Tesco is returning to the happy days of founder Jack Cohen’s “pile it high and sell it cheap” philosophy with the opening of its new discount arm, Jack’s.

Or to be more precise, Tesco has been forced to improve their offering to consumers by the emergence of ever more vigorous competition. Britain’s supermarkets offer a useful parable about why free markets and capitalism benefit us consumers so much and why those of us lucky enough to live in free market, capitalist societies are the richest people the world has ever known.

This is not to deny the standard complaint about the capitalists – that businessmen are rogues who would rip us off the moment they get the opportunity. The question is not whether that evil lurks, it’s how to control it? The answer is emphatically through open markets.

A very rough and potted history would be that Britain used to be covered by butchers and grocers and other high street businesses, most of which were put out of business by the emergence of Tesco’s and other supermarkets. Economies of scale, combined with the more efficient use of capital and labour produced the retail services most of us now rely on for our most basic need – sustenance. Many bemoan the demise of smaller businesses, but it is undeniably the case that big businesses have reaped huge benefits for ordinary households across the country.

The same is true elsewhere, of course. President Obama’s former economic adviser Jason Furman has estimated that the existence of supermarket giant Walmart produces $263 billion in savings each year for American families. That’s not just from buying their goods at low prices, but from WalMart’s model forcing everyone else to also lower their costs and profit margins to remain competitive.