The Institute for Policy Studies is the Pluto of think tanks, the one farthest from the Reagan sun.

In the cold, left-wing reaches of the Washington solar system, off Dupont Circle, a small band huddles, planning to gain mastery of the political Force. "What we're playing for," says Marcus Raskin, an IPS senior fellow and cofounder of the institute, "is the spirit of the time."

* After six years of Ronald Reagan, IPS appears to be the think tank that time forgot. "We've spent 20 years with Republican presidents," says Robert Borosage, the 40-year-old IPS director. "The posture we've been in for a generation has been defensive. And we're in middle age now."

The institute was not created to be estranged from power -- it began in 1963, trying to float left-wing ideas into the Kennedy administration. By speaking "truth to power," as Raskin put it, power would gradually cede ground; the strength of the argument would carry the day. But now the thinkers at IPS are struggling to form the plausible left wing of a Democratic administration that doesn't exist.

Ironically, as IPS has declined in Washington influence, its stature has grown in conservative demonology. In the Reagan era, the institute has loomed as a right-wing obsession and received most of its publicity by serving as a target. Perhaps the most lavish attack -- "IPS: Empire on the Left" -- was written by Rael Jean Isaac in Midstream magazine, asserting that the New Left, "after its supposed demise," continued to shape U.S. policy, serving the "Soviet line," through IPS.

Still, amid such persistent accusations that the institute is a conspiratorial nest of Marxist-Leninists, the place more nearly resembles the stateroom scene in the Marx Brothers' "A Night at the Opera," in which the purposeful, the alienated and the merely curious crowd themselves into a small cubicle.

Amid the daily din, 20 resident fellows wander about (their salaries range from $18,000 to $50,000, the latter figure reserved for ancient seers). Among the illuminati are George McGovern; Roger Wilkins, the civil rights thinker; Richard Barnet, the cofounder, whose writings on national security appear regularly in The New Yorker; Barbara Ehrenreich, the feminist author and cochair of Democratic Socialists of America; and Isabel Letelier, widow of the assassinated Chilean exile leader.

Residents are not chosen by any formal process; each finds his own way there, though a principle of kinship certainly is at work. Yet if IPS scholars are generally like-minded on the issues, "There isn't a political agenda per se," says Raskin.

*Senior fellows often are unavailable for interviews because they are taking a stint at the switchboard. The paint in the building is peeling, the elevator doesn't work -- and hasn't for years. Unframed posters thumbtacked to nearly every wall are a gallery exhibit of protests, past and present; one fellow describes the physical conditions as "Third World." The de'classe' style that meant political commitment in the 1960s remains in fashion here.

In the dingy warren, hundreds of students come and go, attending courses at the institute's Washington School. Youthful assistants, attired in jeans and work shirts, dash from floor to floor (no elevator), clutching the latest pamphlets. Unexpectedly, a foreign leader, usually out of power, may arrive for a lightning visit -- say, Neil Kinnock of the British Labor Party. And there are less auspicious visits from the 200 associate fellows, who are academics from across the country, a few of whom receive small grants.

Earlier this year, before he joined the IPS board, McGovern remarked: "At IPS you have highly intelligent, marvelously motivated scholars who are not well structured, a kind of conglomerate of bright minds going off in various directions without any serious effort to influence public policy. I say this with affection. I wish it weren't true." TGlory Days

"Ideas have always counted in Washington," says I.F. Stone, the journalist and author, friendly toward IPS. "What has really changed is that right-wing ideologists have suddenly flowered. The town is lousy with conservatives. IPS is about the only think tank on the left."

*Yet, in an earlier time, IPS fellows possessed the aura of glamor that came from being Washington's most intense intellectual opponents of the Johnson and Nixon administrations. The Childe Harold restaurant, in the spirit of the time, honored Marcus Raskin by naming a sandwich after him.

"They have not caused developments so much as anticipated them," wrote Garry Wills in a 1971 Esquire article on the institute. And President Nixon saw fit to recognize Raskin and Barnet by inscribing their names on his "enemies list."

*Some ideas emanating from IPS seemed eccentric; others might be immediately applicable. The point was to generate and test them. In those glory days, when the New Frontier transmuted into the Great Society, a few notions that had been incubated at IPS -- such as the Model Cities program and the Teachers Corps -- became policy; and in the halcyon days before the Vietnam war, IPS became a regular part of the policy-making culture, where officials and scholars mingled daily. (Assistant Secretary of Labor Daniel Patrick Moynihan, for example, was an active participant in education seminars.)

Above all, IPS pioneered the modern politics of ideas in the capital. And even as conservatives were clubbing IPS, they attempted to imitate its form. The Heritage Foundation, for example, was modeled directly on IPS.

"The thought occurred to me," says Paul Weyrich, the New Right leader who was the first president of the Heritage Foundation in 1973, "that if an operation as overtly left as IPS could get by with having an impact on the Hill, then a respectable conservative institution could have an even greater impact."

In 1981, after years of denunciatory articles in conservative publications, the demonization of IPS reached an apotheosis in fiction: "The Spike," by Arnaud de Borchgrave (now the editor of The Washington Times) and Robert Moss. The story's action revolved around a think tank called the Institute for Progressive Reform, depicted as "a classic communist-front operation" that gains control over Congress and the National Security Council.

"They wanted to make us pariahs," says Richard Barnet. "We underestimated public relations, the steady barrage of right-wing talk. If you read what they say about us, you wouldn't believe the debate has shifted to the right." From Left to Right

The transition from Kennedy to Reagan, from liberalism to conservatism, is encapsulated in the IPS story -- a story of liberal fragmentation, squandered opportunities and dashed hopes.

When Raskin came to Washington in the late 1950s as a congressional aide, he was a graduate of the University of Chicago and its law school, a wearer of the thin ties and oval, tortoise-shell glasses that were emblems of the intense intellectual of this strange interregnum -- post-Stevenson and pre-Kennedy. He had been a child prodigy on the piano, but felt he could never attain the heights of a Rubinstein and chose instead to become a virtuoso of public policy. His mind is a constant storm, raging simultaneously with clouds of abstraction and the most precise proposals.

After Kennedy was elected, Raskin was appointed deputy to McGeorge Bundy, the national security adviser. He remembers sitting at a long table with the generals and wise men -- Dean Rusk, Walt Rostow, Paul Nitze, John J. McCloy -- to plan policy on disarmament. "If this group cannot bring about disarmament," declared McCloy, "then no one can."

Raskin rolled his eyes. His gaze caught the look of another eye-roller -- Richard Barnet, McCloy's aide at the State Department.

Barnet had graduated from Harvard summa cum laude and attended Harvard Law, the Harvard Russian Research Center and the Princeton Center for International Studies. Then he wrote a book on disarmament. In the age of the best and brightest, it was an impeccable re'sume'. The calm and rational Barnet seemed built to specification for the world of Foggy Bottom, yet he was already somewhat disillusioned.

*"I was quite struck by the relationship between academics and the government," Barnet says. "They were essentially servicing the bureaucracies, not challenging the assumptions. It was a narrow group. Henry Kissinger was very much around."

He and Raskin decided to leave the government to find a better vantage from which to influence it. Washington was then in the Stone Age of think tanks. Following the dominant model of the Brookings Institution, the few that existed aspired to neutrality and "value-free" research. The notion of a politically engaged institute struck a lot of the people they knew as a bizarre innovation. "They were amazed we were doing such a thing, such a crazy undertaking," says Barnet. Still, he adds, "the relationship to the administration wasn't bad." The White House and State Department remained open to them.

They would be intellectuals as activists and activists as intellectuals.

Initial funding came from James Warburg, an FDR economic adviser and member of the "Our Crowd" banking family, and Philip Stern, the Sears heir. The first chairman of the IPS board of trustees, appropriately, was the old New Dealer, Thurman Arnold, senior partner at Arnold, Fortas and Porter, the formidable Washington law firm.

This year, the annual budget for IPS is $2 million, a pittance compared with the $11.2 million being spent by the Heritage Foundation and the Brookings Institution's $14.5 million. The IPS endowment consists of the institute's two Q Street buildings and a stock portfolio worth less than $1 million. Individual donors and foundations provide the bulk of the funding.

Among the former are Smith Bagley, an R.J. Reynolds Inc. heir; Robert Potter, former general counsel of The Wall Street Journal, and Max Palevsky, a high-tech entrepreneur. Foundation support this year includes grants from MacArthur ($200,000) and Ford ($50,000). The Rubin Foundation, whose endowment comes from the Faberge' perfume fortune, has given millions over the years.

*Money, however, is not the root of all influence. The institute is in perpetual financial straits, yet another sign of profound shifts in the realms of politics and ideology.

Since 1964, when LBJ won a landslide and the Democratic consensus seemed secure, the left and right have gradually traded places. Conservatives turned what was widely regarded as a far-fetched ideology into conventional wisdom; left and liberal ideas that were once considered mainstream have been relegated to the fringe.

The ideological hegemony that conservatives currently exercise -- especially over the Washington political community, according to Barnet -- may be because "people on the right had a much more perceptive view of the importance of ideas than the liberals."

But the conservatives have also had Reagan, whose popularity has muffled much debate. When the battle for the post-Reagan succession begins in earnest, when preconceived notions are overrun by events, what Barnet calls the "crisis of all ideologies" may finally erupt. "This is a period of shifting sands," says Raskin. "People are looking for first principles to hang on to or ideas to serve as guideposts."

* Barnet hears echoes of the late 1950s, when another aging, popular Republican was in the White House and liberals groped for alternatives. "In a way," he says, striking a hopeful note, "it's like the beginning." The Cultural Revolution

By the mid-1960s, IPS scholars who had contributed to the aura of progress surrounding the Great Society mustered their skills against LBJ's venture in Indochina. In 1965, the year of the first U.S. bombing of North Vietnam, Raskin and Bernard Fall, an IPS associate fellow, edited "A Viet-Nam Reader," which became an essential text for the teach-in movement that swept across the campuses.

IPS itself became the site of a perpetual teach-in, with congressmen and their aides bustling in and out of countless seminars. In the House of Representatives, the antiwar caucus organized, informally known as "The Group"; at every twist and turn in the legislative battle, The Group, assisted by IPS, forwarded resolutions, designed amendments and monitored appropriations. The Johnson administration responded to the transformation of IPS from critical helper into critic by infiltrating FBI informers into the institute and wiretapping its telephones.

In 1968, the velocity of events accelerated. In Boston, the first great antiwar trial was staged. The defendants, accused of conspiracy to encourage young men to resist the draft, included Dr. Benjamin Spock, Yale chaplain William Sloan Coffin -- and Marcus Raskin. Each represented a distinct dissident element within the liberal coalition. In the end, all were acquitted. By then, says Raskin, "liberalism was engulfed."

Barnet suggested that liberalism of the classic Cold War variety had become beholden to the "national security state," a leviathan that demanded a permanent war economy. For two decades, Barnet has elaborated these themes. Liberalism itself, according to Barnet, had been distorted into the doctrine of big government run amok. Paradoxically, the right has appropriated for its own ends much of the anti-big-government feeling churned up by the left.

During its years of opposition to Johnson and Nixon, IPS became a bridge between liberalism and the New Left, a phenomenon that began as a revolt against the old -- the old left, the old right and the old liberalism.

The New Left was above all concerned with a revolution of American political culture. As the Vietnam war dragged on, the New Leftists became increasingly frustrated; the hunt for surrogate proletariats became desperate. Perhaps Third World revolutionaries were the true agents of change. Or perhaps blacks fit the pattern. Then feminists proposed women as the oppressed majority. And, after the emergence of the feminist movement, some argued that the true oppressed vanguard was gays. "Participatory democracy" was the watchword.

* As things fell apart, a Third World revolutionary drama played out one of its bloody acts at IPS. In September 1976, as Orlando Letelier, the former foreign minister of Chile and an IPS fellow, drove through Sheridan Circle, his car exploded with a bomb, set off by agents of the Chilean military dictatorship. Ronni Moffett, Raskin's assistant, was also killed. This moment of martyrdom confirmed the worst fears. The world of ideas had passed through a warp and become a world of violence. Many at the institute anticipated further terror; some were afraid to start their cars in the morning.

A few months later, the institute's financial crisis came to a head. Many of the foundations and individual donors were no longer willing to fund much of the research. At IPS, representative scholarship of the period included such articles as "Lesbians in Revolt" and "The Seven Days of Creation From a Buberian-Feminist Perspective."

"The problem," says Barnet, "was the infinite expansion of claims on the place. Every subject was valid. There was a kind of pseudo-democracy, an ethos of participation, that excluded establishing priorities."

In the name of participation, according to Raskin, "an alienation occurred of the people who were most senior, who had built the institute and raised the money." Some of the most distinguished thinkers -- friends of Barnet and Raskin who had agreed to come to IPS as fellows -- were opposed by the cultural revolution faction, and rejected: Hannah Arendt, Hans Morgenthau, Herbert Marcuse, Erving Goffman.

* Forced to cope with the shortfall of cash, Barnet and Raskin offered a plan of general cutbacks. The response by 11 of the fellows was to form a union, demanding salary increases and absolute work-place democracy. Some claimed that they were discriminated against because they had not written, much less published, any articles or books. And some of the women felt a special sense of grievance. "The feminist movement was always being trivialized," says a woman who has played a major role at IPS. "That was a very basic split on the left. It's a major reason why organizations fell apart."

* "People got more and more into constituency organizing without ever figuring out what could be done together," says Raskin. "At the institute people were no longer talking the same languages. It was a kind of freak-out. It was very hurtful."

* In the settlement, Barnet and Raskin gave the dissidents $470,000, then a third of the IPS endowment, to build their own institute as they wished. But, unable to raise more money or even to work together, they soon dispersed.

As this self-destructive episode unfolded, a new Democratic president, Jimmy Carter, took office. IPS, which existed to provide intellectual energy on just such an occasion, was prostrate.

* In any case, the IPS scholars "paid very little attention to the Carter administration, a big mistake," says Raskin. "I think the door was open. We didn't even walk through it. Carter appeared to us to be more of the same. We made an error. We were moral snobs."

* Paul Warnke, who was chairman of the Arms Control and Disarmament Agency and later an IPS board member, says, "Carter and his group didn't understand Washington. It didn't surprise me that IPS didn't have much influence. Almost nobody had influence." The Really Big Chill

What it feels like to be left-wing in a conservative age can be broken down into distinct stages, something akin to grief: First comes shock -- disbelief that a conservative is actually president and that he actually has a program. Then come fear and trembling -- fright that the program is a new Inquisition. Rage and protest follow, succeeded by a recognition of the need for new thinking. This works-in-progress stage is the one that most IPS scholars currently find themselves in. Accordingly, IPS fellows will publish about 15 books this year, six of them issued by the institute.

* During the 1984 Democratic primaries, Raskin and Barnet advised George McGovern and Sen.sw,-2 sk,2 ld,10 Alan Cranston (D-Calif.), and IPS fellow Saul Landau, an Emmy-winning filmmaker, shot some of McGovern's spots. IPS director Robert Borosage was brought into Jesse Jackson's campaign by IPS fellow Roger Wilkins, who came to the institute after The Washington Star folded because he believed it was the only place where he could be a "public scholar," an activist and a writer. Wilkins, a former assistant attorney general and a nephew of the late NAACP president Roy Wilkins, has helped organize the waves of recent demonstrations outside the South African Embassy.

To Jackson, he was a senior adviser. "The relationship between Jesse and IPS is built on me," says Wilkins. "Jesse and I have known each other for a very long time, more than 20 years, since he was working for Martin Luther King Jr. and I was in the Department of Justice. As an older fellow I have not always approved of everything Jesse has done; nor have I always approved of his style. Having said that, my sense is that his run in 1984 was historic and constructive."

* "Looking in horror" is how Wilkins describes the Reagan years. The defensiveness that the other IPS fellows experience is magnified from a black perspective. "Things have happened in these last five years that I wouldn't have believed could happen. Initially, that takes away a lot of your creativity. It's not time to experiment."

He has begun work on a book assessing the Great Society. "I look at the Great Society as a great experiment, a beginning. As with all experiments, some things had to fail. You learn and go on from there. I would be shocked and dismayed if my conclusion is what we need is more of the Great Society. But I'm not ready to talk about the conclusion."

IPS has always attempted to operate on two levels: Its "public scholars" are ideally supposed to be both activists and intellectuals. This stance has ceaselessly inspired conservatives to accuse IPS of subversive intent, down to the present debate over Nicaragua.

*In recent years, the views of some IPS fellows have prompted the charge that they have become apologists for Third World revolutionary tyrannies. "They are absolutely pro-Sandinista. I have not heard a critical word," says Robert Leiken, a fellow at the Carnegie Endowment for International Peace, who has been associated with IPS in the past.

*"It's critical to be critical," says Barnet. "There's always a danger of appearing to be an apologist of something you're trying to explain in a hostile political environment. There's a perception that we're overly concerned with the Third World. I think it's a fair criticism." He adds, "Our biggest weakness is in domestic policy."

But the criticism about IPS that comes from places other than the right is not really about being "overly concerned" with the Third World. Rather, IPS is charged with a romanticism that clouds perception. The focus of much of this criticism falls on Saul Landau, who befriended Fidel Castro in 1960 and made a film about him.

But much of the rosy glow has faded. "For me," he reflects, "Cuba is not a terribly attractive model. The stuff that seemed exciting to me 25 years ago -- revolution -- doesn't seem exciting now. I want to get out of Nicaragua and into America."

"The real question," says Barnet, "is to redefine the conditions the nation is in, which are totally different from the period after World War II."

Since 1983, IPS has sponsored an annual meeting of American experts and Soviet officials, a meeting that, incidentally, provides a perennial occasion for denunciations: "serve s the interests of the Soviet Union," railed a letter to Secretary of State Shultz from 12 New Right senators and 70 representatives.

Raskin, in his role as cochair of SANE, one of the most venerable peace groups, is forwarding a scheme for general disarmament. In the meantime, another IPS fellow, William Arkin, is compiling a military atlas, graphically detailing the arms race.

Howard M. Wachtel, an economist at American University and a fellow at IPS' Transnational Institute (an IPS affiliate based in Amsterdam), explains in his new book "The Money Mandarins" how a "supranational" monetary system has created novel perils of instability. Yet another project, focusing on the future of rights and planned in anticipation of the bicentennial of the Constitution in 1987, is being conducted by McGovern.

The current scene has been intricately analyzed by another fellow, William B. Cannon, former dean of the Lyndon B. Johnson School of Public Administration at the University of Texas, whose forthcoming book argues that the 1980s have been a decade of yawning inequality. His political prescription is to transform the Democratic Party into a tightly disciplined party of the "lower class." At the institute, Cannon's analysis provoked much debate. There was general agreement with his view of what Reagan had wrought, but general disagreement with his political proposition.

But the sum of the parts does not equal the whole. "We are defined by the tension with orthodoxy," says Barnet, "not just by the particular issues or proposals we make."

Yet this is not the only tension with which those at IPS must cope. There is much talk about the wretched of the Earth, but little about the class to which the IPS fellows happen to belong -- the new class whose skill is knowledge and information. The IPS thinkers have not devised a new New Deal. But they believe that a transformation at least on that scale is needed. They have an intimation that this is an age in which the old categories no longer apply and the new ones have not yet been clearly defined. This is the ultimate tension: The formulas of the past are exhausted.

*"The steam has gone out of all the major ideologies, whether it's Marxism, or pure capitalism, or even the standard mix that goes by the name of social democracy," says Barnet. "They are all basically 19th-century ideologies; they are all in crisis.

*"This is a time waiting for new ideas to provide some kind of structure. It is one of the reasons there is an impatience with the institute. People want answers."

"The old ideologies must be transcended; they impair our understanding," says Raskin. "We have to continue searching."