Tea Time With Jesse

Six of One, Half Dozen the Other

My Treasonous Charge Gets Squashed

Posted by middlerage on January 25, 2012

Annie, aka the cgig, gives a well reasoned counterpoint to my diatribe about Apple:

[…], why is it considered treasonous in this case for the corporation to go overseas for workers? They were “born” here, partly due to the opportunities that the US provides…education supporting the creators; governmental regulations in their favour; etc. From there, they have expanded to an international company. It would be nice for them to stay in the US then, and continue to foster the economy (and give a bit back), but you mention that they now do business with 100 companies worldwide. Once they have expanded that network, why are they obligated to keep the jobs in the US? Who are they obligated to be patriotic to, if they have shareholders and clients all over the globe?

Not to get all Personhood on you here, but let’s compare this to an individual. Think of it as a person who was born in the US, and moved overseas for work. Possibly because the job market in the US wasn’t that strong. Is that treasonous? In both cases, the person/organisation is doing what is selfishly economically beneficial to them. The person was educated in the US and received all the benefits of growing up with this particular society’s way of fostering growth. Should they feel obligated to stay in the country and give back to it, both through taxes and staying engaged in the community and doing public service? It would be nice if they did, but hardly anybody would consider it selling out their country if the person went overseas.

Well, said. To paraphrase A Street Car Named Desire – I’ve always depended on the kindness of friends to bring me out of my tree. Also I confess I don’t understand the T. Pratchett reference, so you’ll have to explain.

Perhaps we can imagine a spectrum. Let’s construct a selfishness/citizenship spectrum: If there are people on one end of the spectrum that would sell out their country for nothing but money (not even ideology), and fascists on the other end, with an über sense of nationalism, then reasonable, logical folks should be somewhere in the middle. There just is no point in having a corporation with no selfishness at all, otherwise you’re not making money. I ‘get’ that many corporations had a choice of move over seas or close up shop. You can’t even argue about the morality or amorality of Apple if they no longer exist. (Well, I suppose you can, but…)

So now we get to those devilish details. Just where on the spectrum should corporations fall? I feel like they have drifted too far towards the selfish end of the spectrum. Most Americans vote, pay taxes, serve on juries, and generally follow the law. One of the things that warms my patriot heart is the post I had awhile ago about how furriners view America. A whopping number of comments concerned the honesty boxes you see by rural highways selling firewood or potatoes. Foreigners, especially Britishers were amazed. Now, in the great honesty box of life, how well do I think corporations treat honesty? Not very.

Anyway, your point is well taken, so now it is just a matter of what corporations should be doing to be at a good point along the selfishness/citizenship spectrum. Which brings us to your next part:

Let’s see if we can’t find a mutually beneficial arrangement…the best way forward might be to provide the corporations an economically desirable way for them to do what we want. […] Who in China provides the training? They must be acquiring their qualifications somehow. Presumably it is part of the state-sponsored education system? If so, then perhaps the US should offer that same sort of training. (This is different than sending people back to school to better compete for jobs that currently exist, since that still ends up with the same number of people employed. This is about making companies want to create new jobs in the US.)

I guess all this comes down to a question of approach. Is it going to be “this is the way people are, how do we deal with it?” or “this is the way people are, how do we change them?” (out-of-context credit to T. Pratchett) The changing them gets hard. They will always act for their own self-interest, whether that is the individual or the corporation. But if we can align their self-interest with ours, maybe we can deal with them.

As for “why is it the US that needs to solve the problem”–because it is OUR responsibility to stay relevant in a changing world. Let’s take a good long look at our strengths, and an equal one at our weaknesses, and figure out what niche we can best fill in the future.

If you watched the State of the Union last night, then I think President Obama and you are singing from the same page, which is nothing to be ashamed of. But I disagree with him. If corporations are not pegged at the selfish end of the spectrum, then what kind of ‘citizenship’ things could they be doing? Reagan republicans love to privatize things, and what could be more perfect than corporations setting up their own training centers rather than depending on community colleges? In fact, isn’t this some of the history of our current school system? Forward facing rows, punctual start and end times, homogeneous rote learning all to benefit the industrial revolution (I admit that ‘history’ may be apocryphal, but still…). I would argue that contributing to the training of your own workers is a win-win and also contributes to your contribution as a good citizen.

Again, if we give corporations stable transportation, patent laws, domestic security, tax relief, financial incentives, yadda yadda, what are we getting in return?


8 Responses to “My Treasonous Charge Gets Squashed”

  1. So do small businesses get an exemption from training their own workers? Is that mom-and-pop shop going to have to pay a scholarship to hire a machinist to compete with overseas rivals? Small businesses don’t ship jobs overseas, they simply fail.

    I agree that there’s a spectrum and some companies are more evil than others, and that all corporations could use a nudge in the ‘good’ direction. Before Enron, almost no business schools required any study of ethics. Yikes. But when you single out Apple, where does Apple’s donations* to Project Red (fighting AIDS in Africa) come in? How about the similar investment in two Bay Area hospitals? Is that not ‘enough’? Personally, in light of yesterday’s earnings report, I think they could do more, but what’s the guideline here? Is it a percent of earnings? Of revenue? Of net?

    We have a word for how we as a society decide the appropriate amount for corporations to pay. It’s called taxes. If you want to argue that it’s too easy for corporations to weasel out of paying taxes, you’ll get no argument from me. Providing loopholes makes our legislators rich. If you want to say that corporate taxes are too low even for the companies that don’t exploit an essentially corrupt government (if any such companies exist), I’m willing to listen. If you want to say that only voluntary contributions to society count in the balance of good vs. evil, then to be honest I’m not much better than a corporation.

    * sorry, not sure I’m allowed to tell you numbers – Apple seems to actively avoid publicity about this stuff.

    • middlerage said

      I was going to respond to your comment over at the first post, but hadn’t got’round tuit yet, so I’ll combine my responses here.
      Over there, you said:
      “Do they owe it to the US to manufacture stuff here? I really don’t think so. They are going a long way toward leveling the labor markets worldwide, and that’s going to benefit all of us in the long run. Happy middle-class Chinese people don’t invade Taiwan.”

      So here is a root point of disagreement, and the inspiration for my posts: I do think they owe it to us. I don’t think corporations can exist as part of the scenery. They are more than that – members of our community. And as members they need to contribute somewhere along an undetermined part of that spectrum that isn’t pegged at one of the endpoints. I think dividing up corps into Apple-USA and Apple-BRazil and Apple Ireland is disingenuous. I’m not picking on you – I think this is a favorite tactic of CEO-speak. But come on, I’m not letting Tim Cook off the hook if Apple-Brazil sells embargoed super chips to Iran.
      Additionally, it is a happy benefit of the amoral wolf that he is culling the sick and the old from the herd and keeping the herd as a whole healthy, but that’s not the reason he is hunting the sick – he is selfishly trying to eat. Likewise, I’m glad happy Chinese don’t want to invade Taiwan, but I’m not going to give Apple credit for that.
      Another (or related) root of disagreement is your statement, “We have a word for how we as a society decide the appropriate amount for corporations to pay. It’s called taxes.” I think that members of a community owe more than direct payments to the government. Voluntarily more.
      There is also confusion about what I mean by educating their own workers (my fault for not being clear). So let me clarify: I do not want to privatize education, I do not want to do away with community colleges. I want company owned training centers to be in addition to traditional education. You can graduate H.S. and move on to auto mechanics school, or comm. coll. or uni, and if you are lucky enough to live in Cupertino (or depressed Oakland) you can go to “Apple School” and learn how to be a manufacturing engineer. And. And. Be subsequently employed. But I also think this is a minimum. Passing out eTextx to all schools would be a citizen-contribution beyond the minimum.
      In your other comment you made a couple of points that I also disagree with – you said that Apple employs a lot of people (emphasis yours), but the way the NYT article puts it, that is not the case. I mean domestic workers. I don’t know who is right, and the NYT is not omniscient so I happily take them with a grain of salt. And you said that Apple doesn’t do sweetheart deals. Actually they very recently started a server farm in NC with a sweetheart tax deal from the state gov. The actual “sweetness” of the deal is a matter of opinion, and is not as great as an absolutely sickening one given to Google by the state.
      In your first sentence, above, you ask about small business responsibility. Fair enough, and I admit large corps get picked on for this, but I don’t think it is unfair; I will resort to that old commie mantra – From each according to his abilities, to each according to their needs.

      This kind of engagement is precisely what I intended for a “tea time” conversation. I’m having fun. Good on you and Annie. And good on Apple, because I don’t think we’d be having this conversation about Enron or BP – what is there to say about pure evil? But Apple does enough good that ironically they set themselves up for dissection (I know I am repeating what you’ve already said). I am MOST impressed, with Apple, that you feel so free to talk about this. Companies are not known for their respect of free speech. Oh, and giving insurance to sweetiepie rocks too.

    • middlerage said

      Just had another thought – both the news and you have mentioned that Apple has had an extremely good quarter (year?) and is sitting on gobs of cash. I would like them to spend some on charities, but if they didn’t, and a year from now we are in a global depression and Apple is making NO money, but because they saved up a war chest they can pay all of their worker anyway…I will be impressed. And unaware of my hypocrisy. As long as they do good with the cash, whether short term or long term. I think (but am not sure) a lot of cash helped Ford pull through the crisis. I guess I am long-windedly saying that saving up gobs of cash is not necessarily a bad thing. Especially if they spend it on you during a rough patch.

  2. Annie said

    I don’t know that Apple (or any other similar company) feels that they have an obligation to the US based on our national benefits that they receive (tax benefits, patent laws, domestic security, etc). I am not saying I subscribe to this, but what Apple might say in return is: we have provided you with new technology and an entirely new way of life for a huge number of your citizens. How many people believe their quality of life has increased because of our products? I won’t lie, my sanity and work ethic is sometimes dependent on my ipod being charged.

    Minor sidetrack for reminiscing: about a week before I left Duke, you asked me whether I thought people were inherently good or evil. I think I answered “inherently animal”. It is all based on survival and wellbeing of the individual and their community, which gives back to them. People rank “my needs” first, and second place is a close tie between “my wants” and “other people’s needs”. It can swing either way depending on the circumstances, though “people I know (i.e. in my community)” will always rate far above “100 people I don’t know”. (This explains why people are appalled about worker suicides at Foxconn, but aren’t sending in their iPhones for a refund.) But even more importantly, it explains why corporations act the way they do, since corporations are made up of people acting like people, who are concerned about themselves (job security) and their community (the company/investors), with a slightly wider community including some nationalistic sense. The best we can hope for is that they will go out of their way to be as human and civil and patriotic as they can be, right up to that line where it starts to cost them extra money. What we might think they *ought* to do isn’t relevant, as that assumption requires them to be inherently good.

    One of the more rambling points I was trying to make in my last comment was: how do we make conditions in the US such that it is as profitable for them to keep jobs in the states rather than ship them overseas? Providing a labour force with the right training already might be a good start. Though I completely skipped over the labour costs issue, which was horribly remiss of me. So what can we do instead? (You know me Jesse, I always need to find solutions too!)

    New plan: Companies that sell products in the US have to abide by same labour rules as the US does. living wage as appropriate for local cost of living (bonus: that means US workers get that too! talking to you, Walmart.) certain amount paid holiday/sick leave, workers comp, health and safety, hours limits. other benefits as appropriate. This means the workers all over the world are not subsidizing our consumerist lifestyles by working for practically nothing. Also makes us a more competitive workforce, dollar for dollar. Even though the cost of living in these other countries is lower than here (and therefore wages are still less), with transportation costs it may come closer to evening out. Enough to make a bit of a difference, at least.

    downside: cost of all products will immediately increase, including essentials. Americans will never accept that. Plus, that will cause cost of living to increase in the US, which will (by that new rule) require that minimum wage increase also, which will make us less competitive as compared to those overseas companies again.

    downside #2: some companies may decide that it is no longer profitable/worthwhile to do business in the US at all, and will only sell their products overseas. May not apply to originally US based companies, but if, say, a Japanese or Swedish company manufactures in China under bad conditions but makes a product that is essential to future growth/competition worldwide, we are SOL.

    upside: even if we don’t get all these jobs in the US, there will be a dramatic increase in well-paying jobs in China etc. More competitiion for these jobs. Expectations will get noticed by other companies, including those that primarily supply other developed countries. perhaps this becomes the norm expected for all companies supplying developed countries.

    upside #2: manufacturing all items increases in cost, so it becomes more economically worthwhile to buy high quality products that will last a long time. This is more environmentally sustaining also. see Germany, where manufacturing hasn’t gone out of fashion, mostly because “german made” means “your grandchildren will be shrivelled and old before this vacuum needs to be replaced”. My German flatmate’s mother once refused to buy her a crockpot because the company was coming out with a new model and would only guarantee parts and service on this one for 10 years more.

    alternative #1: can we dramatically increase taxes on any company that doesn’t abide by these worker regulations, rather than banning them completely? and direct these taxes to subsidies for worker training for companies who keep jobs in the US?

    Downside #1 is really the killer here…any alternative solutions that you can come up with that can avoid this??

    wow this got long…btw this is a really fun thread, Jesse. And Jerry, really interesting to hear your take on this too–don’t walk away unless your blood pressure requires 🙂

    • middlerage said

      No worries on long responses. I know that Santa Fe NM ordained a living minimum wage to lots of hand-wringing. I have no idea how it is working out for them. I’m sure a few more towns with a liberal bent probably have done the same. We’ll just have to wait for studies and results.

      People keep saying that consumer products will get too expensive if they are built with ethics in mind (both enviromentally and workers rights), and Americans won’t stand for it. But I don’t like that worry for two reasons: 1) How do we know American’s won’t stand for it? Will we really stop shopping? Besides, the Apples products are so expensive, yet we still buy them. 2) Having been in the midst of the mitigating-global-warming-will-wreak-economic-havoc war, I’m just amazed by this type of thinking. There is only one alternative – we have a good economy and a frying pan for our descendents. It strikes me as saying, “Let’s not pull this car off the railroad tracks because the tow truck costs money.” What? You think the freight train will stop because of dumb luck?

      The German model is interesting to me, but I confess I don’t understand how companies make money when they only sell you a product once every twenty years.

      Finance and economics is the least interesting subject, for me, but the one I most wish I understood.

      How regulated is kiwi-land?

    • middlerage said

      From the HuffPo comes an idea. Think fair trade coffee.

      But there is another possibility, a version of the fair trade system developed for coffee growers and some other agricultural products. In this system, a third-party investigation sets floor prices based on responsible humane and environmental protection methods. In the electronics industry, the suppliers could use such reference pricing to increase their bargaining positions, and buyers could pay above the fair prices to claim meeting ethical standards. This should not be difficult in the electronics industry, where those in the trade know very well the prevailing prices and costs of particular products. And prices could be revised regularly to reflect technological innovation or wage increases. If some suppliers try to cheat the system by charging the fair price, but with substandard practices, their competitors will soon find out and the negative publicity could lead to contract cancellation. The beauty of the system is to use the subcontracting networks to monitor the contractors as competitors would always be on the lookout for cheating. Fair trade price does not eliminate market competition but curb its worst excesses and reward the responsible players.


  3. Annie said

    Oh yeah, paragraph 2 above was a general response to the selfishness-citizenship spectrum. Every human act falls into both the hierarchy and the spectrum, which would probably look like an Escher drawing if you tried to combine them into a single diagram 🙂

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