On July 26, 2013, Ronald D. White writes in the Los Angeles Times:
In the glow of a red laser light, Ulysses Delgado watches a sophisticated machine turn a leather hide into pieces for a truck interior, cutting around all the misadventures that befell that particular cow — the branding burns, barbed wire scars, insect bites.
The Lectra Versalis cutting machine, recently installed at Katzkin Leather Inc., wastes less leather and requires less energy to run than older versions, said Delgado, an engineer at the Montebello company. But mostly, Delgado loves the speed.
“Twice as fast as the other cutters we have,” Delgado said. “Like magic.”
Katzkin is betting that its new cutter will boost productivity and propel the company to its best sales in its nearly 30-year history of making seat covers for cars, trucks and sport utility vehicles.
At more than $500,000, the machine purchase represents a huge investment for the 400-employee company, but it’s only the first phase.
“We have stepped up in technology,” said Mitch Hubbard, Katzkin’s creative director. “We have four other older cutting machines. We are going to phase them out and we’ll be doing twice as much work.”
Katzkin is doing what a lot of other U.S. manufacturers have been avoiding: buying more sophisticated machinery to boost production.
This should be a story about productiveness as a result of the use of machines, which are enabling companies to produce less expensively and more efficiently. Yet the article is couched in the notion of “labor productivity” gains, when in fact it is the machines that are producing the increased productiveness.
This is a critical distinction as it forces one to evaluate production as two input factors: human labor and non-human productive capital assets––land, structures, machines, super-automation, robotics, digital computerized operations, etc. As tectonic shifts in the technologies of production continue to destroy labor and devalue the worth of labor it is critical to ask WHO OWNS THE MACHINES?
Of course, the answer today is the present wealthy ownership class.
What historically empowered America’s original capitalists was conventional savings-based finance and the pledging or mortgaging of assets, with access to further ownership of new productive capital available only to those who were already well capitalized. As has been the case, credit to purchase capital is made available by financial institutions ONLY to people who already own capital and other forms of equity, such as the equity in their home that can be pledged as loan security––those who meet the universal requirement for collateral. Lenders will only extend credit to people who already have assets. Thus, the rich are made ever richer, while the poor (people without a viable capital estate) remain poor and dependent on their labor to produce income. Thus, the system is restrictive and capital ownership is clinically denied to those who need it.
Conventionally, most people do not have the right to acquire productive capital with the self-financing earnings of capital; they are left to acquire, as best as they can, with their earnings as labor workers. This is fundamentally hard to do and limiting. Thus, the most important economic right Americans need and should demand is the effective right to acquire capital with the earnings of capital. Note, though, millions of Americans own diluted stock value through the “stock market exchanges,” purchased with their earnings as labor workers, their stock holdings are relatively miniscule, as are their dividend payments compared to the top 10 percent of capital owners.
Binary economist Louis Kelso asserted: “The problem with conventional financing techniques is that they address only the productive power of enterprise and the enhancement of the earning power of the rich minority. Sustaining or increasing the earning power of the majority of consumers who are dependent entirely upon the earnings of their labor, or upon welfare, is left to government or governmentally assisted redistribution of income and to chance.”
What should be occurring throughout American industry in companies such as Katzkin Leather and others is financing new machine investments using Employee Stock Ownership Plan (ESOP) credit mechanisms to enable their employees to acquire shared ownership stock representing the new productive capital assets and pay for their acquisition with “future savings” or earnings generated from the investments themselves. This is the basis of the decision to invest that Katzkin Leather management used to decide whether or not to invest in new, far more productive machinery, that will pay for itself within three to five years.
Yet there is never a discussion in such articles published by the Los Angeles Times or other national media organizations which addresses financing economic growth with “future savings” as an effective means to broaden individual ownership in FUTURE productive capital asset economic growth.
See “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624 and at http://foreconomicjustice.org/?p=9206
http://www.latimes.com/business/la-fi-made-in-california-katzkin-20130726,0,3426366.story
