What Tesco knows and Woolies forgot

John Kay is an economist who believes markets do a better job than governments in organizing the economy, but his understanding is nuanced. He is keenly aware of the value of institutions and he knows that "market economies function because they are embedded in a social, political and cultural context, and cannot work otherwise."

He writes in his current column,"I do not think children should be taught that greed is the most powerful human motivation. The people who are most successful in business in the long run are people who are passionate about business, not money."

It is not greed that drives capitalism's success but the dynamism that freedom and incentives set in play to unleash human creativity. Some of its defenders are its worse enemies: they talk "about 'wealth creation', although most of what they described seemed to be a diversion of wealth for the benefit of particular individuals rather than the creation of new wealth."

John Kay is mostly devoting himself to writing these days. He has a weekly column in the Financial Times. His forthcoming book (The Long and the Short of It - everyone's guide to investment and financial markets ) is recommended by the Institute for Economic Affairs, the think tank that supplied Maggie Thatcher with economists.