Editorial: Who can buck the market?

The recent turmoil surrounding the future of the Rover car plant at Longbridge and of Ford at Dagenham has once more brought into sharp focus the fundamental rule of economic life in the market system—no profit, no production.

Despite the concerted pleas of the government, the trade unions and even Ken Livingstone, Ford looks set to pull out of Dagenham causingover 2,000 jobs to be lost directly and more still indirectly. At Longbridge, BMW was no longer prepared to subsidise a loss-making plant by creaming off the profits from its more successful operations elsewhere and decided to cut and run. After a period of uncertainty when it looked like the entire plant would close, BMW now appears to have done a deal with the Phoenix consortium led by former Rover chief executive John Towers, a deal which the unions and the government hope will keep redundancies down to manageable levels.

But whether Rover ultimately survives at Longbridge will have little to do with any emotional attachment executives at Phoenix may have about Rover or whether workers at the plant work diligently in an attempt to ensure its survival. What will ultimately determine Rover’s future will be the ability of its new owners to sell Rover cars at a sufficient profit on the world market. Unfortunately for them, this is a market place where monetary demand for automobiles (the only sort of demand that counts) is already at near saturation point, with cutbacks in production and plant closures taking place not just in Britain but in the US, across Europe and in the Pacific Rim.

Margaret Thatcher was not right about many things in life but she rarely spoke truer words than when she said you can’t buck the market”. As workers in car plants all over the world discover the wisdom of this particular remark the hard way we would add only one caveat to it—”you can’t buck the market by working within the market system”. The only real way to buck the market is to chuck it altogether, and thereby create a future we could all look forward to without apprehension.