I wish there were an insurance policy one could take out in defense of capitalism. I could imagine that the premiums would have been oversubscribed to an Adam Smith Fund to Retire Frank Lorenzo. Or to a Ludwig von Mises Fund to Protect the Market from Frank Lorenzo.

A few years ago, Irving Kristol wrote a book called ''Two Cheers for Capitalism,'' in which he hailed the accomplishments of the marketplace but remarked with sorrow (and indignation) the bad name some capitalists give to the marketplace. One thinks of the Hunt brothers' attempt to corner the silver market (the silver market had a hearty last laugh at the expense of the Hunts). Or of the executives who take out golden parachutes so that if their companies sink or are taken up in mergers, they will be able to waft their way in luxury to the end of time.

Frank Lorenzo, if you missed it, will be paid $30.5 million by the Scandinavian Airline System in exchange for his stock in Continental Airlines, which also owns what is left of Eastern Airlines. The marketplace made its last, lapidary judgment on the value of Lorenzo: Jan Carlzon, chief executive officer of SAS, said that the resignation of Lorenzo from Continental was crucial to the deal. ''Without that in the picture, we wouldn't have done it,'' he said. He wasn't asked whether SAS would pay still more if Lorenzo had promised to take a job as CEO of one of the competitive airlines.

As it stands, Lorenzo is fetching between $14 and $18 per share of stock, which is about double what the stock is selling for. When this was pointed out to him, he remarked airily that Continental stockholders should have sold out a year or so ago, when the stock was up at the level Lorenzo is now getting. The moral would appear to be that a shareholder of a company run by Lorenzo should get rid of his stock as soon as possible.

When Lorenzo took over Continental, he vacated company personnel contracts by the device of letting Continental go bankrupt -- and then restoring it, contract-free. That device is not in and of itself dishonorable, but the objective must be served, and the objective was to save a company and to put it back on a solid footing. Eastern Airlines, which Lorenzo purchased and attempted to rehabilitate, answered him by going on strike in the spring of 1989, a strike led by the machinists (who were then led by the labor union version of a Frank Lorenzo, William Winpisinger, a socialist more concerned with the class struggle than with the fate of his union members).

To the surprise of management, the pilots joined in the strike, and for many weeks Eastern was moribund. Little by little the pilots came back, but the draconian work rules and meager salaries being paid to ground personnel and to administrative staffs broke the fighting spirit of the company.

Frank Lorenzo was not named by the Justice Department as one of the nine defendants in a lawsuit alleging that inferior parts were used to maintain Eastern Airlines planes in order to cut down on the cost of well-made parts. But assuming the complaint is not frivolous, under Frank Lorenzo's management one of the proudest airlines in U.S. history was prepared not only to humiliate and impoverish its workers but also to run the risk of killing its dwindling patrons.

Conduct such as his ought to be at least a cultural concern of defenders of the marketplace. There is no way a law can be passed to the effect that chief executives ought not to profiteer from the distress of companies they managed. Such laws could not be written, and shouldn't be. But some general manifestation of disdain for the abusers of capitalism is appropriate. The Helmsley Laws, we might agree to call them, as we ponder the rhetoric that will be spent on the Lorenzo case the next time the Democratic convention orators meet to characterize Reaganomics.

It is a burden of the marketplace system that it is often practiced by men and women of low moral standards. One of the best defenses of capitalism is that much less harm is done by such abusers than when they find themselves in positions of power within government. When that happens, their mistakes are macrocosmic.

Eastern will (one hopes) recover from the treatment Lorenzo gave it. But the United States has not yet recovered from the treatment it got from such as Lyndon Johnson. William Schlamm's apothegm comes to mind: the trouble with socialism is socialism; the trouble with capitalism is capitalists.