A publisher who is hoping to persuade Paul Volcker to write his memoirs recently sent the former chairman of the Federal Reserve Board a copy of a newly published book about the Fed. Along with the book came a note that, according to friends of Volcker, said: "I hope this book makes you so mad that you'll feel compelled to write a reply."

The book the publisher sent Volcker is titled "Secrets of the Temple: How the Federal Reserve Runs the Country," and it's not hard to imagine why the former Fed chief would find it objectionable. Instead of hailing Volcker as the man who saved the U.S. economy from double-digit inflation, author William Greider criticizes his policies for causing more harm than good.

The book has drawn incredulous reactions from some of Volcker's admirers. Lyle Gramley, a former member of the Federal Reserve Board, said that attacking the Volcker Fed for quashing the inflation of the 1970s "is like knocking a team that has just won the Super Bowl after going 0-16 the year before."

But despite Greider's unconventional thesis -- or perhaps because of it -- the book is sparking considerable interest and debate among economic analysts and policy makers. Helping to generate readership is the fact that the New Yorker magazine published three lengthy excerpts.

The argument advanced by Greider, a former assistant managing editor of The Washington Post, is rooted in populism. He contends that the Fed's policy of driving up interest rates to subdue inflation benefited the wealth-owning classes -- banks, Wall Street firms and rich bondholders -- at the expense of the farmers, workers, small businessmen and others who constitute the "debtor class."

Most orthodox economists disagree with Greider's class-oriented approach, because they believe taming inflation makes the whole economy better off. But even critics of Greider's theories are expecting his work to have a significant impact.

On Capitol Hill, staffers on the banking committees have already sent a few written queries to the Fed about the book's revelations, and they say that the book, by demystifying the central bank, will spur lawmakers to ask pointed questions of Volcker's successor, Alan Greenspan. On Wall Street, Fed watchers have devoted "a lot of discussion" to the book, said David Jones, chief economist at Aubrey G. Lanston & Co., because of its detailed accounts of the events behind crucial Fed decisions.

At the Fed itself, senior staffers were generally upset over the New Yorker excerpts, which were photocopied and widely circulated at the central bank. Joseph R. Coyne, the Fed's spokesman, refused to respond to the book. "Why should I?" he demanded. "He {Greider} knows what I think of it." A number of others, including Volcker, also declined to be interviewed; some said they wanted to avoid publicizing the book.

But a few Fed officials who agreed to discuss the book said that while they strongly dispute Greider's conclusions, his reporting on the Volcker era is surprisingly free of factual errors. "I think it brings out the story of what went on pretty accurately," said Frank Morris, president of the Federal Reserve Bank of Boston.

The book recounts several episodes in which the Fed squeezed credit even more tightly than it intended, driving interest rates to record levels and engendering a deep, lengthy recession in 1981-82. Greider contends that the central bank showed little concern for the pain experienced by ordinary citizens and the protests issued by their elected representatives. The Fed eased only when the economy's woes threatened the health of the banks -- which had generally profited from high interest rates, he writes.

Fed officials say Greider is correct in his assertion that the Fed's efforts to quell inflation tended to hurt poor people disproportionately. But they say he goes too far in claiming that the Fed put the interests of the moneyed classes above the interests of society as a whole.

"What would happen to poor people if, instead of facing up to inflation, we had just kept moving down that track to the point where nobody would invest anymore in productive assets and would only invest in paintings and antique silver?" asked Morris. "How do you get sustained productivity gains in an economy where the financial sector is falling apart completely because of inflation?"

Roger Guffey, president of the Kansas City Fed, said: "In hindsight, I would say there were times when we probably overshot a bit" by keeping credit too tight. But, Guffey added, "Hindsight is always 20-20," and he suggested that the end result was worthwhile. "Stability of prices is a key ingredient in maintaining a viable economy," he said.

But Greider contends that the Fed actually damaged the economy's long-run prospects, especially during the recovery when the central bank kept interest rates relatively high. He writes that Volcker and the majority of his Fed colleagues were "haunted" by fears that they would ease credit prematurely and allow inflation to rekindle, as the central bank had done in prior expansions. Consequently, they decided in early 1984 to step hard on the monetary brakes to keep the economy -- which was then growing rapidly -- below full employment.

The decision was a "momentous" one, made by "an obscure group of unelected technocrats ... in virtual privacy," the book says.

Conceded a Fed official: "There's some dirty laundry hanging out there {in the book}, in terms of the accountability of this place."

The author quotes Stephen Axilrod, who was then the Fed's top economist, as explaining the Fed's 1984 policy in retrospect: "When you're trying to wring out inflation, you have to keep the economy below its potential. The nasty way of putting that is, you have to keep unemployment high."

Paradoxically, it was Volcker himself who put an end to this policy when he realized the Fed had once again clamped down too vigorously on credit. Greider discloses that the Fed chairman, virtually ignoring a vote by the central bank's policy-making committee, ordered a lowering of interest rates in September 1984.

By then, Greider contends, it was too late; the economy's momentum had been so crippled that whole sectors, including agriculture and heavy industry, were struggling to stay afloat. The deflation that hit commodity producers is still threatening the economy today, he argues.

Asked about the 1984 decisions, Axilrod, who is now vice chairman at the Nikko Securities Co. International, said the Fed could be criticized for keeping money too tight at that time and causing the dollar to soar too high, thereby hurting the competitiveness of U.S. industry.

But Axilrod said that by maintaining a convincing anti-inflation policy, the Fed may have minimized the amount of pain that the economy had to undergo. Noting that renewed fears of inflation would tend to drive interest rates up again, he said: "You could argue that we've been able to keep the economy going this long because inflationary expectations have been wrung out."

The fiercest criticism has been aimed at Greider's conclusion that a modest rate of inflation is desirable because it rewards producers, stimulates business activity and redistributes income from the rich to the poor.

"I think that's nonsense," said Charles Schultze, who chaired the Council of Economic Advisers during the Carter administration. "In the long run, inflation tends to be bad virtually for everybody, because it messes up the operations of the economic system. Moreover, we know that, whether we like it or not, the public doesn't like inflation, and will eventually turn against politicians who preside over it."

Agreed the Boston Fed's Morris: "There were tremendous costs to disinflation, and we're still dealing with them. But he {Greider} draws the wrong conclusions from that. The conclusion I draw is, the costs of disinflation are so horrendous, we have to make sure that we never generate another period of rapid inflation again."

Greider said he is hardly surprised by such reactions, and that he expects opinion to change slowly. "We have been reinflating money for the past year, and it is no coincidence that during that period the economy got healthier," he said.

"I will say this," he continued. "If the economy deteriorates in the next six months, then everybody is going to be for the reinflation of money. It will become the conventional wisdom very quickly if we slide into recession."