In his farewell address at Harvard the other day, former secretary of state Cyrus Vance used uncharacteristically sharp words ("dangerous . . . naive . . . foolish") to deplore the "new nostalgia" for military solutions as a substitute for diplomacy.

Without mentioning names, he took unmistakable issue with the administration he served and resigned from on a matter of principle -- and took a calculated whack at the Kissingerian "grand design" approach to foreign policy as well. And that's what caught the attention, understandably.

But the fact remains that the issue he spoke of most passionately -- his most "heartfelt concern," according to associates -- was not the failure to ratify SALT II, or the overemphasis on arms spending, or the "preverted hubris that overestimates our power." Vance's sharpest words were reserved for the state of the American foreign aid effort in recent years.

"American aid programs . . . make the most difference in supporting our Third Word diplomacy and in addressing now the causes of later crises. Yet they are under constant assault in the Congress and elsewhere.

"The result is -- I can think of no other word -- disgraceful."

That statement attracted no notice at all. And that, alas, is also understandable. The American public, Congress and the executive branch all seem to be about equally turned off by the idea of providing economic development assistance to the dangerously destitute and politically turbulent nations of the so-called Third World.

Long gone is the spirit of the Marshall Plan or the days of Harry Truman's Point Four or the time when a secretary of defense, Robert McNamara, could devote a major address to a global challenge as far removed from the traditional preoccupations of the Pentagon as economic development. Yet McNamara spoke eloquently nearly 20 years ago of the problems of poverty and hunger and overpopulation as the root cause of the sort of economic deprivation and consequent social unrest that offers easy targets of opportunity for communist expansion and leads us, ultimately, into confrontation with the Soviets.

It was never such a large leap for MaNamara from the Defense Department to the presidency of the World Bank. He saw it the way Vance sees it -- as the difference between the operating table and preventive medicine.

But Congress, it is all too evident, does not believe in preventive medicine. As Vance also noted bitterly: "We are far in arrears in meeting the pledges we have made to the multilateral development banks, and likely to slip still farther."

All the while, Congress strains to spend more money to build rapid deployment forces for instant intervention in Third World internal upheavals on behalf of governments that have their own "Vietnam complexes" and no great yearning to be saved from themselves by force of American arms.

This is not to knock military preparedness or the prudent application of American force when diplomacy and deterrence fail. It is merely to commend Cy Vance's sober balancing or risks and needs -- military, economic, diplomatic.

It is undeniably "disgraceful," as Vance noted, that the United States now ranks 13th among the world's 17 largest industrial nations in the percentage of gross national product it devotes to development assistance -- and is about to be knocked down another notch by Japan.

It is no more defensible that American foreign aid, as Vance also pointed out, has been reduced by 25 percent over the last 20 years, even as the number of needy new nations -- and potential trouble spots -- has rapidly grown. Economic development now accounts for only about 1.5 percent of the entire federal budget.

True, there is waste in these efforts. There is also corruption; we are talking about nations newly formed. But there is also more than enough evidence that economic development can be made to work; that it offers diplomatic leverage for the short haul, if your interests are pragmatic and immediate; and that doing nothing to ease the Third World's economic misery is a certain prescription for trouble even if doing something is no guarantee of tranquillity.

What economic development aid won't do, of course, if measurably improve the welfare of mankind within the term of an incumbent member of the House, or of a president, or even a senator. And because it is preventive medicine, you can't even prove beyond doubt that what you set out to prevent was ever going to happen. It is not rewarding, in that sense.

And yet there is a certain nuttiness in spending greatly increased sums of money so that sophisticated new weapons now on drawing boards will be ready 10 years from now to deal with crisis and conflicts directly related to social and political unrest that relatively inexpensive economic development programs, launched today, might do much to alleviate.

Foreign aid is a way to hedging bets, I suppose, and only really worth doing if you think it matters what sort of world awaits your children -- and theirs.