EIL
Sir: I refer to Nicholas Davenport's article on EIL (February 7). It sounds to my untutored eye like a way to fill the deflationary gap by reducing savings, rather than the usual method of increasing spending. It may be totally unintentional, too. The theory propounded by Labour, that more investment is needed, is hardly just a claim for socialism, but for industries in general. It is always very tricky to compare Britain and the United States. A friend argued very forcefully to me once that unless the United States increased capital spending by reducing government borrowing (which specious see-saw theory is assiduously promoted by the right wing) we would go the way of Britain.
It is highly amusing to find that the British are promoting capital spending for socialist reasons. It almost lends credence to the idea that there is a secret, mysterious connection between England and Wall Street. Ambassador Richard's remarks on Moynihan could also be an example. In any case, the existence of a deflationary gap in the UK should utterly scotch any notion of a capital shortage off the bat. It's amazing how completely false notions make such headway.
Of course, having inflation and deflation simultaneously may confuse people, but in a mixed economy ,what should they expect : consistency and straightforwardness, as in the politician's talk ?
Peter Sutherland 5 Nelson Street, Winchester, Mass.
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