Wednesday, February 15, 2012

Sure, Apple Could Build the iPhone Here | The Nation:

In loyalties, Apple is spiritually offshore. “We sell iPhones in over a hundred countries,” 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.”

It was the phrase about having no obligation that riled up Clyde Prestowitz, one of the US government’s top trade negotiators in the Reagan years. In an acrid posting on the Foreign Policy website and in a chat over the phone with me from his winter quarters in Maui, Prestowitz efficiently dismembered Apple’s “no obligation” pretensions and its rationale for why it and kindred companies had no alternative to offshoring.

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 about those jobs that “aren’t coming back”? We’re not talking about simple assembly that costs a bundle per unit in America and mere cents in China. In the mid-’90s, at the Apple plant in Elk Grove, California, the cost of building a computer was $22 a machine, compared with as little as $5 at a factory in Taiwan. This is not a dominant factor when the machine sells for $1,500 and you have costs like transport to figure in. Furthermore, stricken America is actually becoming a low-wage magnet.