The sun never sets on Cupertino

A new article in the NYT is getting a lot of buzz: “How Apple Sidesteps Billions in Taxes.” Quoting from the piece seems superfluous; if you’ve read the headline, you have a pretty good idea what the article says, just without the details. (In short form, Apple saved about $2.4B last year by having their investment fund subsidiary incorporated in Nevada and having global subsidiaries in Ireland, the Netherlands and the Caribbean.)

This is an interesting piece, and I don’t want to downplay the significance of it. It leads to a lot of questions that are as much philosophical as economic. Is it unethical for a corporation to dodge taxes like that? If it is, isn’t it just as unethical for an individual to do so? What about the case that taxation itself is unethical, whether for individuals, businesses or both?

Yet what’s most interesting about it is how it falls in line with other reporting/campaigning recently, from conditions at factories in China doing contract work for American companies to how “green” companies are in their production lines, components, and even power generation. All these stories, without exception, are about industry-wide conditions: nearly all high-tech products are being made in China (and many by Foxconn); nearly all technology companies use a lot of power and produce a lot of tough-to-recycle stuff with production methods that are often dangerous; nearly all profitable companies, especially “globalized” ones, spend a lot of resources trying to find ways to lower their taxes.

Even though the stories eventually mention everyone else, they’re always headlined—and frequently pitched—as if they’re all about Apple.

This steams up Apple fans and analysts. “Reporters are just doing this to drive up page hits,” they rail. “They’re holding Apple to a higher standard than everyone else.” Fans can, of course, be reliably counted on to get outraged about such things, and detractors are sure to pop up in comments expounding about how Apple never does anything innovative and stole everything from Xerox and Steve Jobs was a terrible person and Apple fans are morons distracted by shiny shiny things and real computer users would never own one and hey let’s say “iSheep” because nobody’s ever heard that before and it’ll make us look so witty and thoughtful.

So: yes, this certainly does bring in zillions of page views and publishers damn well know that’s going to happen. And yes, it certainly is focusing the spotlight on Apple when it’s hardly just them doing whatever supposedly nefarious things we’re decrying.

But is it wrong to hold Apple up to a higher standard?

Apple is, at this point, the largest and most profitable technology company in history. Their profits and revenue are growing at rates which no company their size in the history of corporations has ever achieved. And they’ve arguably defined the face of computing since the mid-’80s, by continually establishing precedents that the rest of the market follows. One could make a good case that Apple has become, with the possible exception of the East India Company, the most successful company the world has ever seen.

This doesn’t excuse reporters, critics and activists from being genuinely lazy. A lot of what Greenpeace and labor activists beat up on Apple for is data that’s coming from Apple’s own published audits, a level of transparency that very few other companies even aspire to. I doubt they intend to be signaling that if you slam the door in their face they’ll give you a pass, but that’s exactly what they’re doing. And there are a lot of unsubstantiated tropes that have entered “common wisdom,” like how Apple never gives to charity. (Apple simply doesn’t trumpet how much they give to charity, which is probably just as well: they could be giving away more than most businesses make in a year and still look penurious.)

But defenders of the East India Company couldn’t really say, “Well, everybody else is doing what they do, so give ’em a break.” In fact, nobody else was doing what they did. The analogy only goes so far—Apple isn’t, as far as we know, maintaining their own private navies and establishing colonial fiefdoms abroad—but the point is that in many significant ways there isn’t anyone else doing what Apple is doing. There never has been. Apple has become the most successful company in the world by manifestly not conducting business as usual. And everything they do—from the way they market and design their products to, yes, the way they conduct business with their suppliers—sets precedents that are very likely to be with us for decades.

The silver lining here is that—whether or not they’re getting the credit they deserve for it—Apple seems to be setting precedents in transparency about their processes, too. Kind of ironic for a company that’s so legendarily secretive, but there it is. For the foreseeable future, Apple will keep telling us about their factories in China, how green they are, and how many jobs they bring to the United States so stop whining about taxes already darnit—and they’ll keep having more spotlights on them than anyone else when it comes to just what’s going on with their factories in China, how green they are, and just how much tax they really are paying darnit. This is probably the way it must be when a company is what Apple has become—and maybe it should be.

  1. chipotle posted this