PAINTING IN THE LATE '80s. Shock and novelty are out. Accessibility, technical skill, tradition are coming back in.

Julian Schnabel's huge paintings on view at the Pace Gallery here - most of them painted on muslin landscape backdrops acquired from the Japanese Kabuki theater - shock the viewer by their unconventionality. But then, that's par for the course these days, as has been proven time and again during the early 1980s by one West German, Italian, or American artist after another startling us half out of our wits by the outrageousness of his or her creation. And yet, paradoxically, by that fact alone, Mr. Schnabel aligns himself more with what has been than with what is beginning to emerge, positions himself more among the ``old masters'' of the first half of the 1980s than with the ``young turks'' out to dominate the latter half of the decade.

Shock and novelty, as Schnabel and his colleagues are discovering, are not as ``in'' today as they were four or five years ago. By and large, they are being replaced by qualities that produce works relatively bland and vaguely familiar in appearance, that hint strongly at a return to a more rational and controlled form of representationalism or abstraction, or that make their point by commenting coolly or coyly on what has happened in art these last 60 or 70 years.

Clearly, we have entered a period of retrenchment and consolidation - a time when novelty has lost much of its charm, in which looking back has become as fashionable as looking forward, and in which everything that has happened in art over the past century or so is being reexamined for ideas or forms that might have been missed or that can be appropriated to make a more ``relevant'' statement today.

Thus, Sherrie Levine has devoted much of her time recently to painting pictures ``after'' such early 20th-century masters as Malevich, El Lissitzky, and Schiele, and to developing her own brand of ``formalist'' and ``surreal'' abstractions that reflect qualities found in the work of everyone from Max Ernst to Gene Davis. David Diao has fashioned an entire suite of paintings based on a famous photograph of the Malevich installation in ``The Last Futurist Exhibition'' in Petrograd in 1915. And Mark Tansey continues to do photographically precise paintings whose blandly illustrational technique underscores his witty celebrations of recent art historical events and ideas.

These artists represent only the tip of the iceberg, however. Even a casual walk through New York's SoHo or East Village, or a quick glance at what is happening in Los Angeles, Chicago, Boston, or New Orleans will indicate that a real change is overtaking American art. Extremism and sensationalism may still dominate the art news, but the main body of today's art - much of the best of it, in fact - is becoming increasingly more modest, accessible, and technically refined. It is less likely to commit itself dogmatically to a single style, and much more willing to accept widely divergent approaches as equally valid as expression - if perhaps not always equally ``true'' as art.

This movement toward conservatism comes immediately after what has been the liveliest period for American art since the late 1940s and early 1950s. For better or worse, more excitement, rage, frustration, and hope were engendered during the past decade than were seen since the days of Abstract Expressionism and the first stirrings of Pop Art. Schnabel, Georg Baselitz, Enzo Cucchi, J"org Immendorff, David Salle, Jean Michel Basquiat, and a host of others triggered more cries of outrage, more forecasts of painting's imminent demise, than anyone since Pollock, Warhol, and the early Joseph Beuys. The fact that some of this reaction was due more to these artists' publicity than to their work makes little difference, for almost every major post-1948 reputation has been - to a larger extent than would have seemed possible before World War II - nurtured by a persistent, if informal and generally well-intentioned public relations campaign by interested dealers, curators, and critics.

The overall effect of this has been that no one today is entirely immune from partisanship. Not the curators, not the critics, and certainly not the dealers. Even the collectors, committed as they generally are to a particular area of interest, add their voices to the overall confusion, and are often as excessive in their praise and as vitriolic in their condemnations as the most ambitious art professional trying desperately to be heard.

How, one might well ask, in the midst of this confusion, is quality rewarded and talent determined? The answer, simply put, is that all too often it is not.

If Miss Levine is mentioned in an article such as this, it is not so much because she is an exceptional painter, but because her work represents a clearly staked-out position that both rejects the histrionics of the past decade and hints at where art might be going as it heads for the 1990s. She is, to put it bluntly, more interesting and important at this moment for what she represents than for the quality of what she does.

Fine and good, but what about the vast majority of creative figures who strike no postures, do not see themselves in art historical terms, and devote themselves exclusively to producing the very best art of which they are capable?

With few exceptions, they are in professional trouble, with relatively little chance of being exhibited in ``main line'' galleries or major museums.

Or, at least that was the case until very recently. Today's more pragmatic attitude toward what constitutes art is producing a more tolerant climate for artists who would have been rejected a decade or two ago as unorthodox, overly idiosyncratic, or even downright heretical.

It's been a slow but inexorable process, with the 1986-87 season giving particular evidence that the tide has turned and that, for the moment at least, dogma on the one hand and exhibitionism on the other, have lost much of their clout and respectability. The best shows of the season so far - from John Ahearn's, Ida Kohlmeyer's, and Alan Magee's to Joel Shapiro's and William T. Wiley's - represent a significant consolidation of creative resources and intentions rather than a policy of dramatic expansion.