Innovation/Global Risk

Apple:  “No obligation to solve America’s problems”

By Shlomo  Maital


 Apple’s jobs: in China


A hard-hitting blog by Clyde Prestowitz, former chief trade negotiator under President Ronald Reagan, highlights a key dilemma facing America.  Global companies based in America feel no duty to take into account the interests of their country; rather, they seek to maximize profits, often at the expense of American workers. 

   In a previous blog, (July 1, 2011: “iPod not Apple of America’s Eye”), I noted how most of the iPod jobs are in China.  In last Sunday’s New York Times, a top Apple executive was quoted as saying: “We [Apple] don’t have an obligation to solve America’s problems”.

    Comments Prestowitz: “Apple’s products still have a large U.S. government R&D content and I’ll bet that the guy who says Apple has no obligation to help Uncle Sam does strongly believe that Uncle Sam has an obligation to stop foreign pirating of Apple’s intellectual property and to maintain the deployments of the U.S. Seventh Fleet and of the 100,000 U.S. troops in the Asia-Pacific region that make it safe for Apple to use supply chains that stretch through a number of countries such as China and Japan between which there are long standing and bitter animosities.”

   Prestowitz concludes:  “Apple is not the pinnacle of capitalism. It’s the pinnacle of the marriage of Silicon Valley innovation with strategic Asian mercantilism.”  

    Prestowitz recalls:  “In the 1981-86 period I was one of the U.S. government’s top trade negotiators, especially with Japan. At that time, Apple was trying to crack the Japanese market for personal computers and getting nowhere. Steve Jobs and other Apple executives had the funny notion that the U.S. government had an obligation to help them and asked me and other negotiators at the Commerce Department and the Office of the U.S. Trade Representative to help them get on the shelf in Japan. 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 U.S. government money.”

    Perhaps Apple has slightly modified JFK’s dictum to read: “Ask not what we should do for our country, ask only what our country can do to fatten our own profits”.  There is a massive asymmetry here, as Prestowitz notes.  America’s trade deficit with China has grown in recent years, even under Obama.  It will stay huge, until attitudes of global American companies like Apple completely change.