"In the long run we are all dead." That is how Keynes impatiently dismissed the economists' conventional distinction between the short run and the long run. Today that distinction is crucial to understanding why the OPEC cartel is dying with a whimper, not with a bang.

Power is the basis of any cartel, particularly the power to control production. At the height of its power the Organization of Petroleum Exporting Countries accounted for more than 60 percent of world oil production; this year it will account for only about 40 percent. By some estimates, OPEC's share will shrink to 20 percent by the end of the decade.

The continuing decline of OPEC's power is explained by what economists call elasticity -- the response of the supply and demand of a product to a change in its price. Elasticity is much greater in the long run than in the short run.

When oil prices first rose in 1973, consumers responded with outrage but little decrease in their demand for oil. Encouraged by federal controls on oil prices, they continued to drive gas-guzzling cars in the comfortable belief that the energy crisis was a one-time event whose time had passed.

It took time to convince consumers of the need to buy fuel-efficient cars, but the next round of oil price hikes in 1979 convinced even the skeptics. It took time to convince Detroit of the need to produce those fuel-efficient cars, but now the entire auto industry is retooling to make them. Each year of this decade will see approximately 10 million new fuel-efficient cars replace a like number of gas guzzlers, resulting in a continuing decline in the demand for gasoline.

Similar fuel conservation measures are taking place in business and industry. Old office buildings are being modified to use less energy and new ones are being designed to use far less. A new generation of efficient jet aircraft will reduce fuel consumed in air transportation. Industrial plants, particularly chemical ones, will be much more energy efficient in the 1980s than in the 1970s.

The rise in oil prices has separated the growth in GNP from the growth in demand for oil. Real output in the U.S. economy was 12 percent higher in 1980 than in 1973, but oil consumption was down 2 percent in the same period. The rate of the decline in U.S. oil consumption reached a remarkable 8 percent last year, and is continuing at almost that rate this year.

Time was necessary to reduce the demand for oil, and time was necessary to increase supplies from non-OPEC sources. It took time to train new petroleum geologists, build new drilling rigs, develop new seismic technologies and exploit alternative energy sources. The effect of time and the enormous capital budgets of oil companies has been to build an oil exploration industry that today rivals the auto industry in size.

The necessity of finding more oil has been the mother of inventions to do the job. New seismic techniques, aided by extensive use of computers, are improving the chances of finding oil. The Overthrust Belt in the Rockies is one of the hottest areas in the country, but its convoluted geology would have made finding oil very difficult without the latest advances in exploration technology.

Those advances are needed to offset the fact that the large, easily accessible oil deposits have been exploited. Increased exploration activity has been very successful at uncovering new gas reserves, but only time will tell if it will have comparable success in finding oil faster than it is consumed.

Other countries have the same incentive to expand the production of fuels, and some are showing dramatic results. Countries as unlikely as Mexico and Malaysia have emerged as oil exporters, an event few people considered possible five years ago. All over the world, a record number of holes are being drilled in the search for black gold, and a good deal of it is being found. Sustained higher oil prices also stimulate the supply of oil substitutes. Coal is being substituted for oil in cement plants and electric utilities. Shale and tar sands, the reserves of which are enormous, may become substitutes if long-run improvements in technology make them feasible.

The long-run trends toward reducing the demand for oil and increasing its supply are as apparent to OPEC members as to the rest of the world. OPEC is in trouble, but its members don't know what to do about it.

The oil cartel has overpriced its product and now its members can't agree on what the new price should be. Saudi Arabia tried to assume the mantle of price leader at the OPEC meeting in May, but there was no stampede of followers. The price hawks declared they would never lower prices just as prices began to tumble. Today those price hawks are suffering the double indignity of eating their words and lowering their prices.

Not only did OPEC overprice its product, it did so in the worst possible way. Sharp increases in oil prices in 1973 and 1979 led outraged consumers to view OPEC members as ruthless bandits who exploit their customers when given the opportunity. Reducing that opportunity by reducing dependence on OPEC is now a major objective of oil-consuming nations who view the cartel in terms of unconscionable prices, unreliable supplies and unpredictable politics.