Tech


I keep hearing about overseas manufacturing versus goods that are made-in-America. Barack Obama raised the issue in the State of the Union address last night (full text found here). Obama described incentives to bring manufacturing jobs back the the US:

Long before the recession, jobs and manufacturing began leaving our shores. Technology made businesses more efficient, but also made some jobs obsolete. […]  Tonight, I want to speak about how we move forward, and lay out a blueprint for an economy that’s built to last — an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values. […] Now, this blueprint begins with American manufacturing.

Obama went on to describe how the auto industry, especially GM, Chrysler and Ford, has rebounded, adding “nearly 160,000 jobs” in the process.

We bet on American workers. We bet on American ingenuity. And tonight, the American auto industry is back.

What’s happening in Detroit can happen in other industries. […] We can’t bring every job back that’s left our shore. But right now, it’s getting more expensive to do business in places like China. Meanwhile, America is more productive. A few weeks ago, the CEO of Master Lock told me that it now makes business sense for him to bring jobs back home. (Applause.) Today, for the first time in 15 years, Master Lock’s unionized plant in Milwaukee is running at full capacity. (Applause.)

Obama outlined three tax dis/incentives to encourage businesses to bring manufacturing back to the US: no tax deductions for businesseses that outsource jobs – instead, tax deductions should be for companies that bring jobs back to the US; multinational companies should pay a basic minimum tax, rather than avoiding taxes “by moving jobs and profits overseas” – and again, money instead should be for companies that stay and hire in the US; and finally, American manufacturers should get bigger tax cuts, while doubling tax deductions for high-tech manufacturers, with financing assistance for new plants, equipment, or training when moving to certain communities.

So my message is simple. It is time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I will sign them right away.

Simple, okay. The New York Times considered a similar problem in its article, “Apple, America, and a Squeezed Middle Class,” which described why Apple has moved its operations to China.

It isn’t just that workers are cheaper abroad. Rather, 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.

The article points out that Apple does not directly employ many of the workers who assemble Apple products. Instead, Apple turns to subcontractors for manufacturing. Apple may directly employ the person who writes the software for the iPhone, but probably not the worker who cuts the glass front. That worker is probably employed by a subcontractor instead. I’m not convinced Obama’s call to tax multinational corporations would impact the decision to hire an overseas subcontractor.

Charles Duhigg and Keith Bradsher do a great job for The New York Times in describing a central dilemma for Apple: Steve Jobs demands a different screen for the phone, one that won’t scratch. It has to be GLAAA-A-A-ASS! (Surely I’m not the only one who read that interaction as a kind of Jobsian temper tantrum?) What this explains is how Global Commodity Chains work. Normally I would link to Wikipedia’s page for Global Commodity Chains, but there isn’t one – presumably because it is a part of some other theoretical construct and I just forget which. Instead, I will wrack my brain for that sociology course I took in… Spring 2009? Global Commodity Chains specifically describe the way goods are produced in a globalized market. A chain begins with the source of the raw materials. Common examples of raw materials might be wood, minerals, metals, “rare earth metals,” crude oil, etc. Those materials go to manufacturing facilities, where workers turn them into parts. The parts are assembled into products. The products ship out to the (usually big box) stores that will retail them, so that consumers can then buy them. Every stop along the chain is thought of as a “node.”

Some people try to integrate research in Global Commodity Chains with World Systems Theory, in order to explain the relationships between countries: some primarily produce and export raw materials – usually the Developing World or Periphery, some manufacture goods (sometimes these are also producers of raw materials) – the Developing World or Semi-Periphery, and the countries where people buy the finished products – the Developed World, or Core. I find this especially important – remember, I’m in Latin American Studies – because those relationships are often one-way, wherein materials from one country are bought in another country. Because of government (and corporate) corruption, concentration of wealth and ownership of land, the technological investments needed to extract those materials, among other reasons, the benefits of raw material exports tends to be limited to a handful of wealthy individuals in the country that exports the materials. Sometimes, the materials are extracted by foreign companies that may not have a real interest or stake in benefiting the country where they extract materials – so wages suffer, the environment suffers, etc. In some cases, the corporations disrupt the ability of people to live independently of an income, in order to create a labor pool. It is this scenario that characterized development in Latin America, and is also the reason why the US is often seen as a pariah.

In the case of Apple’s manufacturing, the company considered sourcing its glass screens in the US, but the costs associated with developing the product were high. Instead, Apple went with a company in China that already had the facilities and resources to carry out testing. I think of those facilities and resources as the infrastructure of manufacturing. The New York Times article points out that in terms of worker wages, paying US wages would add $65 to the cost of each iPhone. It’s not about the wages – it’s the infrastructure needed to coordinate a global supply and commodity chain. You have to include shipping materials, components, and products. It seems that today’s factories are increasingly specialized as well, which is understandable considering development officials have long promoted comparative advantage, and it makes sense that you would see factories acting similarly by focusing on making one type of product very, very efficiently. The manufacturing infrastructure is what makes all these factories able to coordinate in a way that streamlines shipping and overall production as well. China is in a great position to achieve such infrastructure, because the government continues to subsidize its industrial development, in a socialist market economy that seems to blend command and market economies. In much the same way that foreign corporations built Latin American transportation infrastructure, China’s government is subsidizing it’s manufacturing infrastructure. The US would need a large level of investment to reconstitute our own manufacturing infrastructure, as well as an ability to incentivize doing so – and I suspect it will take more than tax breaks (especially when you consider that the US has many free trade agreements that limit the subsidies and incentives it can offer).

With all that in mind, the problem with using US labor has never been just about the wages. The thing that unions have done, to the apparent chagrin of people like the Indiana state republicans, has been to not only raise wages but to improve the working conditions in our own factories. US workers can make time-and-a-half for overtime – which kicks in after the 40 hour work week. We don’t put our children to work in factories. We no longer lock our poor inside factories during the work day. We also enforce environmental standards so that factories don’t turn our land into a wasteland. Don’t get me wrong, I’m not heralding the US or its unions as the end all and be all of labor standards. But when Apple points to the Chinese factory’s willingness to roust 3,000 workers from sleep in the middle of the night to start putting in the shiny, unscratchable glass screen, I don’t stop to wonder what went wrong with US workers. Instead, I wonder why the hell Apple can’t wait 12 hours to restart production. What I’m left with from that story is a narrative of a corporation that wants its product perfect, on the timeline of an arrogant and demanding caudillo, with more regard to profit than to the workers producing its product. And Apple isn’t even responsible, because it isn’t Apple’s plant that produces that product – it’s an unaffiliated subcontractor.

If the US is serious about reconstituting its manufacturing sector, we need to be serious about rebuilding the plants that make those little, seemingly-insignificant products that provide the components for the fancy gadgetry. The developed, core nations are understood to be so because they excel in high-tech industry. The US, as the uber-core nation, or (waning) hegemonic power, or whatever you want to call it, has kept at the forefront of the high-tech industry and innovation. The US rose to that position largely because of manufacturing innovations in the auto industry. But in the recent economic troubles, it is the semi-periphery that has (so far) stayed steady, while the US and Europe flail to regain their footing. The professor of that sociology class in 2009 described the flaw in betting that the finance industry would ever constitute a replacement for true high-tech industries, and I think his words ring even truer today. The thing is, the semi-periphery isn’t mid-tech industry somewhere between low tech and high tech; the semi-periphery has some remnants of low tech industry and some influx of high tech industry. That’s where China is currently successful – by using it’s lower tech industries to support its higher tech industries to make products extremely efficiently and cheaply. Maybe what the US needs is a renewed appreciation for the low tech (with updates). We still need our mills and our gasket manufacturers and our component factories – at least, if our goal is to stay at the forefront of global industry. These can be small, local(er) businesses, which is also cool. Maybe, while we’re at it, we can reconsider the worth of our shiny gadgetry, pay our workers a livable wage, and consider how to scale back our wanton consumerism so that, instead of boatloads of cheap crap, we focus on quality items that we recognize for what they are – luxury goods.

Every so often, I can’t seem to fall asleep. Last night was one of those nights; I have a cold and my head hurt, my back hurt, my legs hurt, and trying to sniffle quietly is not especially effective. Finally at about 1am, I came downstairs so my partner could sleep without starting every time I “quietly “sniffled. When I can’t sleep, I browse the internet. Usually, I browse the Cheezburger sites because they are interesting enough to pass the time, without being so engaging as to keep me awake once I am ready to finally fall asleep with my face mashed into the keyboard. Lately though, even the most casual of internet sites has picked up the anto-SOPA mantra,  making it that much harder for me to disengage in the wee hours.

Sure, the Indiana legislature is back in session, with an impending selection of mind-numbing, facepalm-inducing, terrible, horrible proposals to ensue. “Right To Work” (AKA “Right-to-Work-for-Less”) is just one of many lining up to make my head explode in astonished fury this year. But first: SOPA is the Stop Online Piracy Act; it’s buddy is the Protect IP Act. Piracy in this case does not refer to pirates terrorizing the high seas (nor, unfortunately, to the amazingly ironic rescue of Iranian fishermen that included a helicopter from the USS Kidd, member of the John C. Stennis Carrier Strike Group, on the heels of Ahmadinejad’s warning to stay the hell out of the Persian Gulf). I assumed when I wrote the last sentence that this, the next sentence, would begin: “Instead, online piracy refers to…” followed by a legal definition. Unfortunately, I can’t seem to find a clear legal definition. Online piracy does not appear in the bill’s definitions section. I searched Google (possible thanks to SOPA’s current, non-yet-implemented status) for [“Online Piracy” legal definition]. That query worked for intellectual property, and I found this page with a definition (generally: property covered by copyright, patent, etc), examples relating to relevance, and numerous links. I did find a reference outlining piracy: defined under the law of nations, and requiring robbery at sea… I also found arguments relating to how poorly SOPA defines the crimes it seeks to combat, under Wikipedia’s “Arguments Against” section. I will uncomfortably assume that online piracy refers to stealing someone’s intellectual property in the cyber realms – a space so illusive as to necessitate reference to piracy rather than theft. Meanwhile, Congress continues to pirate porn.

Many of us are familiar with film and music industries’ efforts to prevent people from stealing their intellectual property. Those my age may have discovered Napster just in time to panic about getting sued over it, as comprehension of the differentiation between “sharing” and “theft” was just beginning to dawn. I won’t cover all the arguments that suggest the industries overestimate their losses, because other people do that better than I could, because it just makes intuitive sense that corporations would set their losses as high as possible in order to recoup as much as possible, because it also makes intuitive sense that greater losses mean they have more to lose and are thus more importance/relevance, but mostly because I promised I would clean up the disaster that winter vacation wrought upon our house and there just isn’t time in the day to do both those things. I will say that I am one of those people who, facing the decision to steal, buy, or go without, generally won’t steal because it is complicated, won’t buy because it is expensive, and so go without because I am too poor lazy busy to do otherwise. If, however, Google puts together an easily searchable section of free stuff like they did with out-of-copyright books, I’m all about it. Suffice it to say, no, I don’t believe the industry heavies are losing over $12 billion annually to intellectual property theft.

I do believe the internet is really, really important. I occasionally stop to remember that I only learned to send email when I was in college; my childhood was pre-internet. I even used floppy discs – and had to type in instructions to tell the computer to run the program on the disc! But I can’t imagine what it would be like to lose the trove of accessible information the internet represents. And not just information, but increasingly the platforms for social networking that internet applications offer – tools to disseminate and make use of the internet’s information. The revolutions in Africa and the Middle East are but one brilliant example of how humanity can flourish when it is able to communicate and access information. The horror of SOPA isn’t simply that it would limit first amendment rights to free speech, but that it would hamper the ability of regular people to access information and communicate with each other. No, of course, that isn’t SOPA’s goal, but when the majority of websites that host internet applications are in danger of being blocked by service providers because you posted an illegally copied video/image/piece of property on your profile, that is an easily anticipated outcome of SOPA. Have you ever looked inside your computer? Without those internet applications and the platforms that you use to share information, that’s what the internet looks like – coils and wires and metal. Oh, maybe a fan, too.

Google’s Chief Internet Evangelist (because that’s a thing you can be, apparently) wrote an op-ed arguing that the internet is not a human right. (Cerf quibbles about human versus civil rights; I refer to basic rights because I am less concerned with what is legally recognized than I am with what people deserve.) The argument that it is up to technology creators to empower, support, and protect people on the internet totally, absolutely, unequivocally misses the point of the ongoing revolution-and-SOPA-inspired discourse. Cerf is thinking of ways to make the internet a better tool, which is fantastic. But the argument about the internet and human rights that should accompany any such discussion is that fundamental rights should be protected on the internet. If a government shuts down that resource to the detriment of people’s ability to come together and share information, that infringes on their ability to perform those acts (freedom of speech, freedom of assembly, etc). Such rights are not simply ideas; people must be able to exercise or act out their rights freely, or they are for naught. Cerf asserts: “For example, at one time if you didn’t have a horse it was hard to make a living. But the important right in that case was the right to make a living, not the right to a horse. Today, if I were granted a right to have a horse, I’m not sure where I would put it.” He misses the forest for the tree, even while transportation and freedom of movement remain vital elements of fundamental rights and freedoms. Access isn’t only about making something available, it also means not denying someone the ability to use the thing in question.  If someone denied you the ability to have a horse in that historical frame, it would have been tantamount to denying you the ability to make a living. Back to the internet: we should protect the tools and forums people employ to exercise their rights and freedoms as vital components to the rights and freedoms themselves. Take away those tools, and you remove access effectively diminish one’s ability to exercise their right, even if you do simultaneously pay lip service to supporting those rights.

Ultimately, the internet provides open forums and tools for people to gather, discuss, share, dissent, dissemble, and so forth. The ability to do so, to exercise those freedoms is more important than piracy or the entertainment industry’s ability to turn a buck. The government already fights “online piracy” – I’ve gotten nearly a dozen emails about ICE/Homeland Security’s success shutting down Ninja Video, seizing their domain names, and charging the operators. Presumably, then, SOPA escalates the ability to prosecute while broadening the range of who is responsible while increasing penalties. But it would do so at an unconscionable cost, by limiting the ability of the public to use the internet for legitimate and purposeful ends.

In case you had some need for even more links:

Hilary Clinton on Internet Freedoms: http://www.state.gov/secretary/rm/2011/02/156619.htm

Stephen Colbert on SOPA: http://boingboing.net/2011/12/02/stephen-colbert-explains-sopa.html

I don’t know what it is about the Google anti-trust hearings going on that has me so worked up. I keep wavering between the notion that there is no anti-trust issue and that Google’s services are free besides, and the possibility that maybe there is some monopolistic tendencies but I like Google. To really get the effect, there is a bit of foot-stomping with that italicized ‘like’ up there ^^.

In brief, Google’s would-be competitors dislike their standing in Google’s search results. The more complicated explanation from Yelp, for example, is that Google takes its content and publishes it without permission, and on Yelp’s protest Google threatened to remove Yelp from search results entirely. So yeah, that sounds pretty unfair, but I do wonder… Google displays reviews, including those from Yelp, as an aggregation of web results, which is kind of how Google does everything. If that’s true, then Google would be removing Yelp from those results to prevent their display. But all that assumes that Google’s Places works like Google’s basic Search, by aggregating results, but of a specific type, in this case, of reviews available on the internet. If the reviews are useful, one can click to follow just like on the basic Search.

I think the real problem has more to do with internet enterprises being so dependent on Google to do business – and that’s their problem, not Google’s. In the traditional business world, it would be foolish to expect a standard yellow pages listing to attract a large business following. That’s why yellow pages allowed advertising, why businesses advertised in.. wait… what were those? Oh – newspapers. How are any of these web sites and corresponding businesses relevant to my life? Well, they aren’t, but I’m unusually not-open-to-buying-things (i.e. – poor). But if I were open-to-buying-things, would Yelp, for example, be of any use? Not really. When we do spend money, where we go usually involves some old fashioned social capital: our friend works here, this place sponsored our school’s last event, etc. We are, you could say, discerning (you know, if you were nice about calling us cheap!). The problem with Google’s competition is that they haven’t found a way to make themselves relevant… at all.

You know who is relevant? Google. We chose an urban public school district (on purpose, even) where resources are a big issue. The technology at our school isn’t what we would like. High up on my list of resources I would like to see, as a parent, is an online platform that allows parents, students, and teachers easy, coordinated communication, where I can see homework, read newsletters, teachers can send emails, etc. We don’t have that now, but that kind of platform has become an intrinsic resource for higher education, and I think its absence is to my child’s detriment. Well, it turns out Google offers just such a platform, for free, for educational institutions. It’s the same apps package it offers businesses (and non-profits at a discounted cost). Google makes tangible efforts to benefit people’s lives in key ways, and that increases their social capital in a unique way. In other words, they make themselves relevant in real life in a positive way, while other online enterprises have stuck to the internet without getting creative in their marketing; I can only assume they are squirreled away in the intertubes counting acorns somewhere…