IT happened while I was eating lunch with two of Harvard's dedicated liberal activists. One of them asked the other for help organizing opposition to Prop 1-2-3, the upcoming ballot initiative that would allow some tenants to purchase their rent-controlled apartments.

"I don't have much time," she replied, "but rent control is such an important issue."

Both of these women are dedicated liberals. So am I. That's why I oppose rent control.

It isn't my intention here to defend Prop 1-2-3. Without being incredibly well-informed on the issue, my impression is that Prop 1-2-3 is an ill-conceived and somewhat sleazy move by the real estate industry that wouldn't appreciably improve Cambridge's housing problems.

My purpose is to convince my activist friends that, in principle, liberals ought to hate rent control.

Liberals should hate rent control because it violates every principle they purport to embrace. It contributes to the housing shortage and to homelessness. It benefits those who need it least and forces the expense on those who can least afford to pay.

Rent control is a phony liberal issue.

ANOTHER disclaimer is in order here. I don't believe that simply scrapping rent control would solve the housing crisis. Free-marketeers don't recognize that the people who get left out of the housing market face a fate worse than those who bid too low in the Ec 10 carrot market. They end up sleeping on grates.

But in at least one respect, the Reaganites are correct: the market distortions induced by rent control hurt almost everyone--especially the disadvantaged that liberals ought to be protecting.

The argument might be counterintuitive, but anyone who has survived week one of Ec 10 knows the essential logic behind it. When government intervenes in a market and establishes a ceiling price below the market price, there are some winners and some losers.

The winners are those who can find housing at the cheaper price. The losers are less noticeable. Suppliers of housing lose because they get less for their apartments, and thus have little incentive to provide more housing. (This means that the supply of housing is lower than it would have been without rent control.) As a result, there is another, more important group of losers--the consumers who cannot find housing at all because of insufficient supply.

Unfortunately, the people who cannot find housing are all frequently the poor, even though rent control supposedly equalizes the ability of rich and poor to compete for housing.

When the option of outbidding other customers is foreclosed, rich customers turn to "phantom markets" to get their hands on an apartment. This may take the form of legwork, finder's fees, inside knowledge of an available rentstabilized apartment, or even bribing the landlord.

The point is that there will always be fewer rent-controlled apartments than there are people who want them. The wealthy and well-placed have the ability and resources to find the rent-controlled apartments. The low-income renters who really need cheap housing don't.

Of course, not every rent-controlled apartment is occupied by a non-needy person. But the system definitely favors them, and several studies of New York tenants show that those who live in rent-controlled apartments have, on average, higher incomes than those who don't.