Francis Bator, a Harvard University professor who once served Lyndon Johnson, tells an interesting story in the current issue of The Economist. When Jimmy Carter met with a group of economic advisers at Plains toward the end of 1976, the late Arthur Okun gave him the following warning:

Unless the then president-elect decided to adopt some form of direct wage restraint, the underlying rate of inflation would rise from about 6 1/2 percent to around 10 percent, and the Carter administration would be judged a failure. Whether Okun actually used the 10 percent figure is a matter of debate among those who were present at that meeting.

But the thrust of Bator's account, I know from my own conversations with Okun at that time, is correct. Okun clearly saw the dangers that would come from the inflationary side, and expressed them with more passion than did Charles E. Schultze and other advisers who basically agreed with him. Carter, anxious to assuage both the labor and business communities, instead listened to his friend Bert Lance and to Labor Secretary Ray Marshall, ruling out any notion of an "incomes policy."

Okun was right. It was downhill all the way for the Carter administration after that. A package of economic stimulants Carter put into effect was poured into an economy that -- with no lid on costs -- was open-ended to the ravages of inflation. The external shocks suffered from oil, food and a declining dollar exchange rate simply made things worse. There was an abortive attempt in 1978 to come back to an incomes policy (ironically endorsed by Marshall), but Carter was afraid to try it.

Obviously, there is a lesson here for the Reagan administration. Swept up in its passion for supply-side economic theory, President Reagan also does not have any policy dealing directly with wage or price restraints. Except for a prayerful reliance on Federal Reserve monetary restraint -- which if followed as promised is likely to abort economic growth -- there is no Reagan anti-inflation policy.

In a posthumous book just published by the Brookings Institution (to be reviewed in Book World next Sunday), Okun made the point that in modern society, wages and prices do not respond easily to classic methods of restraint. In it, he outlined the reasons that make it necessary for government itself to clamp some kind of lid on cost pressures -- unless it wants to break the persistent inflationary cycle by massive unemployment.

But Reagan is blissfully ignoring these warnings -- just as Carter did. As Bator says, "with no worse luck than Carter had, the corresponding inflation rate by the end of the first Reagan term is likely to be 15 percent."

The standard rebuttal of the Reagan team is that this line of criticism takes no account that the president's approach is "bold" and totally new. They say if the president's entire program is passed, old concepts can be discarded. Incentives to save and invest will grow, inflationary expectations will diminish, balanced economic growth will produce a bigger economic pie to be shared by all.

The goal can't be faulted. But is a dreamy-eyed view of the world. And it is not enough for the Reagan cabinet to brush aside thoughtful criticism from many quarters by charging that it is "Keynesian," or that it comes from those fellows who loused things up in the Carter years. The Reagan administration has to deal on a serious level with the hard questions that are asked about the program and its lack of internal consistency -- and so far, it has refused to do so.

There should be too much respect for the professionalism of the Congressional Budget Office staff to ignore its conclusion that the Reagan deficit projections vastly underestimate indexed benefits, unemployment compensation and interest payments on the national debt. Federal Reserve Chairman Paul Volcker has voiced some of the same skepticism.

The CBO sees a budget deficit of $67 billion in fiscal 1982, $22 billion higher than the Reagan forecast. And as for that budget balance in fiscal 1984, the CBO estimates red ink of $49 billion.

Walter W. Heller and George L. Perry, two highly regarded Democratic economists, write in the Minneapolis National City Bank letter: "In the absence of any direct attack on the price-wage spiral, one cannot expect brisk recovery, receding inflation, and falling interest rates to coexist."

They point out that the president is relying on the Kemp-Roth tax proposal to boost demand on monetary policy to curb inflation and on supply-side policy to promote long-term economic growth. "But unfortunately, the economic world doesn't work in this neatly compartmentalized way," they say.

It should be obvious, even to the ideologues, that the Kemp-Roth bill may stimulate demand, but also will have an inflationary impact; that high interest rates, if they have the desired anti-inflationary effect, also will slow down growth and discourage investment. And any supply-side responses, if they come, "will be far too weak to lead the economy out of this dilemma."

There is much wisdom in these cautionary words of Bator, Heller and Perry, as there was in Okun's warning to Carter. The comforting vision of a rising economy side-by-side with falling inflation that Reagan promises us won't be accomplished without some direct restraints on wages and prices. This is no longer a hands-off world.

One final (I hope) note on those Saudi oil policy items I mentioned in my "letter" to Secretary Haig two weeks ago. Policy Review, which carried the Douglas Feith article, is a quarterly journal of the Heritage Foundation, not the Center for International Security. And for those who want a briefer exposure to Prof. Kelly's ideas (than contained in his book "Arabia, The Gulf & the West") Heritage has a printed version ($2) of a lecture, "Islam Through the Looking Glass." Call Herb Berkowitz at 546-4400 for the Feith article or Kelly lecture.