THE SOLUTION to the troubles of the savings and loan associations will be, in the long run, very simple: there won't be any savings and loan associations. A radically Darwinian process of evolution is now under way in the financial world. Those that can't adapt, and quickly, will perish. The depositors are in no danger, of course, because their money is insured by the federal government. The surviving institutions will be indistinguishable from commercial banks and mutual funds. That transformation is already well advanced. If there were nothing more at stake than the shareholders' investments, the country could afford to shrug and let the business settle iself jungle-fashion.

But there is good reason for public concern, and for prompt public intervention. This transition is going to impose substantial costs on the public. The choice is between paying federal insurance on the deposits of failed S&Ls and some sort of bail-out.

One careful analyst, Andrew S. Carron of the Brookings Institution, suggests that, if high interest rates persist, as many as one-fourth of the country's 4,600 S&Ls might fail by the end of next year in the absence of federal action. He argues for prompt decisions by the federal regulators to help the stronger of the endangered institutions to survive, and to merge or sell the others quickly out of existence. The crucial decision to provide subsidies was taken a long time ago, he observes, when the federal government began providing deposit insurance. The only question now is the form of the subsidy--and whether it will be the large amounts that immediate aid will require, or the much larger ones required later to pay off depositors after failure, when the losses will have continued longer.

The chief regulator, the Federal Home Loan Bank Board, is now preparing to expand the kinds of business that the S&Ls can engage in. That will be helpful to them in the long term, but it doesn't do much about the immediate squeeze between the low interest paid in to them on mortgages and the high interest that they must now pay out to attract deposits. For better or worse, the way this transition works out will set the terms under which you will be able to build, buy or sell a house for decades to come. A series of bankruptcies in the S&L industry can only make mortgage lending more difficult and expensive.

The distress of the S&Ls has been created by the conjunction of the 1980 deregulatory legislation with interest rates at a level that no one foresaw. Federal intervention is one way to resolve it, but there are others. Perhaps the philosophers of the free market will argue, as they put it, in favor of letting the market work. But it is necessary to say that it sometimes works exceedingly destructively and, particularly in the financial world, not very efficiently. It's possible to do better than that.