In response to:
Oil in the Family from the August 17, 1978 issue
To the Editors:
I would like to respond to the letters from NYR readers John Kenneth Galbraith and Page Smith, who took issue recently with Mobil’s advertising (NYR, August 17).
Professor Galbraith chastises us for the following passage from a Mobil ad:
All of these [social] 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.
He states: “The clear and inescapable meaning of the above is that inflation is caused by recessions.” Not quite. What is meant is just what we said: deficit financing of government spending over an extended period means inflation. Even the greenest of Professor Galbraith’s students should be able to see that.
But while Professor Galbraith admits the necessity of “sizable corporations,” Mr. Smith deplores “excessively large enterprises,” seemingly on the grounds of size alone. That seems a rather thoughtless view. What is “excessively large”? Is the Department of Energy too large? The Democratic Party? Harvard University?
No one denies that business, large and small, exists to make a profit. But why is it so difficult to accept that people in corporations can be as interested in the environment, in the arts, and, yes, in social programs as those in government or academia, for example? One might almost infer from the waspish tone of readers Galbraith and Smith that they actually resent the possibility of such a thought—and perhaps resent the presence of poachers in one of the happiest hunting grounds of “liberal” ideas.
Vice President, Mobil Oil Corporation
New York City
September 28, 1978