During Terry Leahy's time at Tesco, it has done extraordinarily well. Yesterday, in the Telegraph, he wrote a powerful case for the market and competition:
"Competition has, as Adam Smith observed, converted "the private interests of and passions of men" into consequences "most agreeable to the interests of the whole society". In a passage relevant to retailers, Smith wrote "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their interest. We address ourselves not to their self-love, and never talk to them of our own necessities, but of their advantages".
Faith in these principles has resulted in lower prices, more choice, higher living standards, more jobs, more government revenue to fund public services and more prosperity. Consider the benefits in retail. In the first six years of this decade, the largest four grocery retailers each introduced, on average, three new products a day. In the ten years beginning in 1997, Tesco saved the typical household almost £5,000 on its shopping bills, created one new job every 20 minutes, and paid £3.5 billion in tax – enough to pay for 160 new secondary schools.
So as governments tackle the recession, they must not forget the benefits that free trade and markets have delivered, and the power of consumers. They must remember that the problems we face are not caused by too little regulation, but regulation that has been spread too widely and indiscriminately.
Siren voices, calling for ever more regulation and intervention, must be ignored. That way lies the rocks, and the reason is simple enough. The more we regulate business, and the more that a government spends, the greater the burdens on the private sector – companies of all sizes that employ many millions of people, and whose taxes pay for public services. The higher those taxes are, the less there is for companies to invest, the fewer jobs they can create, the longer and darker the recession will be."