Wayne O'Leary

Applesauce

You’ve got to hand it to Tim Cook, CEO of computer giant Apple Inc.; he’s a flimflam artist of the first order. Cook’s PR skills were on full display last month during a fawning town hall-style interview broadcast April 6 on MSNBC and co-hosted by network wunderkind Chris Hayes and Kara Swisher of the technology news website Recode.

The interview, staged at Chicago’s Lane Tech College Prep High School before what can only be described as a worshipful audience of aspiring techies, was headlined (no doubt to Cook’s satisfaction) “Revolution: Apple Changing the World.” That title expresses in a nutshell how the honchos of Big Tech view themselves — as avatars of Joseph Schumpeter’s theory of capitalist creative destruction, amoral disrupters bent on destroying the boring and obsolete old world of analog, print and paper, brick and mortar, and remorselessly replacing it with an exciting new one of digitization, computers, and the Internet.

For at least one evening in Chicago, a shimmering vision of future liberation and enlightenment, of mankind ascendant, of all things possible through the magic of technology was set forth before Lane Tech’s dazzled student audience and Tim Cook’s hardly less impressed interrogators; he was the pied piper, and they were his pie-eyed followers. The total effect was that of a free advertisement for Apple consisting of a softball interview by somewhat intimidated journalists, reinforced by an awestruck audience privileged to be in the presence of entrepreneurial greatness and hanging breathless on every word.

What they heard were mostly self-serving statements by the head of what is expected, based on its stock valuation, to become the world’s first trillion-dollar corporation, by-passing rivals Microsoft, Amazon, and Google. Above all else, Cook reiterated, Apple’s leadership loved America, adding “We are patriots [who] want to create as many jobs as we can in the US.”

The facts belie that claim. Notwithstanding the much-hyped 20,000 domestic jobs Apple says it wants to generate (over five years) using its recent tax cut, almost all the company’s manufacturing is handled abroad, mostly in the Chinese factory complexes of its infamous Taiwanese subcontractor Foxconn. There, as many as a half-million workers toil long hours for low pay in atrocious conditions, mass-producing devices for American technology firms, while living in what amount to company towns where half their earnings are deducted for food and rent. Apple’s iPod, iPhone, and iPad have long been manufactured in this manner.

The company’s most profitable product, the celebrated iPhone, is assembled in Zhengzhou, China (known locally as “iPhone City”), a cozy cost arrangement that, according to the New York Times, contributes less than 4% to the value added of the phones. The Times reporter David Barboza noted in December 2016 that Apple’s contractor Foxconn can supply 500,000 iPhones per day at its Zhengzhou facility, where half of all Apple’s smartphones are produced for the world retail market — at a 38% profit, which Apple shares with Foxconn. It was Tim Cook, the patriot, who outsourced Apple’s production to Foxconn beginning around 2000.

Nevertheless, in Chicago, Cook prattled on about having created “huge” numbers of American jobs, taking credit for 1.5 million, a disingenuous claim based on individuals using Apple technology “in the basement of their home” to design apps and start personal businesses to sell their own products around the world. (The actual number of direct Apple employees nationwide is just 84,000.) In the end, Cook finally admitted that Apple was part of a “global system,” in which the manufacture of components and the assembly of products are naturally done in a variety of countries; people should therefore not “fixate” on American content or lack thereof.

The immortal Adam Smith saw Tim Cook coming 240-odd years ago. In his pioneering Wealth of Nations (1776), the founder of modern economics put it this way: “The capital of a wholesale merchant … seems to have no fixed or necessary residence anywhere, but may wander about from place to place, according as it can either buy cheap or sell dear.”

But Cook steadfastly refuses to admit that Apple is no different from any other big, moneygrubbing enterprise, or that its impact has been anything but benign. Tech is special, he wants us to believe. In Chicago, the old bromide about technology creating more employment than it destroys was trotted out again, despite undeniable evidence that Big Tech’s most iconic firms, including Apple, have either shipped the bulk of whatever new jobs they’ve created to overseas locations where labor is cheaper, or gradually eliminated them through production automation.

According to Labor Department statistics, employment at US computer and electronic companies and at semiconductor makers fell by 45 and 50 percent, respectively, between 2001 and 2016, producing a total net loss of 1.2 million high-tech jobs. That fact makes Tim Cook’s confident assertion that under Schumpeterian disruption “many more jobs have been created than destroyed” ring hollow.

When it comes to bottom-line concerns, Big Tech’s professed idealism, altruism, and disdain for profit-making turns out to be a sham. Red, white, and blue platitudes aside, companies like Apple ruthlessly pursue the dollar every bit as much as corporations of the past, and the Tim Cooks of the world are really just New Age robber barons in casual attire.

As expounded in Chicago, Cook’s patriotism was of a transparently self-interested kind. “I want America to be strong,” he trumpeted, but it seemed America’s strength could be best attained by such things as more “coding education” and expanded work visas, policies calculated to facilitate Apple’s manpower needs and global marketing ambitions.

Unfortunately, Cook’s patriotic narrative had earlier hit a snag with the year-end revelation that his company was holding $253 billion of its $269 billion total cash resources in overseas tax havens (the most for any US multinational), awaiting passage of the Republican tax-cut package with its corporate tax-holiday repatriation feature. The new law, Citizen Cook had the gall to tell his Chicago audience, was “good for America” because the money would now be invested at home.

Since then, Apple has instead unveiled a $100 billion stock-buyback plan to boost its share price and a 16% dividend increase, further enriching its stockholders (already corporate America’s highest rewarded) and adding to the record $275 billion they’ve accumulated over the past five years.

How do you like them apples?

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.

From The Progressive Populist, June 15, 2018

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