What was going on when I was born?

The major candidates for United States Senator from New York argued over defense spending yesterday and accused each other of being unfair in discussing it. Politely but persistently, an animated Senator Daniel Patrick Moynihan demanded numbers and definitions from his opponent, Assemblywoman, Florence M. Sullivan. Hurriedly looking through a heap of notes, she sometimes complied with his directions, sometimes counterattacked, sometimes complained. He challenged her at one point to produce a document to support her earlier contention that he had voted against $26 billion for defense. ''I haven't got it,'' she replied. ''You haven't got it because it doesn't exist,'' said Mr. Moynihan. ''And it was not a very fair statement,'' he added. Moments later, Mrs. Sullivan, shook her head. ''Talking about being unfair,'' she said. The Senator had implied in an earlier meeting that he shared ''inside information'' with President Reagan about Russian military might, she complained .

An oil shortage and price run-up is likely to undermine any Western economic recovery after 1985 unless countries do more to reduce dependence on imported oil, the International Energy Agency warned today. The agency, which coordinates Western energy policies, predicted that oil prices would decrease ''significantly'' this year and next, after adjustment for inflation. It based that prediction on the current oversupply of oil. Supply and demand should balance out in 1985, the agency said, but it expects a growing shortage to emerge during the second half of this decade, assuming that Western economies start growing again at an annual rate of between 2.7 and 3.2 percent. By 1990, unless additional conservation measures are taken, the world would face a shortage in available oil supplies of as much as 4 million barrels a day. That, it said, would lead to higher prices that would depress economic activity.

The Police Department of Waterbury, Conn., opened a criminal investigation yesterday into employee charges of illegal chemical dumping by a downtown toxic-waste treatment company. Lieut. Val Bochicchio of the detective division said the inquiry had been ordered by Mayor Edward D. Bergin. Earlier, the health director of Waterbury, Dr. Gert Wallach, described himself as ''shaken'' by the charges. He said in an interview that he would seek new tests, and that if the allegations were true, ''I was hoodwinked by the company.''

Monetarists, the economists who watch the Federal Reserve most closely, were widely divided today over the signficance of the changes disclosed last week by the nation's central bank. Milton Friedman, a Nobel laureate and one of the founders of monetarism, maintained that the Fed is continuing a policy (opposed by Mr. Friedman) of tolerating wide swings in growth of the nation's basic money supply. ''I don't know what all the fuss is about,'' said Mr. Friedman in an interview. He said that he accepted the Fed's explanation that its decision last week to temporarily tolerate more rapid growth in the money supply did not represent a policy change.

There were no graduation exercises, no diplomas, no cheers from relatives, only a trip to the firing range, where 28 men and one woman sharpened their aim by firing bullets into targets with the short, snub-nosed revolvers that they will carry as undercover agents. It was the last session of a two-week intensive course for New York State's newest strike force, a group of experienced conservation officers being retrained to ferret out and gather evidence to convict illegal shippers and dumpers of hazardous wastes. Starting today, the plainclothes officers swung into action, operating out of field offices in White Plains, Buffalo and Albany. Their unit, known as the Bureau of Environmental Conservation Investigations, is modeled after the Bureau of Criminal Investigations of the state police but is an arm of the State Environmental Conservation Department.

In the fourth day of an exuberant stock market rally, the Dow Jones industrial average rose 25.94 points yesterday and closed above 1,000 for the first time since mid-1981. The rise in the average reflected the growing conviction that interest rates will continue to decline. The Dow average, which measures the performance of the stocks of 30 major corporations, finished at 1,012.79, its highest close since April 28, 1981, when it ended at 1,016.93. If it were to continue the pace of the last four sessions - rising a total of 110.96 points -the Dow average would break the record high of 1,051.70 well before the end of the week. That record was set on Jan. 11, 1973.

ALMOST everyone seemed disposed to accept the idea that achievement was slipping in the New York City public schools during the 1970's, when pupils regularly registered low scores on reading tests. But now that scores are rising, universal consent that improvement has occurred seems to be slow in coming. Part of the skepticism has to do with the test itself, part with the new policy of holding back large numbers of students whose reading scores are low. Some critics say such a policy has the effect of making achievement seem higher than it actually is. Are pupils in New York City reading better or is the improvement merely a statistical artifact? An examination of reading test results of the last four years indicates that there has almost surely been higher achievement, but that in some ways the figures may lend themselves to misinterpretation.

GEORGE A. MILLER, a professor of psychology at Princeton University, taught himself to juggle a few years ago and somehow it's been bothering him ever since. ''Now I can juggle,'' he says, demonstrating with empty hands. ''I know I have learned something, but I don't know what I have learned.'' Dr. Miller learned juggling from a book. There is nothing in the book but words and pictures. But, Dr. Miller observes, his large hands still moving, juggling is neither. ''I can propositionalize about juggling, but what I've learned is not propositional and not in pictures.'' So how did the knowledge of juggling get out of the book and into Dr. Miller's mind? In what form is it stored there? And how does it get out again? Dr. Miller notes that most of what the mind does best it does unconsciously, whether the behavioral product is talking, walking or juggling. An act may be consciously initiated, of course, but then the mind goes to work away from consciousness, retrieving the necessary information to put together the complicated behavior - and nobody has ever seen what the mind is actually doing then.

WOODS HOLE, Mass. THE lowly lobster's place on the ocean floor roughly coincides with the rank scientists have long given it in the evolutionary line of ascent. But recent marine studies now suggest that it is, in fact, one of the most complex and, in a sense, most sophisticated of living creatures. Jelle Atema, a biologist at the Marine Biological Laboratory here, has discovered that the American lobster has a taste system, for example, that is a million times more sensitive than man's. Using tiny hair-like receptors, the lobster can actually detect chemical compounds far away from it and as a result can identify and seize food a considerable distance off in the water. This discovery, reported by Dr. Atema at a recent conference on animal chemoreception, is regarded as one of the most important findings in the field of animal neurobiology and chemoreception to be announced in recent years. For centuries, very little was known about the American lobster. But now important other new aspects of knowledge are being added as well: knowledge of its mating habits, its ecology, its migration and behavior patterns. The simple fact has been determined, for instance, that this nocturnal, solitary, aggressive-looking invertebrate, who may live to the age of 40 or more, can home like a pigeon. It can always manage to find its way back to its own burrow, although it can barely see.

Two Swedes and an Englishman won the Nobel Prize for medicine yesterday for their discoveries in controlling prostaglandins, a natural substance implicated in a wide range of human and animal illness. The Swedish winners were Dr. Sune Bergstrom, 66 years old, and Dr. Bengt Samuelsson, 48, who started their research in partnership as teacher and student at the Karolinska Institute in Stockholm. The Englishman was Dr. John R. Vane, 55, who has been research director of the Wellcome Foundation in Beckenham, England, since 1973. The announcement was made in Stockholm by the faculty of the Karolinska Institute.

WORLD STEEL EXECUTIVES EXPECTING POOR DECADE TOKYO, Oct. 11 (Reuters) - Steel executives from the non-Communist world today predicted that profits this year would be virtually nonexistent and that demand was likely to remain sluggish at least until the end of the decade. ''My guess is that steel profits will be a global rarity, if not actually extinct, for calendar 1982,'' Frederick Jaicks, chairman of the International Iron and Steel Institute, told 290 delegates from 36 countries attending the institute's annual conference. The four-day conference, a forum for talks on technical issues concerning makers of steel, is taking place during a severe slump in world steel demand, production cutbacks, layoffs and trade disputes between American and European producers. This year ''promises to go down in the books as the worst within working memory of most, if not all, senior steel executives assembled here,'' said Mr. Jaicks, who is also chairman of the Inland Steel Company of Chicago.

New York City will have to reduce the size of its work force by about 10,000 positions to help pay for its new labor contract, the executive director of the State Financial Control Board said yesterday. The official, Comer S. Coppie, said the employee reduction could be accomplished without layoffs. He said the 10,000 figure, or about 5 percent of the city's 190,000 employees, could be reached by leaving unfilled many of the 13,000 positions that become vacant each year. Such a reduction, he said, would save the city between $200 million and $250 million a year, based on an average cost to the city of between $20,000 and $25,000 a year for each employee. He did not suggest what agencies should absorb the decreases.