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If one reads ''Literature Is Fire'' more closely, one begins to understand. The youngMario Vargas Llosa stated clearly that ''dogma, censorship and arbitrary acts are alsomortal enemies of progress and human dignity,'' noting that ''the road to truth is notalways smooth and straight.'' Like other Latin American writers in the late 50's andthe 60's, he applauded Fidel Castro, but by 1971 he had come to reject the Cubanmodel. This was made clear in several open letters, one of which is reprinted here. Itconcerns the imprisonment of the poet Heberto Padilla and the subsequent coercion ofcertain prominent Cuban intellectuals to back Fidel: ''To force comrades, withmethods repugnant to human dignity, to accuse themselves of imaginary betrayals andsign letters in which even the syntax seems to be that of the police, is the negation ofeverything that made me embrace, from the first day, the cause of the Cubanrevolution: its decision to fight for justice without losing respect for individuals.''

A similar resistance to the brutal aspect of state socialism can be found in ''Socialismand the Tanks,'' written shortly after the invasion of Czechoslovakia in 1968. VargasLlosa wrote: ''The sending of Soviet tanks into Prague to suppress a movement ofsocialist democratization is as much to be condemned as the dispatching of Americanmarines to Santo Domingo to stamp out by violence a popular uprising against amilitary dictatorship and an unjust social system.''

''Making Waves'' is fascinating, in part, because one can follow the twists and turns ofthe writer's mind as he tries, again and again, to find a balance between social justiceand individual freedom, searching for models and arguments everywhere from Sartreand Camus to Isaiah Berlin. In ''The Mandarin'' (1980), Vargas Llosa reconsidered hisyouthful attachment to Sartre: ''One could say that he was full of contradictions, thathis passion often caused him to be unjust and yet, at the same time, there was always a

basic generosity and moral honesty in his attitudes and ideas that made him, with allhis mistakes and political naivete, respectable.'' In a strange way, this might also betaken as a description of the essayist himself. As he grappled with the complex

political realities of South America, he moved inexorably from a naive utopianism toa version of liberalism that involves a commitment to the free market and a passionateattachment to individual liberty.

This classic liberalism includes a belief in pluralism, and here Isaiah Berlin proved an

astute guide. In a major reformulation of his principles, Vargas Llosa wrote in 1980:

''Reading Isaiah Berlin, I have come to see clearly something that I had intuited in aconfused way. That real progress, which has withered or overthrown the barbarous

practices and institutions that were the source of infinite suffering for man, and hasestablished more civilized relations and styles of life, has always been achievedthrough a partial, heterodox and deformed application of social theories.''

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The descent of Mario Vargas Llosa into the crude, exhilarating world of everydaypolitics in the late 80's has been fully described in his memoir, ''A Fish in the Water''(1994). But one is able to comprehend that plunge more fully having tracked hisgradual movement toward liberal pragmatism.

A fair number of the essays in this collection deal with the complex negotiations thatoccur between fact and fiction. ''Only literature has the techniques and powers todistill this delicate elixir of life: the truth hidden in the heart of human lies,'' he says in''The Truth of Lies.'' He insists on keeping literature and history in separatecompartments, seeing this as ''a prerogative of open societies.'' For him, a ''closedsociety'' is one where governments can force writers to heel to an interpretation of thefacts that legitimizes a given regime.

On the other hand, when writers are allowed to produce an alternative vision,''literature extends human life, adding the dimension that fuels the life deep within us

-- that impalpable and fleeting but precious life that we only live through lies.'' Whilethis is nicely phrased, Karl Popper's terminology sounds oddly outdated in the post-cold-war era, where ''open'' and ''closed'' seem inadequate in the face of such well-managed fantasies as the New World Order. How does one, for example, deal with theendless ''fictions'' thrown up -- by ''open'' societies -- as historical truth?

Vargas Llosa is perhaps at his best on particular writers, himself included. There is anentertaining piece on Hemingway as memoirist, a shrewd critique of Joyce's''Dubliners,'' a workmanlike reconsideration of Dos Passos' ''Manhattan Transfer'' andtwo sharp essays on Faulkner. ''Faulkner's world was really not his alone,'' hesuggests. ''It was ours.'' He finds stunning parallels between Faulkner's Mississippiand the world of the Latin American novel, including ''violence, heat, greed, anuntamable nature which seems to reflect instincts that people do not try to keep incheck.''

Some of the finest moments in the book are in those essays where the novelist speaksin the first person, taking us back to his childhood in Peru and Bolivia in ''TheCountry of a Thousand Faces,'' to his days as a graduate student in Madrid in ''WhenMadrid Was a Village,'' and to his years of self-imposed exile in Paris -- a subject thatrecurs in many of these pieces. In all, Vargas Llosa offers a detailed road map of hisimaginative world in ''Making Waves,'' and readers of his fiction can only be grateful.