A QUARTER of a century ago Rudolf Flesch published his book, Why Johnny Can't Read, in which he asserted that too many American school children were not learning to read very well and a shockingly large number were not learning to read at all.

Many people believed him. The book soared up the best-seller lists across the country. Educationists met in conferences, held workshops, wrote scathing critiques. School boards increased their budgets for reading instruction. Publishers rushed to print with retreads of the ancient phonics texts advocated by Flesch.

The tens of thousands of research reports issued in the two decades since then have continued to tell us that Johnny still does not read very well. The reports claim that adult illiteracy is almost pandemic, that the quality of writing skills -- the other face of reading -- is degenerating in the colleges and even in the professions. They also reveal that the great and enormously costly federal government programs in reading instruction come almost always to nought. The children of disadvantaged families seem to make only minimal gains, briefly, before they sink into illiterate, unemployable dolor.

These reports will be back, but something will still be missing from them. Somehow it has escaped the attention of critic and defender alike that most children tend to read better elsewhere than in school. Most children do grow up to become adults who use the ability to read to get information, find answers to problems, and have a good time with a fat book that entertains them at least as well as television.

Roger Farr, president of the International Reading Association, was quoted recently in Language Arts (the official journal of the National Council of Teachers of English), as saying that "Research in the 1970s has provided ample evidence that fundamental illiteracy [in the United States] has been eliminated for all except for the most seriously physically and psychologically handicapped. Furthermore, comparisons of average reading levels of students over time indicate that today's students read as well or better than those in the past. With fundamental literacy for all a near reality we are aiming at higher degrees of literacy."

Those remarks go counter to yesterday's (and tomorrow's) headlines about the decline of reading scores, achievement scores and the college entrance examinations. (The declines are real but almost beside the point.) Farr's observations certainly support the sense that the lay public appears to have: There are still unmet needs, as evidenced by the complaints of the competency testers. There are still grievous failures. But school testing will always miss the hidden fact of operational literacy.

John R. Bormuth, in "Value and Volume of Literacy," an article published in Visible Language last year, makes the point that the public almost always initially responds to warnings of the literacy experts with "grave concern, showing that it is well aware of the vital role that literacy plays. But that concern quickly subsides, suggesting either that the public is as fickle as cynics would have us believe or that it knows something that the experts do not, that it is getting strong counterindications that are more credible than the expert's evidence."

Bormuth goes on to say that the public sees so many people so often reading and writing, carrying and consulting books, magazines and newspapers that it finds mountains of even trivial evidence that the printed page and its reader is alive and well.

Bormuth also views literacy "not solely as an esthetic endeavor, as a problem of educational concern, as a matter of social equity, or as a necessity of democratic government, but also and primarily as an economic [his emphasis] activity that is deeply embedded in the culture at large and woven inextricably into the processes by which we win our bread and board."

The crucial point in Bormuth's brilliant and lucid essay is that literacy, however defined, is widely but not quite universally enjoyed; that the production of literacy (the teaching of it) is worth far more than it costs to produce; that it is "one of our nation's most important economic activities" and finally that "Personal and social investment in literacy has been growing rapidly." After all, the burgeoning information industry, no matter how mindbogglingly complex its technology or its circuitry, depends at its base on some "inkstained wretch" writing words that will have to be read and understood by the consumer.

In short, there is strong evidence that the reading teacher and attendant specialists are far better at their jobs than they pretend to be.

For teachers of language and reading are the ones who are primarily responsible for the vast growth of the reading public, for all the people buying books and magazines in supermarkets, in drug stores and at airports. Teachers, more than any other profession, have energized the development of those information service industries. Teachers, who despite their own self-denigration, are the ones who help nourish each generation of writers, poets, dramatists -- perhaps especially when those artists and word-users deny that any teacher ever gave them a helping hand.

Yet teachers of our language are strangely ambivalent about their calling. It is a democratic tradition not to hold them in very high regard. They tolerate the pap of the mindless texts used for most beginning readers. They gladly suffer the graceless prose and the truncated thinking found in most of the schoolbooks in most of the subjects through most of the school years. They make feeble leaps of faith when they invite their students to reach for the "higher degrees of literacy" that is our language heritage. But they wince when their pupils reject both pap and protein to read mysteries, and gothics, and low adventure and high smut, never being able to admit that the road to the mountaintops of literature often begins down in the bogs.

Such teachers must be cautioned not to put the marvelous and simple skills of reading and writing to dull pedagogic use too soon. Bruno Bettelheim, the child psychologist, was quoted in this newspaper (Sunday, Nov. 25) as urging that the reading child be given more interesting material than is found in the babbling basal texts that assault the child's sense of logic and language decency. Too often, teachers, at the behest of curriculum-makers, are forced to make early reading instruction a dulling mechanical trade with no joy in it anywhere for themselves or the children. Bettelheim's recent book, The Uses of Enchantment, is a proper corrective here. He says, induct the child into our language through its folk and fairy tales, its poetry and songs, through the heritage of the great and abiding stories. Remember that the power of the child's language is vastly greater than the tiny vocabulary of the schoolbooks. Of course the reading child will miss things, who does not? The gain is almost always greater than any lapse or loss.

This induction should be easy and generally pleasurable because teachers and parents have so many allies, almost all of them working for pay; the editors and publishers of inexpensive books, the comic strips in newspapers, the comic books that too many teachers are taught to hate, even the television hustlers shilling for cereals and toys.

For there is money in reading. Therefore publishers flourish. Professor Bormuth is precisely right: literacy is primarily an economic activity. Done well it can be everything else that makes life worthwhile. Westinghouse knows this. The International Paper Company knows this. So does IBM and so does Xerox. Each year big business spends school-budget-sized sums to promote, celebrate, and yes, exploit the acquisition and improvement of reading and writing skills. Over many years, the International Paper Corporation has used space in mass circulation and special interest magazines, usually two-page spreads, offering practical and attractive advice on how to read and write more effectively.

Yes, there is money in reading, and it is neither crass nor vulgar to recognize the fact. Look at the latest news of the large sums paid for the paperback rights to publish (sometimes) yet-to-be-written books. Look to the growth of bookstores, the independents as well as the large chains. Read all about the ever-expanding book clubs, the explosive growth of new and established magazines. The public is reading. The reading public is very large. Its range of interests is as wide as the culture and as deep as the intellectual heritage of civilization.