Now that the battle for Connaught BioSciences Inc. is over, it's time, as we editorialists say, to shoot the wounded. By these I do not mean those hallucinatory economic nationalists demanding a Canadian bid for Connaught: They retired from the field long ago.

The groaning figures begging to be dispatched are rather those journalists who somehow persuaded themselves they knew which of the two foreign bidders - France's Institut Merieux, or Switzerland's Ciba-Geigy and its U.S. partner Chiron - was the better for Canada. Prominent among those urging the government to step in on Ciba-Geigy's behalf, notwithstanding Merieux's clearly superior offer to shareholders, were the Globe & Mail's Terence Corcoran and The Financial Post's Hyman Solomon and John Godfrey.

Corcoran's view is easiest to forgive, if one understands its origins in an abomination of government. His readers will know Corcoran is sympathetic to markets, but only so far as they fit within a laissez-faire world view. The seeming paradox is illuminating: Free markets are not only not the same thing as laissez- faire, they can even conflict.

From a free-market standpoint, prices should determine investment decisions. If state-owned Merieux was prepared to offer shareholders close to $1 billion for Connaught, they should have been allowed to take it. But for Corcoran, this was forgotten in his concern that this should result in a government - in this case, indirectly, the French - taking over a private firm.

INTUITIVE DECISION

Solomon's perspective was more the usual vanity of the planner. He did not, at least, fall into the trap of equating the worth of each bid with the numbers of research and development dollars it promised: the fallacy of measuring quality by inputs, rather than results. Instead, Solomon simply decided, more or less intuitively, Ciba offered more in ''overall strategic technology terms.'' Biotechnology, remember, has been ''identified'' by the government as a ''strategic'' industry.

What on earth does this word mean? Either ''strategic'' means Ciba's technology offers higher potential economic returns - in which case, it should have been prepared to put its money where its mouth was and make a higher bid, rather than sucking up to the government and the press to bend the rules in its favor. Or, more likely, it means Ciba's technology sounded sexier.

It is astounding that in this age one should still have to put the basic case for the market: for decentralized decision-making, for competition as a discovery process. Blocking Merieux would have amounted to forcing Connaught's shareholders to subsidize whatever grand industrial policy visions are held by those who favored Ciba to the tune of $200 million. I do not question their wisdom. I only ask that they invest their own money.

But the most bizarre intervention was easily Godfrey's, who compared the case for government intervention in the Connaught takeover with its role in building the CPR and organizing the war effort. There was, he asserted, an ''overriding national interest'' in each, transcending mere economic interests.

Let us concede that both the latter examples were essential to Canada's survival as a political unit. What does that have to do with Connaught? Governments didn't invest in the railway or in armaments because they thought they were going to be growth industries. They did so, because they were explicitly not growth industries: They were things the state needed that the market alone could not provide, or leastways not at the time.

Godfrey is using one argument - that governments must do what the market cannot do - to reach an entirely different conclusion: Governments are better at doing what the market can do.

It's interesting to observe how Godfrey's arguments have changed over time. It used to be that government had to ensure Connaught stayed in Canadian hands because the market had somehow failed to notice its enormous growth potential. Then when it became clear Connaught had no growth potential, the issue became ensuring that Connaught went to Ciba-Geigy, because the market's preference for Merieux's $37 a share bid had overstated Connaught's value.

That ought to tell us Godfrey does not proceed from demonstrated market failure, and so to intervention; he is determined to intervene from the start, and so casts about for a market-failure argument to support his inclination. This is easy enough, on his definition of market failure: when the market fails to support something he thinks it should.