Joe Eaton was astounded. He had learned he was being investigated by Internal Revenue's special spying program in Florida and couldn't see his own life.

On appeal, Eaton got the file and found out that the reason he was suspect was that a youth being tried for drug violations had been carrying a slip of paper with Joe Eaton's name in his wallet.

Eaton is a judge in U.S. District Court in Miami. The young man was one of 5,000 people who had appeared before him. That was the only connection . . . .

"The privacy invasion is a trend," said Robert Ellis Smith, 36-year-old editor of Privacy Journal, the most talked-about Washington newsletter since I.F. Stone's Weekly. "It's hard to get people riled up about a trend. It's all so gradual. You've got to give up some privacy, after all, to get some benefits, you tell your age for your driver's license because you don't want to hold up the line arguing. People have a basic inclination to be open. And also, people don't know what's being done with the information."

That's where Smith comes in with his Independent Monthly on Privacy in a Computer Age, which he has been turning out for nearly three years from a homey little office over his Capitol Hill garage. His 1,500 subscribers pay from $15 to $45 a year - $60 overseas - for the tightly-written eight-page mixture of reportage and advocacy.

". . . Annable Stoddard was fired from her third-grade teaching job in Western Wyoming for lacking adequate discipline, classroom house-keeping or the 'dynamics necessary to motivate students.' What she suspected, however, was that she was dismissed for her stoutness, divorced status and lifestyle. After she had taught in the school, for two years, the principal asked her about a light in her bedroom in the evenings when her children were away . . ."

Smith comes to the privacy issue via civil rights: After Harvard (62) he edited the weekly Southern Courier awhile, then worked in the HEW civil liberties office during the busing controversy, putting himself through Georgetown Law at night. Then he moved on to the American Civil Liberties Union in 1973, started the Privacy Digest and "came to know the vagaries of working on grants."

Finally he founded his own newsletter with $1,000 from his savings and has been more or less thriving ever since, allowing for the naked feeling you get in a one-man business.

He has a theory about "dormant data," information that is collected for one reason or another and lies around perhaps for years in a computer bank. In the old days you'd have it in a manila folder which would get dusty on a shelf some where and eventually would be thrown out. But a computer printout looks forever fresh.

"What we're talking about is control," he said. "They don't perceive it as an invasion of privacy." He is concerned about the apparent lack of interest in accuracy (which would seem to confirm that getting data on people really is just a matter of feeling powerful) and the easy access other computer operators have.

Before recent curbs were put on tax records, people in the trade called IRS files "the lending library."

"The thing is, this country depends on a voluntary tax system, and the whole basis is that it's confidential. Individuals are reacting to the computer scrutiny by playing it safe, modifying behavior a bit. It's showing its effect."

. . . In Rochester, N.Y., a woman was told at the Casual Corner, where she had been a sales clerk for a year, that there was a new policy: She would have to open her purse for inspection every day. She refused and was fired. The state ruled that she even so, because "claimant did not commit an act of misconduct sufficient to disquality her . . ."

Smiths finds a few small signs of a consumer rebellion against the computer invasion. Here and there, someone sabotages a credit card or refuses to give a Social Security number. But it wil take a lot more to get the public excited, maybe some thing comparable to the uproar over a national data bank we heard a few years ago.

"People are going to get more aware," he said. "They'll begin to shop around for, say, the bank, that requires the least information from them for a loan, the medical insurance that doesn't have to know quite so much as the others. The changes will come."

Computer education is another thing, reaching as it does to the elementary schools and correspondence schools.

"You can build your own computer now for about $500. People are learning how to use them, just as they learned how to manipulate the telehpne system. I hope consumers will run'em for their own advantage. Why shouldn't a citizen go to IRS and use their machines to compute his own tax? The airlines massage and manuever us with their computers; why couldn't we write up our own tickets on their machines?"

. . . It was not the feminists, but IBM, that suggested Juanita Kreps for Secretary of Commerce. President Carter relied heavily on IBM for his talent search.

He wound up with no less than three IBM board members in his cabinet . . .

Privacy Journal goes on, in this memo titled "The Armonk Mafia," to list other IBM connections with the administration. In another item Smith notes that IBM arranged to sell the Soviet tourist agency a $5-million computer system for handling travel reservations - despite American objections that the thing could be used by Russia for improper surveillance.

Computer and credit firms are more than alittle defensive in dealing with the Journal, Smith said. Most of this targets insist that some other guy is the real villain: the credit people blame the FBI, the FBI points to the banking systems, the banks accuse the medical world and so on. Nevertheless, the all subscribe to the Journal.

They also provide through worried employees, some useful tips. Mostly Smith works, like I.F. Stone, from the mass of information that government and business publish about themselves. This is the thing that bothers him most about our mania for gathering information in American today: When are we going to start using all this stuff, digesting it letting it guide us to social change?

Some office buildings have computer designed right into their heating system, since the machines give off a tremendous amount of heat. On a cold day, they could just as well be set to producing information merely to keep people warm. The medium has forgotten the message.

Smith is down to a 40-hour week now. He enjoys the freedom. "It's more leisurely than gainful employment." Readers send him nuggets from all over, monitor state legislatures for him, feed items to his journalist's memory which can match up apparently unrelated facts remembered from last winter with some new revelation.

The privacy issue goes beyond computers, of course. It is a question of national attitudes and priorities and, one might speculate, could be another expression of our increasing division into two Americas, the doers and the spectators. Nevertheless, computers will always be a major concern for Smith, for they have made the massive attack on privacy economically feasible.

The most pitiable victims, he feels, are the people who are forced to take lie detector tests to keep a job. Quite aside from the fact that the machines may by used inaccurately is the contemptuous refusal even to consider a subject's personal integrity.

And then there are the credit reports. Smith mentioned a midwestern newspaper editor who tried to get a loan, ran into a stone wall. Absolutely no. He checked around, learned that his neighbor had called him - to a loan officer the ultimate bogeyman - "a hippie type."

Why? Because he drove a Volkswagen bus.