FREE-MARKET CHAMPS? : Score One for the U.S. in the Battle Between Capitalism and Communism. Now What?

We won. They lost. The collapse of the empire built on a sick parody of a 100-year-old theory has concluded the ideological battle that kept the last half of this century from just being about TV. Katie, bar the door, it’s all over but the shouting, and it’s a runaway, a blowout, a rout for the free market.

Our stores are full, not only of bread and meat, but of 18 different brands of “ultra” detergent, of fresh produce from every time zone and of pet food nutritious enough to keep homeless elderly humans alive. Our economy, and our national government, have not come apart faster than a late-model Zil. But, somehow, being on this winning team has not exactly inspired champagne showers in the locker room.

The magic of the marketplace, as Ronald Reagan used to put it, has revealed its own shortcomings. For one thing, many of the most talented magicians are languishing in jail, hanging around bankruptcy court or mysteriously falling off their yachts. Thanks to the swarm of reporters covering the New Hampshire primary, we learned that five of that state’s eight largest banks have failed. The few savings and loans left standing have removed the words savings and loan from their signs, apparently out of fear that larcenous management is contagious.

Many of our manufacturing industries pay their top executives enormously swollen salaries for figuring out more ways to fall behind competitively. Our broadcasting institutions are similarly being managed into obsolescence. Families that depended on two incomes are finding that, in a recession, they’re doubly vulnerable.

But the most telling indication that we haven’t figured out all the answers is the increasingly ramshackle condition of anything that isn’t privately owned. Our half-empty office buildings are filled with marble, but our schools are cramming 40 kids per class into un-air-conditioned temporary buildings made of reinforced cardboard. The business-page experts agree that America’s banks lent more than enough money to build too many luxury hotels, but New York’s Williamsburg Bridge has big holes in it, and the federal government can’t afford child-labor inspectors to police sweatshops and lettuce fields.

The Russians tried, and found sorely wanting, a system that declared all wealth the property of the state, that made the public sector the only sector. We’re finding the problems with a system that puts too much emphasis on a private sector whose idea of long-range thinking is a decent bottom line by the end of the next fiscal quarter.

Here in California, Pete Wilson is in a box built by Howard Jarvis. Since it became political gospel in 1978 that taxes are bad, the big state surpluses of the 1980s weren’t protected for a rainy day. Now that the economy is soaking wet, Wilson tells us that it’s up to welfare recipients to tighten their belts and pay for our schools.

Don’t get me wrong. I hate taxes as much as the next guy. But I also hate the fact that L.A. streets, once cleaner than Disneyland’s, increasingly look as if a hurricane just hit the paper drive.

Well, even though the Chinese and Cubans haven’t heard, Communism is gone now. Thinking about what part of our national wealth should go to Rolexes and what part to libraries should no longer put anyone under suspicion of being a secret agent of Leonid Brezhnev. It might be time, this being an election year and all, for somebody to point out that starving the public sector eventually cripples the private sector. Without sufficient regulation of the financial community, legitimate operators are squeezed out by the Boeskys, Maxwells and Milkens. Without decent public schools, we’ve got a work force that can barely figure out how to use VCRs, let alone build them. The business climate isn’t strengthened when a city’s slogan is “Will Work for Food.”

While the Cold War prevented us from thinking clearly about public and private wealth, along came the Japanese, who figured out that the two sectors are partners, not enemies. We thought we won the Big Game. We’ve barely made it into the playoffs.