It is time to put the North-South cliche to rest. For those who aren't familiar with it, the North-South formulation became fashionable in the early 1970s as a way of depicting the conflict between the world's rich nations (the North) and the poor (the South). But, like many catch phrases, this one doesn't really describe the world as it is, and the perpetuation of this false division may be causing more harm than good in creating a new political foundation for world economic relations.

What inspires these thoughts is the recent report of the so-called Brandt Commission headed by Willy Brandt, former chancellor of West Germany, and including 17 other international notables, among them former prime ministers and foreign ministers of rich and poor nations alike. At the suggestion of World Bank President Robert S. McNamara, the Brandt Commission set out to define relations between rich and poor, a problem that Brandt terms "the great social challenge of our time."

It may be. As never before, we are made aware of and feel a vague responsibility for mass suffering elsewhere. One of today's great moral and political problems is to confront this poverty without lapsing into indifference. Moral indignation alone won't suffice. The taxi driver in New York isn't truly affected by starvation in Africa. People and nations inevitably are concerned with their own problems.

At the same time, decolonialization and three decades of rapid economic growth have eroded the political foundation of the postwar trading system. That system united a small number of Western nations and assumed the widespread availability of key commodities, such as fuel. Now, fuel is scarce, and the explosion of nations (United Nations membership increased from 55 to 1947 to 152 last year) has completely changed the cast of characters. Increasingly interdependent and increasingly diverse, nations face a future of constant and mutually hurtful conflict unless they find common ground for dealing with each other.

But the Brandt Commission's uncritical acceptance of the North-South division is not the way to find common ground. Granted, the division does have a superficial appeal and logic. There's no denying the vast differences in wealth. In 1978, the world's economic output totaled nearly $10 trillion, and about three-fourths of that originated in the developed countries -- roughly North America, Europe, Japan and the Soviet Union -- which contain only about one-fourth of the world's 4.4 billion people.

"Permanent insecurity is the condition of the poor," the commission writes convincingly. "Flood, drought or disease affecting people or livestock can destroy livelihoods without hope of compensation. In the North, ordinary men and women face genuine economic problems -- uncertainty, inflation, the fear if not the reality of unemployment. But they rarely face anything resembling the total deprivation found in the South."

But nations act largely on the basis of perceived national interest, and any policy that aims to alleviate worldwide poverty can succeed only if it reconciles its moral purpose with these perceptions of self-interest. For the North, the North-South division simply spells guilt and is meant to force nations to shovel more of their wealth to the world's poor. Politically, guilt won't work on most Westerners -- Americans particularly -- because they see themselves at the mercy of many countries of the South, especially oil producers that seem to have plenty of wealth.

As a tool for analyzing the South's economic needs, the North-South distinction is no more useful. The great lesson of the postwar period is that the most effective antidote to poverty is rapid economic growth, which, in addition to its other benefits, also tends to reduce birth rates.

But, as in Japan, economic growth depends mostly on the countries themselves. Abouts two-thirds of the South's population live in only eight nations: China (one billion), India (670 million), Indonesia (146 million), Brazil (124 million), Bangladesh (88 million), Pakistan (80 million), Nigeria (70 million) and Mexico (68 million).

No amount of outside foreign assistance is going to help these nations if they lack internal stability and workable development policies.

Neither, however, can they thrive as completely but self-contained units. They need to export -- and not just raw materials but also consumer goods and low-skill manufactured products -- so they can earn and borrow the foreign exchange to buy needed technology. This is a commerce that ultimately can benefit everyone, but it now faces two obvious threats: protectionism in the highly industrialized nations, which deprives developing countries of markets, and further cutbacks in oil production, along with the associated problems of huge overseas debts and higher prices.

Here, conceivably, is the basis for some sort of accomodation. Oil-consuming nations -- rich and poor -- need some sort of minimal guarantees of sustained production, and the developing countries need access to overseas markets. Do the oil producers have anything to gain? Perhaps. Many of them also wants to develop more diversified economic bases and export abroad.

The Brandt Commission believes mutual accommodation is urgent, but trapped by the North-South frame of reference, it gets the emphasis all wrong. Although it has plenty to say about the evils of protectionism, its major proposals involve massive increases in technological assistance from the industrial countries to the poor.

This responds mostly to rhetoric. Oil countries can buy needed technology, and the North is likely to see more development assistance as disguised payoff. Political deals survive only if nations believe their real needs are served. Renouncing protectionism in exchange for oil guarantees serves those needs, but also involves a considerable loss of independence for both sides. That's the simple, tough bargain the Brandt Commission ought to have pushed.