From the Times:

Of course, small retailers whine and complain when Tesco moves into the area because Tesco will nick all their business. Yes, it will, if what you are selling is expensive and rubbish.

 

That’s the core of capitalism. “Better” will always win the day. And it doesn’t matter what form “better” takes. Better can mean cheaper, more convenient, nicer, prettier, more tasty, more healthy. In some way, you have to be better than the other guy, or your kids will soon be presented with a bill for hosing you out of your sitting room.

 

Because the bosses of the giant corporations know this, they strive constantly to make what they sell better, and that’s brilliant for you and me. It’s why we don’t get punctures any more — because the tyre makers are constantly striving to be the best. It’s why your car never overheats any more — because the people who make radiator hoses are no longer stuck in the Seventies, believing they have a God-given right to keep on making radiator hoses, irrespective of how quickly they dissolve.

 

When was the last time you had a faulty cigarette? When was the last time your plane crashed? When did you last take a strawberry back to the supermarket because it was all covered in slime? It’s not governments or best-before dates or health and safety that is doing this; it’s capitalism.

 

And nowhere is the improvement seen more vividly than in the world of motoring.

 

In the olden days, car makers thought local, and that was a disaster. They really did think at British Leyland that the sun was still shining brightly on the empire and that people in Britain would always buy Rovers and Austins because they were British. We saw the same thing going on in Italy with Fiat. So what if the workforce had left its sandwiches in one of the doors and wired up the horn to the starter motor by mistake? The customer would be back. And the government would hand over a fat cheque if he wasn’t. But then capitalism went global and, all of a sudden, Terry and June could buy a car from Japan that didn’t explode every time there was a “y” in the day. So they did.

 

Then it got better. BMW worked out that if it made the X5 in America, the car could be sold more cheaply. Volkswagen thought the same about Mexico, and as Britain slithered further into the mire, we started to benefit from this as well. Toyota, Honda and Nissan didn’t come here because their executives liked our weather or the golf courses. They came because they were drawn here by capitalism, the need to be cheaper.

One of the reasons America has had a strong economy is because of the freedom to innovate. That freedom helped California vinters challenge the French:

Among some people there is a belief that spending tax dollars on certain program is charitable. This belief mistakenly assumes that people 1) pay taxes voluntarily and 2) the tax dollars are allocated according to people’s wishes. Both of these assumptions are wrong. Taxes are not voluntary and politicians spend money on political priorities which aren’t necessarily the same as taxpayer’s priorities.

Real charity is voluntary. It is done out of goodwill or love of humanity. Taxation is not voluntary. Only half of Americans pay income tax. And very would pay as much taxes if it were completely voluntary.

That why I get irritated when I read things like this from an economist named Uwe Reinhardt in the N.Y. Times:

The theory here is that in all modern nations, the better-off members of society would like to provide kind acts for the less well-off. The kind acts in question include financing health care for the less fortunate who cannot pay for that care with their own resources.

…

In our holiday card, my wife and I put forth the hypothesis that, for all we know, the American people are just as kind and charitable in health care as are people in Taiwan, Japan, Europe and Canada, even though it may not appear to be so in light of the demonstrated hardships we tolerate in health care for millions of families at the bottom of the income scale.

…

A tongue-in-cheek holiday card of this nature does, of course, take poetic license, so to speak, but we did try to make a serious point. Namely, thanks to the expensive and often wasteful manner in which our country’s health care providers and insurers have managed their affairs, they have helped to price kindness out of America’s soul.

Federal spending on health care is not charitable spending. Charity is when I voluntarily give my hard-earned money to causes I believe in, such as my church, fighting cancer, or give more transportation options to poor people. That is charity. Real health care charity would involve giving money to people in need, not government programs.     

I wish I had written this.

It’s always impressive to see one person excel in two widely disparate activities: a first-rate mathematician who’s also a world class mountaineer, or a titan of industry who conducts symphony orchestras on the side. But sometimes I think Paul Krugman is out to top them all, by excelling in two activities that are not just disparate but diametrically opposed: economics (for which he was awarded a well-deserved Nobel Prize) and obliviousness to the lessons of economics (for which he’s been awarded a column at the New York Times).

It’s a dazzling performance. Time after time, Krugman leaves me wide-eyed with wonder at how much economics he has to forget to write those columns.

This is the work of Steven Landsburg, author of the Armchair Economist. Landsburg continues here.