By Barry Lynn

Perhaps it is time to erect a new stone next to Adam Smith's grave in Canongate Kirk, Edinburgh. Not to commemorate Smith, whose greatest monument is his masterwork, The Wealth of Nations. Rather, to mark the demise of the insitution Smith did so much to promote - the free market.

If you did not notice the free market's passing, you were not alone. No television newscasts bemoaned the fact. The notice was hidden deep in a Competition Commission report on monopolisation of the grocery market by companies such as Tesco and Wal-Mart subsidiary Asda. The inquiry does not wrap up until November, but the recent interim report set the tone.

According to the section on the buying power of the mega-retailers, old-fashioned supply and demand has been supplanted by something new. Prices today are "negotiated bilaterally" by the giants. Instead of viewing activities that put food on shelves as taking place in a "market framework", we should view them as taking place in something called a "bargaining framework".

So an idea that has shaped humansociety for more than two centuries, an idea we must credit not merely with much of our economic wealth but our political well-being, is interred under a mound of bureaucratic euphemism.

It has become fashionable on both right and left to shrug off the consolidation of power by immense corporations over formerly free, open markets. To many, the process seems inevitable, decreed by technology, the price of progress. The Keynesian economist John Kenneth Galbraith expressed such thinking in his book, American Capitalism, more than 50 years ago.

To accept the inevitability of corporate control over the British groceries market is, however, to accept an old error - to lose sight of the fact that humans manage different markets in different ways to different ends.

Provision of clean water, gas and electricity was once organised in open markets, with many companies. In most industrial nations, citizens at the end of the 19th century - for reasons ranging from safety to efficiency and social equity - began to enclose such markets within monopolised systems regulated in part by government.

Production of chemicals, metals and cars also once took place in wide-open marketplaces. Then, early in the 20th century, in part for reasons of national security, citizens in industrial nations accepted that greater scale might make these activities more productive. The result, at least in Britain and the US, was a sort of hybrid market, with oligopolies regulated by government and, thanks to enforcement of anti-monopoly law, to some degree by the market.

Grocery markets, by contrast, until recently were kept largely open and free, a place where many small companies sold to a robust number of retailers, where a citizen could set up a new business with ease. This openness remained true of retailing and trading generally. Beginning in the early 1980s, however, the radical retreat from enforcement of anti-monopoly law cleared the way for a phenomenal concentration of power. This monopolisation has benefited society in one respect - the lower prices achieved through top-down enforcement of monocultural systemisation. But the achievement shines less bright when we look at what we sacrificed for these lower prices (which, if past serves as guide, will prove evanescent at best).

The list includes such basic social goods as the independence of the small entrepreneur, in such forms as the self-supporting family farm or family-owned retailer. It includes innovation, measured by the individual citizen's ability to bring a new idea to fellow citizens' eyes. Then there is freedom of the worker, measured by the number of potential bidders for an individual's labour. And the political life of the local community, measured by the variety of actors who have a voice.

The greatest loss is measured by the ability of open marketplaces to deliver vital information to society. After all, one of the market's main functions is to help us adjust our consumption, thinking and way of living to the world's ever-changing realities.Let us not blame these failures on the Competition Commission. It is merely fulfilling its mission to prevent harm to the "consumer". Let us blame the politicians. First, for their craven attempt to pass off a deeply political decision as a technical issue to be determined by "experts". Second, for participating in the political putsch signified by whittling the citizen down to a mere "consumer". A panel of bureaucrats is not the proper venue for deciding whether to allow the enclosure of any public commons, let alone one of the most important. What role the marketplace plays in a society cuts to the heart of how a people organises itself.

Perhaps the British people will elect to live in "Tesco towns" and work for Tesco wages and shop at Tesco for products that, even if packaged ever more "creatively", are in truth ever more monochromatically Tesco. Or perhaps they will opt for the far richer, woollier, vibrant, free and politically and economically secure life delivered by a market system that is truly open.
The final decision to erect a tombstone for the free market has not been made, yet. It is up to the British people to make their feelings known now.

The writer is a senior fellow at the New America Foundation
Copyright The Financial Times Limited 2007