When pay cuts were followed by price incrases, the workers of Novocherkassk threw down their tools and took to the streets in a confrontation with Communist Party officials, the police and the army.

By the time the troops stopped shooting, some 80 bodies were strewn across the ground.That incident in southern Russia, acknowledged recently by a provincial newspaper, happened 26 years ago. But fear of that scenario recurring is the nightmare that today haunts Kremlin planners from Mikhail Gorbachev down.

Wage cuts such as those that punished the Novocherkassk workers for their low productivity already have hit workers ordered to meet the current Soviet leader's demand for higher quality. Authorities have acknowledged several peaceful strikes.

The trigger for real unrest could be the price rises that economists have known for decades are necessary. Gorbachev and his advisers repeatedly have warned that his economic reforms are largely meaningless without bringing prices closer to reality.

The absurdities of many prices are well known.

Rents have not been revised since 1928, subway fares not since the system opened a half century ago. Prices of staples such as sugar, bread and meat have been unchanged for decades, and are far below the cost of production. Farmers feed their pigs bread because it is cheaper than grain.

Price distortions pervade the system, encouraging waste in everything and twisting the economy out of all resemblance to the efficiency Gorbachev seeks.

Energy conservation that has made such an impact in the West is almost unknown, since the Soviet consumer - industrial or private - has been sheltered from the realities of energy prices.

Apartments, heated free by huge central plants, have windows open in winter to control the temperature. Poorly tuned state trucks spew clouds of semi-burned fuel into the air.

Industry, following a pricing system set in Moscow, churns out products no one wants or needs and ignores those in demand.

Steel factories that do not pay the real costs of coal or ore pile up mountains of crude iron while failing to meet the demand for the specialty steels Western factories find so profitable.

Oil refineries, unable to charge anywhere near world prices, produce basic products while the world's largest oil producer imports lubricants from the West.

When the current reforms began, the Moscow-based Committee for Prices was setting the prices of 500,000 goods and services, with another 23.5 million set by other government bodies, said Abel Aganbegyan, Gorbachev's economic adviser.

Into that artificial system Gorbachev introduced his demand for industry to pay its own way - although state bureaucrats set both the costs of its raw materials and the price of its products to produce a system of self-financing without real prices.

"Most certainly, many things now depend on the pricing reform," Gorbachev told the party conference at the end of June. "The unsettled state of this problem has complicated progress in the reform program most seriously."

Said one Western economist: "The more I look at the Soviet system, the more I am convinced that you cannot escape basic economic realities."

Soviet planners know large price increases are inevitable if its industry is ever to compete in the world. Almost since taking office in 1985, Gorbachev and his advisers have been warning of price rises.

In a society used to arbitrary government actions, each hint triggered a new cycle of rumors. People who feared the purchasing power of their savings would suddenly shrink rushed to buy whatever was available.

The depth of the public concern, especially in letters to newspapers that serve as a public opinion poll, evidently set off alarms inside the Communist Party as well.

In addition to delaying changes until 1991, Soviet officials have been emphasizing that the public will not suffer.

Meat may no longer cost 2 rubles a kilo, or about $1.45 a pound - less than half the cost of production - but consumer goods prices should drop from present stratospheric levels, like jeans at 100 rubles, or $160, a pair.

Most importantly, officialst say, while prices will rise, so will salaries and assistance to low-income groups.

But if the leadership was confident the public believed that, price reform already would have begun.

Moscow has only to look to its East European satellites to see the dangers. Each cycle of unrest in Poland has been precipitated by sharp price rises. A senior East European diplomat noted that Moscow saw Polish strikes last spring as a harbinger of what could happen.

That East European unrest, coupled with experiences in places such as Novocherkassk, are a powerful brake.

The stability of the Soviet system is based largely on an unwritten understanding - workers tolerate their low standard of living as long as they do not have to work too hard and the cost of basics like food and rent are kept low. A leader would ignore that at his peril.

The eventual price increases therefore will reflect many compromises. Industry still will pretend to operate in a real economic world while continuing in the world the bureaucrats wish existed.

Moreover, most prices still will not be free to fluctuate with supply and demand. The government will fix new prices for the next five-year plan, then proceed again as if time has been frozen.