By Peter Certo
The late Steve Jobs was, without question, a brilliant designer, a skilled businessman, and a talented aesthetician. His leadership of Apple fundamentally changed how we use computers and how we listen to music, and it is largely because of him that many of us now live our lives through the small devices we keep in our pockets.
Jobs was, moreover, an inspiration to those who wanted to believe that a different kind of businessman—even a different kind of American—could master the capitalist system. He was, in the words of progressive blogger Juan Cole, an “Arab-American, Buddhist, Psychedelic Drug User, and Capitalist World-Changer.”
But Steve Jobs was something else, too: the personification of Apple’s anti-establishment brand. He was a living, breathing monument to the underdog and the freethinker, an image most famously peddled by Apple in its notorious “1984” commercial heralding the arrival of the Macintosh computer. In the days since his untimely death, the social media universe has been suffused with quotations from Jobs’ addresses to students, his thoughts on life on death, and his exhortations to the passionate yet frustrated youth of the world, bearing testimony to the resilience of his reputation.
Jobs was most certainly aware of the marketing niches that might be secured by dint of his personal aura. Indeed, as numerous studies have suggested, today’s Apple users are considerably more likely than their PC counterparts to consider themselves nonconformist, open-minded, and politically liberal. Outpacing its small but growing share of the overall computer market, Apple has captured the biggest share of laptop users at U.S. colleges, as young people increasingly turn away from the stodgy and inflexible PCs depicted in Apple’s famed “I’m a Mac” commercials.
But such is marketing. Jobs may have been an exceptional designer, but when it comes to the multifaceted corporate malfeasance that has come to characterize the global electronics industry, Apple is exceptional for its profit margins alone.
Unsavory Practices at Home and Abroad
Like the forbidden fruit of Adam and Eve, Apple’s troubles begin in the ground.
In recent years, activist campaigns like the “Enough” project have highlighted the role so-called “blood minerals” have played in prolonging the war in the Congo, which has left more than 5 million people dead since 1998. With its rich deposits of tin, tungsten, coltan, and gold – essential components for circuit boards and other electronic apparatuses – the eastern Congo is a hotspot for tech suppliers from all over the world.
Enriched by hundreds of millions of dollars from foreign technology companies, armed groups in the region exploit Congolese civilians by using them as forced labor in often-dangerous mineral mines. As various factions fight for control of these mines and the trade routes connecting them to markets, the civilian populations caught in the crossfire are routinely brutalized.
Prompted by the bad press over its “genocide phones,” Apple announced last April that it would attempt to purge conflict minerals from its African supply chain. However, in accordance with a congressional proscription on conflict minerals that took effect that same month, Apple’s compliance is likely to be largely voluntary and thus not subject to independent audits. In any case, companies like Apple and Hewlett Packard have already fueled the conflict for more than a decade.
Apple has drawn further criticism for abuses in its manufacturing process, particularly at the Shenzhen, China complex of Foxconn, a Taiwanese manufacturing behemoth that has assembled electronics for virtually every major tech company in the world. Disguising himself as an American investor, journalist-playwright Mike Daisey visited the Foxconn complex and documented dozens of reports of abusive labor practices, including the widespread use of child labor, the intimidation of employees seeking redress for workplace injuries, and more generally an oppressive combination of lengthy shifts, constant surveillance, and authoritarian management. The Foxconn Daisey described was essentially a private-sector partner to the Chinese government’s program of oppression: it kept would-be activists busy, monitored, and under control.
Apple fervently disputed Daisey’s allegations, but there’s no disputing the disturbing spate of worker suicides that preceded his visit. In the months prior to Daisey’s visit—a peak production period when Apple was gearing up to release the iPhone 4—at least 18 Foxconn workers attempted suicide, 14 of them successfully. Foxconn responded to the ensuing outcry by increasing wages, but it also forced employees to sign “no-suicide” pacts, cancelled compensation to the families of workers who took their own lives, and installed “suicide nets” beneath tall buildings.
Outside of Shenzhen, a recent report by a coalition of Chinese NGOs has linked Apple suppliers to widespread environmental contamination in China, contributing to polluted water supplies and sharp increases in cancer deaths. Apple won plaudits for withdrawing from the U.S. Chamber of Commerce over its climate-change denial, but one wonders whether it will be willing to do the same with its environmentally hostile partners in China.
Finally, inside the United States, Apple has lent its support to the so-called WIN America campaign, a lobbying effort by a coalition of large U.S.-based corporations to get Congress to let them repatriate their offshore funds at dramatically lower tax rates. Much of this money is ferreted away in offshore tax havens. Although these companies promise to create new jobs with the repatriated dollars, a new report by the Institute for Policy Studies shows that the largest beneficiaries of a similar tax holiday in 2004 simply used the extra money to increase their executives’ compensation, cutting hundreds of thousands of jobs in the years since. Apple itself stands to save over $4 billion in taxes if the holiday is enacted, effectively stiffing the U.S. taxpayers who have funded the public infrastructure on which Apple relies to do business.
At every stage of the process, then—extraction, manufacture, and market—Apple’s business practices have hurt the people on whom the company relies for its prosperity.
Of course, Apple is hardly the lone offender when it comes to such abuses, nor even is it necessarily the worst. The company indeed uses the same unenlightened suppliers, contractors, and lobbyists as many of its major competitors, as well as countless other manufacturers from other sectors of the marketplace.
But that is exactly the point. Apple’s products may be exceptional, but judged at least against the sorry standards of global capitalism, the way it makes its money isn’t. The company’s marketing successes among self-described progressives, artists, and students—that vanguard trio of globalization critics—is a remarkable testament to the successful “anti-establishment” brand so personified by its late chairman.
It shouldn’t have to be this way. Apple’s profit margins are famously comfortable, with the company profiting not only from the sale of devices but also from an endless traffic of iTunes and apps. More robust supply chain diligence would hardly turn the company’s ink from black to red. But even if it would, the company enjoys the brand recognition, market share, and affluent customer base to weather a slight increase in the price of its devices, which are already decidedly luxury items. How many other tech companies, after all, can count on devotees lining up outside stores days in advance to shell out $600 for the latest version of a product they probably already own?
Of course, when faced with a business model that depends on war zones, sweatshops, and offshore tax shelters, to consider what level of reform would still permit Apple’s executives to turn a profit seems at best perverse.
Maybe, with the loss of Steve Jobs, Apple’s rebel brand will eventually fade and the company’s executives will find it profitable to clean up their operation. It would certainly befit the memory of a man President Obama called “brave enough to think differently.” Jobs certainly thought differently, but the company he created acted the same as the competition.
Peter Certo is an editorial assistant with the Institute for Policy Studies.