By CHRIS HEDGES

BELGRADE, Serbia, Jan.17 -

Pulsating music thumped through the blue haze of cigarettes smoke and strobe lights of
the Lotus club. Scantly clad strippers spun around poles and leapt into two huge floodlit
cages with men and women from the dance floor. The young couples began to peel off
their shirts and simulate sex with the dancers.
 "Stay a little longer," a patron shouted. " The simulation is just the beginning."
  Under a spotlight a stripper known as Nina, a star of Belgrade's violent and frenetic night
life descended a spiral staircase. Her lover and bodyguard, a stocky woman with closely
cropped hair and a pistol tucked in her belt, followed her from the shadows.
  A year ago Belgrade, which saw daily street protest staged by the political opposition,
seemed on the verge of escaping from the nightmare of war, ultranationalist ideology and
repressive rule by President Slobodan Milosevic.Today the city seems more like Caligula's
Rome.
  There is a wild abandon in the air, bred of hopelessness and apathy. The city's best-
known gangsters, sometimes in the company of Mr. Milosevic's son Marko, who recently
threatened bar patrons with an automatic weapon, cruise the streets in BMW's and
Mercedeses. They haunt clubs like the Lotus in their expensive black Italian suits and
leather jackets.
  This criminal class, many of whom made their fortunes by plundering the possessions of
ethnic Croats and Muslims who were expelled from their homes or killed in Bosnia during
the war there, deal in stolen clothes from Italy, stolen cars, drugs, protection rackets,
prostitution and duty-free cigarettes.
  They also control some 70 escort services in Belgrade, 3 adult cinemas and 29
pornographic magazines, people in the industry say. After midnight the public television
channels show hard-core porno films made in their studios.
  The hedonism comes as inflation is eating away at the local currency, the dinar, which
has lost more than half its value in the last few months. And it comes as the political
opposition self-destructs with infighting after Mr. Milosevic, formerly the President of Serbia
and now the President of Yugoslavia, has reasserted control.
  Adding to the pressures, Serbs are also trying to cope with mounting violence by the
ethnic Albanians in the Kosovo region of serbia, who want independence. And in
Montenegro, which along with Serbia makes up all that remains of Yugoslavia, separatist
forces are building under a new government critical of president Milosevic. On a more
mundane level, Belgrade has been hit by a bus and streetcar strike.
  The effects of social collapse have been devastating. Distraught teachers say they
struggle to cope with children as young as 11 who have been exposed to scenes of
graphic sadomasochism on television. Domestic violence, often by men who are out of
work or have not received their small salaries for months, appears to be widespread,
sociologists say. Crime is endemic.
  "This stratification of society is part of a general trend in Eastern Europe," said Dr. Zarko
Korac, a professor of clinical psychology at Belgrade University, "but in this country it has
taken a more sinister form". The sanctions and the war created a much richer and uglier
underworld.
  " They are our carpetbaggers who buy up the property of the Belgrade elite, even the old
communist nomenklatura. We have descended into barbarity, into the crudest form of life.
We live in a world of moral idiocy. I watch the smiling face of Milosevic, who seems
incapable of remorse or pity, and wonder if he is not the devil incarnate."
  The trend that Dr. korac referred to began with the collapse of Communism, which saw a
rupture of the social contract in Eastern Europe and the discarding of longtime political and
social values. Pornography, along with crime, have been embraced along with the
emerging liberties to engage in trade, publish freely or build opposition parties.
  The violent breakup of Yugoslavia began in 1991, the same year that the Government
decided to permit hard-core sex films to be broadcast on public stations and that the first
locally made pornographic film was produced. While the old Communist Yugoslavia did not
censor love scenes in its state-run film industry, it condemned pornography as the
exploitation of woman and banned its production.
  Many say they do not find it coincidental that this happened as the first graphic pictures of
mutilated and dead from the war, along with the radical diatribes against Muslim and
Croats, hit the airwaves.
  " The war was about the lifting of taboos, about new forms of entertainment to mask the
collapse and repression," said Ljuba Isakovic, a reporter who is writing a book on the new
sexual mores. "War and sex became the stimulants used to keep people from examining
what was happening."
  The kind of licentiousness seen here has not appeared in Bosnia, where the Muslim-lead
Government in Sarajevo is trying to instill a conservative life style and grinding poverty
dominates daily life. Pornography has appeared in Croatia, but on a much more limited
scale.
  One Belgrade woman, Gordana Lalic, 26, poses for pornographic magazines and sings
occasionally in night clubs. Her attempt to build a career in the recording industry has
meant cultivating contracts with Belgrade's most notorious thugs. Ms. Lalic, like many
young women drawn to the glitter of money and power, has often been a victim of its
darker side.
  " I have been raped many times," she said. "I tried to escape from one of these
gangsters the other night by running from the disco. I fell, and he pulled out his gun, put it
to my head and told me I could go with him to his apartment or get cut up into little pieces.
These are people who do not care about murder. when some police saw us, he pulled out
his weapon and they backed away. The police know the price of interfering."
  The pornography industry here has mushroomed with crude and poorly produced videos
made by dozens of producers for as little as a few hundred dollars. The productions, sold
in most video shops play on the theme of Serbian dominance and sexual prowess. In one
film a naked young woman makes a phone call to her Croatian boyfriend and tells him how
much she loves him while she is fondled by two Serbian men. The phone conversation,
the director of the film says, was not staged.
  The films have affected the behavior of children, who try to emulate the sex scenes they
watch on television, teachers say.
  "We recently took students from our school on a three-day class trip," said Natasha
Maqndic, 26, a fourth grade schoolteacher in Belgrade. "Most of the teachers abandoned
the kids to go drinking and gambling. One night I found the 12- and 13-year old boys and
girls having an orgy in one of the rooms.
  " No one is attempting to explain to these children what it is they are watching and doing.
The parents ignore the problem, and the teachers are so poorly paid they no longer care.
How can I tell my students to be doctors or professors when they see that becoming a
gangster means owning half the city."
  Slobodan Stankovic, 37, is one of the giants of the porno industry. Because purely gay
pornography is rare in Serbia, which has yet to accept openly homosexuality, he mixes
gay and heterosexual eroticism in his magazine and films to appeal to both audiences.
  "Serbs need pornography," he said, "because they need to escape from their lousy
lives. They are fed up with politics, with everything."
  Mr. Stankovic did not seem alarmed by the unprotected sex that occurs during his
shooting sessions, often between strangers whom he has recruited off the streets.
  "Serbs are hard to destroy," he said. "Besides, I just film. What they do is their problem."