The Moral of Apple’s Success

Do you remember the brilliant ad campaign by Apple in the late-1990s? It featured the images of some of history’s greatest and most daring personalities, such as Albert Einstein, Muhammad Ali, Mahatma Gandhi, Amelia Earhart, John Lennon and Yoko Ono, among others. In this advertisement that brought the company back into the realm of the counterculture, Apple boldly reminded us to “Think Different”, and to honor those who challenge the status quo and “push the human race forward.” Is it possible for a profit-oriented corporation to really be a part of this inspiring tradition?

If we are to accept the judgment that corporations are people, as the US government and other governments apparently judge them to be, then perhaps we can imagine what kind of people they would be in the real world. The 2004 documentary, The Corporation, written by Joel Bakan, attempted that thought experiment and argues that many major, multinational corporations tend to behave the way that psychopaths would and, therefore, should not really be too attractive as leaders. According to a checklist established by Canadian psychologist Robert D. Hare, tendencies of the psychopath may include: a grandiose sense of self-worth; a cunning/manipulative nature; a lack of remorse or guilt; and a failure to accept responsibility for one’s own actions.

While companies like Monsanto and ExxonMobil may fulfill many of these checklist tendencies in their pursuit of profits, at least according to their critics, Apple hardly projects this kind of image. Instead, it comes across as super-hip, creative, intellectual, suave, and even caring. Think of all of the films and TV shows where your favorite character or recognizable face has their computer open with the iconic Apple symbol clearly on display. Meanwhile, the iPhone is often hailed as one of the most revolutionary products ever.

Apple’s product designs have traditionally been favored predominantly by left-brain users, and I recall a time when one could safely assume that a Mac user was either an artist, musician, designer, or something to that effect. Apple happily encouraged this kind of niche market and in doing so, adopted the attitude that it was on the right side of history. The “Think Different” campaign was very much indicative of this approach to selling its products and overall image. This was echoed by other young, hip companies like Google, who famously note that “You can make money without doing evil”.

In Taiwan, where I studied and taught for several years, many of my students, classmates and friends have been swept into the cult of Apple. When Steve Jobs died in late 2011, there were countless tributes to the man and his creativity. I would often hear students talk obsessively about their iPhone, iPad, or iPod touch, and I would see many young and old people reading the hagiographies about Jobs’ life. It is certainly impressive how much the world has been shaped by one corporation.

At a time of scrutiny for the iconic firm due to a tax avoidance scheme now under investigation by the US Congress, as well as the latest revelations about Apple’s involvement in the NSA dragnet surveillance program PRISM, there is justifiable apprehension among their loyal base of customers. The apparent violation their customers’ constitutional rights to privacy under the 4th Amendment and a blatant denial of fiduciary responsibility to the citizens of California and the US should have us pause and take a look at some relevant issues to understand what Apple’s success teaches us about today’s world.

Treatment of Employees

First, many of Apple’s products are manufactured by the Taiwanese firm, Foxconn, and this has been a source of controversy for various reasons. Employees have been mistreated in a number of ways over the years, leading to a spate of publicized suicides (including a few this past month) and there have been claims about a contract that requires their employees not to kill themselves. In early 2012, The New York Times ran a series of reports about the dangerous conditions and the dubious promises made by Apple to investigate conditions within their contractors’ facilities and take immediate action. The major problem seems to be that Foxconn is such an important contractor and taking genuine corrective action would have serious implications. In 2010, Steve Jobs himself praised the facilities and their movie theaters, hospitals, and swimming pools, saying “my gosh…it’s a pretty nice factory.” Apparently, the workers don’t all feel the same way.

It is also important to highlight that it is not only Foxconn or other companies that are directly implicated in the hazardous working conditions. Apple itself applies significant pressure on Foxconn and its providers to meet enormous consumer demand for new products. There have been many reports of people lining up around the world for hours or days to purchase the newest device because of the effective marketing and, admittedly, the superior design. What this means is that consumer demand drives the company to create and abide by much-hyped release dates. It seems the buck keeps getting passed along in this most chic, mainstream brand of 21st century capitalism.

Tax Avoidance

The main reason why Apple is currently being criticized by a number of observers across the political spectrum is the tax loopholes it has been utilizing. According to the US Senate, Apple’s creative accounting efforts have amounted to savings of some “$44 billion in otherwise taxable offshore income over the past four years.” These innovative methods of moving their money around the world, to Ireland, the British Virgin Islands, Luxembourg and other havens, have been described as unprecedented, though Apple CEO Tim Cook denies this and argued before a fawning US Senate committee that his company has paid “all the taxes we owe — every single dollar.” While many are willing to excuse Apple for its aggressive search for and utilization of loopholes, primarily because it is such a great corporation and job-creator, this belies the notion that US companies profiting from US institutions have a responsibility to their home country or home state.

When it comes to Apple’s domestic accounting behavior, there is also a considerable amount of tax avoidance, legal as it may be. Again, The New York Times reported last year that the Cupertino, California-based Apple created Braeburn Capital in Nevada in 2006, just as Apple’s stock price was increasing rapidly. Why did they do this? Because “California’s corporate tax rate is 8.84 percent [while] Nevada’s [is] zero.” It is worth noting that Apple is not the only company using these legal but dubious tactics, and that California has been suffering a serious budget crisis, prompting various forms of austerity. I guess loyalty and responsible citizenship are not as highly valued as “creativity”.

The central issue here is the high-profile nature of Apple’s behavior and the praise that is bestowed upon the company, regardless of how disturbing the precedents it sets are. Some of the governments undergoing austerity programs include California, the United States Federal government and Ireland, are three of which Apple has creatively manipulated within to avoid paying taxes on its phenomenal profits.

Coltan and the Dark Side of Technology

A third important factor to consider when looking at what Apple means in today’s world is the extraction of precious metals that are required for their products. The Enough Project has characterized demand for coltan and other rare metals, by Apple and other companies like Canon, IBM, Sony and Philips, as contributing to the devastating conflict in the Democratic Republic of the Congo (DRC). Yet, on this issue, it appears that Apple has moved in the right direction in recent years.

There has been extensive pressure applied from concerned actors and at least in this regard, Apple has begun a process that many hopefully expect to end in conflict-free products. There is still a long way to go, and other companies should follow the general direction the industry seems to be taking. The Enough Project released a statement earlier this year that reads,

“It is time for Apple to take the next step and begin a Congo sourcing program to purchase clean minerals from Congo. Motorola Solutions, Philips, and Kemet started programs over the past two years to do so, the Solutions for Hope Project, the Conflict-Free Tin Initiative, and the Making Africa Work program. These pilot initiatives are helpful, but it would send huge signals to the global minerals supply chain, if Apple started a similar project—to help communities directly in Congo and improve working conditions.”

Emphasizing Apple’s role as a global leader in creative technology and marketing comes with the implication of its responsibility for leadership in solving problems in a plagued region to which its success is directly tied. Such responsibility should be universal and it behooves the tech giant to continue to set positive examples, while discontinuing an aggressive grab for ever more profits. Some have reiterated the belief that since many other companies are guilty of similar behavior, Apple shouldn’t be singled out. However, Apple is unique in its phenomenal success and influence and should take its position very seriously.

Creative freedom is the sum of the products that Apple sells, yet it is constantly profiting from the creative genius of others that have gone before it. It didn’t achieve all of this remarkable success in a vacuum and it should put its enormous financial resources and social capital into positive endeavors. Creativity in accounting is not nearly as inspiring to young people around the world (who are in dire need of inspiration) as creativity in humanitarian efforts. To continue behaviors such as the mistreatment of employees, withholding taxes, and not doing everything it can to ensure socially and environmentally conscientious methods of extraction, is simply beneath the world’s most creative and successful company. It is up to the people who use its products to tell that to a reluctant executive board.

Corporations need us, not only as consumers, but as a collective conscience, to steer them forward in the best way possible. In Apple’s case, the most suitable metaphor for one of the most celebrated companies in history, may, in fact, be the creative human genius who, if not raised properly with restrained praise and humane encouragement, could end up becoming a dangerous creative force that speeds up the destruction of society, rather than saves us from it.

Adam Chimienti is a teacher and a doctoral student originally from New York. He can be reached at Read other articles by Adam.