The Robber Baron Revival


“Apple has become one of the best-known, most admired and most imitated companies on earth, in part through an unrelenting mastery of global operations. Last year, it earned over $400,000 in profit per employee…”

There was a New York Times article today about Apple and its outsourcing overseas–you may have seen it the article.  But there were some issues the article tripped past just a wee bit too lightly.

Per the article, Apple employs 763,000 workers, of whom 43,000 are U.S. employees, giving a total of only 5% U.S. employees.

“Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that ‘Made in the U.S.A.’  is no longer a viable option for most Apple products.”

If this is true, I can see why a business would prefer to set up operations overseas. If you owned a business, wouldn’t you? Unless there were some sort of advantages to being an American business…Like benefits America bestows on corporations or to their employees…hmmm… Any tax breaks given to American businesses which are not given to those of other countries? How about access to the American market for its goods and services, free of import tariffs?

It’s too bad our government is currently allowing equal access to our American market to both American companies and to foreign companies such as Apple.  What, Apple?  You say you’re ARE an American company?  What makes you one?  Your employees are foreigners.  Your operations are performed overseas.  How are you different from a foreign company?  Oh–that’s right:  You are getting American company breaks.]

Apple executives say that going overseas, at this point, is their only option.”

Their only option? Really? Their collective backs are against the wall? Does this mean their company is about to fail and their shareholders are at their throats? I mean, I’m just thinking of that $400,000 profit per employee, now. And the fact that they’re reaping the tax benefits of being an American corporation although they are not one, and have been reaping these for quite some time. And that their top level employees—their actual, rather than virtual American employees—have been enjoying the American lifestyle at the top of the food chain over here.  I’m just not so clear on what Apple means by “their only option”.

Couldn’t some of that $400,000 per employee have been shaved off to go into apprenticeships to talented highschool and college students here? In America? Or even untalented ones who tested well for the vocational/industrial aptitude skills needed to run efficient Apple factories here?

Could it be that this is your “only option” if your company’s only motivation is profit untempered by morals, and you have no scruples about eating the hand that is allowing you to feed upon it?

“One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves.  Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul.

Yummy.

New screens began arriving at the plant near midnight. (A foreperson) …immediately roused 8,000 workers inside the company’s dormitories…each…was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames.” 

Said an Apple executive:  “The speed and flexibility is breathtaking…There’s no American plant that can match that.”

So, let me get this really clear:
Apple has taken its firm back to the days of the great robber-baron industrialists, with company dormitories, and the 12-hour workday—and Apple is proud of it. Boasting about it:  How they can depend upon being able to roust their human machines from their Company beds in the middle of the night and prime these pumps for a 12-hour run with just hot tea and a cracker. How is a real human being to respond?  Let me try: 

None of the top-echelon Apple employees would consider this to be appropriate treatment for an adult child of their own, or anyone else they cared about.  The fact that they consider it perfectly acceptable treatment for brown-skinned foreigners whom they never intend to see is dashed disturbing.   (Oh, but it’s perfectly all right, because a higher standard of living is brought to those they serve–perhaps like the British served the Indians?)

Think I’ll Eat About 99% of This.”

Postscript:

At the end of the NYT article was this:

“Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the chief economist at the Labor Department until last September. “That’s disappeared.  Profits and efficiency have trumped generosity.”

WHOAA!!!  This is the department that is supposed to be helping American workers??!!  Betsey’s viewpoint comes through as skewed toward the business end.  She refers to Company dormitories, and tea and cracker fuel, as “efficiency”.   She considers normal humane treatment of employees to be “generosity”.  I’m sure she’s a very lovely person, but she has been working with the barons too long.  Probably without her being aware of it, their perspective has polluted her thinking.

Apparently, google and Wikipedia also need re-education.  The Wikipedia entry for “robber baron” is entitled “robber baron (industrialist)”.  And if you enter “robber barons” into google’s search box, google asks you if want “robber barons or captains of industry”.

Which Is It?

We should be far past the days when we had cause to consider all these terms equivalent.

2014-03–Deleted an entire paragraph. Post was too nerdy wordy.
2014-02–Replaced an illustration that had been removed from the web.

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P.J. O’Rourke Lite – The Redistribution of Wealth

Friends Share.

Cherrypickings from P.J. O’Rourke’s, Don’t Vote, It Just Encourages the Bastards, pp. 58-59—Selected lines excerpted, placed in italics if paraphrased.  Closed parens ( ) used versus ellipses to indicate skipped portions of lines.

All political systems are redistributive.  But:  How much?  Of what?  To whom?  By which means?  And where the h*ll do we get it from?  This is the crux of the liberal versus conservative argument in modern democracies.
Imagine that your family is matched by lot with five other families and the resulting half-dozen familial units must pool their resources and come to mutual decisions about how those resources are to be allocated.  Now let’s institute a requirement that the other five families be poorer than yours.
And why is a small bad idea like this supposed to get better if you make it bigger?

Outlier:  For those of you thinking “But this example is moot, because I wouldn’t be the richest one in the group, and the rich families are  so rich they  wouldn’t be hurting to miss some money to help the rest of us”—Well, if you’re thinking that, here’s what O’Rourke has to say to you:

Who’s rich?  You are.  To someone who lives in the slums of Karachi, you’re rich.  I don’t care if you’re driving a 1990 Geo Tracker, haven’t had a job since Cher was a babe, and your trailer home just burned down…you’re rich.  You’re farting through silk as far as that person in Karachi who’s looking for a job as a suicide bomber is concerned.

Outlier:  And I’m just gonna add, if you’re literate and self-aware enough to be reading this, you’re definitely among the rich families.  And the ant and grasshopper rules screw you if any of those other five families are poor because they chose to spend all their bucks on video games, premium cable, nightly meals out, movies out 3x/week, frequent trips to Vegas…

Another rule of restribution can be extrapolated from a family circle:  Never do anything to (or for) a stranger that you wouldn’t do to (or for) your bum brother-in-law.  You can’t let your sister and her five kids by ( ) different fathers starve, but you can try to make her husband get a job.  And you can ( ) run him off at gunpoint if he beats her.
Or say your brother-in-law isn’t a bad guy, just drunk and crazy and high on drugs.  He’s living on the street and talking to people who don’t exist.  Do you pick him up by his collar and belt, heave him in the back of your car, and get him some help?  Or do you respect his civil rights and let him freeze in doorways and get run over by a bus?

Outlier:  I thought this “pretend it’s your own family” approach was the best illustration I’ve ever seen for why our current hands-off policy re: leaving street people free to roam the streets is the very opposite of Do Unto Others, good old common sense, and human decency.

edited in ’13 to shrink images for phones

P.J. O’Rourke Lite – The Free Market


The free market is the greatest repository of our freedoms.  We don’t often exercise our freedoms of speech, belief, and assembly for anything of equivalent consequence to our nation’s or our people’s freedom.  I don’t know much about business, but I know enough to thank it for existing.
 
Free Market in Japan
 
Business investment defines humanity.  If a dog has a surplus s/he will eat it all and vomit it up rather than give a portion of it to another dog in return for shares in ( ) the chewing of shoes.

Business investment defines civilization.  Barbarians don’t raise money through debt and equity.  They raise money through stealing. ( ) Business investment is one of the most important ideas in history.  If it weren’t for business investment, all the inventors, innovators, manufacturers, wholesalers, and retailers who have brought prosperity to the modern world wouldn’t have been able to as they have.

The free market is not a creed or an ideology ( ) it is simply a measurement.  It is a bathroom scale.  We may not like what we see when we step on the bathroom scale, but we can’t pass a law making ourselves weigh 165.  Liberals and leftists think we can.

The free market gives us only one piece of information, but it’s important information.  We ignore it at our peril, the way the leaders of the old Soviet bloc did.  They lost the cold war not because of troops or tanks or Star Wars missile shields.  The Soviets lost the cold war because of Bulgarian blue jeans.  The free market was attempting to inform the Kremlin that Bulgarian blue jeans didn’t fit, were ugly and ill-made, and nobody wanted them at any price.  People wouldn’t wear Bulgarian blue jeans—literally not to save their lives.  But the Kremlin didn’t listen.  And the Berlin Wall came down.
 

Ugly-Fitting Designer Jeans

I’m Sorry, Folks–I Can’t Tell–Are Those the Bulgarian or Designer Jeans?


 
Opposition to the free market is forever expressed in outrage at capitalist success.  Capitalism exploits workers, robs widows and orphans, and concentrates wealth in the hands of the rapacious few.  Critics of the free market think of capitalists as being  ( ) the faceless and thus even more wicked partners at Goldman-Sachs.  ( ) but that’s not who capitalists are, and capitalism is ( ) not a product of the free market anyway.

To undertake any material project—whether it’s the Great Pyramid, a hospital, or a paper mache puppet for a preschool, requires a fund of accumulated resources of some kind whether it’s money, or just paste and recycled paper.  This is “capital”.

Capital can come from savings.  Capital can come from borrowings.  Capital can come from getting something needed for the project by trading a share of ownership of the project once it’s finished (this is what stocks are).  Capital can come from paper money that has no real worth; e.g. that a bank has pulled out of its ass.

 
Capitalism, so-called, is when people accumulate capital of their own free will for use on freely-determined projects.  The fact is that most of these projects flop.  What’s good about the free market is that it lets capitalism fail.  Think of all the wonderful moneymaking ideas people get—and you’ve probably had some of these ideas yourself:  Chocolate-covered hairballs to give your feline something yummy to cough up; scented candles for men—“Mandles”—that fill a guy’s home with smells of “Gear Oil” and “Frying Meat”; FunScreen to protect children from dangerous exposure to fun.  Use FPF 40 if the kid has a skateboard.

Imagine a world where all such schemes come to fruition.  At the end of 2008 and the beginning of 2009, America conducted an economic intervention that kept businesses that were staggering around, intoxicated by overtrading, and blinded by MBA moonshine from falling down the manhole of liquidation.

“Moral hazard” is the term economists use for a situation that reduces the incentive to avoid bad economic behavior. 

The message that the U.S. government sent to the broke banks and beggared financial institutions was “Don’t you ever do this again or we’ll give you more money.”   After which there was a flurry of government regulatory activity to make sure it was illegal to do “this” again.  And the banks and financial institutions won’t do “this” again.  They’ll do “that”.  John H. Cochrane, professor of finance at the University of Chicago ( ) pointed out that “the regulatory system ends up encouraging artificial obscurity.”  Make the rules tougher and they’ll play the game tougher.  Are the people named Masters of Regulation likely to be quicker and better motivated than the people named Masters of the Universe?

Professor Cochrane again:  “To give government officials the power to bail out firms at their discretion, especially if those officials are elected or political appointees, is practically to guarantee a bailout.”

The business of government is failure-proof; i.e. government props up the unpropworthy. ( ) You’ve just explained where those Bulgarian blue jeans came from.  Fortunately, most of America is still allowed to fail.  The free market teaches us a lesson in the value of failure.
 

Orange and Black Striped Stinkbugs Mating

If a Stinkbug Falls in the Forest, Is It a Bad Thing?


 
Cherry-pickings from P.J. O’Rourke’s, “Don’t Vote, It Just Encourages the Bastards”, pp. 36-46, 122-23—Selected lines excerpted, italics indicate paraphrasing.  Closed parens ( ) used versus ellipses to indicate skipped portions of lines.
 

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