Which Breakthroughs Are Revolutionary? (int'l edition)

The Internet is no revolution (''The Internet Age,'' Cover Story, Oct. 4). Instead, it is a useful evolution of existing technology, rather like the fax machine. As a conduit of information, it leaves a lot to be desired. Books and newspapers still have the edge for consumers. Millions of people will never log on, and many will log off because there are better alternatives. But enthusiasm for the Net is creating a massive share-price bubble that will soon cripple the world economy. The simple fact is that 99% of Net companies make no profit.

And even when this performance improves, profits will fall far short of the level needed to justify ludicrous market capitalizations. In the meantime, regular companies will compete by cutting prices, therefore cutting profits and thereby cutting their market caps. This is a classic deflationary downward spiral.

Clearly, the Internet is a false revolution being used by the financial sector to inflate share prices.

Peter Cooper
London

Prices Remain a Mystery in the Oil Game (int'l edition)

I am interested in highlighting the rules new and old of the energy game (''Totalfina's totally new game,'' Industries, Sept. 27). Consolidation has become the status quo in an industry more attuned than ever to the daunting demands of the global marketplace. Totalfina has positioned itself well if energy markets become more regionally compartmentalized. With the North Sea maturing, oil and gas from North Africa, Russia, and the Middle East may find unprecedented opportunity in Continental Europe. In this context, ENI and Repsol-YPF appear quite attractive as the competition evolves, especially considering their Mediterranean and North African pipelines.

New rules and ever-increasing economies of scale in the industry have placed a higher premium on profit maximization and shareholder return, as opposed to government intervention and nationalization. This has taken place on both the company and country level. Even though companies are becoming more adept at cost-cutting and competing in tougher markets, success cannot be guaranteed. The mystery that has chronically befuddled state and company budget planners, this past year especially, is the fickle path chosen by the price of oil in the near, medium, or long term. Companies and countries will continue to be vulnerable to the vicissitudes that will continue to shape the rules of the energy game, forever making oil as risky as it is profitable.

Frederick J. Lawrence
Lower Waterford, Vt.

Europe's Safety Net Makes Life More Civilized (int'l edition)

In ''Europe's big chance'' (European Business, Sept. 27), David Fairlamb et al, put things so simply: Hire and fire, slash taxes, sweep away outdated welfare systems, and bingo--Europe could become a new America.

Yes, for a price. But I think job security and a dependable welfare system to fall back on are a sign of a civilized, fair, and humane society. I'd rather feel that I could enjoy the finer things in life, when having a well-earned break from work, than feel I have to give 150% every day of the week, risking a burnout, and become a top achiever who never ends up having, nor wanting, a break. I'd rather take comfort that I, as a ''have,'' can co-exist in this European society with ''have-nots,'' who still lead a relatively comfortable existence, thanks to welfare.

Work isn't everything. Consider the quality of your life: You can choose to earn enough to get by and still reserve time for yourself and family. Helping others less fortunate is part of creating your own (happy) situation. Not being No. 1 is not such a failure; going to an early grave without having enjoyed life surely is.

Marek Kruk-Strzelecki
Amsterdam

Inefficient State Companies Are Dragging China Down (int'l edition)

The authors of ''China's new capitalism'' (Special Report, Asian Edition, Sept. 27) seem to believe that China is only five years away from a victorious capitalist revolution. In order to substantiate this forecast, they have included in their report the story of the seemingly successful new breed of Chinese entrepreneurs, some of whom, we are told, are the sons of local farmers. These new entrepreneurs are, in the words of the writers, ''China's best hope against the likes of Siemens, ABB Asea Brown Boveri, Ericsson, or Rockwell International.''

Furthermore, through the taxes they are generating, they are supposed to make up for the huge budgetary losses the Chinese government has to sustain on Stalinist-era white elephants such as steel mills and the like. To protect their rights, the people in Beijing have amended the constitution in a bid to offer a legal shield against corrupt Chinese officials. (Romania adopted a similar policy during Iliescu's presidency, with known results.)

To restructure their economy, the report suggests, the Chinese will use this new breed of entrepreneurs to take over and manage money-losing state companies. Thus, through such people as Zhou Fusheng or Zhang Yue, China will get rid of its antiquated factories, bloated payrolls, bad bank debts, a shaky banking system, and the Communist Party's interference in the economy.

The real story of China's market economics endeavors is different. The unrestructured, unsold, and still operational Soviet-era behemoths are a serious drag on Beijing's budget. So is the Hong Kong dollar, whose peg to the U.S. dollar has to be bankrolled by the Bank of China. Furthermore, most of the foreign direct investment is from Chinese living abroad, and although it might fuel economic growth on the mainland, it does not return profits to the hapless investors.

Unfortunately, the Chinese transition to a market economy and the modernization style employed closely resemble what historians call defensive modernization. If one adds to this the mountains of debt accumulated by state enterprises, the nearly bankrupt banking system, and the restless Chinese military, one can more easily understand why at the recent Asia-Pacific Economic Cooperation meeting in Auckland the Chinese leader tried to ask President Clinton's permission to wage ''a little war'' against the much more successful rebel Taiwan.

In the years to come, I can envisage a possible joint military-communist crackdown on business only if and when the Chinese economy falters. However, it seems that the U.S. Democrats are in election mode, and they want to extend, almost at any cost, the ''feel-good'' policies that have characterized President Clinton's approach to world economics and international affairs.

Florian Pantazi
Sydney

''Olivetti: Back to the bad old ways?'' (European Business, Oct. 18) (int'l edition)

''Olivetti: Back to the bad old ways?'' (European Business, Oct. 18) stated that Olivetti's 51.9% stake in Telecom Italia would remain intact under a plan to transfer Telecom Italia Mobile to Tecnost, another Olivetti company. It should have said that Olivetti's stake in Tecnost would decline to 41% or 42%.