King Market kills King Coal (1992)

Editorial from the November 1992 issue of the Socialist Standard

Even die-hard supporters of capitalism were stunned by the announcement. Over the next six months 31 of Britain’s 50 remaining pits were to close, throwing 30,000 coal miners onto the industrial scrapheap.

Michael Heseltine, once billed as the acceptable face of capitalism, spoke as if he were Margaret the Mad Marketeer herself. There was no alternative. It was a straightforward commercial decision. Gas had out-competed coal in the marketplace. "British Coal cannot go on producing coal that cannot be sold". To subsidise coal for power stations would be to keep electricity prices 3 per cent higher than they need be. British manufacturing industry had to "compete in an increasingly competitive world". That meant "we have to search for opportunities to lower costs". This was one and the government had seized it. The electricity companies were right to go for gas. British Coal was right to shut down more than half the British coal industry. The economic case for this was "unanswerable". Tough luck on the miners and too bad about past government promises of no compulsory redundancies. Well, to tell the truth, he didn't actually say this last. But that in effect was what he was saying.

In terms of the logic of capitalism he was right. Under capitalism production is in the hands of business enterprises, private or state, all competing to try to make profits. To stay in the race for profits you have to keep your costs down. If you don't then you go to the wall. Which is what happened to British Coal. They cannot supply coal to their main customers, the privatised electricity companies, at a competitive price, and they are suffering the consequences.

The Market has given its verdict and the sentence has to be carried out. As usual the victims are members of the working class. Not only the miners and their families, and the communities in which they live, but the tens of thousands of other workers employed in servicing the pits and in transporting the coal. They will join the 3,000,000 already on the dole in this, the biggest slump since the 1930s.

British Coal is crying "unfair competition" and some are saying they have a point. Nuclear power, originally developed as a by-product of the Bomb, is being subsidised, partly still for military reasons. Gas, it is predicted, will only temporarily be cheaper than coal. Maybe, but even if governments don't have to let so short-term market considerations apply as the Tories now are, they still have to take market trends into account. You can’t buck the market. But the way the market is going to jump can't be predicted very far in advance. The relative prices of the various fuels — coal, oil, gas, nuclear power — are continuously changing.

The fact is that the market nature of the capitalist system rules out the adoption of any rational, long-term energy policy. In the 40s and 50s coal was the cheapest fuel and the government based its energy policy on this. Then in the 60s the price of oil fell below that of coal and the Labour government of the day embarked on a massive pit closure programme. In the 70s oil prices again rose above that of coal and the miners were able to exploit the situation to win two national strikes over wages, in 1972 and 1974. The government turned to nuclear power. In the 80s oil prices fell again and the government took on and, as we can now see, completely smashed the miners union. Now gas has emerged as the cheapest fuel and a "dash for gas” is on. It is not difficult to see where this is going to end. Already the papers are talking about a "massive overcapacity in generation if all the plans for gas-fired capacity go ahead" and saying that "many of the new gas power stations face a limited life". (Daily Telegraph, 14 October)

So in a few years time some of the gas power stations will be closing because, just as with coal today, productive capacity will be beyond market capacity. The Market will be demonstrating its madness again.

The case against the market system is unanswerable. What we need is a society where all the means of producing wealth are owned in common, so that they can be used to produce what we need not what the market dictates. Only then, in the absence of market forces and vested capitalist interests, can a rational energy policy be adopted.