PRESIDENT Reagan, criticizing the Dukakis campaign for hiding its true colors, said it best a few days after the Democratic National Convention: "You'll never hear that 'L' word--liberal--from them."

Since late in the primary campaign, when it became apparent that Gov. Michael Dukakis would be the Democratic Party nominee, his campaign has followed the conventional wisdom of American politics which says that a liberal candidate cannot be elected President. In an attempt to win the general election, Dukakis has distanced himself from the "liberal" label, and tried to pose as a moderate. Ironically, those attempts at ideological hide-and-go-seek may cost him the election and do terrible damage to the cause of American liberalism for years to come.

During his convention acceptance speech, Dukakis proclaimed that "this election is not about ideology, it's about competence. And it's not about meaningless labels. It's about American values." Wrong. Labels have a great deal of significance in American politics. A candidate who refuses to define himself allows his opponent to make those definitions. Vice President George Bush's strategists realize that and they've kept Dukakis on the ropes since August because of it.

The fear of the "L" word is based upon a wrongful assumption that liberalism is indefensible in American political dialogue. As Marc Pearl, the National Director of Americans for Democratic Action, one of the nation's most prominent liberal organizations, explained in an interview, "We're not about to change tha mentality of the American electorate during this campaign."

The unexpected show of support for the Rev. Jesse Jackson during the primary campaign, however, demonstrates that the electorate is not as stubborn and intransigent as political pundits believe. Jackson's campaign is evidence that liberal values can be articulated successfully to the American public.

During his speech near the Business School last week, Jackson lambasted Vice President George Bush for his criticism of Dukakis' membership in the American Civil Liberties Union. Jackson charged that Bush saw the ACLU as an insurgent group, and claimed that Jesus Christ, the Jews in Nazi Germany, and Martin Luther king, Jr. were all viewed by their tormentors as insurgents. Bush, he said, was on a "mean and ugly" side of history.

By contrast, Dukakis, rather than offering a rousing defense of the ACLU for its vigilant defense of free speech for the past seven years, issued a statement outlining his disagreements with the organization. His strongest countercharge was to accuse Bush of questioning his patriotism, without explaining how being a member of the ACLU is just as patriotic an act as saluting the flag.

For eight years, the Republicans have been charging that liberalism is a tired, out-of-date approach to solving the nation's problems. In 1984, Reagan accused the Democrats of being "so far left they've left America."

Yet evidence suggests otherwise. Throughout the Reagan era, polls have consistently shown that Americans have supported the liberal positions on equal rights for women, opposition to the contras, and increased federal spending for day care, education, and medical benefits.

American presidential elections have a tendency to spark realignments of public opinion toward the nation's major political parties. A decade ago, the Democratic Party was regarded as the dominant political force in America. The term "conservative" was about as well-respected as "liberal" is today. Yet Reagan's 1980 election was as much a victory for conservative principles as it was for his candidacy.

In the 1980 election, the Reagan campaign launched a $5 million dollar television advertising blitz aimed at discrediting liberals. A bloated, white-haired, red-faced politician--an obvious caricature of then-Speaker of the House Tip O'Neill--was shown trying to drive a sputtering jalopy running out of gas. In 1984, the Republicans successfully added the "tax-and-spend label" to the Democratic image, and liberals began to call themselves "neo-liberals" and "progressives."

As Pearl says, "We no longer look at the real definition of liberalism. All we see is the history of the past eight years, rather than the historical definition of the liberal tradition that people respect--Kennedy, Roosevelt."

As the Reagan era draws to a close, Dukakis has a unique opportunity to put forth a spirited defense of liberalism. Huge pockets of Americans--most noticeably women and minorities--have been left disenfranchised by the uneven economic boom of the 1980s. Problems that have gone unaddressed during the Reagan administration--homelessness, the need for universal health care, and the disparity between women's and men's wages--are beginning to gain national attention.

A Dukakis administration could do much to solve these problems. But if he is elected without the type of philosophical grounding Reagan presented in 1980, he lacks a popular mandate for his agenda. And if the standard-bearer of the major American political party most associated with liberalism refuses to affirm those values, they may cease to exist as a prominent political force.

This election was supposed to prove Bush to be the ultimate political wimp. Instead, Dukakis has become the candidate who refuses to defend himself and the principles he represents. The voters want a President who can stand up on their behalf. How can Dukakis convince the public he is capable of standing up for them, if he refuses to stand up for himself?

In an ideal election, Pearl said he wishes Dukakis would venture, "If being a liberal means being a champion of worker rights, being a champion of family rights, being a champion of children's rights, and government acting as a catalyst to help people, then dammit, I'm a liberal."

It's not too late.