Although Mikhail Gorbachev insisted the other day that "neither the internal nor the external policy has changed" in the Soviet Union, the truth is that everything has changed.

The Soviet interventions in Lithuania and Latvia have demolished any lingering hopes that Gorbachev could transform the Soviet Union into a free association of republics. In essence, the Soviet Union has ceased to exist.The great question now, which will be played out over the next months and years, is what will emerge in its stead.

Before the Jan. 13 invasion of Lithuania there was still hope that the republics could attain political independence peacefully and go on to freely establish economic ties that would benefit them all. This still may occur but not under the leadership of Gorbachev, who has clearly chosen to save the empire by falling back on the army, secret police and central bureaucracy.

While the crackdowns in Lithuania and Latvia mark the end of the reformist Gorbachev era, they do not portend, as some are saying, a return to the old ways. Given the political change that has already occurred and the country's sickly economy - which might collapse entirely following a countrywide crackdown - repression is not an option.

It is revealing and tragic that Gorbachev and his reactionary allies in Moscow have chosen to apply force precisely against nations that have behaved in a model civilized, law-abiding way, free of terrible interethnic violence. It is revealing because the Baltic states are defenseless, a fact that doubtless was not lost on a military. Yet the Baltic states would have made excellent allies of Russia - would have been another Finland - had they been allowed to become independent. And we know that Finland has helped the Soviet Union economically without in any way threatening its security.

Although Vilnius in 1991 resembles Prague in 1968 and Budapest in 1956, there is something completely new in the present situation. The brutal action in Lithuania was condemned not only by national democratic movements in the republics but also by some of the establishment.

Most importantly, the leader of the Russian republic, Boris Yeltsin, has condemned the action. Moreover, mass demonstrations in Moscow and other major cities show that his stand has popular support among Russians.

Yeltsin and his advisers understand that the political independence of the republics does not preclude their economic cooperation with Russia. Unlike Gorbachev, they realize that ethnic affairs in the former Soviet Union have been transformed into international relations and that political liberalization and economic reforms must proceed from this fact.

Events in Vilnius and Riga have now destroyed any hope that economic reform will be promoted by the center, because Gorbachev's new allies oppose the market and private property.

What is likely to happen next? As the Soviet economy continues its inexorable decline, we can expect a more severe and brutal version of the Polish crisis of 1981, which followed Gen. Wojciech Jaruzelski's declaration of martial law.

The latest turn of events presents a dilemma for policymakers in the United States and the West. They understandably wish to keep dealing with Gorbachev, whose foreign policy has, to say the least, served Western interests.

Yet, they have to recognize that to support Gorbachev and condone the repression in the Baltic states is to harm the forces of political and economic reform in all the Soviet republics.

(Roman Szporluk is professor of history at the University of Michigan.)