This week, Congress will convene the first in a series of hearings on the budgets of the National Endowment for the Arts and the National Endowment for the Humanities.

The uncertain future of the endowments has become a controversial issue since last fall, when the Reagan administration called for a 50-percent reduction in each agency's funding requests for fiscal year 1982.

Since their creation in 1965, the endowments have enjoyed continued financial growth and program expansion. By fiscal 1981, the NEA annual budget had readed $158 million, and President Carter proposed increasing the figure to $175 million for the coming year. For the NEH, he proposed raising the current $152 million to $169 million.

But when Reagan's Office of Management and Budget submitted its plan to reduce federal spending, the endowments were targeted for substantial cuts in fiscal 1982 and spending limits of $100 million beginning in 1984. That proposal outraged supporters of the endowments and satisfied detractors, including some at the conservative Heritage Foundation, which had charged the agencies with political bias in awarding grants -- among other purported shortcomings -- in a study prepared last fall for the incoming Reagan administration.

The opinions below represent both sides of the endowment debate. To simplify issues, the argument is limited to the National Endowment for the Arts.

Defending the NEA is Toni Morrison, whose "Song of Solomon" won the 1977 National Book Critics Circle award for fiction. A senior editor at Random House and a member of the National Council on the Arts (the advisory body of the NEA), her latest novel, "Tar Baby," was published this month.

Tom Bethell, a Washington editor of Harper's, Washington correspondent for The American Spectator and author of the 1977 book, "George Lewis: A Jazzman From New Orleans," argues that the NEA should be abolished.

SUPPORTERS of the National Endowment for the Arts argue that government spending on the arts is tiny compared to total federal expenditures, and taht the budget cut proposed for the NEA ($88 million) is so small a portion of the overall budget ($695 billion in fiscal year 1982) that it is a pointless exercise in penny-saving.

I would have little quarrel with this argument if it could really be demonstrated that arts spending does any good. If my math is right, the reduction in funding for the NEA is little more than one five-hundredth part of the total proposed budget reduction. Thus, if arts spending really has produced a cultural flowering that otherwise would have been nipped in the bud by the rigors of the market, or is likely to produce such a flowering in the future, then I would say that the current level of spending is a small price to pay.

But it appears that arts funding, far from encouraging creativity, actually ends up by stifling it. If so, it might be best to abolish the NEA altogether.

The principal instrument for eliciting creativity in people of artistic disposition is the marketplace itself. Contrary to the popular myth, most artists do not live in lonely garrets turning out masterpieces appreciated only by later generations.

Typically, what happens is that someone decides that he or she (male chauvinism will hereinafter prevail) wants to write or paint or play music. The aspirant then makes some tentative essays in one or another direction. After producing something, he is likely to try to find an audience, even if only members of his family or friends. "Do you like it?" "Is it any good?" "Should I try another approach?" These are likely to be his concerns.

All people of artistic inclination, in whatever field, constantly seek the approval of the public. "For we that live to please must please to live," said Doctor Johnson. Contrary to what some may think, this is a healthy state of affairs. The marketplace -- the reading, listening and viewing public -- does by and large have good judgment. A writer, in moving from the unpublished to the published stage must in so doing improve. Unpublished masterpieces don't exist.

But the individual who receives a grant to engage in some creative endeavor is precisly cut off from this immensely beneficial interaction with the market. The recipient, instantly rewarded for an artistic effort that he has not yet made, or in some cases even demonstrated that he can make, is in danger of developing a welfare outlook. The market's opinion of his output (if it materializes) becomes less important than his continued good relationship with the arts funder.

In a arts-funded world, the young writer may well feel that he can pursue one of two courses: He can try to please newspaper, magazine or book editors by writing something that they want to publish (and pay him for). Or he may go to a federal endowment, where he can try out his wiles on a program director. If he goes to the editor, and is persistent, he will be forced to improve his writing (if he is going to eat).

On the other hand, if he goes to the arts funder, he will first of all have to polish up his bureaucratic skills. He will learn how to fill out forms . . . artfully. I was amused to read that a well-known jazz musician connected with NEA was at one point instructing young jazzmen in grantsmanship.

What then becomes of the aspirant's proposal? Once the arts funder has all the applications in hand, he is inevitably forced to decide among the competing claims of hundreds of projects and proposals, all of them from people who have already steered clear of that preeminent instrument of allocation, the marketplace. It is genuinely difficult (as people at NEA have found) to determine the relative worthiness of presumptively non-marketable ideas. If the project is so meritorious, how come no editor or gallery or producer thinks so too?

Inevitably, then, many grants are awarded on purely whimsical grounds. This in turn leads to the proposal of whimsical projects, matching the known foibles of the funders. Thus we find a quick slide down the slippery slope of avant-gardism. As the British poet and novelist Roy Fuller has written, "the bestowal of money for the arts inevitably attracts the idle, the dotty, the niminally talented, the self-promoters."

The next thing is that arts funding bcomes politicized. When the dollar figures rise above a certain level, this is inevitable. Legislators who vote for the outlays sooner or later demand to play Medici by dispensing a due portion of the money to their own states. The only problem is that once politicians find thay can satisfy some of their constituents in this way, there's no limit to the potential size of the art barrel. Michael M. Mooney put it this way in his recent book, "The Ministry of Culture":

"Anyone who sihed to do so could organize, then lean on their legislators for the money. Auditors' revelations didn't matter at all. When compared to the exacting requirements and fearful expenses necessary in the sciences and engineering, the data by which culture was judged was far more flexible. If an adequate sewer was promised to a city, not only would it take years to complete, every component of a sewer's operations had to flow down hill. The inestimabale advantages to the politics of art were that the arts were relatively cheap, they were quick, immediate, visible, and who would even complain about music that ran uphill?'

Arts-endowment supporters may well reply that the principal task of the arts agencies is not the risky business of subsidizing innovation but the weighty duty of propping up institutionalized culture: symphony orchestras, opera and ballet companies, museums and the like. True, this may well be their principal function. But once again I would argue that the effect is the opposite of creative.

What pressure to change cultural direction does a symphony orchestra experience if its operating losses are forever covered by federal and state funds? None. Subsidized arts activities on this scale thus become the cultural equivalent of Chrysler. There's little need to innovate if the government is going to pick up the tab. But throughout history, economic pressure has always produced cultural changes, just as technological pressure has stimulated business change. The main effect of a publicly financed cultural safety net is to keep things the same and thus to increase the power of musicians', actors' and stage-hands' unions. Sooner or later, the most powerful opponents of David Stockman's proposed cuts in the NEA budget are llikely to be AFL-CIO lobbyists rather than chagrined concert-goers.

As economist Richard Netzer points out in his book "The Subsidized Muse Public Support for the Arts in the United States": Musicians, actors and museum staffs can be expected to take into account the existence or possibility of public financial support in staking their wage claims. Increased public subsidy has contributed to the recent rise in militancy among some groups of professionals in the arts . . . But these individuals are not the intended beneficiaries of public support for the arts."

One may argue that it is not the function of symphony orchestras and opera companies to innovate. They are there to repeat unvaryingly, in perpetuality, the great works of the Western tradition. If Richard Wagner needed 100-piece orchestras and 20 spear-carriers to satisfy the demands of his genius, why then we need them again today to fully experience the reenactment of his vision. No matter that we live in very different economic circumstances. How very Philistine even to approach so sacrosanct a matter as Art in such cras economic terms! If to achieve this Cultural Enrichment, stage hands, spear-carriers and cymbal-players must be hired en masse and paid according to union demands, why then the public will gladly submit to a minimal increase in taxation. So runs the argument.

Louis Harris has even conducted polls to prove the point: "By 59 percent to 39 percent, a solid majority (of Americans) are willing to pay $15 more in taxes, if need be, to assist the arts financially," Harris reported recently. Oh really? Voluntarily? Why use the IRS to collect the money in that case? If 59 percent of America feels that generous, why not just collec the money by voluntary donation on street corners? (Harris, in addition to being a pollster, is chairman of the American Council for the Arts, a national arts advocacy group.)

My own impression is that precisely as a result of these "conservative forces our cultural rites -- opera, for example -- have become barren and formalistic reenactments of "culture"; tedious in the extreme, but coming with Kennedy Center seal-of-approval and perhaps Joan of Art in attendance. In any event, wonderful opportunities for members of the audience to display the finery and refinement.

Of course if people want to spend their time this way, they have every right to do so. But let them also spend their money, not other people's. I know that subsidizing culture in this way was supposed to make it more "accessible" (a favorite word of art-funders) to lower-income groups, but this hasn't happened, according to Netzer. It has merely meant cheaper tickets for the upper-middle-class and higher salaries for the performers.

So let's think about doing away with the NEA completely. The rigors of the marketplace first might inject a little life into some of our lumbering dinosaurs of European culture. We might acutally see a creative mutation or two. In response to the new challenge, a modern composer might write something that appeals to audiences rather than to dreary old critics, experts and arts funders. As the novelist Kingsley Amis has pointed out, "the really rare event in musical life is the second performance of a modern work; no subsidy for that."

Do I hear the work "Philistine" floating in my direction? I don't particularly object to it. I spend about half my life listening to classical music on the record player (nothing after Beethoven, however; and I don't go to concerts much because it is such a tense, edgy way of listening to music). I even stroll around the occasional museum. I'd be prepared to pay admission to the latter; and if, as a result of the loss of subsidies to orchestras, their numbers dwindled and phonograph records became more expensive (I'm not sure they would), I'd be happy to pay more.

I came to America from England in 1962, however, not for European culture but because I was attracted by the American version. Nothing we have heard or seen since has come close to the great outburst of creativity that occurred in this country at the beginning of the 20th century -- jazz, the blues, ragtime, the movies. It was the great cultural event of the last 100 years, although the people involved in it would not have known what the word "culture" meant. No one has ever been able to explain the suddenness, the intensity and the originality of that great cultural eruption, occurring simultaneously in various parts of America. Clearly, it was in an important way a national phenomenon: Of or pertaining to nationhood.

Thank goodness there weren't any arts-funders around at the time. If there had been, the wouldn't have had the slightest idea of where to mail the checks. Who would have seemed better qualified to the experts of the day: Arnold Schoenberg, or some working-class blacks in the back streets of New Orleans? Even if by some miracle the arts funders had caught up with King Liver and Buddy Bolden on South Rampart Street and handed them some cash, it wouldn't have done them any good. It would most likely have been harmful. Whether "Dippermouth Blues" would have ensued is problematical.

It doesn't do people any good to pay them to be creative. Either they have got it in them or they haven't. Up-front money doesn't sort out the talented from the untalented. On the contrary, money handed out to those who are on the verge of breaking through and making it on their own almost always does immeasurable harm.