WHILE LITERATE Americans have lain awake worrying about the specter of global over-population, another threat has been gaining momentum: a collapse of birthrates among the industrial democracies.

The issue has become a major one for European leaders. At stake are great-power status, the whole philosophy of the welfare state, and the status of immigrants who could arouse nativist backlash in countries where the original stock is dwindling.

Here are the statistics:

Between 1965 and 1985, fertility rates of the industrial democracies tumbled far below the Zero-Population-Growth (ZPG), or replacement level. In several lands, actual population decline set in, with deaths exceeding births. In demographers' terms, a total fertility rate of 2.1 babies per woman insures the population will stay level over the long run, discounting immigration. As of 1983, West Germany and Denmark each had a rate of 1.3, the Netherlands and Italy 1.5, Japan 1.7, France and the United Kingdom 1.8. In the United States, the rate tumbled from 3.6 in 1955 and 2.9 in 1965 to 1.7 in 1976, and has since hovered around that figure. Even this number significantly relies on the astonishing fertility of our unmarried teenagers, a fact which comforts no one.

The geopolitical implications are large. From 1900 to 1950, the Western nations and Japan accounted for roughly 30 percent of the world's population. That figure is now 15 percent. Even assuming a continued decline of fertility in the Marxist and Third worlds, stable rates in the West, and continued immigration into the U.S., the West's share will plunge to 9 percent in another 40 years.

In 1983, a call for collective action by the Common Market countries was issued by Pierre Beregovoy, minister for social affairs in France, where recognition of the threat has transcended party lines. In 1978, then-president Valery Giscard d'Estaing, a Gaullist, argued that "a society no longer able to assure the replacement of generations is a society condemned," and he called for special policy incentives to encourage an increase in three-child families. More recently, Socialist President Francois Mitterand has argued that "the decline in the birthrate constitutes a grave menace for the West, and we must take action."

The fertility collapse has hit particularly hard in West Germany, where in the decade after 1966, the number of families with three or more children declined by two-thirds. In Sweden in 1976, deaths actually exceeded native births for the first time. Among Swedish politicians, the left worried about gutting the financial base of the welfare state and urged expansion of day care. Conservatives worried about the decline of the traditional family and sought to reduce the incentives pushing women into the labor market.

Lurking behind these developments has been a common fear: displacement by other peoples. Germany ceased admitting new "guest workers" in 1974, followed shortly by Swedish and French immigration shutoffs. The reason is not hard to see -- by 1975, there were 235,000 more deaths than births among the native Germans, while the immigrant workers had 99,000 more births than deaths. Similarly in France, expansion of the population since 1975 is attributed almost exclusively to the high birthrate of immigrant North Africans. In both cases, reaction against immigration set in only after the native population slipped into decline.

The depopulation debate now appears to be spreading to the United States. U.S. News & World Report has recently described a "baby bust" and an intensifying "politics of fertility." Washington's American Enterprise Institute sponsored a recent seminar warning that great powers need relatively large populations to support industry, roads and national defense. Speakers also pointed out that declining populations are also rapidly aging ones, facing loss of vigor and enormous costs for welfare programs.

Such arguments actually are renewing an older debate. Between 1900 and 1940, every Western nation except the United States worried about depopulation. France in 1800, with 28 million persons, was still the demographic equal of the Russian Empire. Then fertility decline brought stagnation. Between 1870 and 1940, the French population remained stuck at 40 million. In the latter year, shortly after Hitler's armies occupied Paris, Marshal Petain lamented: "Too few children, too few arms, and too few allies-those were the reasons for our defeat."

The population situation had failed to improve despite the efforts of hundreds of pro-natalist, pro-family organizations that sprang up across Europe after 1900. Philosophers of the question linked the birth decline to a general spiritual and cultural crisis in the West. A majority of pro-natalists agreed on the need to prohibit the sale of contraceptives, and to strengthen prohibitions on abortion. But pro-natalist Social Democrats dissented, arguing that modern parents would not relinquish control over their fertility.

On the causes of the population crisis there was more agreement. The problem, said both sides, lay in their countries' wrenching shift to the new world of industrial societies.

Roman Catholic theorists such as Valere Fallon argued that a market-determined wage system discouraged children by taking no account of family size. In a competitive economy, the childless bachelor and the man with a wife and five children at home received the same income.

Social Democrats, led by Swedish economist Gunnar Myrdal, made a similar argument. In recessions, younger workers with small children were the first to be laid off. Larger families tended to live in the worst housing.

Antimodernists with fascist leanings, including the German sociologist Roderich von Ungern-Sternberg, charged that the free market had given rise to a new human mentality -- "the striving spirit" -- which encouraged heightened individualism and led bourgeois man to believe that those who had few or no children had a better chance of winning the socioeconomic race.

By the late 1930s, governments in democratic France, Belgium, and Sweden, Nazi Germany and fascist Italy were frantically attempting to find policies that would encourage larger families. Then the war intervened and attention was diverted.

Of course, the defenders of market capitalism and liberal individualism had argued that the crisis was only temporary, and birth rates would soon find a new equilibrium. Indeed, after World War II, birthrates began climbing throughout the Western world, finally seeming to stabilize slightly above the replacement level in the '50s and early '60s.

Demographer Richard Easterlin of the University of Pennsylvania predicted cyclical baby booms in America well into the next century. In the Western world generally, the received opinion of social scientists was that Western birthrates would hover at or somewhat above the replacement level. A steady state had been achieved.

Then, in 1964, something went horribly wrong. With an uncanny coordination, birthrates throughout Europe, North America, and Australia began to fall again, and at accelerating rates. This happened in Marxist, socialist, and democratic capitalist countries alike. The downturn began in a period of unprecedented prosperity and economic growth and continued through the stagflation of the 1970s, into the 1980s.

Never before in the long history of demographic change had multiple populations stopped growing in normal times because of deficient fertility. Had the West entered new and wholly uncharted demographic terrain? What had changed?

(1) The new technologies of contraception and the legalization of abortion.

The introduction of the birth control pill in 1965 and the legalization of abortion in most Western countries in the 1968-80 period resulted in a sharp decline in the percentage of unwanted births. Among married women in the United States, for example, the percentage of unwanted births ("not wanted by mother at conception or any future time") fell from 20.5 percent in 1965 to 13 percent in 1973 and to 6.8 percent in 1982. According to one analysis, 42 percent of the fall in total fertility between 1973 and 1982 can be explained by this decline in unwanted children.

(2) The ongoing divorce of fertility from marriage. Sweden and the United States offer two illuminating examples of societies that are consciously severing the ancient connection between wedlock and children.

Alice Rossi, in her 1983 presidential address to the American Sociological Association, noted that voluntary illegitimacy is growing in popularity and we may be moving through a time when parenting is being separated from marriage, as sex was separated from marriage in an earlier period.

Also, the number of reported cohabitating couples in the United States, while still small by Swedish standards, did climb from 523,000 in 1970 to 1,988,000 in 1984, and the illegitimacy ratio (illegitimate births as a proportion of live births) has quadrupled since 1957.

In Sweden, marriage is slowly disappearing as an institution. In 1966, Sweden counted 61,000 marriages; by 1972, the number had fallen to 38,000, with a slowed, albeit continued, decline thereafter. Recent estimates say 25 percent of couples living together are unmarried, up from one percent in 1960. Sweden's 1975 census showed married women, ages 30-34, with an average of 2.0 children; among cohabitating women in the same age bracket, the figure was 0.9.

(3) Incentives not to have babies because of the change from a one-income to a two-income family norm.

In an article for Feminist Studies, sociologist Nancy Folbre argues that the "patriarchal" or traditional family was subverted by capitalism, which separated home from work and raised the price of children for women: the income or production they had to forego in the workplace in order to provide maternal child care at home.

Nonetheless, Folbre points out that this problem was partially solved by the creation of a difference between men's and women's wages. This difference was a powerful incentive for women to assume the task of child care, "simply because they cannot replace the earnings that would be lost if fathers took time off from wage work." Such a system held through the 1950's.

Meanwhile, Folbre continues, as child labor became illegal, as families shrank in size toward a norm of only two children, and as commerce gave us cheap substitutes for home-produced goods and services, the valuation of women's household labor fell. Even husbands began to see the benefits of sending their wives to work, she says. As women with fewer children began to spend more time in the marketplace and less time at home, they gained more experience and training. Finally, many women -- and some of their husbands -- began demanding equal-pay laws, affirmative action, and revaluation of male-female job categories on the basis of "comparable worth."

At this critical point, the boundaries which had protected the family from the logic of radical individualism were breached. Barely any defenders of the old order were to be found.

This collapse of a family-oriented economy, Folbre explains, is precisely what happened in Europe and the United States during the 1960s and '70s. Childraising now imposes "truly phenomenal economic costs upon parents" and provides no benefits. All existing economic incentives, she concludes, point toward continued fertility decline.

Making a similar argument in an article entitled "Will U.S. Fertility Decline Toward Zero?" Joan Huber of the University of Illinois answers yes. She argues that during the 1950s, expansion of business and government increased demand for clerical workers, traditionally a female job. Similarly, the baby boom increased demand for teachers and nurses, also female tasks. The diminished supply of young, unmarried women workers due to the low birthrate of the 1930s and the lowered age of marriage after 1945 also conspired to drive up demand for the labor of married women. So began the massive flow of the latter into the labor force, a development which was politicized in the 1960s and continues to our day.

Huber reports that this trend originated despite "a mass media propaganda barrage extolling the joys of family togetherness."

She anticipates no improvement. First, the direct costs of child-rearing continue to rise, exceeding $175,000 for the first child. Second, the psychic costs of having children increase as parents face friends, peers and professional advice contradicting their beliefs. Huber points to studies showing mothers at home with preschoolers to be the most unhappy group in the population. Third, the economic rewards of childbearing decline as Social Security wipes out the economic bonds of parents to children. Fourth, as women's education level and job opportunities rise, the cost of staying home also increases. Fifth, husbands have become primary advocates of working wives, having learned (as did husbands in the Soviet Union) that the added income, in practice, costs them almost nothing in terms of extra housework. And sixth, the dramatic rise in the divorce rate since 1965 has suppressed the desire for children, by increasing women's risks of being saddled with the children alone.

If the United States stood splendidly apart from the rest of the world, these economic facts of life might be acceptable: our numbers would decline, slowly at first, then with accelerated speed; our society would rapidly age, yet there would probably be sufficient reserve wealth in the nation to see us all comfortably through to our graves; last one turn out the lights, please.

Yet we do not stand apart from the world. Over the long run, our ability to maintain the industrial base essential to our national security depends on relatively large numbers. Nations of 225 million people can afford to build submarines and aircraft carriers. Nations of 25 million cannot.

More immediately, we are confronted by an altogether new situation with immigration. Earlier immigrants landed in a country where the native-born population was still growing through relatively high fertility. The new immigration (1965-present) is different. The biggest share comes from the Mexico/Central America region, a demographic hothouse with extremely high fertility rates and some residual resentment about the seizure of their lands by the Yankees. They are settling in a land where the native-born population has been showing a fertility rate leading to long-term population decline since 1973. If these two changes continue over the next several decades, it is folly to assume that there will not be major political and cultural consequences.

Among other things, conditions would be ripe for a latter-day wave of passionate, possibly ugly nativist and xenophobic reaction. The survival of the United States as a pluralistic democracy may depend on how we choose to handle the fertility question.

So what's to be done? (1) We could adopt the feminist agenda. This would include men taking equal responsibility for child care, workplace daycare centers, after-school-care centers, flexible hours, job-sharing, parents' insurance (paid leaves of absence after a birth), and so on. There are some undoubted benefits in this approach, yet the experience of Sweden and Denmark, which have been pursuing these policies for several decades, strongly suggests that recovery of the fertility rate is not among them. These two nations remain at the bottom of the demographic pile.

(2) We could create strong pronatalist policies. This has recently been attempted in several Eastern Bloc countries. The German Democratic Republic and Czechoslovakia have tried incentives such as monthly allowances for children, a year's paid maternity leave, and salaries up to $210 a month for mothers of children under two. However, the changes have served primarily to alter the timing of births rather than lifetime fertility. Moreover, such heavy emphasis on socialized income redistribution would seem alien to America.

(3) We could change economic incentives. Instead of taxing everyone and creating government payments and dependency for families, we could instead turn to the tried-and-true American method of social policy: use tax credits and exemptions to allow families to keep more of their earned income. Tax deductions for dependent children could be dramatically increased, from the current $1,080 to $4,000 or even $5,000 per child. The maximum child-care tax credit, now available only to working parents using day care, could be granted to couples who arrange to care for their own children at home. A new refundable income tax credit of $500 per child could be granted to taxpayers, up to the maximum value of their FICA or Social Security tax for the year.

These changes would also assist America's ace-in-the-hole on the fertility question: its pervasive religiosity. One consistent finding in various countries and eras is that strong religious faith translates into larger families. This appears to have relatively little to do with strictures against birth control and a great deal to do with reverence towards creation and life and obedience to God's perceived will. Indeed, America's existing pockets of high marital fertility are found among religious groups: Mormons, the Amish and Hutterite farm communities, Southern fundamentalists, Hassidic Jews and traditional Catholics.

(4) Restoring cultural values that favor childbearing. Our culture now celebrates infertility, a value clearly derived from changes in everything from our religion to schools that no longer teach principles of obligation and responsibility to one's lineage, to art and literature that now cast marriage and procreation as backward while extolling unencumbered sex and self-absorption.

It is important to remember that the economic principles undergirding family life could crumble only after decades of such cultural softening. Their restoration can occur only after these cultural foundations of family life are recovered.

This latter task is large, yet the 1980s are delivering promising signs that it is possible. America's churches are in turmoil and seem ripe for renewal. The disastrous decline of American education has apparently ceased. There are even glimmerings of a revival of traditional themes in literature and art.

Over the long run, only the nurturing of these trends will restore the United States as a nation friendly to children and family.