Today's crisis lineup: grounds for fear?

THE only thing we have to fear is that we will forget the only thing we have to fear is fear itself. Generations of history students, politicians, and nightclub comedians have mouthed the famous Roosevelt phrase so often that they have almost drained it of meaning. But it's very apt today as we look at:

Fear of falling markets. Fear of a falling dollar. Fear of a depression. Fear of the superpowers playing games and wasting opportunity. Fear of larger war in the Persian Gulf. Fear of a trap in Central America. Fear that Philippines reforms won't make it. Fear that South Korea's democracy will be stillborn. Fear that China will roll back its progress. Fear that a contagion of protectionism is around the corner.

The first step in dealing with these multiple and often interrelated anxieties - and their chilling effect on millions of decisions in the world marketplace - is to try to understand what is rational and expectable. Rational expectations may be very sobering at this stage; they should not be mysterious and scary.

Let's look dispassionately at the major concerns in today's world:

Falling markets. Most American, Japanese, and European companies were worth the same amount Oct. 20 as they were Oct. 19. But millions of institutional and individual investors had simultaneously run from one side of the deck to the other. The market ship had not hit an iceberg. Its passengers had swung from over estimating the economic situation (and market values) to under estimating them. The passengers had been warned to be careful; most hadn't listened. Post-mortems have now turned up details of this financial Sarajevo. Corporate raiders fled from their buying binge in the US because a change in tax law ended favored treatment for their massive borrowing. Phalanxes of programmed computers magnified the rout. Massive margin calls against speculators who had borrowed to play the ever-rising market added to panic. Japanese and other overseas investors calculated that the rising yen, which made US stocks cheap to buy, also meant a falling dollar undercutting their longer-term value and yield. As is so often the case, over-enthusiasm led to over-pessimism. And that pessimism may lead beyond prudent retrenchment to so much canceling of planned spending and investment that a world recession results.

Falling dollar. There should have been no mystery here. Many careful economists had told the world the dollar should fall further. The logic was solid: Until American exports increased steadily enough to reverse the US trade deficit significantly, the dollar's fall would continue. It could only be braked temporarily by central banks, not halted. Those economists had long warned the world that if Washington didn't discipline its deficit spending, Americans would have to continue selling off their private capital assets to foreigners and call on foreigners to fund their government deficits. That, in turn, would mean less investment in modernization, productivity, and the future standard of living for Americans. The only mystery here is why it took White House and Congress so long to quit posturing and tackle the deficit.

Protectionism. Generals are not the only leaders who go on fighting the last war. The American Congress endangered markets everywhere by threatening to impose tariffs and other barriers that shrink the world's pie - its trade, profits, employment, debt payoffs. The economic pie had been expanding generally (with gaps) since the post-World War II reconstruction began. The protectionist legislators were, to switch metaphors, threatening to slam the barn door, not only after the horse was out the door but when the horse showed signs of coming back into the barn. The American trade gap has been agonizingly slow to turn around. But it is beginning to do so. This is not the time for barriers to trade.

Superpower faltering. Anatoly Dobrynin may not have become the Soviet de Tocqueville during his 30 years as Soviet ambassador to Washington. But he learned a lot about the strengths and foibles of the US government in the late 20th century. Now that Dobrynin leads the team advising Mikhail Gorbachev, the Kremlin is timing its notorious 11th-hour bargaining technique more tellingly than ever. Cassandras in the American media alternate between (1) worrying that the Reagan administration is so wounded Gorbachev will wait for its successor and (2) worrying the White House will give away chips to get a summit public-relations success. These oscillating worries overlook Gorbachev's tactical need to strike a deal with the right-wing Mr. Reagan. That is his best guarantee that the next American president - Republican or Democrat - will have Reagan's mantle and a protected right flank in more important arms control and trade negotiations of the future. Gorbachev faces concealed opposition to his reform programs. So he may want both to show his toughness, by ``ploying'' with the summit, and still get the benefit when he switches and agrees to meet Reagan. In short, superpower progress is not dead.

Gulf war. The West must worry more about cat-and-mouse tactics than accidental escalation here. Washington is trying to put military pressure behind its UN move for a mediated end to the war. Tehran is bargaining for a cease-fire in which it holds onto captured Iraqi territory. Iran's best negotiating tactic is to imply that religious zealotry will keep its military threat alive for decades, which would be a lot longer than the patience of Congress or the White House.

Uncertainty in Asia. With Mrs. Aquino's revolution going through the Perils of Pauline, the arrival of democracy in Korea still not certain, and the principal Pacific Rim stock markets nose-diving, one of the 20th century's brightest scenes of progress is passing through a shadow. Any drying up of consumer buying in Europe, North America, and the third world would be a body blow to these export-driven economies. So, in a politico-military way, would be any reversing of Deng Xiaoping's economic liberalization in China. If there is some reassurance to be found in this scene, it should come from two principal directions: (1) The shrewdness and flexibility of the Pacific Rim economic decision makers, from Japan to Singapore. (2) The often misunderstood shrewdness of Deng's tactics against first his old guard conservatives, then his over-exuberant liberals.

Scanning through this analysis of the interlocking sources of today's fears, one sees no rosy glow. But neither is there reason to magnify the problems.

It is possible that the major players have at last frightened themselves into creating regularly used international economic machinery of the kind most of them have long ago built into their domestic economies: Agreed common rules for world stock exchanges; a standard system for controlling currency fluctuation; an international equivalent of antitrust machinery to assure more level playing fields; speeded bargaining on trade barriers; and, long-range, a serious effort gradually to integrate the Soviet bloc into the international market system.

The latter will be extremely difficult. It will depend upon the success of Gorbachev's reforms in creating a supply-demand, price-driven system. But the reward would be worth the problems if it regularized and gradually demilitarized great power competition.

Such changes in the way we manage global relations would help reduce some major fears caused by uncertainty.

Earl W. Foell is editor in chief of The Christian Science Monitor.