End of an era: two economists view the Great Society

President Reagan begins Oct. 1 to fulfill the promise made at his inauguration -- to cut the government down to size. That day officially starts the rollback of the "Great Society," launched 17 years ago and now blamed for inflating the federal bureaucracy and the economy.

In recent interviews, two economists from opposite sides of the political spectrum looked at the federal programs that will be trimmed back. Only one had regrets.

Sar A. Levitan, co-author of a book on President Lyndon B. Johnson's Great Society and a professor at the American University, says that despite its failings and excesses, the federal government has pulled some Americans out of poverty and turned the nation around on racial discrimination.

Thomas Sowell, a professor at Stanford University and a foremost member of a tiny group of black conservative intellectuals, had no tears for the loss of federal spending. The Great Society has "hurt" the disadvantaged, he says. Racial progress has come from blacks helping themselves and not from Uncle Sam's efforts, he says.

Here is how the two economists size up the past two decades of federal government action: Welfare

"A lot of problems were simply hidden during the 1960s," says Professor Levitan, pointing to the fact that many of the poor lived in remote rural areas and didn't know welfare was available. From 1960 to 1975, he says, the number of Americans receiving Aid to Families with Dependent Children (welfare) jumped from 3.1 to 11.4 million. About 11.1 million receive welfare today, he adds.

"It's a change in the means of support," he says, especially for black families who once made up only a small percentage of recipients and now make up about half. Meanwhile, the percentage of households headed by single black women jumped from 20 to 40 percent.

"To what extent has the expansion of the welfare system encouraged dependency rather than self-reliance?" he asks, answering his own question by saying that for most welfare clients, the choice is between mere subsistence wage jobs and relief. "We haven't eliminated poverty in the US. We have reduced deprivation."

But Professor Sowell argues welfare damages the poor in the long run. "When from work. Welfare is paying him not to do what he needs to do."

The conservative economist also blames welfare for increasing illegitimate birth rates. "It does encourage teen pregnancy," he says. "There has been a massive increase of teen pregnancy among blacks in the era of [increased] welfare. This is relatively new." Race Discrimination

"Why did we have a change of heart [on race] in this nation?," says Levitan. "Because the government forced us. We elected a Congress that voted the Civil Rights Act [of 1964] and educational subsidies to send hundreds of thousands of blacks to college."

Federal agencies "breathing down the necks of employers" opened more jobs to blacks, he says. College subsidies have made it "possibile for lots of blacks to get into middle class status."

Sowell counters that the last 10 years have seen only wealthier blacks proper , while those at the bottom are worse off. "The bottom 30 percent earn a declining percentage," he says. And federal agencies that pressure employers to hire and promote minorities do not help either, he argues, since some employers are reluctant to hire minorities for fear they will sue if they are not promoted.

Economic progress has come because "blacks have helped themselves," says Sowell. "Neither Booker T. Washington's education nor William Du Bois's marching did it." The major factor from 1940 to 1960 was "relocation out of the South," he says. Antipoverty programs

President Johnson's Great Society set up hundreds of local antipoverty agencies known as community action programs. "It was an idea of trying to get the poor to participate in programs," says Levitan. And many blacks later prominent in politics started their public careers there.

"I would not knock the fact that they served as a breeding ground for development of a black middle class," he says. "There were precious few opportunities for blacks to develop managerial skills."

Sowell called the antipoverty programs "glorious examples of foregone conclusion thinking -- an idea that became fashionable." The problem with the agencies, he says, is that "the number one incentive of a bureaucracy is to enlarge itself, and it cannot do that by allowing its constituents [the poor] to become more independent."

The Comprehensive Employment Training Administration (CETA), which runs training programs for the unemployed and which has been greatly cut back by Reagan, "is anti-training," he says. "What a person needs is to learn work habits such as that you go in on time. . . . CETA has to accept behavior patterns that would never be accepted in private industry." Food assistance

The food stamp program, begun as an experiment by President Kennedy, did not really take off until the Nixon and Ford administrations, says Levitan. Except for those persons who have no access to social services, "we have no hunger" in the US today, he says. "There was hunger in the 1960s."

The Reagan cuts mean "there'll be more hunger," say Levitan. "For better, or for worse, a large segment of the population depends on the federal government," and the Reagan turnaround is coming too fast.

Says Sowell, "I grew up among very poor black people. They fed their children long before there were school lunches. I suspect there are more black kids whose nutrition is neglected today. Kids were fed then, and I have a feeling they're going to be fed now."

Sowell concedes that there could be a difficult adjustment period. "It's painful," he says. "I worry about that. There are people who've gotten dependent and may not be prepared. But the question is, Are we going to let [ the dependence] go on?" He adds of the Reagan cutbacks, "We're talking about trimming around the edges."