THERE IS A FUNDAMENTAL contradiction in the carefully developed image that President Reagan projects. On the one hand, he invokes the American spirit and promises that this nation can be great again if Americans will only dare to be great. On the other hand, Reagan encourages a nostalgic view of the American past.

Nostalgia is lazy man's history -- the past through rose-colored glasses -- and it flourishes when present reality and future peril drive people's thoughts to a search for more comfortable channels. One of the unpleasant legacies of the unlamented 1970s is a notalgia boom that coincides with the beginning of the Reagan era.

Nostalgia and a call for action don't mix. Nostalgia is incompatible with the frontier spirit, the "can do" attitude prevalent as the nation grew which Reagan seeks to revive. Nostalgia (its first meaning is simply homesickness) looks backward, not forward, and takes root when people have lost confidence in their ability to meet future challenges, the opposite of the risk-taking frame of mind Reagan seeks to inspire.

American nostalgia is the frontier spirit turning on itself, Sociologist David Riesman describes nostalgia as a product of Americans' roller-coaster view of themselves. "We either think we're the best people or the worst. Both concepts are vanities. The feeling that anything is possible is replaced by an equally exaggerated feeling of impotence."

Reagan wants to recreate the feeling that anything is possible. He strikes the theme in almost every speech (and has been hitting it since he entered poltics in the 1960s.) There is no doubt that he believes it deeply, but Reagan sends conflicting messages.

Often his suggested solutions in simpler times. There are nostalgic solutions, less likely to inspire new daring than to comfort the anxious. Reagan's image of the past -- like the popular image -- is of the way he would have liked it to be. Past pains and sorrows are lost in the nostalgic prism whiel past joys and triumphs are recalled. As for any survivor of a dangerous moment, the thrill abides, but the fear is gone.

The difference between nostalgia and history is the difference between the tone of war reminiscences prevalent in a Veterans of Foreign Wars hall and the grimmer accounts of war poets and novelists. "Every war is ironic because every war is worse than expected," Paul Fussell wrote in his brilliant book "The Great War and Modern Memory." We fight the last one in our minds and the horros of the new one surprise us. The black humor of "Catch-22" is a pale gray after Vietnam, a war that topped Joseph Heller's imagination month by month with new cruel absurdities.

Nostalgia has no point of view, no critical sense, no room for irony, but it has been an important vien for the entertainment industry, the Hollywood Dream Factory, for years. The showbusiness paper "Variety" once spoofed the dream: "Of the many who dream nostalgically of Mom's applie pie today, 16 1/2 percent never liked apple pie, 27 1/2 percent didn't like Mom's applie pie and a solid 69 percent didn't like Mom."

In an age of nostalgia trips organized by the entertainment industry, Reagan's images of the past are often linked to his Hollywood days. On his first trip outside Washington following the attempt on his life, Reagan went to Notre Dame's commencement and delivered a speech largely devoted to that university's football tradition, but featuring not former players so much as two actors who once portrayed former football heroes: Reagan himself, who had the part of George Gipp, and Pat O'Brien, who was the coach Knute Rockne in the movie "Knute Rockne All American."

Reagan's next trip, to the West Point commencement, brought out another old actor friend, James Cagney. Reagan's style was developed in Hollywood in an era of happy endings. Sometimes sacrifices had to be made, but the good guys won and the problems got solved. The movies of the '30s, '40s and '50s are a looking glass that transforms those decades into, if not fun-filled frolics, at least more sunny times than they actually were.

Not long ago there was a golden time of rumble seats, running boards and front porches, is the message for anxious Americans confronted by the choices of the '80s. Never mind that the view from the rumble seat was of a breadline. Never mind W. H. Auden's phrase for the '30s: "a low, dishonest decade."

The '70s ended, condemned on all sides as a lousy decade, but in the prevailing atmosphere, it too will be brought back, better-than-life, riding on waves of nostalgia, to follow other less-than-glorious decades through the looking glass.

Nostalgia was born when people began to yearn for simpler times free of the complexities of the present. No one has ever longed for a more complicated age. Nostalgia may have existed in Carthage and Troy (certainly the Garden of Eden has been hankered after), but what might be called "modern nostalgia" took root after the Industrial Revolution.

Perhaps its first literary flowering is in Oliver Goldsmith's "The Deserted Village." The poem mourns for "A time there was, 'ere England's griefs began." It was written in 1770 as the impact of the Industrial Revolution swept over Britian.

"E'en now the devastation has begun,/ And half the business of destruction done;/ Even now, methinks, as pondering here I stand,/ I see the rural virtues leave the land," Goldsmith laments.

Such nostalgia, of course, misrepresents the facts. Goldsmith ignores the poverty and misery of rural life just as those seized today by the "Let's all move to the country and grow things" impulse skip over what life on a farm meant for so many people.

An even most striking misapprehension is the nostalgia for earlier years in American cities. At the turn of the century, about half the nation's urban population lived in squalor. The "good old neighborhood" was a rotten place for many and, despite all they endure today, city dwellers now enjoy a cleaner, safer place to live for the most part. The number of city dwellers living below the poverty line has been better than cut in half during this century.

Reagan, a man with an enviable capacity to look at the bright side and a warm affection for the good times of his own life, is telling America that we can all go home again to an age when private enterprise, pluck and personal ambition made it possible for every boy to grow up to be president, or at least president of his own corporation. The only trouble is that even could the clock be turned back, or history recycled, we would find an era less gold than ormolu.

The tricks of memory are one thing, but our nostalgia boom has become more pernicious as it has become more commercialized.

More and more people now have a stake in nostalgia. For some, it is big bucks. After all, a couple in their 20s are not natural consumers of 30-year-old artifacts -- either originals or replicas. Their taste has to be educated. They have to be made to see that an old Joe Palooka lunchbox is better than today's Spiderman lunchbox. Old junk is preferable to new, the hypsters of nostalgia will teach them.

Auction galleries have a stake in the game. For them, turnover is all that counts. The more objects people can be persuaded to treasure -- or at least collect -- the better. People already collect barbed wire (different manufacturers made different barbs) and toe twine (the string morticians tied to a body's big toe and to a bell to detect any movement which would indicate a burial would be premature.) These exotic collectibles haven't yet invaded the auction rooms, but the words "collectibles" and "nostalgia" are natural mates.

Remember when things used to come stamped "Made in Occupied Japan?" You can buy them again. You also can take a university degree in them.

Professor Ray B. Browne has built an institution around nostalgia (which he calls popular culture.) As head of the Department of Popular Culture at Bowling Green University, Browne is one of the important figures in his field. "Popular culture is holding us up to ourselves to see. It can tell us who we are, what we are and why," Browne explains. He presides over what might be called the Library of Congress of junk. His department's awesome collection of study materials includes a tape of Tiny Tim's wedding to Miss Vicky on the Johnny Carson show, the sound track of Chubby Checker's 1961 movie "Twist Around the Clock," and songs by the Monkees.

These exhibits are not held up as what Chairman Mao like to call "negative examples."

Some things man has created are better lost from memory, even some pop singing groups. Otherwise, the past is unmanageable. Without selection, arrangement and perspective, history becomes a jumble like the sound waves that are traveling from Earth out through space, carrying everything we have broadcast onward and onward, a great, garbled stream of sound. Browne is wrong. Popular culture doesn't show us who we are any more than the Congressional Record does.

For the entertainment industry, nostalgia is a gold mine. After all, if you can convince the public that it wants nostalgia trips, it saves a lot of original thinking.

Although Reagan's views of the past are colored by nostalgia -- to questions ranging from welfare to drug addition to government spending the president replies by referring to his actions as governor of California, and his Sacramento successes have acquired a brighter glow with hindsight -- part of what ties Reagan to nostalgia requires no conscious act by the president.

He, a healthy 70-year-old who looks far younger than his age, personifies the triumph, however temporary, over aging that is at nostalgia's core.

"If I were only young again . . ." the nostaligiac is saying. Middle age is threatening. Old age can be downright terrifying. Powers are failing; looks are being lost; anxiety is increasing and youth is so often misremembered. To long for youth is to resist growing old and escape thinking of death.

"Our own death is indeed unimaginable, and whenever we make the attempt to imagine it we can perceive that we really survive as spectators," Freud wrote. i

Nostalgia encourages us not to accept new challenges as Reagan would like us to, but to watch much of our lives as spectators. Reagan calls, in one of his favorite phrases, for us to "make America great again," but the very manner in which he recalls the past with a golden aura defeats his purpose. Future triumphs are not going to be built on the foundation of a longing for an American way of life that has all but disappeared. That yearning gets in the way of any movement forward to new greatness. Rather, it is nostalgia: it invites the mind to recoil from reality and take comfort in a rosy vision of the past.