Cooking the Books: Big Fish Swallow Small Fish

Interviewed on Desert Island Disks on BBC Radio 4 on 3 February, Sir Terry Leahy, former chief executive of Tesco, said that ‘the death of the high street is progress’, adding that ‘the loss of some shops was a price worth paying for the lower costs at supermarkets’ (Times, 4 February).

He would say that, wouldn’t he? But the expansion of supermarkets at the expense of small high street shops confirms Marx’s view that one of the tendencies of capitalism is the concentration and centralisation of capital.

At the turn of the last century this was challenged by critics of Marx, but the whole of the last century confirmed Marx’s contention and it is no longer challenged by bourgeois economists. All sectors of the capitalist economy are now dominated by a handful of firms. Economists have even invented a new word to describe this – ‘oligopoly,’ or the domination of a market by a few sellers. Food retailing is no exception. In Britain this is dominated by just four supermarkets: Tesco, Asda, Sainsbury’s and Morrisons.

Marx put it this way:

‘The battle of commodities is fought by the cheapening of commodities. The cheapness of commodities depends, all other circumstances remaining the same, on the productivity of labour, and this in turn depends on the scale of production. Therefore the larger capitals beat the smaller.’ (Capital, Volume 1, chapter 25, section 2)

So, the supermarkets outcompete the smaller high street shops because, being bigger, they can sell more cheaply. Sir Terry is right on this point, but is he right when he says that the closure of many small shops that this results in is ‘progress’ and a ‘price worth paying’? Many disagree, especially the small shop-owners but also, on the political level, the Green Party which specialises in spearheading campaigns against the opening of new supermarkets as this conflicts with their vision of a smaller-scale capitalism.

People, however, have been voting with their feet – or their cars – and deserting the high street shops for the supermarkets. For most, this is an economic necessity, as to make ends meet they have to shop where the prices are lower.

Also, the ‘lower costs’ that Leahy mentions benefit the capitalist class generally since, in keeping the cost of living lower than it would otherwise be, they also keep down the amount employers must pay in wages to allow their employees to maintain their working skills. In other words, they lower the costs of production generally.

As long as capitalism lasts and by its very nature, supermarkets are going to triumph over high street shops. It is true that some small shops can and do survive by selling better quality goods at a higher price, but these will only ever be patronised by the higher paid. The Green Party will never be able to realise its nostalgic dream of a small-scale, more human capitalism.

Socialists take a different position. In socialism there will be neither supermarkets nor small shops, just distribution stores and centres from which people will be able to take what they need without having to pay. They will all be ‘Payless.’