THE West watched the East last week: the U.S. watched the U.S.S.R. And different people saw different things.

We all agree on this much: The Soviet communist leadership's agreement to accept a multi-party political system is a good thing. Maybe we should burst into wild cries of delight, or maybe we should applaud cautiously and daintily. Regardless, nobody doubts that a dose of democracy, whatever the size, is an exciting step in the right direction.

But is it a step in the Right direction? Is this the Soviet Union's final acknowledgement that it was an Evil Empire after all, that Ronald Reagan's America was right all along? Has capitalism KO'd communism once and for all?

Obviously not. Despite the descriptions of the newly anticipated Soviet government as "Western-style," this is not really an issue of East and West or of communism and capitalism. It is an issue of political democracy. Despite Gorbachev's market-oriented reforms, the Soviet Union will probably never be an outpost of Reaganite capitalism.

Every interpretation, of course, has an equal and opposite reinterpretation. The Left's answer to the Right's questionable vision of events goes like this: if the Eastern bloc has been sensible enough to abandon totalitarianism for political democracy--and even to experiment with free market economic policies--then we should respond in a complementary fashion.

I HAPPEN to agree with this last way of seeing recent events. But even though I agree with it, I think the same problem underlies this view as underlies all Western views of the Soviet Union. We still think in terms of "us" and "them."

Even when we say "We should become more like them as they become more like us," we are still thinking in terms of us and them. Indeed, our thoughts are driven by these terms. who lived through the culmination of the Cold War under Reagan--especially for anyone who grew up during those years--to think of the Soviet Union in any way other than as the polar opposite of the United States. The America of my adolescence acquired its very identity in relation to The Russians.

Even now, every American response to Soviet reforms is in some way a product of that Cold War view. If it isn't a victory of us over them, it's a flip-flop of that, an enlightened cry for a move of us toward them. Even as the chroniclers of current events proclaim the Cold War to be over, our mental worlds are all still marked by an East-West split.

WHY is that so important? Why is the geography of our mental worlds something worth worrying about?

Our mental worlds play a large role in determining what we do. It is not only our conception of global politics that is based upon an us-them split. The us-them dichotomy also colors our local perceptions.

If we are to have any hope of overcoming even our local problems, we have to overcome our mental ordering of the world into a series of unequal pairs. That doesn't mean abandoning attempts to distinguish better from worse. It simply means re-examining the automatic assumption of some equivalence between "better-worse" and "us-them."

The same day the good news came from the Soviet Union, the following items came from closer to home:

. A fourth witness said Boston police coerced her to testify against William Bennett, the Black man everyone assumed murdered Carol Stuart before her white husband became a suspect and committed suicide.

. Boston gay community leaders said George Georgeff was killed in Dorchester because he was gay.

. Although 51 percent of Boston men gave President Bush a positive rating on his handling of the economy, only 29 percent of women gave him positive marks.

. Minority students at Bradley University in Peoria, Illinois (that archetypal American town), protested the local formation of an "American White Supremacist Party."

Some of these pieces of news are immediately good, others are immediately bad. But they're all ultimately problematic in the same way. They all betray the extent to which we have divided our world into dichotomies of us and them.

Before we cheer too hard for the transformation of Soviet Russia, we should think even harder about all the other "Russias" in our minds and in our own country. We should think about those who don't physically resemble George Bush and Derek Bok, and about our consequent relegation of "them" to "minority" status, to existence as the Other.