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A mere eight years before Mikhail Gorbachev, general secretary of the Soviet Communist Party, came to visit the United Nations, Ronald Reagan decided to spend almost every penny the U.S. government had-and borrow some beyond that-to wage Cold War.

The Pentagon presented its Cold War wish list early on, signed contract after contract, and was gearing up to take the battle to the heavens with Reagan`s proposal for a high-tech shield to protect the U.S. from Soviet rockets.

It cost hundreds of billions of dollars, created a $170 billion deficit and funded history`s strongest peacetime military buildup.

And it worked.

There was a declaration of U.S. victory in the Cold War on Wednesday. That it came from Gorbachev only added irony to the moment. The battle that has defined American military and foreign policy since the end of World War II may be drawing to a close.

Recognizing his position as general secretary and president of a nation that has become an economic disaster zone, Gorbachev said the Soviet military ”no longer can or must be an instrument of foreign policy.”

He wants to transform his country. The Soviet Union cannot feed itself. It has offered its citizens only Third World living conditions, a fat military complex aimed at its ”fraternal socialist” neighbors and an international arms race.

For as long as there have been Soviet leaders, there have been pledges of peaceful intent and promises of good behavior.

There also have been wars, invasions and threats of both; Draconian repression of internal dissent; brutal assaults on satellite states; continued development of nuclear weapons, and enough treaty violations to fill a book.

This has been a nation so insecure about its borders that it fired twice on airliners that had drifted off course. The first made it to a frozen lake for a crash landing. The second, Korean Air Lines 007, is spread on the floor of the Sea of Okhotsk.

At the same time, it has been so incompetent that a teenager in a light plane could fly from Germany to land in Red Square, one of the nation`s most heavily protected shrines.

Living conditions in the USSR have been so bad that the government spent much of its time making it difficult for its citizens to get out. And paranoia has run at such a pace that even innocent tourists found it most difficult to get in, and were scrutinized by security forces if they succeeded.

If the situation has been bad in the Soviet Union, its behavior and its problems have warped the American psyche, too. An entire generation was raised on the assumption that nuclear oblivion, sparked by the ideological conflict between good capitalism and bad communism, was likely.

This was an era-hard to forget for skeptics and, perhaps, for President-elect George Bush-in which American schoolchildren visited annihilation in their nightmares and practiced for it in classroom ”duck and cover”

sessions. The Russians were godless; they all wore uniforms and big black boots; they had no scruples and were set on world domination.

All over the U.S., there were big green 50-gallon drums full of survival crackers and clean water. Public shelter signs told people where to hide, as though there would be a world to crawl back to after a nuclear exchange. Every Tuesday morning at 10:30, the attack sirens still sound.

But times are changing in the world and in the Soviet Union, too, faster than anyone expected. British Prime Minister Margaret Thatcher recognized it four years ago when she said the Cold War was over and that she could do business with Gorbachev.

These changes give Gorbachev`s words more weight.

He came to the U.S. fresh from a domestic triumph, injecting a big dose of democracy into the Soviet political structure by setting up a legislature that will replace the nation`s rubber-stamp parliament.

There are other measures of dramatic change, too.

Andrei Sakharov, once banished to Gorky for his dissent, is free to speak and travel and is now visiting the U.S. At a Moscow library only a few weeks ago, the children of victims of Stalin`s purges gathered to try to collect information about their parents.

The nation is again rewriting its history. But this time the academicians are searching not for a sanitized, acceptable version of reality, but for truth. It is a process that casts Gorbachev`s predecessors in a harsh light but a process that continues nonetheless.

That all this was inspired by Gorbachev`s policies of glasnost and perestroika added importance to the general secretary`s comments at the United Nations on Wednesday.

He apparently wants to carry the transformation he is working on the Soviet domestic scene into the military and international sphere, where Soviet actions always have spoken louder than words. In exchange, he wants help. Obviously, he expects a gesture of equal weight in return from the West.

He will start, he said, by cutting half a million troops from the Soviet army, many of them in Eastern Europe and Asia. He wants a cease-fire in Afghanistan by Jan. 1, and help from the UN in getting the remaining Soviet troops out of the country. Some defense industries will be transformed into consumer industries. Soldiers will be mustered out.

Gorbachev says he wants a purely defensive military establishment with a much lower price tag, but one strong enough to obliterate anyone with untoward ideas about marching on Moscow-not an unrealistic notion, given Russia`s long history of being invaded.

Perhaps that may mean a missile so accurate it could land in George Bush`s lap; but not several thousand of them, and not at the expense of the development of his nation. In line with that, he wants strategic arms talks to continue.

Nor will his plan require the stationing of hundreds of thousand of Soviet troops along that appropriately named Iron Curtain.

Communism and capitalism have been in a deadly dance with each other along this ideological border since the end of World War II, like spiders who know that each has the nuclear poison necessary to destroy the other. Only the threat of a fatal bite kept the two forces in line.

But if Nikita Khrushchev came to the UN so long ago to thump a shoe on the table and threaten to bury capitalism, Gorbachev came with a handshake and a smile. Until New York traffic gridlock canceled his appearance, he had even scheduled a pilgrimage to Wall Street, the holy of holies of capitalism.

At the UN, he said the Kremlin and the United States are building a relationship that will ease the way for more agreements in the future. He gave Reagan and Secretary of State George Shultz credit for that and said he awaits Bush`s inauguration in January to continue the process.

”The next U.S. administration . . . will find us a partner who is ready, without long pauses or backtracking, to continue the dialogue,” Gorbachev said.

He wants a treaty that will cut strategic offensive weapons by 50 percent. He wants a convention banning chemical weapons. He wants to negotiate more conventional weapons cuts for Europe.

”I also have in mind economic, environmental and humanistic problems in their broadest sense,” he said.

What Gorbachev offered was nothing less than a new definition of the relationship between the most powerful nations in the world, a challenge to abandon the horror of a contest kept in check by the threat of oblivion.

If the military buildup was the defining element in Soviet-American relations during the Reagan years, President-elect Bush will have the advantage of dealing with a Kremlin leader who is clearly willing to rethink his nation`s place, and America`s place, in the world.