March 5, 1982

At the seaside in Argentina, economy casts a chill A2 Sky falls on a longtime British M.P. A3 U.S. returning to Law of Sea Con- ference at U.N. A3 Around the World A5 Pole says a dozen internees ask for emigration A8 Salvador's land program: fervor on both sides A10 Government/Politics New Soviet weapons are cited in bid for arms buildup A4 Governor O'Neill announces candidacy in Hartford B3 Contract talks between the state and prison guards break down B4 Coast Guard opens hearing on tanker explosion B4 G.O.P. leader questions Pack- ard's party loyalty B7 Fink orders inquiry into P.S.C. ruling on 9 Mile Point 2 plant B8 Washington Talk Briefing A16 Selwa Roosevelt, the new Chief of Protocol A16 General Around the Nation A12 A doctor testifies on Martha von Bulow's medical history A14 Southern home for girls sued by former inmates A15 Industry/Labor Auto union and G.M. prepare to negotiate again B7 Health/Science City health officials test and treat prostitutes for gonorrhea B1 New York importing corneas from other states B9 Features/Notes Sports People A21 Notes on People B7 Man in the News: John W. Vessey Jr., nominee for top soldier B9 Weekend Weekender Guide C1 Greenwich Village is again a magnet for folk singers C1 Folk dancing available almost every night all over town C1 Theater: Broadway C2 "Who Loves the Dancer" at the New Federal Theater C3 Screen: At the Movies C8 "I'm Dancing as Fast as I Can," with Jill Clayburgh C10 Music: Amadeus Quartet marks 35th year C3 Count Basie tribute at Radio City Music Hall C4 Johnston steel orchestra at Symphony Space C4 Art: New artists revitalize Academy of Design annual C1 Treasures of a Japanese collector at Japan Society C22 Auctions C23 Books: Publishing C26 "Kahawa" by Donald E. Westlake reviewed C25 Restaurants C18 TV Weekend C26 Style The Evening Hours B6 New York glitters at Newton opening B6 A gala in Washington for American Indian group B6 Obituaries William Pollock, retired Textile Workers Union head B8 Sports Hoch and Soli share golf lead on 65's A18 Knicks beat Lakers, 129-119, in overtime A19 Rangers gain 4-4 tie with Flyers A19 Islanders beat Maple Leafs, 10-1 A19 Boston College, Georgetown and Villanova gain in playoffs A19 L.I.U. defeats Siena in playoff A20 Yankees have three players pursuing first-base job A21 Mets' Stearns sees his role as a leader A21 Irene Epple wins World Cup race in New Hampshire A21 George Vecsey on Rob McClanahan of the Rangers A22 News Analysis Philip Taubman on secret data dilemma A16 Editorials/Letters/Op-Ed Editorials A26 Peewee, Kenny and Darryl Indian rights, rediscovered Women then and now Mary Cantwell: souvenirs Letters A26 William Safire: the buck never ends A27 Frances Fox Piven and Richard A. Cloward: new ax, old shield A27 Hussein Abdilahi Bulhan: don't aid Somalia A27 John B. Oakes: the Carey-Koch 2d Avenue Westway A27

IN the period that saw the modernist avant-garde rise to a position of surpassing influence and prestige on the international art scene, it was probably inevitable that an institution firmly and unequivocally identified in the public mind with ''tradition'' would fall into a somewhat somnolent state. For many years this seemed to be the unhappy fate of the National Academy of Design, which was founded in 1825 and is thus the most venerable of the city's art institutions. While its members found a comfortable shelter from modernist outrages and innovations in the academy's staid programs and exhibitions, the rest of the art world hardly gave these activities a thought. For decades at a stretch - in the 1950's and 60's, say - it was possible to feel completely informed and up to date about contemporary art in New York without ever entering the august premises that have served as the academy's home since 1940. Yet, for reasons that are interesting, the situation at the National Academy is now undergoing a change, at least as far as its exhibition program is concerned. The change is by no means a radical one - radical changes not being in the academy's line, even now - but a change it is, and some of the results can be seen in the academy's 157th annual exhibition, now on view in the galleries at 1083 Fifth Avenue at 90th Street. (Through March 28.)

THE setting was a modern loft in Lower Manhattan, the music was traditional Bulgarian, and the atmosphere was electric. More than 100 dancers, ranging in age from the late 20's to the early 60's, each grasping a neighbor by the belt, swirled around the spacious dance floor of the Ethnic Folk Arts Center, stamping out a dance called the kopcheto. As soon as it ended, a lilting Russian ballad began, and the dancers chose partners for a graceful waltz. The center is just one of the many venues in the city offering participatory ethnic folk dancing on weekends. Generally, it's come as you are, solo or with partner, in work clothes or evening chic, for one hour or an entire evening of dancing to bouzouki or banjo music. For those who want to sample a bit of everything, there is international dancing with a repertory of Macedonian, Balkan, Russian, Israeli, Norwegian, Italian, Greek and other specialties. But dancers who are exclusively hooked on the intricacies of the Scottish strathspey, the Swedish hambo or the Texas two-step can also find places to practice their footwork.

Harold Kohn recycles his paper clips, and he expects everyone else who works at his law firm - Kohn, Savett, Marion & Graf - to do likewise. ''When I read the mail, I can take the paper clip off and save it just as easily as I can throw it into the wastebasket,'' Mr. Kohn said. ''One of the problems with America today is waste.'' The 67-year-old Mr. Kohn's current battle against waste focuses not on paper clips but on the size of legal fees. He has touched off a fight that may lead to basic changes in the handling of private antitrust class actions.

The F.C.C. agreed to let TV stations broadcast at low power. The decision could lead to the licensing of 3,000 to 4,000 new stations across the nation in the next three years. The stations would have a radius of only 10 to 15 miles. But they could be linked by satellite, creating new networks that could compete with the existing networks. (Page A1.) The F.C.C. also refused to consider a proposal to prohibit co-ownership of AM and FM radio stations in the same city. (D.5) Senate G.O.P. leaders sought to minimize their differences with President Reagan as they pressed ahead with alternative budget proposals. There were signs of growing tensions, however. (A1.)