To the Editors:
In your issue of June 15, a spokesman for Mobil Oil Corporation tells of the utter inability of the firm to “understand why so many liberals in this country are so hostile to private business.” I would like to give those concerned some help on their question; it is not so much hostility as suspicion and this is extensively because the people who write such advertisements are manifestly so incompetent, this being an occupation in which substantial pay seems never to compensate for low professional regard and standing. And, blame must be assumed also by the executives that pass on the resulting product. They are either hopelessly inept, intellectually negligent or, possibly, above reading such awful tripe.
Thus the advertisement in question notes that liberals have been among the prime movers in the enactment of the nation’s social legislation—social security, housing, school lunches, and the like. It goes on to say:
All of these programs have to be financed by revenues derived mainly from taxes on individual and corporate income.
The greater these incomes—which is to say, the more prosperous American business is—the greater the tax revenues. When incomes drop, as in a recession, so do tax revenues. Social programs then have to be reduced accordingly or supported by deficit financing, which over any extended period means inflation. For the poor and for people living on fixed incomes, inflation is the cruelest tyranny of all.
The clear and inescapable meaning of the above is that inflation is caused by recessions. This liberals are expected to believe. They are not expected to notice the absence of any reference to corporate (or union) market power as causes of inflation. Many who come up against such reasoning or nonreasoning will suppose that something is being hidden. The less suspicious but less charitable will be tempted to that slightly snobbish attitude toward business that Mobil writers also identify and deplore. In the face of such work it’s hard not to feel superior.
But such incompetence could be yet more damaging; it could inspire pity and also concern. Many, if not most, liberals would agree that if we are to get oil from the North Slope or the North Sea and automobiles by the millions to use it, we must have sizable corporations to do these things. But many will be led to wonder, if those who manage the engineering, quality control, cost control, auditing, and marketing are as retarded, as error prone, as those who handle this advertising.
John Kenneth Galbraith
August 17, 1978