'GENTLEMEN: I do not wish to accept the prize your guest jury has honored me with.... I believe the awards system in our day is archaic...."So began a letter to the Carnegie Institute in Pittsburgh written 30 years ago by David Smith, who was awarded third prize for sculpture. It was a typically bold, outspoken - and principled - reaction to one of the art world's persistently debatable themes: art prizes. The Carnegie Prize ($10,000 and a bronze medal) continues to be awarded triennially, in October, and the international exhibition that accompanies the latest award is open to the public through Feb. 16 at the Carnegie Institute. Forty-three artists were selected this time, but only one artist, On Kawara, the Japanese painter of dates, was chosen as the prize winner. Whatever Mr. Smith thought, the Carnegie Prize is still going strong after almost a century. In Britain, a much younger art prize solely for British artists has recently been presented to the sculptor Anish Kapoor. It is known as the Turner Prize, and was first awarded seven years ago. Last year the award was suspended due to lack of a sponsor. Mr. Kapoor was chosen from a short list of four artists, whose works were also displayed in a small exhibition at the Tate Gallery, the host venue. The Turner Prize is hotly debated. Competitiveness between artists whose work cannot reasonably be compared seems the main argument against any prize for art - this one included. Not without irony, perhaps, it's named after an artist (J. M. W. Turner) who became great without winning a prize. On the other hand, Turner was very competitive with other artists. He was even known, at the last minute, to heighten the color of his paintings at the annual Royal Academy exhibition so that neighboring works would not outshine his. The strange thing about the Turner Prize is that even those in favor of it concede the strong arguments against it. Nicholas Serota, the Tate Gallery director (the director is always chairman of the Turner Prize jury), admits that "it would probably be fair to say that not many artists like the prize." He mentions "competition" and even "show business" as aspects of the contest that "artists regard themselves as being apart from." "I don't think writers much enjoy the Booker Prize either," Mr. Serota says. (There is a comparison frequently made between the Turner Prize and Britain's annual prize for novelists.) "But," he adds, "the fact is that prizes of this kind nevertheless do raise levels of interest." The Turner Prize began under the reign of the Tate's previous director. Serota could have taken last year's lack of a sponsor as an opportunity to bring about its end. He didn't. He says the criticism and controversy are not the sole product of the prize now worth British pounds20,000 (about $37,000). It is sponsored by Britain's Channel 4 which gives the winner and the short-listed artists wide television exposure. Serota points to the number of people who have come in to see the Turner Prize exhibition this year. He says that visitors come to the exhibition "who would not have come in to see a display simply labeled 'Anish Kapoor, Rachel Whiteread, Ian Davenport, and Fiona Rae (the four artists). But even controversy, he feels, has its uses. "I don't think that notoriety itself is a bad thing if we're able to use it to give people greater insights into what artists are doing." The London dealer of one of the short-listed artists disagrees. Karsten Schubert, who represents Ms. Whiteread, concedes that even to be chosen is "definitely a great honor." But he says he believes it does nothing at all to help him market Whiteread's work. Mr. Schubert says (after advising his 27-year-old artist not to speak to this journalist): "In her case I think it was actually a huge bother ... the ordeal of journalists talking to you and TV people intruding into your studio. It's not like it gives [the short-listed artists] exposure for the first time. They were short listed because they were exposed already." This is true up to a point. Whiteread's sculpture, which has to do with making a presence out of the space that surrounds domestic objects - bath tubs for example - has been exhibited and given critical recognition. But her youth has been disparaged by a number of critics, and like Rae and Davenport, all in their 20s, she has nothing like the international reputation of Kapoor, who represented Britain at the 1990 Venice Bienale. Or the previous Turner Prize winners: Malcolm Morley, Howard Hodgkin, Gilbert and George, Richard Deacon, Tony Cragg, and Richard Long. The accusation of "immaturity" has been leveled at Ms. Rae and Mr. Davenport, as well as Whiteread. Schubert, on the other hand, stabs out: "And who says yo u can't be mature when you're 27?" In fact some critics did observe that age is irrelevant to artistic accomplishment. The terms of reference for the prize this time specified "a British artist under 50," and Serota says that this under-50 specification has "become an issue out of all proportion." But apart from the age question, Schubert says that the selection of Whiteread, who is about to have her first one-person show outside Britain, (at the Luhring Augustine Gallery, SoHo, New York, opening Jan. 11) "doesn't change anything" for her. Her work is being sought vigorously by institutions and major collectors already, and the prize is in fact no more than a recognition of this. Whiteread's reluctance to talk about her Turner Prize experience may be understandable when some of the published comments it has brought forth about her work are noted. One journalist - David Cohen in The Times (London) - wrote: "Whiteread's work is as boring to look at as it must have been to make. The endearing quirkiness of her idea is entirely lost in the banality of the finished effect." This was what Schubert meant when he described the press coverage as "hardly great" and as including "a lot of really nasty garbage." "The press?" he exclaims. "It doesn't matter what they say. They can say anything they like as long as they get the names right and print the pictures the right way up." So much for the agonies of a younger artist. The prize is also criticized for the omission of older artists. Serota points out, though, that the prize, instituted by a group within the Friends of the Tate called "Patrons of New Art," (PNA) was never aimed at older artists and "the notion that somehow there are a lot of dispossessed artists aged over 50 who might otherwise have won the prize" is "actually a false one." The chairman of the PNA, architect Gerald Levin, is in favor of the Turner Prize as it is, though allowing for "fine-tuning" of its terms of reference. His arguments include conviction that "the controversy it creates can only be good for artists and the art world as a whole," because it takes "the mystique from new art." He points out that other dealers seem to have been in favor of it this year. He says that he personally feels "a little disappointed" this time "that having gone for youth in a big way, [the jury] ... in the end, played safe" (by awarding the prize to the most established figure). Mr. Levin recognizes that "an art prize can't possibly be right - there's never unanimity on taste. Jury members can't be perfect." And he thinks it could be improved in future years by having six or eight artists on the short list, and by it eventually becoming a European prize. And he doesn't like the age limit. "You could be 90 and still doing good work." But he says that this prize successfully "closes the gap between what's going on in the commercial galleries and what is being seen" in the public museum/art galleries like the Tate. Serota agrees the prize can be improved. "I think," he concludes, "all these prizes settle down eventually. Give this one perhaps another two or three years and I think one will start to get perhaps some slightly more surprising winners." But the question still remains: Should there be any "winners" and "losers" in the world of art?