Apple's $98 Billion Is Blood Money

There's a lot of hand-waving around Apple's use of sweat shop labour in China. Apple CEO Tim Cook is offended and outraged by the mere suggestion that Apple engages in poor labour practices. And now they've sent the "Fair Labor Association" into Foxconn to perform an "audit" of labour practices at the company.

It's all bullshit.

Know how I know? Because Apple has $98 billion and the Chinese workers who make their shit have zilch. Because Tim Cook got this:

In an SEC filing, Apple revealed that it awarded Cook with 1 million shares of Apple stock. At today’s closing price of $383.58, his new stock is worth $383 million.

However Apple workers get this:

Employees work excessive overtime, in some cases seven days a week, and live in crowded dorms. Some say they stand so long that their legs swell until they can hardly walk. Under-age workers have helped build Apple’s products, and the company’s suppliers have improperly disposed of hazardous waste and falsified records, according to company reports and advocacy groups that, within China, are often considered reliable, independent monitors.

More troubling, the groups say, is some suppliers’ disregard for workers’ health. Two years ago, 137 workers at an Apple supplier in eastern China were injured after they were ordered to use a poisonous chemical to clean iPhone screens. Within seven months last year, two explosions at iPad factories, including in Chengdu, killed four people and injured 77. Before those blasts, Apple had been alerted to hazardous conditions inside the Chengdu plant, according to a Chinese group that published that warning.

And what are they paid for the privilege of crappy work in sometimes dangerous conditions? According to an article in the Guardian they get as little as $8.16 PER DAY. Let's do some quick math, shall we? A Chinese Apple worker would have to toil for 47 million days (that's 128,787 years) to make as much money as Cook received in a BONUS last year. Or, put differently, all of Foxconn's 500,000 workers have to work for three months to make us much as Cook.

So, I don't care if Apple builds Foxconn workers a new cafeteria or the Scab Fair Labor Association goes a little walkabout with company management to take iPhone pics of the smiling, happy workers that are lined up to prove how great their jobs are. In the context of the Chinese dictatorship, which penalizes any attempt to form independent unions, this can be nothing but a charade.

And let's face it, Tim Cook is CEO precisely because he is the Apple executive most responsible for setting up Apple's lauded "supply chains" - i.e. Walmart style narrow profit margins for suppliers in third world countries, primarily China. They didn't make Tim Forstall, the guy who heads up Apple's iOS development - the software in Apple's most successful hardware line-ups, like the iPhone, iPad and iPod. They didn't make Jonathon Ives, the man behind Apple's signature design style, the CEO. No, they made the sweatshop master their big boss - because making profits is Apple's first priority.

So, when Tim Cook says in one breath that he is offended by the suggestion that Apple profits from sweatshops - and in the other talks about how they are trying to decide what to do with their $98 billion cash horde - he is lying. That $98 billion doesn't belong to shareholders, whose prime quality that they have brought to Apple is the fact that they are giant investment funds and super wealthy investors. It belongs to the hundreds of thousands of workers who make the products from which Apple profits so heavily. But don't expect Apple to give any significant amount of that money to the workers - for one thing generosity of spirit is penalized by the stock market. If it goes anywhere, other than into making Apple even bigger, it will be to those wealthy shareholders who have already profited heavily - with Apple's stock having risen 20% in the last year alone. In other words, that $98 billion is stolen money - and in the context of worker suicides and life-shortening hard labour in Apple suppliers' factories, it is even worse than that. It is blood money.

Apple CEO seeks ‘patience’ from investors on $98-billion cash horde - The Globe and Mail:

'via Blog this'

Saint Jobs In Perspective

Been a bit swamped with work - and building a mud hut for my daughter - for the last week but even up to my elbows in mud and straw I knew about the iPhone 4S release and the death of Steve Jobs. As for the iPhone 4S, well, I think that the weird obsession with changing the shape of the damn phone by many tech commentators was totally ridiculous, embarrassing even. I mean, who cares? Clearly not consumers who are snapping up the things in record numbers - 1 million in 24 hours apparently. Apple hasn't staged its remarkable rise from the edge of the grave about 15 years ago by being stupid. They know that there's no point in adding too many new features in an annual refresh cycle because people won't notice ten new things. But do a few awesome things and people will go ga-ga. Besides the dual core chip and shmancy new 8-megapixel camera, etc, the introduction of the Siri personal assistant AI program is the game-changer this time and that is what is selling the phone in such big numbers. Of course, one doesn't want to over-step in the prediction department but it seems to me that Siri is going to be much bigger than most analysts have, initially, realized. Remember when the iPhone 2 came out - way back in 2007 (only four years ago!) - and we all went berserk for the cool touchscreen scrolling. It was a whole new way to relate to your computer (and a smartphone is just a small computer that happens to make phone calls). Well, introducing natural language processing along with an AI that understands context ("remind me to pick up the milk when I leave work", "Text my mom and tell her that I'll be there this weekend.") is a whole new way of interacting. From the demos it already looks pretty amazing and my guess is that Apple will make it work in a way that Google hasn't for the simple reason that Google's model is to throw innumerable ideas at the wall to see if they stick - Google Wallet, Google Voice, Google Plus, Google Goggles, etc. Apple picks its next big thing and pushes hard on it. My guess is that once Siri is established and running smoothly on the iPhone 4S we will see it rolled out to the iPad, Mac computers and the Apple TV. It will have some significant knock-on effects that we can't yet envision - just as we couldn't, when Apple came out with the iPod, know that it would lead to iTunes, etc.

I know that is a bit of a nerd-gasm that seems bereft of political analysis but it's actually a prologue to my thoughts on the death of Steve Jobs. So, please grant me a small measure of forbearance.

First off, the elevation of Jobs to sainthood is a bit nauseating and most of what people on the left are saying is true - as much as anything, Apple pioneered the outsourcing to Asia of component manufacturing to take advantage of sweatshop conditions. That reality is underlined by the fact that Jobs' chosen successor, Tim Cook, was the man most responsible for setting up those "supply & distribution chains" in Asia. And it's absurd to think that Jobs came up with all the tech ideas that are now key to Apple's success or even that they originated within Apple's research and development department (Apple actually does very little R&D compared to other tech companies). But to say that is a bit besides the point - individuals always invent tools and generate ideas in the context of a socially generated need and on the foundation of work by others (somebody invented the computer and then the graphical user interface for which a mouse was a tool that made sense, Apple commercialized these advances. Einstein came up with relativity in the context of a series of well-known problems and partial solutions around the turn of the century). All knowledge and all inventions are first and foremost social. But it's also silly to just pretend that Jobs existence didn't matter (or Einstein's for that matter). In a world where a tiny elite get to make the key decisions in politics and industry, most of the time their decisions do make a difference and the fate of companies, industries and nations can be decided by the brilliance or foolishness of the leader. This is a particularly inefficient way to run society, of course, and makes the world prone to a lot of avoidable disasters - even if it weren't for the fact that the profit dynamic often benefits from avoidable disasters. And it's not the only dynamic - masses of people do still struggle to make their voices and ideas heard, scientists toiling away in their thousands do generate new devices and ideas to provide technological advances. But the hierarchical and undemocratic nature of our society gives undue weight to the role of "leaders".

And the dramatic turnaround of Apple from its near-death experience in the late 1990s cannot be separated from the return of Steve Jobs to the helm. He was a master at finding the cutting edge of useable - not beta - technology; connecting it to popular desires and fantasies about technology; understanding the importance of "stylish" and ergonomic form factors (basically bringing fashion or the car industry model of annual design changes into the computer world) that meant that their products "just work" without complicated user's manuals; and then he understood, or came to understand, how to integrate it into a total, monetized and convenient ecosystem. Before iTunes started carrying movies - and, of course, they aren't the only ones any more - I would go to the considerable trouble of downloading pirate films simply because it was the only way to get movies online. Hollywood and the music industry refused to offer its films and music online, fearing the loss of control (and profit). The arrival of iTunes smashed first the music industry's distribution model and then the film and television industry as well. Granted, both industries have learned to profit from the new model (with Apple dipping its fingers into the pie now) but we forget that this simply didn't exist ten years ago. Just the other day I was talking to a musician I know about download cards that indie musicians sell at shows. No longer are they saddled with cases of CDs in their basement or car trunk. Take home the download card - or go onto your iPhone or iPad and type in a few numbers and ba-da-boom you have the album on your phone. With iCloud it will instantly exist across all of your Apple devices. That is a significant advance. It wasn't that they invented anything new per se it was that they knew how to meld together established technologies towards disruptive ends. Apple is now a behemoth with a total ecosystem that is awe-inspiring, particularly now with the introduction of iCloud and the deep integration of Siri into iOS.

Back to the hagiography of Jobs, of course the media is drooling over him. He was the perfect capitalist: modest in appearance, a family man who shunned ostentatious displays of wealth, and a "self-made man" who was outcast from the garden of Apple and then returned as a mature man to save it again. The blood and guts, as always, are disappeared - we don't hear about the ruthless competition and the tens of millions spent on litigation to disrupt competitors (the ongoing patent war with Samsung, for instance, has reached ludicrous proportions). And we don't hear much about the toiling workers in Chinese sweatshops who are denied the most basic rights and are paid a pittance in order to sell the glorious iPhone at a low cost to North American and European consumers. I don't pretend to know the demographics of the people mourning Steve Jobs with flowers and sticky notes outside of Apple Stores around the world - are they rich, middle class, working class, etc? Beats me. My guess is that in, for instance, China, there aren't a lot of workers taking flowers to mourn Steve Jobs. They have bigger fish to fry. But to lots of people in North America he is a symbol of something, even if it is a manufactured symbol and that is interesting to me. And - while I'd rather people identified with Occupy Wall Street (and Boston, and Chicago and Toronto, et al) - I'm not willing to just write people off who look to Steve Jobs as dupes. In many ways he represented the hope that the world can be changed - even if it was primarily via tech gadgets - and I, for one, am not willing to shit on that hope.

Steve Jobs' Biggest Success: Sweatshops & Fat Salaries

The other day I mused on the simultaneous outpourings of sadness and loss over Jack Layton & Steve Jobs and what each of them represented. As I noted at the time I am a Mac Head and a bit of a technophile/gadgetphile. Having had a few days to think about what I wrote I've decided that I was too soft on Mr. Jobs. My eyes were filled with iPhones - perhaps it's my anxious wait for the new iPhone 5/4S coming in the next few weeks - and I felt a twinge of betrayal as I typed up my blog post on a Macbook Pro. But I've broken free of Steve's evil spell and I think it's important to set the record straight.

Steve Jobs real advance was not in creating great products. Of course he realized that for Apple to survive meant leveraging cutting edge tech that was nonetheless ready for the consumer market. He hired Jonathon Ive to design stuff that looked sexy and Steve thought outside of the box when it came to things like ways to transmit audio and, ultimately, video. The creation of the smartphone was, perhaps, his biggest masterstroke and a game-changer.

All that is true but the man who to whom Steve Jobs handed the throne at Apple wasn't Jonathon Ive the innovative designer, it was Tim Cook the Chief Operating Officer. Cook's claim to fame is not technological innovation or having a finger on the pulse of the American (world?) consumer. Rather, he is the man credited with cranking up Apple's bottom line by neo-liberalizing the hell out of the company - getting Apple out of manufacturing and outsourcing everything that wasn't nailed down, particularly to Asia and other low wage economies. Of course, that shouldn't surprise us, Cook is also on the board at Nike, another notorious sweatshop company. He is, in other words, a hatchet man. So much for all that hippie love and Levi's jeans wearing regular guy shit that Apple was supposed to represent. In this sense, Apple really led the way in decimating the American tech industry and putting manufacturing into the hands of workers living in repressive low wage regions like China where trying to form an independent union can get you some serious jail time. According to this article in Working In These Times:

According to former Intel CEO Andy Grove, in the 1970s there were about 150,000 Americans working in the computer industry. Between the 1970s and now, the computer industry economic footprint grew from being a $20 billion a year industry to $200 billion a year. At the peak of U.S. employment in the computer industry, there were two million people employed in making computers in the United States.
Now, with most computer manufacturing being done overseas, there are only 150,000 Americans employed in the computer industry, according to Grove, who wants to reverse the trend.

In These Times is, frankly, a bit obsessed with moving tech jobs back to the USA, as though that is a solution. Workers in the USA have also suffered declines in real wages over the past two generations. In fact, if the issue were social justice, Chinese workers could rightly point to the fact that their incomes have doubled or trebled in the same time period and wildcat strikes have not only been more widespread than in the USA, they have won bigger wage gains. "Buy American" is simply not a viable solution for the problem of neo-liberal wage and benefit cuts. However, it is certainly the case that while wage rises have been significant in China in the past 20 years, wages remain low and conditions are still often appalling as an investigation by the UK Daily Mail discovered:

Yet, amid all the fanfare and celebrations this week (for the release of the iPhone 4 when the article was written), there was one sour, niggling note: reports of a spate of suicides at a secretive Chinese complex where Jobs's iPhone, iPod and iPad - Apple's new state-of-the-art slimline computer - are built and assembled.
With 11 workers taking their lives in sinister circumstances, Jobs acted swiftly to quell a potential public relations disaster.
Stressing that he found the deaths 'troubling' and that he was 'all over it', the billionaire brushed aside suggestions that the factory was a sweatshop.
'You go in this place and it's a factory but, my gosh, they've got restaurants and movie theatres and hospitals and swimming pools,' he said. 'For a factory, it's pretty nice.'
His definition of 'nice' is questionable and likely to have his American workers in uproar if such conditions were imposed upon them.
Foxconn employs 420,000 workers at its Shenzhen plant where conditions are very basic with no air-conditioning
For, as Apple's leader was taking a bow on the world stage, the Mail was under cover inside this Chinese complex. And we encountered a strange, disturbing world where new recruits are drilled along military lines, ordered to stand for the company song and kept in barracks like battery hens - all for little more than £20 a week.

But while the workers who make Apple products lack the right to form independent unions and make less than $40 a week, not so Tim Cook who helped create the sweatshop. According to Forbes Magazine, Tim Cook received total compensation of $59 million in 2010. No, you didn't read that wrong - fifty-nine million dollars. As a reward for his new role as the CEO of Apple, Cook was given a little gift: 100,000 shares in Apple. At its present value those shares are worth $383 million. Just to put that in perspective, last year Tim Cook was paid the same amount as 28,365 workers at Foxconn who made the iPhone, iPad, etc etc. And that, really, sums up Steve Jobs' greatest hit.