FIVE OF THE Democratic Party's six presidential candidates (Reubin Askew is the exception) advocate some form of "industrial policy." But what is it? The candidates talk of things from trade policy to tax reform, but the distinctive proposals can be put into two groups: collaborative decision- making by different segments of society (business, labor, government) and investment or direction of the flow of investment by government.

Collaborative decision-making has become more attractive since nations like Japan and France applied it and attained higher growth rates than the United States in the 1970s. Candidates Gary Hart, Ernest Hollings and Walter Mondale all call for action. Sen. Hart wants "long-term agreements to help industries become more competitive"; Sen. Hollings wants government "to act as a catalyst" to "make our industrial base competitive again"; Mr. Mondale wants "cooperative agreements" to "restructure and revitalize ailing industries."

It is interesting that these Democrats seem to be calling for an end to what has been Democratic (and national) policy since 1935: the conduct of relations between management and labor on an adversary basis with government acting, if at all, as referee. Many people agree that such adversary relations don't always serve the public interest. But few have grappled with the difficult question of how to convince managers and labor leaders, not to mention public officials, to discard the habits of a lifetime.

Regarding government direction of investment, some proposals here are sensible: John Glenn's and Gary Hart's call for increased public and private funding for research and development. Others are more dubious, like Walter Mondale's proposal to steer capital away from ergers and toward R&D. The history of government attempts to control private capital flows is not a happy one.

Alan Cranston has called for a new Reconstruction Finance Corp. and Sen. Hollings and Mr. Mondale advocate, vaguely, government investment in key industries. Sen. Cranston gives first priority to "sunset industries"--older industries in trouble. Candidates give lip service to the need to invest in "sunrise industries"--new industries that might grow. But it is sunset industries with their existing work forces, unions and managers that have the political clout. Nearly half the members of Congress are members of the Steel Caucus. Only a handful identify with the microchip industry.

This country already has a variety of policies in place that you could call industrial policies, from the interstate highway system to agricultural subsidies to the Chrysler loan guarantee. The successes of some of them should not obscure their cautionary lessons. If the Democrats center their presidential campaign on industrial policy and then win, there will be terrific incentive for ailing industries to seek public money. Scandals like those that tarred the RFC in the 1940s are the least of the problem. There is a danger that what is called an industrial policy will mainly prop up inefficient industries and retard economic growth.