Tuesday, February 14, 2012

Dragons' Teeth and Crocodile Tears

Okay, Duncan, get to work!

I've been meaning to write about this for weeks, but you know how I am; it took me until yesterday to change my holiday-themed profile picture on Facebook, and then only because several people nagged me. I mean, c'mon, if I delay just a few months more it'll be War on Christmas Season again and the picture will be timely. But anyway.

I think I detect a slight waning of Apple adoration, and even of Jobs worship, since the media began covering the horrific work conditions in the Chinese factories where Apple products are made. I could be wrong, though. Some writers have argued that it's not fair to pick on Apple, because conditions are no better in the factories that manufacture electronics for other companies. True, Apple is not the only offender, but it's appropriate to single them out simply because Apple devotees were so damned smug about their electronic pets, and so cultish about Jobs. And to be fair, it seems that some of them have admitted that using people up might be too high a price to pay for having the coolest toys. That's progress.

I was writing about this before Jobs became late, and in my first post about his legacy I used Apple as only one example of the human costs of capitalism. Judging by some of the articles I read which focused mainly on Apple, they may just have felt betrayed: But, but, Steve -- I thought you were cool! I mean, you're a genius and a visionary! Say it ain't so!

We learned from the new biography that Jobs had criticized Obama for not being "business-friendly" enough.
"You're headed for a one-term presidency," he told Obama at the start of their meeting, insisting that the administration needed to be more business-friendly. As an example, Jobs described the ease with which companies can build factories in China compared to the United States, where "regulations and unnecessary costs" make it difficult for them.
If this sounds like a typical "economic freedom" whine, a la the Koch Brothers, it is. For all that such people complain about government interference in the economy, they couldn't succeed without it, and indeed they expect and demand it. Tabloid Friend on Facebook linked to this New York Times article which contains a now-famous anecdote about the development of the iPhone. Jobs demanded scratch-proof glass, and he got it from China.
When an Apple team visited, the Chinese plant’s owners were already constructing a new wing. “This is in case you give us the contract,” the manager said, according to a former Apple executive. The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory. It had a warehouse filled with glass samples available to Apple, free of charge. The owners made engineers available at almost no cost. They had built on-site dormitories so employees would be available 24 hours a day.
Notice the sentence I put in boldface there; most people apparently didn't. Mostly the lesson we were supposed to learn from this story was "supply chains." China has the newest and best and the US doesn't. But supply chains aren't a natural product of "economic freedom," they're complex infrastructure that capitalists aren't interested in building themselves.

Some might argue that this isn't really capitalism, it's residual Communism that the Chinese haven't fully weaned themselves from. But this sort of government subsidy is exactly how capitalism works in the real world, as opposed to the propaganda of "economic freedom."
In particular, companies say they need engineers with more than high school, but not necessarily a bachelor’s degree. Americans at that skill level are hard to find, executives contend. “They’re good jobs, but the country doesn’t have enough to feed the demand,” Mr. Schmidt said. ... Apple executives believe there simply aren’t enough American workers with the skills the company needs or factories with sufficient speed and flexibility.
I'm not sure that the executives' contention should be believed, partly because an engineer with a bachelor's could probably do the job just as well, but would probably cost too much. And notice that they clearly want those "factories with sufficient speed and flexibility" to just grow out of the ground. Building such factories themselves would be expensive, and cut into profits. That's why Apple and other companies go overseas, where the factories have already been built with government subsidies. The same goes for the engineers "China provided"; they didn't emerge from their mothers' wombs with the skill set they needed. But who's going to pay for training those engineers? Not I, said the Jobs.

Alexander Cockburn wrote a good column on this for The Nation, quoting a Reagan-era trade negotiator who had been angered when an Apple executive told the Times, “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”

In the 1981–86 period, Prestowitz says, Jobs and his executives “had the funny notion that the US government had an obligation to help them…. We did all we could, and in doing so came to learn that virtually everything Apple had for sale, from the memory chips to the cute pointer mouse, had had its origins in some program wholly or partially supported by US government money…. The heart of the computer is the microprocessor, and Apple’s derived from Motorola’s 680X0, which was developed with much assistance, direct and indirect, from the Defense Department, as were the DRAM memory chips. The pointer mouse came from Xerox’s PARC center near Stanford (which also enjoyed government funding). In addition, most computer software at that time derived from work with government backing.”

Prestowitz points out that Apple also assumes the US government is obligated to stop foreign pirating of Apple’s intellectual property and, should supply chains in the Far East be disrupted, to offer the comforting support of the Seventh Fleet. “And those supply chains. Are they the natural product of good old free market capitalism, or does that scalability and flexibility and capacity to mobilize large numbers of workers on a moment’s notice have something to do with government subsidies and the interventionist industrial policies of most Asian economies?”

What Prestowitz says is what the arch-heretic Noam Chomsky (among others) has been saying all along: the wonders of American free enterprise were in reality products of government intervention and subsidy. And remember that bit in Jobs' complaint to Obama, about the ease with which companies can build factories in China? It's a lot easier when the Chinese government and American taxpayers are footing the bill. Why do American companies get tax breaks for operating overseas? That is what the Right calls "social engineering" and "redistribution of wealth" if it goes in the other direction. But it should: tax breaks, perhaps, for returning production to the US; maybe even subsidies for building up our supply chains; but it would also be legitimate to raise taxes on companies which operate overseas.

Last Friday Democracy Now! did a segment on the human cost of cheap, cool high technology. One guest was Charles Duhigg, a New York Times reporter who'd done a series on conditions in the factories. Mostly he gushed about the "amazing products" Apple produces, and the infrastructure that makes that cornucopia possible:
Well, one of the things that President Obama asked was, is it ever possible to bring back those jobs to the United States, to make iPhones in the U.S.? And what Steve Jobs said was—I think accurately—those jobs are never coming back. And the reason why isn’t just because workers are cheaper in China, although that—they are cheaper in China; it’s because China has established a huge competitive advantage over the U.S. There are supply chains that exist in China and Asia now which the U.S. simply can’t replicate. And there’s a system of labor there that allows factories to hire 3,000 people overnight or, as Mike can speak to, create facilities that house 250,000 workers and change them in a couple of hours or a couple of days from one product to another. It’s an amazing, amazing manufacturing capacity that’s grown up overseas—with harsh costs associated with it, but that makes it possible for us to get a brand new iPhone every single year.
"There's a system of labor there" that "by American standards, would be almost unconscionable." But Apple is "enormously well-meaning," and "you have to take Apple at their word, because this is a major corporation, they usually don’t lie about stuff like this." (I sat there astounded as this nonsense poured giddily out of the man's mouth.) But the important thing is that it makes it possible for us to get a brand new iPhone every single year; one shudders to think about the consequences if we couldn't.

The other guest, Mike Daisey, was more critical. He's doing a one-man show called The Agony and the Ecstasy of Steve Jobs, based on interviews he did with Chinese factory workers.

MIKE DAISEY: Well, Foxconn chose to deal with the suicides, in the period when I was visiting—what they had done, after month after month of suicides, was put up nets.



AMY GOODMAN: To catch the bodies.

Duhigg's response?
Without Foxconn—and there’s only really one or two other companies that can do what Foxconn does—you can’t produce 300 million iPhones. You need a partner like this that you can give designs to, and they can start it rolling out a week later. And Foxconn does it amazingly. Now, conditions inside the plants are fairly harsh, as Mike so eloquently describes. But it is—it’s a new type of company that really we haven’t seen in history.
Well, that's all right then. Mr. Duhigg will no doubt flourish at the Times. But it does appear that Apple's lustre has begun to tarnish. Not only The Daily Show but This American Life -- both epitomes of US media cool -- have done segments critical of Apple, and that's got to hurt. Apple is fighting back, though.
In the last month, Apple has released a damning audit which found that almost 100 of Apple’s supplier factories force more than half their workers to exceed a 60-hour week. The company announced responsibility for aluminum dust explosions in Chinese supplier factories that killed four workers and injured 77. Hundreds more in China have been injured cleaning iPad screens with a chemical that causes nerve damage.
This is a familiar tactic, though, as Jeff Ballinger, the author of the article I just quoted, points out. It's what Nike did when conditions in its factories were revealed. By ostentatiously taking responsibility while limiting transparency and insisting on voluntary monitoring, companies can maintain a good PR front without changing conditions very much, except for the people who really matter.
This is not to say that these high-profile monitoring operations are worthless. Just ask the shareholders who saw Nike bounce back from being equated with slavery to join the top rankings of “responsible” companies. “Corporate social responsibility” has proved invaluable at repairing brand images and wrong-footing the anti-sweatshop movement – maybe what Bill Clinton had in mind when launching the Apparel Industry Partnership, precursor to the FLA.
Yesterday FAIR had a blog post on the other leg of Apple's defense: that, as New York Times tech writer David Pogue, put it, "Bringing workplace standards and pay in Chinese factories up to American levels would, of course, raise the price of our electronics. How much is hard to say, but a financial analyst for an outsourcing company figures a $200 iPhone might cost $350 if it were built here." And while "we" feel deeply for the Chinese workforce, "we" don't want to pay more for our iPhones! FAIR then linked to a Columbia Journalism Review piece by David Chittum which demolished Pogue's arithmetic.

Even if Pogue were right, and as much as I love my cheap laptop and other electronics, nobody has a right to lower-priced toys at the expense of other human beings' lives or health. We've been spoiled, and we will have to grow up. But it looks like our artificial people, the corporations, will have to grow up first. Apple takes a huge profit margin on the goodies it sells to those of us who want to be cool, Chittum says 71%, and by his calculations Chinese workers could have decent pay and tolerable working conditions without the margin dropping below 50 percent, without having to raise the price of an iPhone at all. Apple would make huge profits instead of obscene ones. Since their profits depend not only on degrading and shortening the lives of their factory workers but on government subsidies in both China and the US, I don't think they'd have grounds for complaint. The world doesn't owe Apple Computers, or any other company, a living. Nor does it owe me, or you, inexpensive computers and cell phones.

Remember: "business-friendly" means "corporate welfare."