CALIFORNIA COMMENTARY : The Path to Oz Is Paved by Business : There’ll be no return to glory unless leaders in the private sector pitch in to create opportunity and jobs.

Something about California, the beauty of its weather, perhaps, or the majesty of its scenery, seems to encourage delusionary thinking: If we put on our ruby slippers, close our eyes and wish hard, we will find ourselves restored to the Oz that the Golden State has always invoked--serene, happy and sunny.

California, indeed, has much to offer--climatic advantages, deep-water ports, highly skilled workers, world-famed technology centers and a lifestyle that is envied everywhere. And I have to include, of course, the wide range of business opportunities that have drawn so many commercial enterprises to the state, including my own. Like other transplants from the East, ARCO has reinvented itself as a California company in its 22 years in Los Angeles and we wouldn’t dream of being anywhere else.

But California today, especially Los Angeles, is quite a different place than the one that greeted us in 1972. Blighted areas are grimmer, more frightening, more hopeless. The schools seem increasingly overwhelmed by the challenges they face. Once, California seemed so rich that it hardly mattered if business came. Those days are over. But what is especially troubling is that our response to these problems has been so uncertain and ineffective. Are we willing to fight for California’s future, or do we go on deluding ourselves that if we turn our back on the problems, they will cure themselves?

The most damaging delusion is the idea that those of us who are leaders, particularly in business, can afford to avert our eyes while the problems that plague the state are dealt with by government. The truth is that government in this state is hard-pressed to maintain the status quo, let alone effectively address tasks as complex as restructuring our schools and reviving the riot-scarred areas of our cities.

The state and city have important responsibilities in both areas, of course, but I am convinced that their efforts will bear generous fruit only if the community in all its facets is strongly committed to getting the job done, and actually involved on a daily basis. In the area of school restructuring, I find encouraging evidence of such community involvement. LEARN--the Los Angeles Educational Alliance for Restructuring Now--is a mix of all the leadership elements of this huge, complicated, multicultural region. And while much remains to be done, LEARN has at least begun to arrest the slide of the Los Angeles public schools and powerfully reassert the neglected interests of our young people.

LEARN is an important beginning but only one step. My advice to business is to stop complaining about the school system--I’ve done my share--and instead work at becoming its daily partner in developing the youngsters who will be our employees and our leaders. Join the LEARN effort, adopt a school, get involved. Call the partnerships office at the Los Angeles Unified School District. They’ll get you started.

But even more than in the schools, our commitment to California’s future will be tested by our willingness to take aggressive action in support of our inner cities. If we continue to shun them, they will not go away or miraculously improve; they will only get worse--more threatening, more desperate. One of a number of programs designed to ameliorate the problem came into existence shortly after the L.A. riots two years ago. It’s RLA--Rebuild Los Angeles. The results have not been all that we’d hoped for.

When I volunteered to chair RLA, many people wondered why. The answer isn’t that I have a precise formula for making it work. I don’t. But I know that it won’t have a chance without someone who is willing to overcome his or her reluctance and take the first step toward a better future for that part of California.

So, why not me? And why not you? Since becoming RLA chairman, I have come to realize that the most desperate shortage we face in trying to rebuild the riot areas of Los Angeles isn’t money or skilled personnel or computers--it’s interest. The TV coverage of the riots frightened the people of Los Angeles, both inside and outside the affected areas of the city. Two years later, the insiders are left with their problems and the others are trying to forget about the whole thing--while praying that it doesn’t happen again.

What we need to do is add a little sweat to our prayers. Invest in minority equity funds and financial institutions. Increase minority employment, recognizing that multiculturalism can be an opportunity rather than an obstacle. Spend more on minority vendors. Seek opportunities to make investments that will produce jobs in economically depressed neighborhoods.

The bottom line, as we say in business, is very clear: We must build the future of California together, or we’re never going back to Oz again.