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Blame the gardener

American politicians and media love to blame China for ‘stealing’ jobs. Following is a pie chart showing Apple’s profits and percentage contributions from its global supply chain. Blaming China is like blaming one’s gardener for his financial woes. This chart is a true pie in the face to those who have so clouded reality in the American public discourse about trade with China. The true tragedy here is that China is polluting her environment at such alarming rates on behalf of companies like Apple. What Apple is getting away with is not shown – a wedge is yet to be made representing environmental damages done.

Source: salon.com via Salon.com on Pinterest

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  1. Kai
    June 8th, 2012 at 04:35 | #1

    Your argument here is convoluted and it shouldn’t be because this pie chart is a powerful graphic for very good arguments against very lousy American complaints/criticisms.

    What this pie chart and pie charts like it immediately communicate is how much money goes to Apple versus its suppliers and outside contractors. It’s useful for showing how little suppliers make compared to how much Apple makes for what is essentially design and marketing. This is a chart that people point to when talking about evolving a society up the value chain, from low-profit manufacturing to high profit services. This is what some American politicians point to when they say Americans can no longer compete on low-margin manufacturing and instead tool themselves up for service industry and tech jobs. This is what many Chinese politicians point to when they say China has to progress beyond being a cheap labor pool and the factory to the world, that it has to move up in order to make more money, that it needs to stop being an OEM and develop brands with international appeal. This pie chart shows that greater reward comes with greater risk.

    1. The pie chart doesn’t address the American politician’s fallacious argument blaming China for “stealing” jobs. It just shows the distribution of profits. Profits has little to do with number of jobs. The simple rebuttal to Americans blaming China for “stealing” jobs is to question the definition of “stealing” versus “competing”. The dumb ones won’t be fazed, the ignorant ones will be confounded, and the slightly smarter ones will elevate the debate to what counts as “unfair” competition, especially when it comes to government economic policies.

    2. I don’t understand the garderner analogy. There are probably better and more fitting analogies than “gardener” describing the financial relationship between the US and China. I don’t see how blaming a gardener relates to China being blamed for stealing jobs or of America’s financial problems. What happened to the easy analogies like borrower and lender or consumer and producer?

    3. China is not polluting herself on behalf of Apple. It’s polluting itself willingly on behalf of itself, for economic benefit and growth. We shouldn’t make fallacious arguments like this. It just undermines the validity of the rest of our arguments. Painting China as a victim in this situation isn’t very effective.

    4. Apple is not “getting away” with anything really. You can’t blame them for creating products that people are willing to pay a high price for and that manufacturers like Foxconn are willing to bid for. Likewise, its hard to blame Foxconn for offering wage and working conditions Chinese labor are willing to accept. This is the nature of capitalism. Both parties are entering into an agreement of their own volition for what they see as self-interest. Vilifying Apple here is just as misguided as victimizing China.

    5. Making a wedge for environmental costs is tough, mainly because so many people have a vested interest in NOT making that wedge. Everyone wants to minimize their costs because they put self-interest over the interests of the community. Classic human behavior. Such a thing has to be forcefully legislated and enforced, but even the government will resist it. Adding greater “environmental” surcharges effectively makes Chinese manufacturing less competitive, thereby risking losing economic growth to other countries who are still willing to pollute or bear the environmental costs. As it is, China is trying to find ways to do both, with questionable efficacy of course, but at least its paying lip service. China’s elite aren’t idiots. They know there are costs but they’re trying to squeeze as much volume and speed of development out of China’s environment while they can (in their eyes) afford to do so. They’ve made their decision. This wasn’t forced upon China. This was a conscious decision on China’s part to compete for global trade that would bring to it other benefits. Simple cost-benefit trade-off.

  2. June 8th, 2012 at 11:28 | #2

    @Kai
    I would agree with your second paragraph in its entirety. But I want to show you something you said to illustrate how you are nitpicking with me:

    This pie chart shows that greater reward comes with greater risk.

    I am not going to accuse you of making convoluted argument. How do you go from the chart to that argument about it showing risk? But I will accept what you wrote, because beyond what is shown in the chart, the reality is that Apple is making huge bets about their products. They have poured tons of money into design, making the right choices in the ingredients they want to use to make things work well. The payoff was never certain. Their Newton product, as an example, was a huge failure. So, while the chart doesn’t show the ‘greater risk,’ nevertheless, the reality is true – Apple makes big bets and they are being rewarded.

    Your comment, while I agree with most of what you said, is very much an exercise in nitpicking.

    1. “Profits has little to do with number of jobs.”

    You kidding me, right, Kai?

    Let’s do this experiment: swap the “Apple” and “China” labeling in the chart. You don’t think that figures into number of jobs?

    In regards to the ignorant ones, they are who I am trying to address. Tell me this is not the dominant narrative in America?

    The debates with the “slightly smarter ones” go on too, and on this very blog as well. In this OP, I just felt like dealing with the ignorant who are in the majority.

    2. If you pay your gardener a measly amount of money to tend to your garden and then you blame your gardener for your financial woes. That’s ridiculous. The gardener is the producer and you are the consumer. Why is this analogy difficult to understand?

    3. Yes, China is willingly polluting herself just as American companies are willingly manufacturing in China. Who is saying either party is forced to do anything? I didn’t say China was forced to pollute. I merely stated it was a tragedy.

    You said:

    China is not polluting herself on behalf of Apple.

    That’s a ridiculous assertion. Is there pollution going on in China manufacturing stuff for Apple?

    Look, the issue in the Western public discourse is simple. China is the number one polluter. Never is the narrative nuanced to say a lot of that is in making stuff for the West. China pays a tremendous price in environmental degradation in this trade. Again, it’s a willing trade. But China pays a heavy price.

    The dominant Western narrative is that China is ‘stealing’ jobs and the number one polluter of the world. China gets all the blame in this tough exchange.

    4. This is ‘vilifying’ Apple? Look, I have a lot of respect for Apple. I support their hiring of workers in China.

    Kai, are you the type that criticize China over her pollution and then turn around to say, well, it’s OK for China’s environment to be devastated while the consumers don’t need to shoulder any responsibility?

    I don’t think that’s you. Perhaps you don’t like my tone towards Apple?

    This is true vilifying:
    http://blog.hiddenharmonies.org/2011/10/collective-defamation/

    5. And I completely agree with your characterization here.

    So, what’s wrong with calling the situation a ‘tragedy’ in China, because that’s the way to pull herself out of miseries of poverty?

  3. June 8th, 2012 at 11:49 | #3

    It is plain and simple, politicians who used terms such as stealing, unfair competition are xenophobic and ultra nationalist.

    Can you imagine a Chinese politician saying Boeing is stealing jobs from China and Apple exploiting Chinese workers?

    But of course, all those politicians saying that are sane and logical.

  4. Charles Liu
    June 8th, 2012 at 15:34 | #4

    @YinYang

    Of course he’s trying to pick bones from an egg. Everyone is fairly well educated, there shouldn’t be any illusions that “statistical truth” is highly interpretive.

    Yours just happens to be one way to examine the role China plays in the value stream of a product, and I don’t think it’s necessarily convoluted. It’s easily understandable that semi-skilled assembly work off-shored to China represent very small portion of an iPhone’s production cost, and the economic potential it carries.

    Thou labor cost is proportional to product value, but fact remains this type of jobs will not make economic sense in developed economy. They don’t simply head to China, but also SE Asia (Nike, Gap), Mexico/South America (VW), Africa (Mercedes).

    IMHO the Gardner analogy is a good one. China in the workstream of an iPhone is peripheral (assembly), as it’s share of the cost demonstrates.

  5. Black Pheonix
    June 8th, 2012 at 15:41 | #5

    @Kai

    Surely, the “profit” graph shows pretty clearly who has the power and control in this business deal, and who is benefiting the most in the business deal.

    Let’s just say, China is not the one getting the most benefit out of it.

    then, logically, what has China “stolen”?

    *On another side of the “logic”, if the Apple devices are “made in China” under US definition, then it’s Apple USA who “stole” all that profit from China!

    Well, technically in legal terms, Apple Corporation is “receiving stolen profits”, and in that sense, if there is a criminal conspiracy to “steal”, Apple Corporation (and other big US businesses) are the “masterminds” of the conspiracy, and should be charged under US Federal Anti-Racketeering laws.

    LOL!

    *Furthermore, if Apple never informed China of how many jobs would be lost in its plans, then China has no knowledge of any conspiracy to “steal”.

    China is then an “innocent contractor”, not part of the conspiracy.

    *Of course, all this talk about rules of US laws would be too “convoluted” for ordinary Americans.

    Of course, nothing would be fair to people who are too dumb and apathetic to read their own laws.

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