LONDON -- Perhaps the most remarkable occurrence in Britain in the 1970s was the sharp decline and equally rapid recovery in the morale of the better-heeled middle class. Five years ago, stockbrokers and senior journalists, lawyers and real estate speculators, doctors and businessmen, a fair sampling of politicians and top civil servants all despaired of a country that had rejected a sound government which promised to put striking coal miners in their place. Inflation touched 30 percent, the pound fell and apocalyptic judgments sounded throughout the land. Britain was ungovernable, heading toward the maelstrom, another Weimar Republic. Normally unflappable men flapped. Peter Jay, then economics editor of the Times of London, demonstrated -- at least to his own satisfaction -- that stability, democracy and free unions were incompatible. Pergrine Worsthorne, the civilized house philosopher of the Sunday Telegraph, urged bowler-hatted men to build barricades. But before long, the sun shone, the Financial Times index of industrial stocks climbed back toward 500, the pound put on new weight. Those reckless unions reluctantly agreed to compel their members to pay the price for the monetary excesses of Conservative financing. Inflation came down to levels a strage new world regards as tolerable, just below 10 percent. Jay, now ambassador in Washington, chanted hymns to Britain's strength and cried hosannas for the prime minister, a Moses leading the country out of the desert. (The Moses is Jay's father-in-law.) Worsthorne, in a thoughtful essay on my book, "Britain: A Juture That Works," gracefully acknowledged that "those, like myself, who have been prophesying doom -- the collapse of democracy, etc. -- ought to be made to realize that their apocalyptic forecasts were and are greatly exaggerated." To be sure, he found me guilty of a "facile, starry-eyed indulgence of Britain's shortcomings," but even so this may have led me "to a sounder estimate of Britain's future than those much more penetrating prophets of doom..." IF "BRITAIN" had stopped with a simple demonstration that the country was not falling apart, that it had enjoyed a record postwar growth in living standards, that its outlays for welfare, its tax burden, government control of resources and strike record were typical of advanced industrial nations, all would have been well. Or nearly well. The man from The Wall Street Journal, a paper that had invested much newsprint in arguing otherwise, was unconvinced even of his. He muttered darkly about my having "manipulated" statistics to "grind axes." The Economist, more knowing in these matters, thought the book's statistical demonstrations were "notably successful in taking the steam out of familiar indictments..." But that distinguished weekly also had its misgivings about "Britain's" attempt to look ahead. What caused pain was the argument that Britain's conventional industries -- steel, ships, autos, textiles and basic machinery -- like those of other developed nations, face a dismal future in world trade. So Britain, first into the Industrial Revolution, may be the first to enter a post-industrial world. In time, the argument continues, much the same fate is likely to overtake other advanced nations. The United States had discovered with dismay that its manufacturing productivity increases far more slowly than that of Germany and Japah. In Sweden, arguably the world's best managed economy, Volvo can no longer recruit Swedish workers but turns increasingly to less well-off Finns. Those hardworking German industrial workers often bear Yugoslav and Turkish passports. Even more offensive than this description and forecast is "Britain's" suggestion that David Ricardo and his Doctrine of Comparative Advantage offer a way out. The present industrial nations, by force if not policy, must earn their living by doing those things they do best. More and more, Britain and the others will become whitecollar societies. Post-industrial states will exploit their advantages in the great growth sector of services -- banking, insurance, education, medicine, publishing, dissemination of information, tourism, managing plants and projects in the Third World. Industry, of course, will not be abandoned entirely. Goods of high scientific content -- the British viewdata. U.S. computers, new modes of transport, microprocessors and much more -- will flow in an ever-increasing stream from the West to serve not only domestic economies but also the increasingly richer nations in the Third World. THE NOTION of a white-collar Britain touched a sensitive nerve in a society where the more articulate middle class is desperately anxious over vanishing status. British workers, like those everywhere, will resist any change that destroys their livelihood but are more relaxed about status. Those especially who were drafted for military duty -- like enlisted men everywhere -- have illusions about the capacities of the "leadership" class. Indeed, this loss of respect is another source of middleclass anxiety. At Britain's topmost rung, a touchingly innocent assurance of superiority spares its members from concern. Writers with working-class roots were generally less upset by the prospect of a white-collar Britain. So Harold Evans, son of a locomotive engineer and editor of the Sunday Times, gave generous space to "britain's" thesis on the front page of his review section. But a week later, an editorial page essayist struck back in anger. The parody by Russell Davies, literally obscene, featured a parrot who shrieked, "Feces of fate." "What shall we call it?" asked a coal miner's wife, fresh from phoning Zurich with investment orders. Her husband, now a tourist guide, replies, "I think we'll call it Nossiter. After that daft old American prat who comes round cadging cast-off sonnets." The skit was both funny and revealing. Its very excess exposed the raw nerve that had been bouched. In much the same way, a genteel foul from the daily Times of London -- a very different affair from its muscular Sunday brother -- complained in this newspaper of the "terrible nonsense" I had inflicted on an otherwise sensible world. He was too shy to discuss the prominent role that my book accords his paper. In a section on the dangers of institutionalized secrecy, I examined at length the role of the Times in obstructing the flow and polluting the sources of information. Again, at a debate in London with a prominent British journalist, a conspiciously liberal commentator, my critic broke off in exasperation, "But can you really imagine a steelworker writing poetry?" The thought of a whitecollar society -- to say nothing of the potential competition -- is simply unbearable for the more gentlemanly writers. In fact, I can't imagine many displaced workers in steel, autos, ships and other conventional industry quickly turning to typewriters. But "Britain" describes a process that takes place slowly, over time. (All western nations are rich enough to subsidize inefficient producers for a while, and all western nations do so.) It suggests a less class-ridden system of education, one that opens up possibilities at least for the steelworker's son to become a film splicer in television (already a substantial earner of foreign exchange), or a cameraman or even a writer of scripts. IF THIS outline of an increasingly white-collar Britain exasperated some with clean shirts, it was nothing compared to the outrage over my conclusion that Britain's low manufacturing productivity reflected a rational choice. Since it could be demonstrated statistically that none of the common explanations held up, I was driven to conclude that overmanning and slow assembly lines reflect workers' decisions. Factory jobs are monotonous, frequently dangerous and typically soul-crushing. British workers have reached a level of income where the extra effort to win more pay is simply not worth it. To be sure, like everyone else, British workers will seek and even strike for more pay for the same work or less. But most decline to work more intensively to earn more. In the parlance of economists, they choose leisure over goods. An editorial in The Director, a management organ, was headlined, "We Want To Do Better, Mr. Nossiter." The editorial went on, "If Mr. Nossiter thinks the British actually prefer relatively low growth; he has only to talk to any director, trade union official, civil servant or politician. They will soon disabuse him." Of course. Few, except the ecologically doctrinaire, want low growth. The question is how intensively manufacturing workers will work for it, and the answer lies in their performance. The occupational list cited by the magazine is not an issue. Most corporate managers, union officials, high civil servants and politicians work at tasks that engage the energy and imagination, that yield satisfaction, that enlarge the human spirit. Many indeed work hard -- as do artists, television performers, merchant bankers, insurance company professionals, engineers, teachers and even journalists, and for the same reasons. This suggests that the road to higher growth is through the shift of resources from less productive, less efficient manufacturing to these other spheres. CERTAINLY the most imaginative critic was Paul Theroux, a writer of fiction. He even managed a creative reading of the telephone book. Writing in The New York Times, Theroux said he had looked me up in the directory and found I was living on "Eaton Place, and if any street in the world may be said to be paved with gold, it is Eaton Place." This, he implied, accounted for my relaxed view fo Britain, really a dreadful place. He would rather live in Sandwich, Mass. Alas, I live several blocks south of Eaton Place and its aura of "upstairs Downstairs," at the bottom of South Eaton Place, four doors from a pub in a public housing project for policemen. Unless my neighbors, the cops, have pried loose all the precious metal, I've been unable to find anything but mica in our street. However, I think I can claim to have made a convert. Four days after this appeared, Theroux was interviewed by a British paper, The Guardian. There he was described as believing that "all's right with the world" and "happy he's living in London." Theroux had even taken a new address. For the New York paper, he said he was living in Wandsworth, which has a down-at-the-heels ring; for the London paper, he was living in Clampham, which has a tonier resonance. Theroux's recent exuberance goes considerably beyond anything in "Britain." But then it may reflect the different voices he adopts for different audiences. There is, in fact, an insistent note of acution in my view of Britain. The indignation of middle-class writers over their potential loss of status in an economy dominated by services has some anthropological interest. But it is of far less concern than the powerful vested economic interests that inevitably resist change. Managers and stockholders, union officials and blue-collar workers -- as well as the politicinas who represent them -- will not welcome being told they must conform to Ricardo's law, must run down less efficient industry and move into sectors of growth. Both major parties in Britain, Tory and Labor, still compete with programs to revive or invigorate industry. But if adaptation is resisted, if resources are frozen in less efficient plants, even Britain's relatively slow growth will halt. In time, static incomes will become declining incomes. So complete a reversal of expectastions held by all citizens could erode the fabric of even Britain's sturdy demoncracy.