Britain's economy: Everyone has a theory, but who has a solution?

Beneath the colorful surface of British life, behind the palaces and the pubs , the homes and the shops, the dog-walkers and the joggers, a war bigger than any since World War II is being fought out amid a mood of national introspection and doubt.

Britain today strikes the returning visitor as a country self-absorbed, deeply worried at the continuing spate of bad economic news but retaining the basic tools to put matters right.

Britain is self-sufficient in energy. It has, as the director general of the Confederation of British Industry, Sir Terence Beckett, points out, commercial and financial expertise. London, for example, is where the gold transfer for the release of the US hostages from Tehran took place.

Another London businessman comments: "Among our great virtues is our inventiveness -- we keep on coming up with good ideas in industry and science."

Yet Prime Minister Margaret Thatcher's stern effort to turn the country around economically is now balanced on a knifeedge. Everyone, it seems, has his own explanation of how Britain slid into its economic mess; and how best it can climb out.

Here are snatches of interviews with this correspondent, each spotlighting one particular angle of the crisis:

Retired banker: "This is just as much war as World War II was. Churchill rallied us and promised us victory. It's harder now -- we have so many nationalities, and we can't really afford the social welfare system we've set up. We need a leader to pull us through and I hope Mrs. Thatcher can do it."

London journalist: "Well, I'm worried about the future of my country. This is not the place it was 20 years ago, or even 10. The news seems all bad. Standards are slipping. Services are worse. I am probably too pessimistic. But I am just back from vacation and it's not a good feeling here these days."

International truck driver for a British chemical company: "Management just doesn't seem to care about the little man who really does the job, who drives the truck. We never see the big bosses on the shop floor. There's no feeling of pulling together, know what I mean?"

London lawyer: "The split between management and workers is a class difference. English managers today are largely public school boys, who were taught that a gentleman doesn't soil his hands by working too hard."

London housewife: "The news is all so bad. Why doesn't someone talk about what's right with Britain for a change?"

What is right with Britain? The answer depends on who you ask.

Mrs. Thatcher's government -- at least, the hard core Conservative Party and Cabinet members closest to her -- say Britain has been paying itself too much for too long but not earning enough in sales and productivity to afford it.

This view says that the current massive unemployment is short-term anguish that cannot be avoided if industry is to shake itself out, abandon those sectors that cannot compete, lower its salary bills, and step up the quantity and quality of its output.

"We simply can't compete with Japan and Korea and others in processing steel, " says one businessman vehemently. "We can't compete in textiles. So our old, outmoded plants in the north of England are folding up. Sad, but inevitable."

The government points proudly to some recent statistics. Among them: The rate of inflation fell to 15.1 percent in December and is expected to drop again this month. It has fallen for seven straight months so far. Last year's trade balance was a record $5.47 billion, according to newly released figures.

Employment Secretary James Prior told a BBC radio interviewer Jan. 18, "I think there are reasonable grounds for thinking we have passed the worst." Government officials say there are signs that managers are beginning to manage and industry to slim down and compete abroad, as they face government pressure, inflation, unemployment, and the high exchange rate for the British pound.

Yet, the economy remains sunk in recession. Mr. Prior, in the same interview , conceded that January unemployment figures would be "very high" and that they would stay high for two or three months more.

The Post Office continues to record large losses: L46 million in the first half (April to October) of the current fiscal year, even though postal charges have gone up twice already in 18 months and are due to go up again Jan. 26.

The government has begun a program to train 440,000 young people a year, but the Confederation of British Industry reports 560 companies going out of business every month -- 921 in October alone.

According to one estimate, unemployment, well over 2 million for many months now, is jumping up by about 3,000 jobs per day.

Typical of the gloom felt by many businessmen in London is a new forecast by Phillips & Drew, a large London stockbroker, which says Mrs. Thatcher's monetarism is bound to fail. By 1985, the company says, about 3.25 million people will be figures, manufacturing will be 10 percent less than in 1979, and there will be a trade deficit despite North Sea oil.

Mrs. Thatcher's view to hold down public- sector wages is being contested by prison workers and seamen, both threatening to escalate current strikes. A dispute over the huge nationalized British Steel Corporation is intensifying.

A bare majority of BSC workers approved a "survival plan" that would slice 22 ,000 jobs, close several plants, cut output from 15 million to 14.4 million tons a year, and freeze pay for six months. But the heavy steel members of the steel workers' union overwhelmingly rejected the plan. BSC's American chief, Ian MacGregor, says he needs a "yes" vote to swing L750 million more ($1.8 billion) in aid from the government.

Meanwhile, government-dominated British Airways, British Rail, and BL (British Leyland) are all cutting staff, cutting production (except for the Mini Metro economy car of BL, which sells well), and cutting services, while raising prices.

Many experts says Mrs. Thatcher must do a better job in holding down public-sector salaries and reducing public borrowing (now way above earlier targets).

Much depends on individual Britons and how they react to the current bad news. Will they hang on and give Mrs. Thatcher time to work? Helping Mrs. Thatcher is the sight of the opposition Labour Party fiercely divided by internal w rangling between moderates and left-wingers.