LOVING YOUR ENEMY is no problem--but financing him is something else entirely. This is the revelation dawning on the anemic Goliath Big Labor as it squares off against Goliath Business in a drawn-out tussle over turf. While corporations move their facilities into Sunbelt territories where unions do not flourish, labor is making tentative approaches toward asserting its authority over pension investments, once the exclusive domain of management. Pension funds may turn out to be just the resource labor needs in its declining years.

Labor's support of Big Business Day is a symptom of growing frustration with stymied organizing efforts and dwindling influence in a Congress dominated by corporate Political Action Committees. Although labor leaders still respect the role of large businesses in generating jobs, they have reached a new perception of an adversary relationship with management after the defeat of labor-law reform in 1978.

Other labor grievances include the business flight to Southern lands of modest wages and right-to-work laws, as well as the increasing use of slick consultants who collaborate with management to create a "union-free environment." Last October an alarmed Robert Georgine, president of the traditionally conservative building and trades department of the AFL-CIO, testified at Congressional hearings that "union-busting is a rapidly expanding and growing industry itself."

In this atmosphere of tension unionists are becoming sensitive to the ways corporations are using the deferred savings of their employees. Shortly before he assumed the AFL-CIO helm, Lane Kirkland told his colleagues that "pension funds have been used by some banks and investment counselors to finance runaway employers to the injury of the very unions and workers who negotiated and created those funds. That has to stop." The question of who has the right to control pension-fund investment is a controversial one with far-reaching implications for the structure of the economy.

In their 1978 manifesto The North Will Rise Again, Jeremy Rifkin and Randy Barber estimated that "over $200 billion in pension-fund capital comes from the combined deferred savings of 19 million union members and the public employee funds of the 16 states that make up the northeast/midwest corridor." All pension-fund portfolios could total $1.3 trillion by the late 1980s, controlling half the securities of U.S. industry, according to recent calculations in Fortune magazine.

The staggering figures will probably prompt Kirkland and his cohorts to challenge management authority over pension money very cautiously, out of fear of a backlash. But Barber, co-director of the People's Business Commission, points out that if union efforts were to provoke new legal restrictions on pension investment, "you haven't lost anything." However, he believes such business attempts would fail, in part because state and local governments would regard legal thwarting of union control as raising the threat of eventual federal encroachment onto their own sovereignty.

ON THE OTHER HAND, Barber acknowledges that union leaders must go a long way in educating the rank and file before they can be sure the members will fight for pension control demands presented on the bargaining table. Increased educational programs may be one of the recommendations in a forthcoming study of the pension issue commissioned by the AFL-CIO Executive Council. The AFL-CIO's Industrial Union Department is also expected to release its own study of the matter in the next few months.

Studies will not produce action at the highest levels until union officials are satisfied that certain legal doubts have been resolved. In the past, labor leaders have generally been reluctant to take on the fiduciary responsibilities entailed in managing pension funds. The Employee Retirement Income Security Act (ERISA) requires pension trustees to direct investments "solely in the interest of the participants and beneficiaries." While activists may argue that preserving union jobs and the long-term economic viability of urban areas is a legitimate financial interest of union members, socially-oriented investment decisions might invite class-action suits by members pursuing a narrower interpretation of the law. Rifkin and Barber suggest that unions could continue to maximize returns by confining their investments to companies with desirable labor policies within the Fortune 500. ERISA administrator Ian Lanoff appears sympathetic to this viewpoint.

Despite the uncertainties, Randy Barber said, "Unions are asking questions far more than when we wrote the book," adding, "The real impetus for these studies and the changes you're starting to see is coming from local and state union officers." An Operating Engineers Local in south Florida has put up $2 million to offer its members home mortgages. In Southern California, the Building and Trades union is contemplating a program to target pension money for building houses, apartment buildings and shopping centers. The construction trades have always had exceptional influence over pension funds because of the unstable nature of employment in their industry.

But there are signs around the country that other unions are envious of the 50-per-cent representation in pension boards common to the building trades, trucking and other multi-employer industries. The International Chemical Workers have succeeded in placing a watchdog representative on one board and gaining joint control on another. In March the bargaining council of the Communication Workers of America voted to demand "effective union participation in pension fund investment policies."

The greatest breakthrough in pension board representation has come in a company that desperately needs the cooperation of its union. In return for permission to defer its pension-fund contribution, Chrysler consented to a union demand for a joint advisory board on pensions. Three representatives from Chrysler and three from the United Auto Workers will oversee the investment of 10 per cent of each year's net increase in pension money for "socially desirable" ends. In addition, the union can veto investments in up to five companies every year as a result of ties to South Africa.

Together with the nomination of union head Douglas A. Fraser to the board of directors, the pension concessions at Chrysler represent a new phase in union influence over management in the U.S. The outcome of the Chrysler experiment will help determine whether "pension power"--today bringing to mind only the Gray Panthers--will become a commanding slogan in the future.