They don’t like competition these capitalists, don’t like it up ‘em
A little story in two parts.
The comments came as Sainsbury’s said profits were unlikely to rise this year amid fierce competition between supermarkets.
The company said it was expecting retail underlying profit of around £1bn for the current financial year, compared to £1.04bn in the year to March 1.
…
Asda, the UK’s third-largest supermarket, earlier this year kicked off a price war among supermarkets, with bosses claiming they had a “war chest” to win back shoppers.
Allan Leighton, Asda’s new chairman, said he was planning a “material reduction” in the company’s profits so it could spend on cutting prices and improving stores.
It already prompted larger rival Tesco to say this month that it was preparing to invest £400m in price cuts.
It is competition in a free marketplace - free in the sense that others may enter - that turns that greed driven capitalism to the consumer benefit. As we’ve noted - several times - before those capitalists want our money. But if there are several competing for the access to our wallets then prices have to, as part of the basic game theory, fall. Thus keep the markets free that others may enter and competition drives the system to the consumers’ benefit.
As is shown by the other part of this story:
The boss of Sainsbury’s and Argos has urged Sir Keir Starmer to close a tax loophole used by Chinese retailers amid growing fears that Donald Trump’s trade war will fuel a surge in cheap imports to Britain.
Simon Roberts said urgent action must be taken to ensure “everyone is paying their tax wherever they’re operating from”, increasing pressure on the Government to stop companies such as Shein and Temu profiting from the de minimis rule. This is a tax exemption for imported small packages of low value.
He said: “If there’s a loophole here ... then that needs to be closed.”
It comes after British retail chiefs warned earlier this week that more low-value packages would be diverted to the UK after Mr Trump’s administration closed a similar loophole in the US.
That de minimis exemption drives more competition which also works to the advantage of consumers. Which is why the capitalist bosses don’t like it.
Yes, yes, clearly mere tax arbitrage is different and so on. And yet the point we are making still stands out. It is competition from a multiplicity of potential suppliers which tempers that capitalist system into being the pro-consumer one. Free markets are the cure for everything the Marxists whine about that is.
Now all we’ve got to work out is why everyone seems to forget this. After all, Adam Smith did publish on this a full century before Karl Marx did and it was Adam that was right here, not Karl.
Tim Worstall