Saturday, October 24, 2015

Apple: Rotten at the core

Apple workers in China (Reuters, Bobby Yip)

By Eric Alterman in The Nation magazine (Rotten at the Core):

...To focus on Steve Jobs's personality is to obscure a far more important point about the global force he helped to unleash.

Apple may be the most successful corporation of all time. It recently reported a quarterly profit of $18 billion, the largest in history. Its record for technological innovation is unchallenged. It is the most admired brand in the world, according to the 2015 Interbrand Best Global Brands report. And its recent market-capital valuation at $765 billion (before dropping a bit) is the highest ever for any US company... 

But two other factors have contributed mightily to Apple’s success: the unconscionable exploitation of the people who manufacture its products, and the company’s refusal to contribute even a fraction of its fair share in taxes...

In December 2014, the BBC documentary series Panorama secretly filmed inside a number of Chinese facilities where employees of Pegatron and Foxconn were assembling the newest iPhones. As the documentary noted: “The team found Apple’s promises to protect workers were routinely broken. It found standards on workers’ hours, ID cards, dormitories, work meetings and juvenile workers were being breached.”

...The corporation could easily demand structural changes in the way its supply chains are constructed and workers are treated. But it can get away with only pretending to do so because the vast majority of its customers—to say nothing of its fanboy media following—care only about the coolness of its latest gadgets, and not a whit about the exploitation and misery experienced by the people who actually make them.

Similarly, Apple is just as good at avoiding taxes as it is at making iPhones. In 2013, a Democratic Senate staff investigation found that by creating mail-slot entities all over the world and attributing its profits to them, Apple has managed to pay just 2 percent in taxes on $74 billion of income overseas. According to Citizens for Tax Justice, 18 of America’s largest corporations, led by Apple, deployed these tactics to avoid paying $92 billion in US taxes last year. 

And if that isn’t bad enough, Apple—which has $181.1 billion socked away in offshore accounts—is among the group of multinationals lobbying Congress to grant them a second repatriation tax holiday so they can bring an estimated $1.7 trillion home at the significantly reduced rate of 6.5 percent. The last tax holiday, passed in 2004, led to a cut of more than 20,000 US jobs and lowered R&D spending—directly contrary to the arguments made on its behalf, the Senate report found.

If only someone would make a movie about that.