IT WAS A STRANGE sight for Houston. It was an even stranger sight for a Holiday Inn. But there in Houston last month, surrounded by freeway ramps near the Intercontinental Airport, the familiar green-and-white Holiday Inn sign that normally greets Kiwanians and Rotarians had a much different message: "Welcome Democratic Socialists."

Democratic socialists? In capitalist Houston? Home of oil barons, monument of conspicuous consumption and unplanned sprawl, crown of free enterprise?

Indeed, the socialists had come to Houston. Specifically, the Democratic Socialist Organizing Committee, a surviving faction of the old Norman Thomas Socialist Party, held its fourth biennial convention at Houston's Airport Holiday Inn, the first time the 3,000-member organization (known as DSOC and pronounced Dee-Sock) had convened west of the Mississippi.

This was more than a sociological oddment. It was emblematic of DSOC's broader push to attain respectability, to come out of the closet and merge into the political mainstream, to shake off, once and for all, the ugly step-daughter image that socialists in America have borne since the turn of the century.

Their strategies are many-seeking prominent converts to the cause, forging coalitions within the Democratic Party, with labor, racial minorities, feminists and disenchanted radicals of the 1960s; battling their "alien ideology" stigma and condemning the "state capitalism" of Soviet Russia; abandoning the third-party puritanism of the Thomas socialists of a generation ago; shunning the word "nationalization" like the plague.

In fact, the democratic socialists are preaching a new gradualist gospel which, in at least some important respects, isn't that far away from today's liberal establishment agenda.

"We want to be on the left of the possible," sums up Michael Harrington, author, political scientist and national "chair" of DSOC.

Bucking a Trend

GIVEN "socialism" standing in this country as a dirty word, and today's growing Proposition 13-style conservatism, the socialists have no small chore.

True, they were welcome in Houston, and DSOC's membership has multiplied tenfold since its creation in 1973, which has helped maintain its $140,000 annual budget. But the prospect of being linked to DSOC and socialism still sets off jitters among some on Washington's Capitol Hill. Many trade unionists, though natural DSOC allies, are hesitant to join its ranks, still fearful of red-baiting a quarter of a century after Joe McCarthy.

On the other hand, parts of DSOC's agenda-a national health service, increased worker control of the worksite, the leashing of multinational corporations-are hardly new to the national consciousness and already enjoy a provisional respectability.

These are goals widely discussed in establishment periodicals, researched in respectable think tanks and in some instances put into limited operation. Scattered local experiments in free medical service, community food co-ops, union "voice committees" and other mechanisms for employe participation in workplace decisions have proliferated, while Washington continues to lurch ahead with its Medicare, Medicaid, Social Security and other social welfare programs.

To socialists, of course, such federal efforts are still vastly inadequate and lack the popular control and financial accountability to make them truly humane. But still, in a sense, the establishment center and the democratic socialist left appear to be drifting slowly, hazily toward each other.

Selling the respectability of democratic socialism has meant not only trying to erase its "alien ideology" tinge, but also suggesting that its basic tenets - social responsibility and shared wealth-are in fact more patriotic than the personal acquisitiveness of free enterprise capitalism.

But attracting prominent converts to the cause has not been easy. A campaign to recruit several well-known liberal establishment figures as socialists and DSOC members has, in fact, met with mixed results. Such notables as Yale theologian Harvey Cox, feminist Gloria Steinem and civil rights leader James Farmer came to DSOC's banner. A scattering of trade union leaders and state and local public officeholders also joined. DSOC's star recruit is Democratic Rep. Ron Dellums of California, its only congressman and the first explicit socialist on Capitol Hill in half a century.

But many others have kept their distance. Some were simply misdiagnosed by DSOC as socialists.But for others - especially labor leaders and public officeholders - McCarthy-era fears persist, and they prefer to stay unlabeled. Dellums estimates that "six to ten" other members of Congress "subscribe to DSOC principles" but are not yet ready to make the move out of the shadows.

Several liberals in Congress acknowledge an informal acquaintanceship with DSOC's Harrington, and a few have DSOC members on their staffs. But with few exceptions, the lawmakers put as much ideological distance between themselves and socialism as they can. "For God's sake, don't print my boss' name," says one DSOC member who is a legislative assistant to a New England congrssman.

"We Were Surprised."

THE JITTERS run even deeper in organized labor. Many trade union leaders, almost intuitive socialists when dealing with corporate management, mask their socialist ideology before rank-and-file followers because of historic U.S. trade union distrust of socialism.

One labor leader who is an up-front socialist, however, is William W. (Wimpy) Winpisinger, president of the 960,000-member International Association of Machinists. "I tell them [his union's members] that their president is a socialist over and over and over again," he says. "I get them over the catchword. I tell them to get used to the word socialism."

Winpisinger's candor stunned other trade union leaders. "Frankly, we were surprised when he became a [DSOC] member because of the controversiality surrounding the name 'socialist,' " says Dave Kusnet of the American Federation of State, County and Municipal Employees (AFSCME), a 1.2-million-member union whose leaders maintain informal ties with DSOC.

But Winpisinger has not suffered among his members. "A lot of the members think I represent some foreign ideology that's not in the interest of the American working people," he says, "but as soon as I talk to them and show them the DSOC constitution and the IAM [statement of] purposes, they see there's very little difference."

Winpisinger, as president of a major trade union, serves on the 35-member AFL-CIO Executive Council, the policymaking body of the labor federation. But he often is isolated and outnumbered by the more conservative loyalists of AFL-CIO president George Meany. Also, many of the union leaders who shy from DSOC cling, either formally or informally, to a competing outgrowth of the old Thomas Socialist Party, the Social Democrats, USA. The Social Democrats, who view themselves as more "labor oriented" and less doctrinaire than DSOC, include such figures as civil rights leader Bayard Rustin, New York teachers union leader Albert Shanker and Meany assistant Tom Kahn.

The Necessary Optimist

HARRINGTON, at 51 perhaps the best known and most articulate socialist since Norman Thomas, is not discouraged by the hurdles to achieving respectability for socialism. "If you're a socialist, you have to be overly optimistic to survive in the United States," he says.

In addition to the small but growing number of publicly avowed socialists today, Harrington contends, there are millions of rank-and-file Americans - trade unionists, minorities, farmers - who are unconscious socialists, people whose unarticulated discontent with the current economic and political system could weld them into a mass socialist movement.

A handful of explicit socialists have already been voted into state legislatures and city council from Maine to California, he notes. Zolton Ferency, the sharp-tongued former Democratic state chairman in Michigan, ran as a socialist in that state's Democratic gubernatorial race last August and came in second, with 26 percent of the state-wide vote.

Harrington himself worked briefly for the establisment in the mid-1960s when, after the success of his book on U.S. poverty, "The Other America," he helped Sargent Shriver shape the Johnson adminstration's war on poverty. "For better or for worse," Harrington remarks, "I think we have carved out a socialist presence in the democratic left of this country."

It is a presence, he claims, with limited but measurable impact - on selected trade union leaders and on scattered liberals in Congress, as well as on the Democratic Party's policymaking apparatus.

DSOC maintains warm ties with Winpisinger of the IAM, Jerry Wurf, president of AFSCME, and Douglas Fraser, president of the 1.4-million-member United Auto Workers, a union with a tradition of socialist leadership under the Reuther family. In addition to Winpisinger, two UAW vice presidents and a number of lesser officials in AFSCME are DSOC members.

Similarly, on Capitol Hill, DSOC maintains informal ties with a few liberal Democrats, including Sen. Edward M. Kennedy of Massachusetts, Rep. John Conyers of Michigan and Reps. Ted Weiss and Stephen J. Solarz of New York. There are also about a half dozen DSOC members on congressional staffs. Harrington meets occasionally with Kennedy, Conyers, Weiss and a few others, but the lawmakers stress the casualness of these encounters, and most say they do not seek legislative proposals from Harrington.

Ted Kennedy "knows Mike Harrington and sees him from time to time to discuss politics in a very general way," says Kennedy spokesman Tom Southwick, ". . . but in terms of policy input, I think it's minimal."

"I would say DSOC has no clout on the Hill, or if it does, it's very minimal," says Steve Silbiger, Solarz's legislative assistant and a DSOC member himself." Silbiger says Solarz, a Brooklyn congressman, meets Harrington occasionally, "but he's no socialist." As for himself, Silbiger adds, "I divorce my DSOC membership from my job. When I work for Steve Solarz, I'm 100 percent loyal to Steve Solarz."

"It Will Happen"

OTHER MEMBERS of Congress speak more positively of Harrington and DSOC's influence. "I look to Mike Harrington as one of the better people around for both statistical and rhetorical backup on issues," says Teds Weiss, who represents Manhattan's Upper West Side.

John Conyers of Detroit has known Harrington for years, and "there is good cross-fertilization of ideas," says Conyers press aide Bill Kirk. "Philosophically, intellectually, Mike and John are very close, especially on such issues as energy, employment and Pentagon budget-cutting. . . . It's just that John is probably a little more pragmatic in dealing with the realities of the two-party system."

Dellums, who is from the heavily liberal San Francisco Bay area, has encountered little red-baiting since becoming a member of a socialist organization. "The 1960s liberalism is really an anachronism," he remarks, adding: "Gradually more members of Congress are going to start coming out saying they're social democrats . . . It may take time, but it will happen . . ."

Through its coalitions with other groups, DSOC has also acquired some access to Democratic Party policymaking. Its principal coalition, called the Democratic Agenda, for example, has successfully pressed the Democrats to adopt more liberal language in their public health, employment and other platform planks, most recently at the party's midterm conference in Memphis last December.

Some two dozen of the 1,636 delegates at the conference were socialists and DSOC members. Marjorie Phyfe, the Agenda's coordinator and chief moving force, is a DSOC member, as are Harrington, Dellums and seven other members of the Agenda's 24-member board of initiators. The board also contains several leaders of the labor and Democratic Party mainstream: Reps. Conyers and Robert W. Kastenmeier of Wisconsin, Wisconsin state party chairman Michael N. Bleicher, UAW president Fraser and AFSCME president Wurf.

Phyfe estimates there are also five to ten DSOC socialists on the 400-member Democratic National Committee and 10 to 12 serving on various platform advisory committees for the 1980 party convention.

Convention Compromises

DSOC's own convention last month was a central reflection of its bid to blend into the political landscape - from the "Democracy and Socialism" T-shirts that the 150 delegates could buy for $5 each to the ideological compromises evident in the agenda and even in the choice of the convention site.

In picking Houston, "We were trying to make a statement that we are a national organization, not confined to the snow belt," says Frank Llewellyn, business manager of the New York-headquartered DSOC. DSOC planners also wanted to meet in a state that had approved the ERA constitutional amendment on women's rights, as Texas has.

But they had to settle for a non-unionized hotel because that was all that was available. And in the last-minute rush of preparations, they didn't have time to determine if the Holiday Inn used J.P Stevens linens for its banquet tables (Stevens being much hated by many liberal and radical groups because of its alleged employment abuses).

Similarly, a dissident "left" faction demurred at the constant talk of coalition politics, contending DSOC should be more explicitly socialist and reduce its reliance on coalitions with nosocialists. But in his keynote speech, the cheerily disheveled Harrington, a political science professor at Queens College in New York, outlined what he said should be DSOC's short term goals in a coalition of the democratic left. These goals fit well his discription of being "left of the possible:"

Implementation of the Humphrey-hawkins employment law and development of a national full employment plan.

Enactment of a national health program with strict cost controls and "progressive financing."

Creation of a public energy corporation, modeled on the Tennesse Valley Authority, to develop publicly owned oil and gas deposits "and to tear away the veil of secrecy which now hides the activity of - and even the basis data about - oil multinationals."

Beginning of an effort to make the "decision process in giant corporations transparent by requiring them to give advance notice of, and to defend publicly, any price increases."

Opposition to cuts in social spending and to increases in military spending, especially increases above inflation rates.

Restructuring of the federal agricultural support system to favor family farmers rather than agribusiness and to "allow the consumer to get the benefit of unrestricted output".

These and other proposals "may seem moderate to us, but they are radical to the nation," declared Harrington, clearly expressing the dominant sentiment of the convention.

Further down the socialist road, he said, "It is critical that private, profitmaximizing, corporate control of the investment decisions be abolished." He sees this occurring through a series of largely traditional socialist steps toward "industrial democracy": public and employe members serving on the boards of major corporations, public control of collective sources of new capital such as pension funds, collective profit-sharing in which a "portion of profits in an enterprise is paid, in the form of equity capital, into a worker-controlled fund which will actively participate in decisionmaking."

Harrington and other DSOC leaders shun refernces to "nationalization" of industry, saying they prefer "socialization" in which legislatively constituted committees, boards and other mechanisms for broad popular control of major industries guarantee worker and public participation in fundamental decision making.

Simple nationalization, Harrington says, can lead to the inhumane "state capitalism" of the U.S.S.R. Industrial commissars in Russia have become an entrenched "new class" unto themselves, with little interest in the commonweal, Harrington says. By the same token, he adds, direct nationalization of industry in America would simply place present corporate executives and technocrats on the government payroll, with no democratization of planning or policymaking.

Conspicuous in DSOC's membership are the small numbers of rank-and-file trade unionists, blacks and other minorities. This was evident in Houston, where the voices chiefly were those of the university and the research center, the social worker, the poverty lawyer and the labor economist.

DSOC members wince when critics suggest their organization amounts to an exotic debating society of privileged political intellectuals. They acknowledge there are fundamental and almost contradictory problems in attracting to the complex dialectic of socialism the minimally educated and at times anti-intellectual class of Americans for whom it is intended.

"It's not just the 'alien doctrine' of socialism that puts union members off," says Franklin Wallick, a DSOC member and managing editor of Washington Report, a UAW weekly newsletter. "There are also a lot of people who don't want to sit in a group discussing abstract concepts."

Socialists thus often confine themselves to bread-and-butter issues, without the underlying social analysis, in addressing trade unionists. But Harrington says an increasing cynicism among workers ("The oil companies are ripping us off!") has created a kind of shoot-from-the-hip socialist analysis of its own in the working class.

This discontent, combined with DSOC's other broader thrusts into coalition politics, will ultimately bring socialism into the mainstream, Harrington believes. "This is where we begin, not where we end," he says. Maybe. CAPTION: Illustration, no caption, By John Judis for In These Times; Picture 1, The Machinists' Winpisinger: No flak from union members. By Gerald Martineau-The Washington Post; Picture 2, California's Ron Dellums: Their man in Congress. By Tom Allen-The Washington Post; Picture 3, Michael Harrington: "You have to be overly optimistic." By Dan Miller; Picture 4, Ms. editor Gloria Steinem: Among the newer recruits. By Larry Morris-The Washington Post.