Apple’s Riches are Cool?
Published in Le Figaro
(France) on 26 March 2012
by Pierre-Yves Dugua (link to original)
(France) on 26 March 2012
by Pierre-Yves Dugua (link to original)
Translated from
by Ann Marshall Thomas.
Edited by Casey J. Skeens.
I’ve stayed silent on this topic for a week to give commentators and analysts a chance to weigh in on a subject I find fascinating. I haven’t noticed any major breakthroughs, so I’ve decide to put in my two cents.
Have you noticed that no one seems upset about Apple’s exorbitant profits?
From an American point of view, which favors risk and capital gains in a competitive environment, I am not appalled that Apple can accumulate some $100 billion in profit. Is it even worth pointing out that a part of these profits are invested in foreign countries in order to avoid repatriation taxes in the United States? (I’ll get back to this later.)
But with today’s populist/anti-capitalist movement, notably in France, a country that invents new taxes every day to punish large companies or “the rich,” I would have thought that Apple’s money would have offended certain sensibilities.
After all, if we subscribe to the mood of the moment we would have to say, “If Apple is rich, it must be because the company stole its money from someone.” Luckily, Apple is not listed in the French stock market index. If it were, the firm, co-founded by Steve Jobs, would most certainly be subjected to a surcharge in the name of national solidarity and “redistributing” the wealth of capitalists.
Here are some questions that I would have expected from those who believe the current economic crisis calls for us to punish success in the name of equality.
- “Why not force Apple to lower its prices?”
- “Why not require Apple to raise the salaries of its employees and sub-contractors?”
- “Why not oblige Apple to assemble its products in the United States and to use American workers rather than set up factories in China?”
- “Why don’t we establish a maximum profit ceiling that a company can achieve, above which, 100 percent of its profits will be confiscated?”
After all, the iPad is expensive. That’s not fair, is it?
I suspect there are several reasons for which Apple has escaped the “fiscally correct” police. Firstly, Apple is not the only company to accumulate enormous profits. In fact, it just decided to redistribute a modest part of those profits to its shareholders. But it is in good company: Cisco, IBM, Microsoft, Google and Oracle among others, are sitting on hundreds of billions of dollars.
The oil companies have made enormous profits too, but in their case, the battle is over. Barack Obama wants to raise their taxes. They are perceived as dirty polluters who finance fascist regimes. I’ll move on.
We don’t even need to mention the banks. Instead of rejoicing to see that they are changing their policies and beginning to accumulate surpluses, we continue to accuse them of all financial problems. Ditto for the automobile companies.
There is decidedly something special about the “high tech” companies that are still seen in a good light. They are “cool.” Especially Apple, which sells its products to the larger public. No company is cooler than Apple.
Cisco, Oracle and IBM are cool too, but the larger public never sees their products. However, it seems we are still willing to give them the benefit of the doubt.
Another important point: These companies did not have to be bailed out in 2008-2009. Lucky.
The lifespan of “high tech” companies is especially low, but no one seems bothered. The universe of innovation has no pity. Do you remember Sun Microsystems? 3Com? Nortel? AOL? Even RIM is on a downward slope that may be fatal.
This lower lifespan, which makes up the day-to-day life of “capital risk” professionals, proves that to provide the state with the means to invest public money in “companies of the future” (a practice that is popular in France at the moment) is dangerous and naive. This practice is an excellent way to forge political friendships but an even better way to waste taxpayer money. No one really knows how to identify a “company of the future,” especially government officials or even financial engineers. Only the market can decide the success of a given product or service. I understand that this is a difficult reality for many in France. It doesn’t correspond with centuries of Colbertism (philosophy espoused by Jean-Baptiste Colbert). In a certain manner, each person who invests in the stock market believes they have identified “the company of the future.” But relatively few are truly successful. It is practically impossible to create a stock portfolio that appreciates, in the long-run, more than the share indexes. I repeat, in the long-run...
Let’s get back to Apple. The company has recently been criticized for using Asian sub-contractors who exploit their employees. National Public Radio (NPR)’s discovery that reporter Michael Daisey had actually fabricated much of the story is heartening and deserves its own blog post.
In short: Michael Daisey (author, actor and agitator) has been all over the news in the past few weeks. MSNBC and the other left-leaning media groups gobbled up his story. On air, he denounced the abuse he claims to have seen in China with his own eyes: mutilated employees, adolescents forced to work in the Apple’s subcontracting factories and intoxicated with dangerous chemicals, clandestine workers’ unions…etc. The talented Michael Daisey wrote his own show entitled, “The Agony and Ecstasy of Steve Jobs.”
There is just one little problem: Daisey flagrantly distorted the truth. NPR decided to verify whether or not his “reporting” in China really happened as he said. They uncovered that Daisey exaggerated, reconstructed, invented, recreated, fabricated and embellished his story into a full-fledged fiction. He probably didn’t invent all of it. But his credibility as a “journalist” is seriously damaged. End quote.
For the moment, Apple has escaped populist vindication. This is good news. In the United States, a politician who, in order to prove he is on the people’ side, forces a company to invest here rather than there, would be denounced as a socialist. People tell me that in France, this word doesn’t mean the same thing. Shame on those who believe otherwise.
There are, however, reasons to criticize Apple. If not for its commercial and financial success, then perhaps for the closed character of its “ecosystem:” Apple controls the supply of applications sold on iTunes and decides the prices of the music, films, digital books, authors’ profit margins and newspapers. Apple protects its profits in every possible way. Its power is enormous. The company even dictates its conditions to many “non-high-tech” sectors.
Apple acts in the interest of its shareholders, but not always in the interest of the rest of humanity. Fortunately Google, Amazon, Microsoft, Facebook and others are still holding on to their own pieces of the tech world. Many criticisms of Apple could also be applied to Google and Amazon, companies that also control their “ecosystems” for their own good.
A free-market economy, defended by the law and the government, is the correct response to this hegemonic menace. Not regulation of profits, investments, labor requirements or taxation, at least until the free-market no longer regulates itself...
I would like, for example, to see the free-market equalize the relationship between the press and publishers on one side and Apple and Google on the other. I dislike the idea that tech companies can monetize content created by writers and publishers. But like all things, as soon as our own personal interests are thrown into the pot, our perspectives change.
Have you noticed that no one seems upset about Apple’s exorbitant profits?
From an American point of view, which favors risk and capital gains in a competitive environment, I am not appalled that Apple can accumulate some $100 billion in profit. Is it even worth pointing out that a part of these profits are invested in foreign countries in order to avoid repatriation taxes in the United States? (I’ll get back to this later.)
But with today’s populist/anti-capitalist movement, notably in France, a country that invents new taxes every day to punish large companies or “the rich,” I would have thought that Apple’s money would have offended certain sensibilities.
After all, if we subscribe to the mood of the moment we would have to say, “If Apple is rich, it must be because the company stole its money from someone.” Luckily, Apple is not listed in the French stock market index. If it were, the firm, co-founded by Steve Jobs, would most certainly be subjected to a surcharge in the name of national solidarity and “redistributing” the wealth of capitalists.
Here are some questions that I would have expected from those who believe the current economic crisis calls for us to punish success in the name of equality.
- “Why not force Apple to lower its prices?”
- “Why not require Apple to raise the salaries of its employees and sub-contractors?”
- “Why not oblige Apple to assemble its products in the United States and to use American workers rather than set up factories in China?”
- “Why don’t we establish a maximum profit ceiling that a company can achieve, above which, 100 percent of its profits will be confiscated?”
After all, the iPad is expensive. That’s not fair, is it?
I suspect there are several reasons for which Apple has escaped the “fiscally correct” police. Firstly, Apple is not the only company to accumulate enormous profits. In fact, it just decided to redistribute a modest part of those profits to its shareholders. But it is in good company: Cisco, IBM, Microsoft, Google and Oracle among others, are sitting on hundreds of billions of dollars.
The oil companies have made enormous profits too, but in their case, the battle is over. Barack Obama wants to raise their taxes. They are perceived as dirty polluters who finance fascist regimes. I’ll move on.
We don’t even need to mention the banks. Instead of rejoicing to see that they are changing their policies and beginning to accumulate surpluses, we continue to accuse them of all financial problems. Ditto for the automobile companies.
There is decidedly something special about the “high tech” companies that are still seen in a good light. They are “cool.” Especially Apple, which sells its products to the larger public. No company is cooler than Apple.
Cisco, Oracle and IBM are cool too, but the larger public never sees their products. However, it seems we are still willing to give them the benefit of the doubt.
Another important point: These companies did not have to be bailed out in 2008-2009. Lucky.
The lifespan of “high tech” companies is especially low, but no one seems bothered. The universe of innovation has no pity. Do you remember Sun Microsystems? 3Com? Nortel? AOL? Even RIM is on a downward slope that may be fatal.
This lower lifespan, which makes up the day-to-day life of “capital risk” professionals, proves that to provide the state with the means to invest public money in “companies of the future” (a practice that is popular in France at the moment) is dangerous and naive. This practice is an excellent way to forge political friendships but an even better way to waste taxpayer money. No one really knows how to identify a “company of the future,” especially government officials or even financial engineers. Only the market can decide the success of a given product or service. I understand that this is a difficult reality for many in France. It doesn’t correspond with centuries of Colbertism (philosophy espoused by Jean-Baptiste Colbert). In a certain manner, each person who invests in the stock market believes they have identified “the company of the future.” But relatively few are truly successful. It is practically impossible to create a stock portfolio that appreciates, in the long-run, more than the share indexes. I repeat, in the long-run...
Let’s get back to Apple. The company has recently been criticized for using Asian sub-contractors who exploit their employees. National Public Radio (NPR)’s discovery that reporter Michael Daisey had actually fabricated much of the story is heartening and deserves its own blog post.
In short: Michael Daisey (author, actor and agitator) has been all over the news in the past few weeks. MSNBC and the other left-leaning media groups gobbled up his story. On air, he denounced the abuse he claims to have seen in China with his own eyes: mutilated employees, adolescents forced to work in the Apple’s subcontracting factories and intoxicated with dangerous chemicals, clandestine workers’ unions…etc. The talented Michael Daisey wrote his own show entitled, “The Agony and Ecstasy of Steve Jobs.”
There is just one little problem: Daisey flagrantly distorted the truth. NPR decided to verify whether or not his “reporting” in China really happened as he said. They uncovered that Daisey exaggerated, reconstructed, invented, recreated, fabricated and embellished his story into a full-fledged fiction. He probably didn’t invent all of it. But his credibility as a “journalist” is seriously damaged. End quote.
For the moment, Apple has escaped populist vindication. This is good news. In the United States, a politician who, in order to prove he is on the people’ side, forces a company to invest here rather than there, would be denounced as a socialist. People tell me that in France, this word doesn’t mean the same thing. Shame on those who believe otherwise.
There are, however, reasons to criticize Apple. If not for its commercial and financial success, then perhaps for the closed character of its “ecosystem:” Apple controls the supply of applications sold on iTunes and decides the prices of the music, films, digital books, authors’ profit margins and newspapers. Apple protects its profits in every possible way. Its power is enormous. The company even dictates its conditions to many “non-high-tech” sectors.
Apple acts in the interest of its shareholders, but not always in the interest of the rest of humanity. Fortunately Google, Amazon, Microsoft, Facebook and others are still holding on to their own pieces of the tech world. Many criticisms of Apple could also be applied to Google and Amazon, companies that also control their “ecosystems” for their own good.
A free-market economy, defended by the law and the government, is the correct response to this hegemonic menace. Not regulation of profits, investments, labor requirements or taxation, at least until the free-market no longer regulates itself...
I would like, for example, to see the free-market equalize the relationship between the press and publishers on one side and Apple and Google on the other. I dislike the idea that tech companies can monetize content created by writers and publishers. But like all things, as soon as our own personal interests are thrown into the pot, our perspectives change.
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