Airbus has announced that because of low demand it will stop production of its superjumbo A380, capable of carrying 520 passengers in its popular seat configuration, and capable of carrying over 800 passengers in all-economy configuration.Earlier, Tata stopped producing Nano, which did not even take off, unlike A380.A380 was the largest passenger plane built, Nano was the smallest car built.
When ideas for their development were conceived, Harvard graduates must have minted money in doing market analysis, in projecting demand, in calculating returns on investments. Both companies must have sunk money on R&D, on setting up plants for the two, shareholders must have invested money, banks, after “due diligence” must have extended loans.
So were all these guys wrong? Incompetent? Corrupt? Were serving vested interests? Were fly-by-night blood-sucking Capitalists?
Answer: None of the above.
We refuse to study economics, and so we fall for such allegations. Analysts in both cases were working in good faith, acting on the available market data, interpreting it in a certain way, and making intelligent guesses for the future.
So what went wrong? Answer: Nothing.
That is how the market is: it is always changing. Some make estimates of the future market data which turn out true, others make estimates which turn out horribly wrong, because data beyond their control changed. Some had got the estimate right, but some technological breakthrough put paid to all their calculations.
In America, 50% of the start ups close within two years of launch.
This is the life of entrepreneur. He takes risks, sometimes makes profit, at others makes losses, goes out of business, is ruined. When he makes profit, Leftists abuse him, call him exploiter, extort money from him, make his life miserable. When he makes losses, he sinks alone, unknown, nobody demands that his business failure be compensated by government, no morchas are taken out for him, parliament is not stalled for him.
Free Market is magic. It has given to the poorest things which were prerogatives of kings just 100 year ago. Yet, various gangs of losers, some called Leftists, others in religious colours, are always plotting its downfall. All succeeding to various degrees because masses are morally weak, and dumb enough not to comprehend what Free Market has brought them.
Attacks on Free Market, and success of the attacks, are the most glaring moral failing of mankind, and mark of its stupidity.