"Who Owns Production? A response to "Who Owns Kentucky?"

Levi Rafael Published:

In the December 8th State Journal, in an opinion article titled “Who Owns Kentucky?” Attorney Robert E. Salyer made a remarkable observation about the absurdity of the current economic system that we live under.


“When a country increases its production over time while decreasing the average amount of associated labor, this logically ought to yield real benefits for the people. One might think that the people on average would be able to work a little less, and that at the same time have a little more”


But has this been the case? No, argues Salyer. Economic security is worse than it was 50 years ago, less and less Kentuckians own farms and stores. Salyer argues that these Kentuckians “controlled their destiny,” but no more. With rising unemployment, growing attacks on wages and social programs, and a trend towards de-industrialization and constant “restructuring” of entire economies, where are the benefits to be associated with this ‘decreasing average amount of associated labor?’


As human beings have progressed throughout history, being able to get more products out of less labor has been the driving force of human civilization. It led humanity to outgrow the hunter-gatherer phase and begin engaging in agriculture, tool-making, and handicrafts. The human race accomplished this by developing its productive forces. By productive forces are meant the means of production (machines, resources, buildings, etc.) combined with human labor. Ultimately, it is human labor that is the main productive force in society, because no machine could work or no raw materials could be used without being first acted on by human labor.


By developing the productive forces, human labor is able to have more with less labor. But a capitalist economy operates on the law of value, which means that the value of a commodity is determined by the average amount of society’s time and energy it takes to produce a given commodity. Products of high value require a great deal of society’s time and energy (labor) to produce, and so in a capitalist economy, investment goes into the production of these high value commodities for higher rates of profit. But as investment flows into the production of high value goods, it becomes easier and faster to produce them, and more machinery is used and the amount of human labor needed to produce this commodity is less and less. Hence, its value decreases, and relative to the amount of capital invested in its production, eventually the rate of profit for the investor tends to fall. As a result, more products are produced than can be sold, and an economic crisis ensues.


So why isn’t less labor yielding more leisure and benefits for the people who labor? Salyer, referring to the correlation between increased productivity and increased livelihood, argues that “This paradigm may have applied once, but no longer does.”


True enough. During the 19th century and the two Industrial Revolutions, capitalism was able to overcome economic crisis by expanding production. It built new industries that employed more people and was able to absorb the unemployed back into productive sectors of the economy. But at a point, this economic system can only grow the productive forces so far.


Today, expanding production and employment is not how crises are overcome. Instead of expanding production and developing the productive forces, modern, corporate capitalism has entered its destructive phase, where new booms can only occur after a massive destruction of capital through mass unemployment, de-industrialization, economic crises, world wars, and potentially even ecological disasters and the like.


It is worth noting that the post-WWII boom, the only boom of its kind in the 20th century, did not occur because of the growth of new industries or the development of the productive forces. On the contrary, it occurred because of a massive destruction of productive forces, through the economic destruction of the Great Depression and the massive destruction wrought by WWII. Andrew Kliman, a professor of economics at Pace University, argues in his article "'The Destruction of Capital' and the Current Economic Crisis" that the main reason for the post-war economic boom was the massive destruction of physical and value capital that occurred in WWII and the Great Depression.


That is why it is scary that today, more manufacturing jobs in the US have been destroyed than during the Great Depression. When producing goods and services becomes no longer profitable, capital is invested in unproductive sectors such as FIRE (finance, insurance, real estate), and the military-industrial complex. A recent study by The Information Technology and Innovation Foundation shows how, during the Great Depression period between 1929-1933, the percent change in manufacturing employment dropped 30.9%. But between 2000-2010, manufacturing employment has decreased 33.1%. Yet despite this massive destruction of productive forces (what is sometime referred to as the ‘real economy’) no new boom has occurred, and the destruction continues. How much more destruction can Kentucky take? How much more destruction can the national and world economy take before we can call it a ‘collapse?’ And just how much will we have to sacrifice to start a new “boom?” Is it worth it?


It is time to open a forum and ask ‘who owns Kentucky,’ but to answer all of these questions we must ultimately ask ‘who owns production?’


Production is privately owned, and determined by the laws of the market. Since WWI, the laws of the market have proven themselves incapable of growth in the productive forces like was seen during the industrial revolution. The only booms that have occurred in the past century were spurred not by growth in industry, employment or technology, but by the massive destruction of capital that took an entire world war and the poverty of the Great Depression to make happen.


Salyer proposes that Kentucky people take control of key sectors of the economy for the benefit of Kentuckians, but the problem is that up to now, no such action has been taken. The vast majority of Kentuckians have no control over production or over their own economy.


“But the state has absolutely no real power to make capital toe the line in terms of social and ecological responsibility, in terms of economic sustainability, if the capital doesn’t live there” Salyer goes on to say “If capital is owned in state, it can be held responsible and accountable in Frankfort. But, not otherwise...Kentucky has a thousand times what it needs for herself. In farm produce, Kentucky can feed legions today, and even more tomorrow.”


Salyer argues that the problem is that Kentucky’s economy is driven ‘elsewhere,’ and that by putting businesses under local private ownership, Kentucky’s economy can be spared. But this phenomenon is not restricted to Kentucky alone, and a solution in Kentucky will not be enough to spare the crisis of the national and world markets, which Kentucky is a part of. The conclusion to be drawn from that, I think, is that demanding public control and ownership over the key sectors of our economy is something that must be implemented. And this not just on a local, but on a national scale. In this case, production can really be held responsible and accountable to the public interest.


One cannot expect investment to go into something that is not profitable, regardless of its real effect on the ‘real economy’ and human lives, or what state it lives in. That is why we should put key sectors of the economy into the ownership of the public. But we also cannot expect government bureaucracies, also beholden to corporate plutocracy, to run these sectors in the interests of the people. Only by placing these publicly owned industries under the truly democratic control of working people, through union representation, factory committees, consumer councils, employee’s boards of oversight, etc. can the economy be rebuilt, and massive destruction of Kentucky’s and the United State’s productive forces be avoided.


Can we expect a forum to exist, when the political machines of the state and the nation is dominated by the twin parties of big business and finance, who oversee and implement the process of destruction from layoffs to the destruction of emergency unemployment? Salyer identifies how throughout this process of economic destruction, that Kentuckians have lost the ability to ‘control their own destinies.’ But how can working people control their own destinies when they have no political representation? In addition to a forum on figuring out “who owns Kentucky,” we must also have a program for action. This can be done by the formation of a mass-based political party who takes its roots not in business and finance, but in working people, the vast majority of Kentucky and the United States. What we need is a Labor Party for the United States.


Salyer correctly identifies that a “self-perpetuating plutocratic system has arisen to gobble up the benefits of ever-more potent technology and industry.” To challenge this plutocratic system, working people, the foundation of the ‘real economy’ and humanities main productive force, must take control of the conditions of its own prosperity. Working people in Kentucky and around the nation must begin to take control of their destinies.


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  • It appears that Salyer and Rafael are talking about different goals.  These may overlap at times (and appear to, in their criticism here), but not always.


    Rafael is focused on economic equality, and that the political system protects an unequal economic arrangement.  Salyer on the other hand seems to be complaining about outside ownership, and that government is encouraging shipping this ownership outside.  Which destroys local character, and local control ultimately, among other things.  It doesn't take much to imagine that Salyer's ideal could result in inequality, and Rafael almost explicitly pooh-poohs localizing the solution.

    To "ihateoxygen," I don't think criticising giving tax breaks especially to big, out-of-state corporations (while local businesses don't get them) is a liberal-progressive idea. 

  • So this lieyer i mean lawyer... Sorry  couldnt resist.  So if I hire him as an attorney and i think his fee is to high can i go cry to the government and make him lower it.  I bet he DOESN't provide his services for free!  Idiotl liberal progressive idea as usual.  Take a look at how many state and federal legislators are lawyers you will find a ton.  And look at the shape of our state and federal economies....hhhmm just sayin

  • Student of Lenin are we?


  • Certainly this article is not meant to defend attacks on living standards and wages, my point is that as we become more productive, we should also become more prosperous (per capita) as well

  • From what little I know of the Australian economy, it seems that Australia was able to sustain itself on a mining boom, particularly from demand for resources in China. But as China's economy is now experiencing difficulties, and a crisis of overproduction appears to be looming in Australian mining, time can only tell what will become of the Australian economy. Certainly the effects of crisis are not felt everywhere in the same way, but because of the interconnectedness of the world economy, even they cannot escape the general crisis of overproduction, falling rate of profit, etc.

  • So explain Australia having a 16dollar an hour minimum wage and riding out the last recession with no problem.   Our Republican leaders tell us the economy will collapse if businesses have to pay a decent wage?      Beginning in 1980 the buying power of thee poor and middle class was dimminished every yeaar till now a middle class person must work 2 jobs to make what at one time one job would make.