Michael Pertschuk, the outspoken and soon to be outnumbered liberal member of the Federal Trade Commission, says the Reagan administration's rallying cry on antitrust issues is "Free the Fortune 500."

William F. Baxter, the law professor who is the administration's top antitrust law enforcer, doesn't really disagree. He says his job could be described as deregulating big business.

His recent settlement of the mammoth American Telegraph and Telephone Co. case and the dropping of the International Business Machines suit fits into the "bigness isn't badness" thesis the administration is pushing. So does the FTC's dropping of cases against the large oil companies and the handful of cereal makers who dominate the market.

Many experts in the field believe that, when considered in the recent history of antitrust enforcement, the end of these two giant cases, and even much of the administration's rhetoric, doesn't represent any radical departure from evolving antitrust policies.

For more than a decade, there has been a trend at the Justice Department's antitrust division away from filing huge monopoly cases. Its workload increasingly has been in filing less-noticeable, procompetition statements before regulatory commissions. There has been an evolution, too, in the courts toward the type of economic analysis that Baxter and other disciples of the Chicago school preach.

But there is still a lively debate going on between those who say the basic thrust of antitrust enforcement--filing price-fixing cases and blocking mergers between competitors--is unchanged and those experts and politicians who are concerned about the philosophical direction in which Baxter is leading government enforcement.

Antitrust, after all, conjures up ancient memories of the Standard Oil monopoly and the country's historical concern for the concentration of economic and political power in the hands of the few. Even some Republican senators have criticized Baxter's hands-off attitude toward most large mergers.

Thomas J. Campbell, the 29-year-old head of the FTC's bureau of competition, noted that his office has challenged all three major mergers it has considered since he arrived last fall.

He--like Baxter and James C. Miller III, new chairman of the FTC--doesn't have room for what they consider social and political nostrums in their equation. Campbell, for instance, said he'd like to see lots of small companies flourish because they come up with technological innovations. "You could call that a social consideration. I call it economic," he said.

Baxter said he's not worried about the size of a company at all and added, with a laugh, that he'd learn about the illegal activities of a giant "if they're blowing up their competitors' factories."

It's that kind of comment, even in jest, that makes the populist hearts of politicians flutter. They, after all, have poured unsolicited money into the lead agency--the antitrust division at Justice--for years, and some critics claim there is little to show for it.

Before recent cuts, the division had 400 lawyers, the largest at Justice and the only one with a separate line-item budget. Its resources have climbed from $7 million in 1965 to $45 million, but the number of cases it filed barely rose. Sen. Howard Metzenbaum (D-Ohio), former head of the Senate antitrust subcommittee, for instance, railed at John Shenefield, the Carter administration's antitrust chief a few years ago, for failing to file enough cases.

Victor Kramer, a law professor at the University of Minnesota who worked on the original AT&T case in the early 1950s and was later counselor to Attorney General Benjamin R. Civiletti, is another critic.

He feels that the place is top-heavy with layers of review, that it could be cut in size by one-third, and that it shouldn't appear in nearly so many regulatory cases. Not surprisingly, those who have led the division disagree. Shenefield says pleasantly, "Victor's full of baloney."

Baxter does agree the division could be cut in size, through attrition. But to fulfill his goal of "moving the law" to incorporate his economic efficiency view of antitrust, he'll be spending a lot of time trying to undo what he considers bad cases and bad court precedents that have restricted American companies in an increasingly international marketplace.

And with the private bar filing 1,600 cases a year to less than 100 by the government, he admits he faces a real challenge.

Baxter's strategy includes refusing to file cases that could lead to bad court precedents, loosening reins on merger guidelines, reviewing some 1,200 old consent decrees and wiping out restrictions he deems out of date, and even intervening on the side of defendants in private antitrust suits.

He is also reviewing the long-dormant investigation of the American oil companies' actions in the Persian Gulf and is now considering closing it, he said.

And he has taken a personal hand in writing the government's Supreme Court briefs in antitrust cases. He has been outspoken in his belief that the court has made a series of bad decisions in recent years, and he seems intent on trying to overturn them.

He said he felt the government filed "a large number of ill-conceived cases over the years." The antitrust division lost many and won others, he said, "only because there was a Supreme Court that was willing to construct a brand new theory . . . to rescue whatever it was the division had attempted, however anticompetitive it was."

E. William Barnett, head of the 14,000-member antitrust section of the American Bar Association, said that although the government doesn't file that many cases, they have a "multiplier effect" that triggers private actions, too.

Still, he said, "It must be frustrating for someone Baxter who sees his role as bending the established law, to see all these private filings."

Barnett said the clash of ideas between the traditional antitrust view that fears bigness, and the Baxter view where economics alone is the issue, is an endless but healthy debate because it makes people reexamine the basic rationale for the antitrust laws.

Campbell, for instance, said, "If you believe in free market solutions, as we do, then it's critical that antitrust work effectively, that you don't have collusions and price fixing."

Baxter says of his liberal critics: "Part of the difference here is between people who believe in science--the use of statistics over large sets of observations to establish general tendencies--and people for whom anecdote swapping is the most reliable soruce of information."

He acknowledges it can be difficult--in a world that used something called the Herfindahl Index to write merger guidelines--translating his theory for the man on the street. "I try to explain in the simplest available terms what it is we're doing. Whether the result is comprehensible is another question."

"I have no reservation whatsoever that it is good for them. Whether I can successfully convey to them the precise market phenomenon through which that effect occurs is a very different question."

An example of Baxter's outlook is the way he views the type of "retail price maintenance" case brought by his immediate predecessor, Sanford Litvack, in the recent prosecution of Cuisinarts Inc. of Greenwich, Conn.

Litvack filed a criminal case against the firm, charging they were refusing to supply customers who sold at a discount. Baxter said he wouldn't have filed the case at all, much less allege a criminal violation.

"That's a good example of a situation in which one can achieve an apparent victory for consumers, by forcing short-run price savings on a device that has already been invented, manufactured and marketed," Baxter said.

"But, in effect and over a long term, it will represent a substantial loss to consumers because of incentive changes it will have in the invention, manufacture and marketing of technically complex goods in the future."

Shenefield said Baxter's contention "looks better as a theory than it does in real life. The economy doesn't operate like a textbook."

Pertschuk agrees that Baxter's economic models are "elegant" and he admits that part of the problem with his liberal view is that it's "sloppier. It takes a balancing of values, a concern about small business, a nervousness about concentrated industries. It's not easily quantifiable."

Baxter is quick to note that Justice is still filing criminal price-fixing cases against highway contractors in several southeastern states. And his refusal to approve the merger of the Schlitz and Heileman beer companies startled some in the industry who thought anything goes.

He also said he will continue the recent emphasis on using resources to make regulatory filings. Fully one-third of the division's lawyers now are mainly concerned with such unglamorous work.

Litvack said Justice lawyers were "instrumental" in making arguments to deregulate the airlines and trucking industries. And Donald Turner, from the Johnson administration, noted that Justice championed the removal of fixed stock brokerage fees at the Securities and Exchange Commission.

"More bang for the buck" is the way one Reagan Justice official said he viewed the regulatory work.

The 300 or so antitrust lawyers at the FTC also do their share of deregulation work, Pertschuk said. But he and others watching the Reagan antitrust effort said the real test of their attitude against illegal activity will be how many and what kind of cases they file.

"These people have a faith in the self-correcting nature of the market place and feel the government doesn't do anything but muck it up," Pertschuk said. "Especially when the economy goes bad, antitrust enforcement becomes a scapegoat. The question is, will antitrust enforcement be confined to catching people in hotel rooms fixing prices?"