Rep. Parren Mitchell, five-term Democrat from Baltimore's inner city seventh district, combines two seemingly incompatible qualities in his role of congressman.

On the one hand, Mitchell is a quintessential liberal. Former chairman of the Congressional Black Caucus, Mitchell has cosponsored legislation to create jobs, principally for urban blacks. He also sits on the national board of Americans for Democratic Action.

And when the Supreme Court recently upheld the constitutionality of affirmative action to remedy racial discrimination, it was sanctioning a Parren Mitchell amendment to the $4 billion, 1977 public works program, which set aside 10 percent of the contracts for minority business.

On the other hand, when it comes to dealing with the economy through monetary policy, Mitchell is a Milton Friedman conservative. As chairman of the House Banking Committee's subcommittee on domestic monetary policy, Mitchell's economic views do not go unnoticed.

Mitchell believes that to combat inflation, the Federal Reserve System must reduce the average rate of monetary growth. If we are to avoid a major recession, the money supply must be slowed gradually.

Mitchell sees nothing anomalous in stressing monetary remedies for a sluggish economy. "I don't disagree at all with the main thrust of my colleagues in the caucus when it comes to job creation to help blacks in all our cities. However, my consciousness has been raised in terms of the benefits of improved monetary policy. The rest of the caucus doesn't really consider the monetary tool."

Indeed, Mitchell's consciousness has been raised in terms of the primacy of sound monetary policy. Credit must go to his subcommittee staff director since 1976, Robert E. Weintraub. Weintraub spent nearly two decades teaching economic at City University of New York and University of California at Santa Barbara. And, although he didn't write his dissertation under Milton Friedman, Weintraub's Ph. D. in labor economics is from the University of Chicago.

When queried about his influence on the congressman's economic positions, Weintraub demurs, "Whatever statement the congressman makes reflects his own views at a particular time. I, like any staff person, can only suggest ideas, and the member either accepts or rejects them."

The consensus is that, in this case, Mitchell usually takes what Wentraub gives him.

Mitchell shares his aide's enthusiasm for classic monetary theory. "When you want to do something to solve the problems of inflation and recession," says Mitchell, "fiscal policy is rather meaningless. The real impact must come from monetary policy.

"When it comes to fine tuning the economy, the Fed has always been most effective, and that means monetary policy. During a recession, they let out on the economy, and during extreme inflation, they pull back."

Mitchell stresses that the Fed should emphasize gradualism in regulation of the money supply. He refers to the so-called M1-B category, which is more broadly defined than the M1-A supply. The latter includes cash in circulation and checking accounts, while M1-B also includes deposits that act like checking accounts.

Mitchell makes his point through example. "Since 1970, money growth, measured over 12-month periods, has rolled up and down between 3 1/2 percent and 9 1/4 percent and has averaged 6 1/2 percent. The drop to 3 1/2 percent occurred between February 1974 and 1975, and it greatly exacerbated the recession.

"Then, the jump after 1970 in average money growth to 6 1/2 percent sustained and increased inflation.

"Especially unfortunate was the Fed's running-up of money growth, averaging 8 1/2 percent a year between October 1976 and September 1978. Inflation had been cut in half between mid-1974 and mid-1976, but the new surge in money growth rekindled it.

"The lessons are clear. Since the Korean War, rapid money growth has led inexorably to rapid inflation within two to three years."

With 448,000 constituents just 40 miles away, Mitchell doesn't spend all his time in the Cannon House Office Building worrying about somewhat arcane economic theory.

"With constituents as close as mine," the congressman points out, "most of my day is spent being concerned about their individual needs." And Mitchell is known for providing that lifeblood of political survival, constituent service.

He commutes daily from his restored townhouse in northeast Baltimore.

"Soon after I moved in [to the neighborhood], many other black professionals followed. We didn't displace anyone, just took over already abandoned housing."

Mitchell, aided of course by his Hill staff and two district offices in Baltimore, must sort out myraid mundane requests that pour into his office.

"Sometimes I don't know," begins the seemingly unflappable lawmaker, "it might be easier representing a district in Hawaii. At least then every time a constituent wanted something, he wouldn't just pick up the phone and call." his three offices receive an average 1,800 calls a week, with almost as many letters adding to the workload.

Nevertheless, Mitchell thrives on being wanted. "I know it sounds hokey, but I enjoy all this work. When you take this job, you're asked to perform a public service. And that's what I think I do."

Others agree. Samuel T. Daniels, executive director of Baltimore's nonprofit Council for Equal Business Opportunity, which promotes greater minority participation in private entrerprise, observes: "I've known Parren a long time, and he's always worked very, very hard to help minorities, and here, that means blacks. He has emphasized two things: creation of more jobs and more businesses run by blacks."

Daniels and other black leaders in Baltimore have been generally unaware of Mitchell's monetary views, and, essentially, none of them cares. "All I know," begins Baltimore's Urban League president, TRAVIS W. Vauls, "is that Parren Mitchell has always been concerned about the unemployment problem among blacks in Baltimore and throughout the country. And whatever he does to improve the situation, I'm for."

In addition to chairing the Banking subcommittee, Mitchell plays an active role on the Joint Economic Committee. He also has a hand in bringing blacks into the mainstream of business ownership through his role on the Small Business Committee's subcommittee on general oversight and minority enterprise.

"That 10 percent set-aside for minority enterprise has been my proudest congressional accomplishments," Mitchell admits.