WHEN WORD reached Moscow that Mikhail S. Gorbachev had won the Nobel Prize for Peace, folks noted that it wasn't for economics. But Mr. Gorbachev suggested it was. He called it support for perestroika, his economic reforms.
The prize was intended by Alfred Nobel to encourage peace and the reduction of standing armies. Peace, to the Nobel Peace Committee, is an end in itself.
Mr. Gorbachev, known to some as the butcher of Azerbaijan and the oppressor of Lithuania, has probably brought peace to more people and reduced more military tension than anyone in history. But so far as anyone can tell, he has done that as a means toward an end.
His goal is to free productive capacity to promote a better material life for his people and to catch up economically with TC other countries. He doesn't put peace uppermost. He wants to pick Russia up off the floor, and that is how. Mr. Gorbachev is one statesman who heeds the warning of the historian Paul Kennedy, in ''The Rise and Fall of the Great Powers,'' that empires overspend themselves militarily into economic and political decline.
The Bush administration was quietly subscribing to that doctrine in its arms-reduction negotiations. The need here is not so dire as in the Soviet Union, but the same principle is at work.
And then came Iraq's invasion of Kuwait. Throwing budgetary caution to the winds, Washington plunged into saving the world with one of the most dramatic military movements in history. The reasons for it were clear enough. But the economic risk is considerable.
The crisis comes when the U.S. government was finally facing up to deficits. It coincides with a recession that would justify deficit spending if there hadn't already been too much. The U.S. banking industry is fragile. The housing market is stalled. Retailing is hit. When some are out of work, the working majority see the virtue that previously escaped them of saving for a rainy day.
This has the look of a cyclical recession, more severe for having been postponed. And now it is combined with the lurch in oil prices that affects transportation and chemicals and permeates the economy. The price rise is unjustified by shortage but based on anxiety about Saudi exports. Were they curtailed, which Saddam Hussein might try to arrange, the blow to the U.S. would be severe.
The Iraqi dictator brought this crisis about because he faced the same dilemma that Mr. Gorbachev did, but chose an opposite solution.
Iraq came out of its eight-year war with Iran with its armies intacbut everything mortgaged. Its oil was too little to pay for his ambitions. He wasn't paying his lenders. He wasn't paying his arms suppliers. Kuwait, as a bank, had the temerity to ask repayment.
Financially, Iraq needed to demobilize and put soldiers tproductive employment. That is what countries customarily do after an expensive war. To President Hussein, that idea was intolerable. He could not imagine giving up his military playthings. He craved greater military authority, not lesser. So he swallowed Kuwait and stole its gold, food and medicine. His longer-range idea is to join Kuwait's oil production income to Iraq's to underpin his military ambitions. Nearly unnoticed has been his suspension of payments to creditors.
In other words, Saddam Hussein put the world in turmoil from weakness, not strength. He did it because his game was about up.
As the West mobilizes against his aggression, pressure is put on Japan and Germany to help. As losers of World War II they were required by the victors to demilitarize and found that the key to recovery. Their prosperity, the envy of the world, is based on practical pacifism that was enforced by their conquerors who now regret it.
Saddam Hussein and George Bush have more in common than they admit. Both are slipping into a role as mercenaries. President Hussein believes his army should be supported by the Arab world and be its champion, though he and not Arab donors would say for what it would fight. President Bush wants Arab and industrial nations to underwrite the U.S. military role in protecting their oil. Both see the maintenance of military strength as a source of foreign exchange.
The genius at this was King Frederick II (The Great) of Prussia in the 18th century. He made a poor north German state a world power by first making it a military machine. He was a mercenary, who took British silver to fight or threaten France. But he knew when not to fight. He made peace rather than risk destruction of his valuable military machine.
Saddam Hussein does not know when not to fight. His war with Iran was a disaster for Iraq for which almost any ruler would have lost his power or head. Only by police-state tyranny did he survive. President Bush is being tested on his knowledge of when not to go to war.
There is nothing new about governments deciding they cannot afford military strength. Many a king has curbed his generals. American economic growth in the 19th and early 20th centuries rested on isolation and unpreparedness for war.
But rarely has military strength been so vividly equated with national weakness as now. Saddam Hussein can undermine the United States best by making it keep 200,000 troops in Saudi Arabia. But in the process, he would condemn Iraq to poverty and ultimately destroy his own regime. All without a shot fired.