Jobs, Jobs and Cars by Krugman

[elleng]

Mitch Daniels, the former Bush budget director who is now Indiana’s governor, made the Republicans’ reply to President Obama’s State of the Union address. His performance was, well, boring. But he did say something thought-provoking — and I mean that in the worst way.

For Mr. Daniels tried to wrap his party in the mantle of the late Steve Jobs, whom he portrayed as a great job creator — which is one thing that Jobs definitely wasn’t. And if we ask why Apple has created so few American jobs, we get an insight into what is wrong with the ideology dominating much of our politics. . .

So we should be grateful to Mr. Daniels for his remarks Tuesday. He got his facts wrong, but he did, unintentionally, manage to highlight an important philosophical difference between the parties. One side believes that economies succeed solely thanks to heroic entrepreneurs; the other has nothing against entrepreneurs, but believes that entrepreneurs need a supportive environment, and that sometimes government has to help create or sustain that supportive environment.

And the view that it takes more than business heroes is the one that fits the facts.

http://www.nytimes.com/2012/01/27/opinion/krugman-jobs-jobs-and-cars.html?_r=1&hp

[baldguy]

1. Why is Apple considered to be an American company? Because the owners are American?

Is Rolls Royce a German company because it's owners are BMW and VW? No, it's a UK company because the manufacturing is done in the UK and most of it's employees are in the UK.

Most of Apple's employees are in China and all of it's manufacturing is in China. Why isn't Apple treated as a foreign company?

[JDPriestly]

2. K&R

[harmonicon]

3. Huh?

Rolls Royce is just a brand now if it's owned by another company. Mini isn't a British car company either, because it's owned by BMW, even though they make the cars in the UK. Is Toyota an American company because they make cars in the US? BMW too, I guess.

What separates Apple even further is that they don't even have many employees in China. They contract with companies there. I'm no pro-WTO free trade capitalist or anything, but even I can make these distinctions.

[limpyhobbler]

5. Sure they are an American company technically.

Sure they are an American company in the sense that they were started in America. They started in the US and that's where their headquarters is.

And they are subject to some American laws. Although they also avoid alot of American laws by having their production overseas.

But to get a little bit philosophical, what is a company?

Is a company just a board of directors and a legal address? Think of all those companies that are headquartered at P.O. boxes in the Caribbean to avoid US law.

Or is a company all the workers and the entire system of production that exist to serve the headquarters? I know it's a different way to think about a company. For example is GM just the board of directors, or is GM really all the auto workers who work there?

I like to look at that question both ways. And it doesn't make much difference to me whether the factory workers are legally employees of a US-based entity, or they are employees of an outsourcing contract factory in China. Those are just technicalities.

So in that sense, Apple is a half Chinese company that just happens to have its HQ in the US. If all it's production operates under Chinese labor rules, Apple is pretty much Chinese. I could say they are half Chinese.

And why pick on Apple? The same could be said of many companies. All that stuff we buy at walmart, the clothes at the mall, at the GAP, Old Navy, Toys R US, HH Greg, Best Buy, etc etc.

It's all manufactured under Chinese labor law, or Indonesian law, or Philippines law. Those companies might be part American, but there is something very Un-American about it at the same time.

[harmonicon]

6. Those are not just technicalities.

Thinking that way prevents you from being able to seriously critique the situation.

[limpyhobbler]

7. Whatevs. Apple/Nike/Walmart are legally American. But all their crap is built in China by slaves.

They build it over there to avoid American labor laws. Meaning they like paying people $1.50 per day. If you want to call that an American company, cool, the law says that as well. To me it's un-American behavior.

Taking a broader view, since all that stuff is built by workers in China, and since they comply with Chinese law and authority as much as American, and because they have no sense of patriotism but only seek to maximize profit, I think they are as much Chinese as they are American.

[harmonicon]

8. Do you really think about it this way?

Since pre-history, products were the result of trade around the world. This sort of relationship predates the idea of a nation state. I think ideas of blind patriotism are poisonous in any scenario, and they're certainly not going to help here.

Have you considered that it may be important to Apple, as a business, to not own their own manufacturing facilities? This allows them to contract things out to whatever company can deliver the product they want at the highest quality. Getting angry won't change the fact that it may well be that the companies that can best provide those goods and services to Apple are in China.

Have you also considered the fact that we, as westerners, are a minority in this world? Are you upset that BMW makes cars in the US? See, German/EU labour laws and wages are better than those of the US, so they shouldn't do that, right? Or is it not hypocrisy you have problems with, but simply anything that's not pandering to simple ideas of patriotism which are only effective for feeling indignant, not for getting things done?

[limpyhobbler]

9. Thank you for asking.

Have you considered that it may be important to Apple, as a business, to not own their own manufacturing facilities?

Yes it is very important to Apple/Nike/Walmart to have manufacturing in China. That allows them to pay next to nothing for labor so they can make more profit.

This allows them to contract things out to whatever company can deliver the product they want at the highest quality.

Companies do not care about "quality" beyond the extent that it affects their profits.

Getting angry won't change the fact that it may well be that the companies that can best provide those goods and services to Apple are in China.

Whatever. They service they provide is access to an exploited and oppressed workforce.

Have you also considered the fact that we, as westerners, are a minority in this world?

I agree "westerners" are a numerical minority in the world, but it has no direct bearing on the issue of US companies manufacturing in China/Indonesia/Philippines.

Are you upset that BMW makes cars in the US?

No.

See, German/EU labour laws and wages are better than those of the US, so they shouldn't do that, right?

US labor laws are lacking, but they are nowhere near as bad as in China. The difference between German and US
labor standards is much less than the difference between US and Chinese labor standards. Also labor practices in China are enforced by an oppressive dictatorial political system that is in no sense accountable to its own people.

Or is it not hypocrisy you have problems with, but simply anything that's not pandering to simple ideas of patriotism which are only effective for feeling indignant, not for getting things done?

I do not understand what you mean by "hypocrisy". Which hypocrisy? My concern in this conversation is for 1) workers displaced from high-quality manufacturing jobs in the US and 2)workers exploited in low-quality conditions in Asia.

[harmonicon]

10. If you're upset about exploited workers, you're picking the wrong battle.

Having Apple contract with a manufacturer in another country wouldn't change the working conditions of the Chinese. You can get upset about free trade, tariffs, political relationships between the countries' respective governments, etc., but blaming companies that only work in this world set up by others won't accomplish that.

Which hypocrisy? You're upset about the fact that non-Americans are making products for American companies but not upset that non-American companies make products in the USA. That's hypocrisy.

In terms of companies like Foxxcon, no workers were displaced to give them their current contracts. US industry dropped the ball a long fucking time ago when it comes to that kind of manufacturing. There aren't US companies that could do what they do.

[limpyhobbler]

11. I don't want to buy or use products made by slaves.

Having Apple contract with a manufacturer in another country wouldn't change the working conditions of the Chinese. You can get upset about free trade, tariffs, political relationships between the countries' respective governments, etc., but blaming companies that only work in this world set up by others won't accomplish that.

I am not focused on Apple. They are not worse than any other company. What do you think would help to improve the condition of the exploited Chinese workers?

Which hypocrisy? You're upset about the fact that non-Americans are making products for American companies but not upset that non-American companies make products in the USA. That's hypocrisy.

Sorry you misunderstood or I did not express myself clearly. I do not have a problem with non-Americans making products to sell in the United States. I have a problem with manufacturing industries paying their workers barely enough money to survive, not allowing workers to organize unions, dangerous/unsafe working conditions. I have a double problem if the national government supports that oppressive exploitative behavior. I have a triple problem if that government is unelected and unaccountable to the people.

In terms of companies like Foxxcon, no workers were displaced to give them their current contracts. US industry dropped the ball a long fucking time ago when it comes to that kind of manufacturing. There aren't US companies that could do what they do.

I do not care about Foxxcon or Apple particularly. I have a problem with the ethical implications of mistreating workers and any companies who participate in that exploitative system should be held to account, regardless of whether they are based in the US or China or another country.

[harmonicon]

12. What would help is fair trade, not free trade.

You can say that "companies who participate in that exploitative system should be held to account," but that won't get us anywhere. Where are you going to draw the line? Find me a business that doesn't use a computer. Those computers are made in China or another SE Asian country, so then isn't every company participating in that exploitative system? What company can run without the use of fossil fuels? Where are those fossil fuels coming from?

The point I'm trying to make is that you shouldn't blame an American company for operating in an economic environment regulated by governments. By being upset with the companies, you're running at windmills.

As far as how you spend your money, I'm on your side here. When I can, I always buy a product made in a country with good wages and labour laws over a competing product produced elsewhere. Unfortunately, this is not always an option.

[limpyhobbler]

4. Good point.

I would just point out that we can say the same of many companies, not just Apple.

Nike's shoes are all made overseas, Everything at Walmart is made in China. Everything at the mall, at the Gap and Old Navy, that stuff is all stitched together by people making less than $5/day.

And it makes little difference to me whether the factory workers are technically employed by some other local contractor.

[Doctor_J]

13. I think you will see this pattern developing

Devoted libs & Dems who have been trying to get the president to move left will stop bitching and start campaigning for him, at least as far as drawing the distinctions between him and the loony right.

[elleng]

14. Sure hope so!