One of the great qualities of the theater, one of the most important reasons it not merely survives but sometimes even thrives in this age of technological entertainment, is its capacity to create and sustain illusion. Because of the physical distance that separates actor and audience, because of the disguising powers of lighting and makeup and scenery, the theater can persuade us to believe anything, even if -- no, especially if -- it is not so.

In this, as in much else, the theater is insistently, pervasively democratic. If anyone in the theater can make us believe anything, then it follows that anyone can play anything: A man can portray a woman or a woman a man, a black can play a white or a white a black, the young can be old and the old young. In the theater differences of sex and skin and age can be meaningless; what matters is whether the actor can act, whether the illusion can be conjured up and the audience made to believe in it.

If anything the theater delights in playing against type. The noted black actor Morgan Freeman recently was enthusiastically received for his performance as Petruccio in "The Taming of the Shrew" at Shakespeare in the Park. Laurence Olivier was praised (and in a few nontheatrical quarters damned) for putting on blackface and playing the title role in "Othello." In opera, which has many great black stars and few black roles, casting against color is so routine as to pass without notice.

All of which is by way of background to last week's astonishing refusal by Actors Equity, the American actors' union, to permit a British actor named Jonathan Pryce to play a Eurasian role in a projected New York run of a new show, "Miss Saigon" -- a decision that Equity will reconsider at a special meeting this week. As a consequence of this decision the musical's producer, Cameron Mackintosh, has canceled the production, on the grounds that the union acted with "no legal basis" and in violation of the artistic rights of those staging and performing the musical.

Mackintosh really had no alternative, at least not if he wanted to retain his self-respect and his standing among serious people in the theater. The Equity action is in every respect except one irresponsible, shortsighted and indefensible. Its sole justification is, as Jonathan Pryce himself put it, the effort "to ensure that any racial minority is given full opportunity to work in the arts," yet even that is compromised by the circumstances of the case.

Chief among these is the simple fact that the role in question, that of a character known only as the Engineer, is racially blurred. How can Equity say that "the casting of a Caucasian actor made up to appear Asian is an affront to the Asian community" when in fact the character is half European? As Pryce says: "If the character is half Asian and half European, you've got to drop down on one side of the fence or the other, and I'm choosing to drop down on the European side."

What would Equity have done had an Asian actor been cast in the part? Refused to permit it on the grounds that this was an affront to the white community? Of course not; it wouldn't even have thought to raise the issue, because no issue would exist. In this case, though, it received a complaint from David Henry Hwang, a playwright, and B.D. Wong, an actor, so it did what all right-thinking people do in this age of extreme race- and color- consciousness: It caved in to this bullying and waved, without actually calling it by name, the bloody shirt of racism.

It did so with much moralistic cant and with great whoops and brays of self-righteousness. "This is a moral decision by the council of this union," according to Alan Eisenberg, its executive secretary. The actress Colleen Dewhurst, president of the union and no stranger to the melodramatic, proclaimed: "In this case, what we're saying, what a whole community is saying, is that this is the time. The time has arrived."

It's the time, all right: the time for posturing and self-dramatization and empty gesturing. Listen, if you will, to the producer Joseph Papp: "There's something maybe foolish, but brave, about Equity's position. I think in the final analysis their position will mean more employment for Asian American actors. As a producer, I have a certain resistance to their position, but as a citizen, and because of my commitment to minority casting, I think they did the proper and heroic thing."

Humbug, pure and simple. Here we have Papp, who as producer of Shakespeare in the Park has been responsible for casting Morgan Freeman in a "white" role, not to mention casting innumerable other actors in "nontraditional" ways in previous productions, praising Equity for forbidding an English actor to play a Eurasian part. If that's not hypocrisy, if that's not a double standard, then what on earth is? As one theater owner put it, all too gently: "It seems to me they have a doubtful stand when they say that nontraditional casting can go only one way."

To call it "doubtful" is to give Equity every benefit of the doubt, and then some. Truth to tell, it's mere grandstanding, an opportunity for Equity to show off its egalitarian bona fides at remarkably small cost. Had an American actor of other than Asian extraction been cast as Engineer, the union would have had no choice except to whine about it, as these casting decisions are reserved for a play's producer and director. But since a British actor was involved, Equity seized the opportunity to deny him permission to perform in the United States. This is how the executive secretary of British Equity put it:

"We completely understand their desire to help their Asian members. All the actors in the United States, as in Britain, are underemployed and insecure, and minority groups are particularly so. However, it seems that in the case of Jonathan Pryce and 'Miss Saigon,' American Equity is using the coincidence of a British actor being involved to try to pursue a policy which it cannot, or does not want to, apply to its own members. That offends us."

As well it should. Equity has been able to make a grand gesture at the expense of a British actor, without having to challenge the casting of one of its own members. Now it can say to Asians and other minorities, "Look, we stood up for you against Jonathan Pryce," and then when they ask why Equity is not challenging a casting choice involving an American actor, it can reply, "Ah, but that is an artistic decision and by contract we cannot interfere with those." Talk about having it both ways!

But don't talk about it to the several dozen American actors, Equity members all and most of them members of minority groups, who have lost the prospect of work as a result of the cancellation of "Miss Saigon." Don't tell them that, as Papp so smugly puts it, Equity's action will mean "more employment for Asian American actors," because they know that's nothing but pretty words.

Who really believes, though, that the entire contretemps is anything except words? Plenty of money will be lost and numerous jobs will vanish if "Miss Saigon" isn't produced, but to the grandstand performers on the Equity council that's nothing compared with the opportunity to get on stage and parade their moral superiority for all to see. And that, dear ladies and gentlemen in the audience, is an illusion.