Harvard economist John Kenneth Galbraith urged Congress yesterday to beef up the antitrust laws to stem a "booming" takeover business that threatens the continued existence of small independent businesses.

"Broadly speaking, any medium-sized firm with publicly owned stock that is successful, conserves its cash, is underpresent corporate arrangements in danger of being gobbled up by a large firm," he said in testimony prepared for the Antitrust Subcommittee of the House Small Business Committee.

Galbraith, who retired from Harvard University in 1975 after 41 years as a professor there, calle into question claims that mergers lead to economic efficiency.

"There is not the slightest reason to believe that after being absorbed by theconglomerate, the small enterprise is more innovative, more efficient, more effective or more profitable than before," he said. "Is anything, the evidence is in the other direction."

The usual motivation of the acquisition is "empire-building," he contended. "And no one doubts that it is frequently to get hold of the cash reserves that have been acquired by the smaller enterprise."

Galbraith said action by Congress was "urgently" required. "I trust that it won't get around to locking the doors after the horses have been stolen."

He also admitted some personal "interest" in the takeover trend sicne the publisher of his many books, Houghton Mifflin Co., is threatened with a takeover by Western Pacific Industries, which Galbraitdescrived as "a former Western railroad."