Should Uncle Sam bite the forbidden Apple?
April 4, 2012 2 Comments
The United States government is $16 trillion in debt. Apple has $100 billion in cash reserves. One is a mismanaged, bureaucratic nightmare; the other an innovative, highly efficient, profit-making machine. Clyde Prestowitz of the Economic Strategy Institute has an answer to the United States’ economic problems. Have Apple do them a solid:
Americans have become used to the fact that most of the jobs created by Apple are in China. We know that Steve Jobs told President Barack Obama that “those jobs aren’t coming back.” Recently, an executive at Apple said that the company has no obligation to solve America’s problems by moving some of those jobs back to the United States. As a business, Apple has a right to fear that moving the assembly work from China to the United States will entail raising labor costs so high as to make the company less competitive and profitable. But for it to say that it has no obligation to help solve America’s problems is completely unacceptable.
Unacceptable to whom? The impulse Prestowitz indulges here is either a hopeless one or a dangerous one. Hopeless if the intention is to convince every major company to act altruistically, and dangerous if government power becomes the answer by enforcing what Prestowitz deems “unacceptable” as the law. This viewpoint is fascist at its core, demanding that companies act in alignment with what fatal conceits perceive to be the nation’s best interests. And what are the reasons Apple has this obligation?
Virtually every piece of technology in any Apple product had its origin or was partially developed on the basis of a U.S. government-funded program. In a global world where piracy of products is commonplace, Apple, like other multinationals, has continuously pressed the U.S. government to enforce copyright and patent laws to protect its intellectual property from international theft. Does Apple owe anything to Uncle Sugar? You betchum. Big time.
One way you can fall under big government’s clutches is dependency, another is the reasoning used above. Catholic hospitals recently found themselves in this same trap (i.e. “but you receive government funding, how dare you question our orders?!). Apple is supposedly indebted to the United States because government has funded research and development in the past? “Every piece of technology in any Apple product” can be traced back to a government origin? What nonsense. Prestowitz disingenuously implies that the iPhone and iPad were inevitabilities, and downplays the imperative role of Steve Jobs’ inventive, risk-taking brilliance. He further attempts to co-opt Apple’s success by noting the US government’s enforcement of the rule of law. Where does that logic end? Am I required to house a civil servant because the government protects my rights to private poverty? Apple and I both pay our taxes.
Prestowitz then partakes in the fool’s errand of explaining to a company raking in profits and flush in cash how it can better operate. Some excerpts:
These components require intensive capital and technology investments, but they do not require a great amount of labor. In other words, they can all be produced in America. Indeed, according to a recent study by Booz and Co., to supply the U.S. market, the most competitive location in which to produce these components is the United States… So what should Apple do?… Apple should go further by telling other suppliers that it wants more components to be made in America. One advantage for this move is that it can create an environment in which more research and development is possible, which in turn can strengthen overall innovation for Apple… Apple should also move some of its assembly operations to Mexico… and help reduce the U.S.-Mexican trade deficit, which is about $55 billion annually.
A strong moral case can be made that Apple should get out of China based on the fact that it’s run by a gangster-commie government that tortures prisoners of conscience in its gulag. But even if, by some miracle, Prestowitz does know better than Apple about its own economic interests, he is playing an endless game of whack-a-mole. Does he intend to then make a business case for each of a number of subsequent companies to repatriate their operations? Time would be better spent fixing the regulatory and tax policy of the bloated behemoth with the $16 trillion debt. Create a freer environment for businesses to operate within. They are not meant to respond to pleas for help, but will respond to the financial incentive of a lower tax scheme. And if Apple still doesn’t come back, a more entrepreneurial environment will ensure that whatever is the next Apple also springs up in the USA. Either way, we should let Apple keep solving technological problems, and demand our government start solving its own budgetary ones.