THE CULTURE OF TERRORISM By Noam Chomsky South End Press. 269 pp. paperback, $12

NOAM CHOMSKY may be for political morality in the 1980s what H.L. Mencken was to cynicism in the 1920s. Mencken attributed the cultural malaise to the nature of the American character, personified in its politicians -- true representatives of mediocrity. Chomsky sees U.S. political culture as terrorism, designed by a manipulative elite to perpetuate the imperial state, from which they receive immense privilege and power while the majority of the world pays the price.

The Massachusetts Institute of Technology linguistics professor asserts that there is a "Fifth Freedom," one more important than President Roosevelt's Four Freedoms -- freedom of speech and freedom to worship, freedom from want and from fear. This unwritten guideline for policy is "the freedom to rob, to exploit and to dominate, to undertake any course of action to ensure that existing privilege is protected and advanced."

The Culture of Terrorism, an angry yet carefully researched book, charges those who control the state with practicing terrorism, while preaching democracy and law. When Third World nations or independence movements threaten U.S. "freedom of access to their land, labor and raw materials," Chomsky asserts, whether in Vietnam in the 1960s or Central America in the 1980s, the Pentagon system" begins to operate. Under the guise of anticommunism and concern for human rights, Third World nations are subjected to "intervention, subversion, aggression, international terrorism, and general gangsterism and lawlessness, the essential content of the highly-praised 'Reagan Doctrine'."

In order to put over this on-going and brutal fraud on a public that believes in the importance of justice and human rights, the state managers engage in "historical engineering," by spinning "an elaborate web of illusion and deceit": "The attitude of the statist reactionaries of the Reagan administration towards their domestic enemy, the general public, is demonstrated by the large increase in the traditional resort to clandestine operations to evade public scrutiny."

Members of the media and the academic world, who help to "deceive the public, for their own good" are offered substantial rewards for accepting as an axiom that those who control the state are just, good, democratic, peace loving and law abiding. According to Chomsky, these assumptions are demonstrably false and the perpetrators of the lie shameful people. They become perpetrators of "thought control."

For Chomsky the real scandal of 1986 was not "that the Reagan administration was caught" or that Ollie North is "an incompetent blowhard," but rather "the blatant illegality of the U.S. attack" on Nicaragua and the wave of terrorism unleashed on the people of Central America.

Chomsky writes that "in a terrorist climate, nothing counts except the success of violence." He cites two New York Times stories that quote Assistant Secretary of State Elliott Abrams: "The purpose of U.S. aid is to permit people who are fighting on our side to use more violence." Nothing could be further from the intention of policy makers than to see the flowering of human rights in the Third World, Chomsky says.

CHOMSKY's own political standards are precisely those enunciated in the democratic documents that gave birth to the republic. Responsible citizenship means informed popular participation. Despite the "historical amnesia and tunnel vision cultivated in intellectual circles" there are responsible citizens, like those who protested against the Vietnam War. They, like those who oppose the Central America policies of the 1980s, show that "it is possible for popular action to have a significant impact on policy." Chomsky's belief in the triumph of democracy over the imperial elite lies in the rise of an "authentic 'counterculture' to the dominant culture {of terrorism}." But as yet it is "without an institutional structure to sustain it."

The informed majority, according to Chomsky, will ultimately penetrate the terrorist fraud of modern political life and become active. And, for Chomsky, this alert citizenry is the ultimate force for political legitimacy.

It is unhealthy that Chomsky's insights are excluded from the policy debate. His relentless prosecutorial prose, with a hint of Talmudic whine and the rationalist anarchism of Tom Paine, may reflect a justified frustration. The members of the cultural apparatus have not responded to his charges that they are irresponsible and have become servants of power. But Chomsky's audience is growing because for those groping for a method to make sense of "national security" policy, his writings are eye-openers.

Chomsky's indictment goes beyond the trendy critique of empire. Although his facts, his argument and his analysis are cogent, his almost-Cartesian method is too rigid to grasp the banal but nonetheless important levels of modern politics. Rather than an inflexible elite that elaborated careful plans to loot the world and keep the public passive, the shaping force for policy may be the very foundations of the post World War II state that perpetuate a "national security" mentality, long past the time when it had any coincidence with political reality.

Saul Landau is a senior fellow at the Institute for Policy Studies and author of the forthcoming "The Dangerous Doctrine: National Security and U.S. Foreign Policy."