Stone Age Future Shock THE GIFT OF STONES <i> by Jim Crace (Charles Scribner’s Sons: $16.95; 170 pp.)</i>

The Neolithic village in “The Gift of Stones” is on the cutting edge of technological progress. Its craftsmen make the finest flint tools and weapons in the region. Merchants come long distances to barter for them. Even the roving bands of marauders are forced to trade instead of rob, since in order to rob, they need the knives and arrows that the villagers produce.

Seemingly, the village is impregnable; its inhabitants are peaceable, hard-working, narrow-minded and smug. There is nothing like a cutting edge for blunting the imagination. Other impregnable societies, since, have found the same thing and succumbed to it.

On the villagers in Jim Crace’s delicately haunting novel, the appearance of a bronze arrowhead will have an effect comparable to that of Japanese production methods on the auto makers of Detroit. Flint gives way to metal; at the end of this very brief and very rich book, the stolid artisans will be a band of itinerants following their crippled village storyteller in search of an unknown and unpromising future.

Formerly, the storyteller’s fictions had simply been their entertainment; now they are prophecy and all they have left. Art, the message goes, is a raft when the waters rise to obliterate houses, workshops and roads.

Message is a crude word. One of Crace’s virtues is to make a deep imprint with light steps. The implications of his novel are complex, but they grow out of simplicity.

The narrator, who speaks sometimes in his voice and sometimes in that of his daughter, is entirely of a piece with his craftsman neighbors. Only, he was born a liar and, as he tells us, if “the bully becomes the soldier, the liar becomes the bard.”

Furthermore, he lost an arm as a boy from an arrow wound. With one arm you can’t gather flint or work it; you can only ramble and watch and come back to relate not what you have seen but what your imagination makes out of what you have seen.

Even at rest, the storyteller deals in fabulation. Fiction is the horizon of reality; he is his village’s outrider. When asked how he lost his arm, he reels off improvisations. An impatient midwife yanked it off. A stranger mistook it for a chicken wing and ate it.

The true story is as beguiling as the fictions. Perhaps it is a fiction too. When he was a boy, a marauder had offhandedly shot an arrow at him. The arm swelled up and required amputation.

The villagers fashioned a splendid flint blade for the job, but they were too specialized to know how to use it or how to stun the victim with a blow so he would feel no pain. The marauders, good at cutting and dealing blows, obligingly did the job when they came back to barter.

Mainly, the storyteller wanders about looking for material. Spying a sail, he follows it along the seaside cliffs until it is lost from sight. He goes farther than any of the villagers have ever been; there is no one to discourage him. People live in villages, he reflects, because “alone, they don’t know when to stop.”

He meets Doe, a widow who lives in the sea marshes with her baby daughter and a dog. He falls in love with her; she feeds him and allows him to stay with her, but resists his advances. Sex is business; she reserves it for farmers or horsemen who come with a chicken or some other useful object in trade.

Out of this, the storyteller brings back transformed pieces of his adventures. He turns Doe and the sail into stories about a boat full of women sailors who come ashore to trade perfume and sex for food with the local merchants.

To his male audience, he emphasizes the sex. With the women, he tells of what fools the lustful merchants make of themselves. He tells of the children of ice-women who threaten to freeze him unless he shows them how to reach the sun.

Doe becomes a woman who lives in a house made of hair. Her dog becomes a dog who sews and cooks. The pungent marsh aroma becomes the story of a smell that feels insulted by a traveler who holds his nose as he passes. The smell takes its revenge; it creeps into the traveler’s wallet and emerges at particularly embarrassing moments.

The stories lighten the lives of the industrious flint makers. But when the storyteller brings Doe and her daughter home to live, the magic vanishes. She becomes a flint worker herself, and the storyteller is cast aside.

It is the beginning of an end. The storyteller has seen flotillas of ships go sailing by the coast. He tells stories about them and about the clouds of smoke that appear far over the horizon. Nobody pays much heed; but soon the flint business fails. Bronze artifacts from the distant, smoking foundries have killed it.

At the end, Doe is dead, slain by a bronze arrowhead. Perhaps a passing horseman has done it; perhaps the storyteller himself. Facts have become as insubstantial as the villagers’ flints. Only the stories survive.

But Crace, whose first novel, “Continent,” won Britain’s Whitbread Prize two years ago, is not delivering a glib parable about the timelessness of art. Time crumbles the cave painting along with the cave.

The displaced flint makers huddle wretchedly on a beach, miles from their former prosperity, and bound for an unfathomable future. It is for the storyteller, awake while the others snore, to fathom it. All he possesses for the task is his bone-tired, worn-out imagination. His daughter describes the sleepless figure nursing his arm stump.

“At last his lies had caught him out. He knew what no one else had guessed, that this salt heath was the limit of his knowledge of the outside world, that all he knew of better days was those few times with Doe.

“He looked out at the night beyond the heath where next day, we would go. The stars were just the same, the moon, the wind. No doubt they had a sun there too. The stories that he’d told were now our past. His new task was to invent a future for us all.”