Bleeding the Bear Market Crimson : A TENURED PROFESSOR <i> by John Kenneth Galbraith (Houghton Mifflin: $18.95; 197 pp.; 0-395-47100-1) </i>

A witty novel about a liberal economist and his activist wife who make a splash as corporate raiders with a conscience hardly seems likely to be optioned as the next Oliver Stone project. If the movie “Wall Street” was a heavy-metal take on greed, the novel “A Tenured Professor” is Cole Porter pricking the egos and satirizing the follies of the latest mergers-and-acquisitions gunslingers and envious academics.

The wry ironies of distinguished liberal economist John Kenneth Galbraith’s third work of fiction are a healthy antidote to the metaphor inflation required to keep up with the numbers generated in the era of junk-bond excess. In this book, Galbraith’s mild-mannered academics deftly outswim and outbite the sharks of leveraged buyouts. And while doing their subtle best to subvert the values of the Reagan revolution, they ironically become one of its prime beneficiaries, using the same tax cuts that fueled GOP investors.

Prof. Montgomery Marvin and his wife Marjie carefully disguise their radical-liberal agenda as he gains tenure at Harvard University for his relatively innocuous theories on refrigerator pricing. But hell breaks loose when Marvin devises the Index of Irrational Expectations (IRAT), which turns out to be an infallible predictor of inflated stocks, a vast improvement on the Hemline Index or Super Bowl Indexes--not to mention anything more realistic or more technical.

When the Marvins start churning out millions selling short on stocks that were buoyed by euphoric yahoos, they have the ammunition to make liberal waves. They fund professorships of peace at the three service academies, pressure corporations to hire women executives, buy out South African stocks from the Harvard endowment, and provide funding to neutralize every Political Action Committee-supported candidate in the land.

Finally, they take on a defense contractor and stop it from making parts for Star Wars, and start controlling a few TV stations. Before Congress decides to do something about the un-American nature of the Marvins’ capitalizing on failure, The Wall Street Journal deals them the harshest blow--praising them for following in the footsteps of Cornelius Vanderbilt and John D. Rockefeller.

Galbraith’s prose style is the very model of the British writer-statesman: lean, lucid and flavored by a dry wit seen best in writers like Richard Crossman and Duff Cooper, and in this country matched only perhaps by former Harvard colleague Daniel Patrick Moynihan.

Galbraith reverses some popular fictions seen in TV and movie financiers such as J. R. Ewing and Gordon Gekko: that the cash nexus is either just a pretense or a substitute for overgrown sexual appetite. For Galbraith, the chase of money is more like courtship than rape, more cerebral and less primal. As for sex itself, there is a great throwaway line about the Marvins:

“Their sex life was normal, thus uninteresting and, remarkably in this age, undiscussed.”

As for their courtship style, it is far closer to Henry James than D. H. Lawrence:

Marjie, clad in denim jacket and “workmanlike” skirt, picks Montgomery out of a crowd in Vienna because he is reading Joseph Schumpeter’s “Capitalism, Socialism and Democracy,” in which he had “taken refuge from Freud’s letters.”

“Very reactionary,” she said.

“Not altogether. He’s kind to Marx, says here that ‘he was a very learned man.’ That’s not bad.”

“Yes, but the book is a hymn of praise for capitalism, even though he thinks the system won’t survive. But it’s too nice a morning to argue.”

Galbraith, a Paul M. Warburg professor of economics emeritus at Harvard and former ambassador to India under John Kennedy, is of course famed for his two major books on economics--”The New Industrial State” and “The Affluent Society”--as well as a book analyzing the great crash of 1929. More recently, Galbraith wrote an article in Atlantic Monthly that analyzed the 1986-87 bull market in terms suspiciously like his novel’s Index of Irrational Expectations--a piece that was eerily prescient of the the October 19, 1987, crash.

While Galbraith remains one of the respected postwar economists, he is seen more as a sociologist and popularizer than a groundbreaking specialist in the field by many of his narrowly focused contemporaries. Galbraith, who grew up under modest circumstances on a Canadian farm, always has been able to move within privileged worlds, but was never of them. Thus, while he is perceived by many as a tall Brahmin Harvard insider--after all, he was one of Jackie Kennedy’s escorts--he always has stood apart from clubbiness wherever he found it.

The book benefits from Galbraith’s essential outsider perspective in several ways. One, he is not embarrassed to populate the novel with at least as many real-life references as does E. L. Doctorow, while having the modesty and good taste not to give most of them imaginary dialogue. Galbraith invokes economists Maynard Keynes, Paul Samuelson, Arthur Laffer and Milton Friedman as well as the recent icons of greed--Bernie Cornfeld, Donald Trump, Michael Milken, Carl Icahn, Robert Campeau, T. Boone Pickens, Ivan Boesky, Dennis Levine. But he does have William F. Buckley and Ralph Nader commenting on the Marvins--presumably with permission.

As for the dangerous device of setting much of this novel at Harvard (books that try to portray Harvard life profoundly are inevitably mediocre because they have a Harvard audience secretly in mind), Galbraith largely escapes. He shows how the Marvins use Harvard, while they are never overwhelmed by it. Still, he cannot resist telling the reader how the university resisted naming a residential house after President Leonard Hoar, how the faculty club used to serve horse meat and how John Kennedy lost points among the faithful when he referred to the Harvard “campus” in a speech--rather than the solemnly traditional Harvard Yard.

Thankfully, not too much narrative drive is lost wading through Harvardiana. But the old professor of economics, like the Marvins, wouldn’t mind being the beneficiary of some built-in sales from the Harvard folk he is satirizing.