on the same central planning structures and mechanisms that were used in earlier economic development plans. This means that the defense sector, even as it allegedly shifts resources to the production of civilian output, continues to operate within a framework dominated by familiar processes of "concentration and monopolization of production." The industrial ministries, still in place, actively support such processes, since a small number of large enterprises are easier to control than a multitude of relatively small ones. Thus, for Fal'tsman it is just as important to reform the "management mechanism" in the defense sector undergoing conversion as in other sectors of the economy. The objective must be the creation of a "self-supporting [bezdefitsitnyi], demonopolized consumer-goods market," a state of affairs that requires breaking up existing plants into smaller units and accepting diverse forms of property ownership. It would be a mistake, however, to assume that Fal'tsman's policy recommendations involve a simple appeal for transition to a "free market." The conversion process must be accompanied by substantial state support for scientific research, a state program for "the protection of man and the environment," and adequate compensation for the social costs (unemployment and the need for retraining?) associated with demilitarization. But writing at the end of 1990, Fal'tsman found the current conversion program inadequate to "the needs of radical economic reform."