Small-magazine publishing, the poorhouse of American journalism, imposes nickel-and-dime restraints on what are often journals of priceless value. Few magazines better exemplify this than The Progressive, the monthly that for nearly 75 years has kept its radicalism unmellowed, its ideals unwatered--and its books unbalanced. Every year but one it has had a deficit. The current debts are so severe that publication may soon cease. As much as $200,000 must be raised.

If the money does come, it won't be from wine-and-cheese fund-raisers staged by liberals summering in the Hamptons and looking for a cause, or from foundations that dabble in the bankrolling of literary respectability. The support will come from readers who will send in hard cash to guarantee the flow of hard truth.

The Progressive, founded by Robert M. LaFollette Sr., a U.S. senator from Wisconsin from 1906 to 1925, delivers each month to its 50,000 subscribers choice cuts of investigative reporting, defenses of the poor and minorities, and expos,es of militarism. For years, its pages were air vents for the fresh lyricism of Hal Borland's nature writing. For wryness, few essayists in America match Milton Mayer.

The special pain of the magazine's current fix and possible collapse is that its circulation has never been higher. Nor have the costs of publication, from paper and ink to mailings. Postal rates have increased more than 100 percent in the past five years.

Bare-bones budgets and voluntary poverty are the normal Franciscan way for most small magazines. The Progressive is different because its small size has never limited the size of its influence. Its articles are regularly picked up as reprints by the wealthy mass-circulation media. One of its recent pieces --on sweatshops that employ and exploit undocumented workers--was the basis for a network television documentary.

Articles from The Progressive are anthologized in dozens of high school and college textbooks. If the censors of the right want to ban such threats to children's minds as books by Studs Terkel and Kurt Vonnegut, they should really get worked up and assign full-time vigilantes to rid the school libraries of all traces of The Progressive.

The magazine's acceptability is based in part on its origins in Midwest radcalism. It speaks more from a tradition than from an ideology. The early Populists who looked to The Progressive 70 years ago to oppose corporate excesses have given way to the populists of the 1980s who are now regrouping to battle the same powers.

The Progressive, which is published in Madison, Wis., deserves to be saved if only because of the service it provides younger, developing writers. Unknowns who write articles of substance are printed: a big name who comes in with fluff is not. Some 200 unsolicited articles are considered every month. One or two are printed, which isn't a bad average.

The current editor is Erwin Knoll, a former Washington reporter who left the capital 10 years ago when a trade- off in lower pay for higher satisfaction proved irresistible. For a man who may be unemployed in a few months, Knoll sounded on the phone the other day as defiantly cranky as if he had money and friends to burn.

He was asked to comment on some of the stormy and unpopular articles The Progressive has run of late, from ones that defended the free-speech rights of Nazis and Klansmen to others that criticized the left for its inconsistency in opposing every threat to life except abortion. "We aren't here to stroke our readers," Knoll said, calming not at all, "but to provoke them into testing their own assumptions and reassessing their own positions."

Knoll has an appetite for provoking more than his friends. He wrote recently that at The Progressive "we make no pretense of 'objectiviy,' at least in the sense that the mass media like to use that word. . . . We believe subscribers are better served when our opinions are readily apparent than when they are carefully hidden and, as is often the case in "objective" publications, injected by sly subterfuge."

That's another reason for rallying behind The Progressive in its crisis. It has yet to be caught printing a subterfuge, sly or otherwise.