Useful look at genetic engineering and its vast commercial potential, Man-made Life: An Overview of the Science, Technology and Commerce of Genetic Engineering, by Jeremy Cherfas. New York: Pantheon Books. 270 pp. $15.95.

This year marks the 30th anniversary of the discovery of DNA - and this month , the first anniversary of the initial pharmaceutical use of genetic engineering: In September 1982, human insulin, was released for sale. Since then , genetic research has continued to shine with bright promise. A flood of new applications is soon to be forthcoming in agriculture, industry, and medicine. This reminds us that we should understand something about genetic engineering and its most important tool - recombinant DNA.

What are the economic, social, and legal implications of gene-splicing technology? How is a new commercial material, such as human insulin, produced? What products will be available next? Where is current research heading?

Jeremy Cherfas addresses these questions in his book ''Man-made Life.'' This detailed history of genetic-engineering research emphasizes that ''. . . Molecular biologists . . . can now read the (DNA) code with ease, manufacture new bits of code that will do things as instructed, and shuffle instructions between utterly different types of organism. They can engineer genes to suit almost any purpose.''

Gene-splicing work involves the manipulation of the long, repetitive molecule that carries genetic information - the molecule biochemists call DNA (deoxyribonucleic acid). This is the molecule that, in Cherfas's words, carries ''the instructions needed to construct and maintain a living organism. . . .''

Today, the precise structure of that genetic information (the long sequences of distinctive chemical units that constitute genes) can be determined. The genes themselves can be manufactured by a machine overnight. No fewer than 300 enzymes (chemicals for cutting and pasting DNA molecules) are available for recombining DNA - for reordering these bits of DNA.

Selected genes are carried into host bacteria (or cells) on specially tamed viruses, or on pasted-together circles of DNA, called plasmids. The bacteria then use the genes to make products, such as insulin, which humans want.

Reviewing the details of genetic engineering makes one thing quite clear: In the ease of recombining DNA lies the danger of genetic-engineering misuse. Cherfas traces the history of the regulation of DNA research from the early doubts expressed by scientists in 1973 to their present consensus that recombining DNA in bacteria is not dangerous in itself. Such recombination occurs in nature all the time.

Although the National Institutes of Health guidelines for federally funded laboratories have been relaxed, they will remain compulsory. The question remains: How should recombinant DNA experiments or applications be controlled by society?

Cherfas points out that not only profits are at stake. Stanford University and the University of California at Berkeley, Calif., hold the patents to many of the basic processes required in genetic engineering. Can beneficial information be kept available, once such university patents have been granted? Should faculty members, or universities, benefit from research funded by tax money? And when should commercial interests or individuals benefit from government-funded research? Who will do the unprofitable work? Will necessary or health-care-related work be neglected in the interest of larger profits?

The enormous economic potential is illustrated by the fact that two gallons of bacterial culture can provide the same amount of antigrowth hormone as can be extracted from a half-million sheep brains, a common source of such hormones.

The problem of human involvement in experimental procedures with recombinant DNA will have to be faced when gene-replacement therapy becomes feasible. Recent difficulties suggest that the rules for such procedures are overly cautious. The technical problems are formidable, but not insurmountable.

Thorough discussions of the implications of genetic engineering can be found in Cherfas's chapters ''Regulation,'' ''Exploitation,'' ''Outlook,'' and ''Rethinking.'' The rest of his book provides a valuable survey of this awesome field of research.

In conclusion, Cherfas reminds us that DNA technology now is in place for good or ill. It is ours to determine how to use it.

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