From Handicraft to the Cloud: Part 1 of 2 (2012)

From the March 2012 issue of the Socialist Standard

As in the industrial revolution, progress in the computer revolution comes at a price.

Despite all the technological innovation, computing is all too often a frustrating and limiting experience. Is this because Google, Apple, Facebook or Microsoft are evil and lock down hardware, platforms, software and content? NO! Is this because we should all avoid proprietary software, even freeware in favour of mutual co-operative open-source projects such as Linux? Well this is barely half the story as can be seen when free open-source software is not immune to industry trends such as cloud computing, bloat, eye-candy, new version fetishisation and app stores. The elephant in the room is the broad historical trends in the industry which affect free software somewhat less than proprietary software and mirror the industrial revolution and tend to disempower, limit and alienate (in the Marxist sense) the end user. Software and personal computing suffers from class divisions.

2011 was another year of hype for cloud computing. In June 2011 Google launched the Chromebook and Apple announced iCloud. The Google Chromebook is no ordinary laptop, it relies on storing software and your data on Google servers. This is called cloud computing and has been considered the next big thing in IT by market experts for some years. The term ‘cloud’ is appropriate since its benefits are nebulous and it may also represent dark clouds on the horizon for personal computing.

The history of personal computing is almost as old as the first manned moon landing in 1969, and in technological terms, the personal computers of today are certainly more advanced. Why on earth is personal computing then, a frustrating and limiting experience? By 1965, Gordon E. Moore had predicted the rate of advancement in computer hardware (doubling every 18 months), which has proved largely accurate. By 1973, the first mouse-driven graphical user interface had been produced.  Niklaus Wirth observed that ‘software is getting slower more rapidly than hardware is getting faster’. This parallels Stanley Jevon’s observation over a century earlier that ‘advances in efficiency tend to increase resource consumption’. To find out why this is the case we have to look at the history of personal computing and its potential downfall.

‘A computer in every home’
The first million selling computer book was the Art of Computer Programming by Donald Knuth in 1968. Although it was an incredibly technical book, Knuth liked to stress the art aspect of the title, and it was certainly in stark contrast to the industry that it is today. In other respects, sentiments among computing enthusiasts would be familiar (especially to socialists) throughout history. In particular, The Hacker Ethic (Steven Levy, 1984, Hackers) which included such noble statements as ‘all information should be free’ and ‘access to computers should be unlimited and total’. This was not unusual for the time. Popular computing literature including magazines and books such as 101 Basic Computer Games (David H. Ahl, 1973) printed lines of code and encouraged users (especially children) to input the code to produce games. Most personal computers offered a command-line interface (even those with an additional graphical user interface) and were bundled with some form of the BASIC programming language, so named because of its ease of use and suitability for learning. The learning curve for using home computers was steep when compared with today but popular computing literature at the time helped make the curve somewhat more graduated. Despite its significance, very few writers have lamented the disappearance of BASIC, perhaps the most well-known article is titled ‘Why Johnny Can’t Code’ (David Brin, 2006).

As Neal Stephenson put it, in the beginning there was the command-line and Microsoft had the odd idea of selling operating systems. It was Apple Macintosh however, who introduced the first commercially successful graphical user interface with drag and drop capabilities and WIMP (Windows, Icons, Menus, Pointers) interface in 1984. Just a year later, the Commodore Amiga 1000 made colour, animation, sound and multi-tasking affordable to home users. Although the desktop metaphor for graphical user interfaces was used by rivals, the Amiga offered an indicator of the ethos of the time. It used the metaphor of a deeply-customisable workbench for its operating system. The desktop metaphor prevailed partly because home computers in the West evolved out of the office at a time when industrial capital was on the decline.  But also, the desktop prevailed over the workbench metaphor, because empowering users to control the means of production was gradually becoming an alien notion.

No single business seemed to be able to establish a hardware monopoly, let alone a software monopoly, that was unchallenged by rivals. In January 1986 PC Magazine reviewed fifty-seven different programs for word-processing. Even the most popular application software such as WordStar, AmiPro and WordPerfect was largely produced by small teams and in some cases individuals. The spirit of the age was described as the era of the bedroom programmer, although this is possibly a little exaggerated. Sharing software was widespread, computing magazines distributed cover disks with public domain and shareware software and users exchanged software in classifieds advertisements. Software developers might not have liked it, but magazines were an important channel for distribution. Acceptable software costs to users were generally regarded as the cost of the disk and this was the attitude in businesses as well as at home. The limitations of the hardware of the time meant also that developers were expected to optimize code to be as fast as possible.

Windows 95
The personal computer industry grew rapidly over subsequent years. By 1992, Amigas had fallen by the wayside. Ataris were cheaper and in 1993 could boast multi-tasking but by then it was too late. A monopoly position had already been established by IBM-PC compatible hardware and Microsoft consolidated their monopoly in software with a $300m launch of Windows 95. Although users may have been reluctant to embrace planned obsolescence, this was a time when the vision of ‘a computer in every home’ still involved selling hardware to first-time buyers.

The truth behind the hype was a little different, RoughlyDrafted.com (5 February 2007) comments:

 ‘From the mid 80s to the mid 90s, Microsoft amassed fortunes as an application developer for the Mac. Even in 1996, Microsoft reported making more money from Office–$4.56bn–than it did from all of its Windows sales combined–$4.11bn. Tying sales of Windows 95 to Office helped to boost sales of both. Microsoft pushed the new version of Office as a reason to buy Windows 95, and Windows 95 helped kill sales of rival applications, including the then standard WordPerfect and Lotus 1-2-3, neither of which were available or optimized for Windows 95 at its launch. By the release of Windows XP in 2001, Microsoft had swallowed up 98 percent of the OS market’

Innovation, but not for the masses

Although Windows 95 firmly established the desktop metaphor over rivals, this was the limit of its innovation and other enhancements were criticised as merely cosmetic. The successful introduction of encyclopedia software called Encarta on CD-Rom was regarded as cutting edge use of technology for encyclopedic content. That encyclopedias might not be traditionally editorially controlled and might instead be participatory by the next major Windows release was not anticipated by Bill Gates in his published book The Road Ahead in 1995 or its heavily revised 1996 reprint.

Many innovations after the achievement of software monopoly never reached the masses or if they did, many years later than when they first appeared. IBM OS/2 never replaced Windows 95, though some considered it more advanced. By 1997, an operating system called BeOS had been introduced with instant-on boot, 64-bit, journaling, indexing and metadata tags, but this too never reached the masses. The first 32-bit internet web browser, with FTP client, usenet group reader and internet relay chat (IRC) client was not from Microsoft but from Cyberjack in 1995. But by embedding Internet Explorer into Windows just as the internet was taking off, Microsoft was able to delay tabbed web browsing as standard (until 2006) which already existed in the relatively popular Netscape Navigator. Internet Explorer became so popular for about 5 years after 2001 that it felt no need to introduce a new version. By then it could no longer ignore the threat of Mozilla Firefox (loosely descended from Netscape) which was rapidly gaining market share.

At least, the marketing for new versions of Windows did claim to offer usability improvements and fix the many problems identified in previous versions rather than just eye-candy. What became clear beyond any doubt was that software was getting inflated at a rate roughly in proportion to each passing year (faster than Moore’s Law). Benchmarking tests are one way to test this, and are sometimes used in the independent computing press.

Bill Gates commented: ‘I’m saying we don’t do a new version to fix bugs […] We’d never be able to sell a release on that basis’ (Focus Magazine 23 October 1995).

The vision of ‘a computer in every home’ began to look dated. Instead, focus shifted to encouraging existing computer users to upgrade software. It suited hardware manufacturers that software updates should make older computers slower. Whereas the earlier trend was for first-time hardware sales to come packaged with software, now software sales (with artificial barriers)  would drive the need to buy new hardware.

Games also played a big part in driving early hardware sales of the first personal computers in the home. Games revenue eventually overtook the movie and music industry and games were even described as the leading artform of the era. The latest ‘Call of Duty’ game was the biggest entertainment launch ever in revenue terms. Games helped drive the industry upgrades but many users’ reluctance to upgrade persisted, and Windows sales through retail channels continued to decline. Planned obsolescence needed introducing more forcefully, and subscriber-computing and the internet was about to offer the opportunity to do it.

The emergence of viruses and malware on the burgeoning internet helped the software update industry. The idea of software spying on the user or otherwise compromising privacy, was something malware and viruses did, not legitimate software. Users owned their software and anything else was an alien concept. As one user on MSFN.org put it:

  ‘I will never understand why users tolerate or accept this. If an individual or company demanded that you prove that you did not steal your home or car, you’d eventually file some kind of complaint or harassment charges against them. If the same standards that are used for applications were applied to operating systems, XP and newer systems would be classified as spyware. Windows has been going in the opposite direction for some time, with each new version giving the user less control over what it does and less access to the data it stores.’

This comfortable position of around 90 percent market share could not be threatened by any rivals. Journalists of the computing press might have been tempted to describe the hardware and software monopolies as the end of home personal computing history. But to do so, would have been as foolish as Francis Fukuyama’s claim to have reached ‘The End of History’ a decade earlier.

DJW

Link to Part 2

Pathfinders: Acta of Desperation (2012)

The Pathfinders Column from the March 2012 issue of the Socialist Standard

Acta of Desperation

One of the more memorable jokes in Douglas Adams’ Hitchhiker’s Guide to the Galaxy was the one about the supercomputer which, on being asked the meaning of life, supplied the answer ‘42’. One of capitalism’s most profound illogicalities is its constant need to render unquantifiable things – like knowledge – in monetary terms so that its bean-counters can do their sums properly. It’s the same joke, only accountants don’t get the laughs.

NASA is pulling out of its agreement with the European Space Agency over the planned ExoMars Rover programme, citing lack of funds. It has already ceased supplying the International Space Station. Given that the ISS is the most expensive thing ever to have been built by human beings, this seems rather like spoiling the spaceship for a ha’porth of tar, but there’s a slump on and the purse-strings are being pulled tight. Science is worth the money, says Barack Obama’s budget, as long as it’s somebody else’s money.

The price of knowledge is being addressed in a different way by the recent signing by 22 countries of ACTA, the Anti-Counterfeiting Trade Agreement, which is the latest international attempt to establish base-line rules for protecting intellectual property rights (IPR). Internet traffic is international but regulations are national, meaning that information – and therefore profit – leaks away everywhere like water from a leaky bucket and national regulators can do nothing about it.

There has been outcry against this agreement, with protests in many European cities. Much of this is youth-based and centred on the idea that information ought to be free. Socialists ought to be sympathetic to this, given that we want everything to be free, but there’s something irritating about people who see no further than the one commodity they’re personally interested in. Instead of being quasi-socialist thinking, it looks like the self-indulgence of privileged young Westerners who don’t know the real meaning of poverty. To someone starving or homeless, they must look like a bunch of rich kids sulking and demanding free sweets.

Despite the surreal appearance of a Pirate Party in Sweden and now in the UK as well, most opposition is not based on some imagined ‘right-to-download’ but on the unarguable truth that, to accommodate the differences between the legislatures of various countries, this agreement is so necessarily general it opens barn-doors to the future enactment of a large array of repressive measures, including those relating to free speech. Pleas by ACTA’s defenders that such measures are not the intention are probably true at this precise moment, but this of course doesn’t guarantee that the thought will never cross their minds in the future. Any legislation which makes repression easier in principle should be opposed on principle.

The ACTA agreement contains provision for the prevention of counterfeit goods too, which, in the case of counterfeit medicines would, in theory, be a very good thing as they are a huge global problem. Whether it is really intended to focus on that market, which largely consists of poor people buying dud drugs because they can’t afford the real thing, or on the lucrative trade in bogus clothing, electronics and DVD brands, which involves flush westerners simply saving a few quid, we leave to the reader’s intelligent guess. It is significant that China doesn’t support ACTA, given that much of this counterfeiting comes from there. China, being a box-shifting manufacturer not a developer, tends to be intensely relaxed about intellectual property laws (see Apple Stuffing).

Against the naive assumption that, alone of all commodities in capitalism, information should be free, should be set the equally naive assumption by ACTA supporters that all ‘stolen’ goods represent a loss of earnings. That piracy costs the entertainment industry money is undoubtedly true, but how do you estimate the value of what people don’t buy? The likelihood is, if piracy were ever truly stamped out, the former pirates would not then happily go out and stump up fifteen quid for a new film or music CD. Instead they’d do without, or wait until it was cheap, and the industry wouldn’t gain much.

What ACTA is really about is not repression but manufacturers desperately trying to raise their profits in the middle of a slump while fending off attempts by poor consumers to undermine them. But other manufacturers can always cash in by doing the opposite. Cheap DVD players are now sold with USB connections, allowing you to play AVI format films from a flash-Rom memory stick. How the film arrived on that stick, and in that format, is a question that we socialists, not being pirates of course, must once again leave to the intelligent reader.

Golden Opportunity

It seems the Tory back-benches are mounting a revolt over the government’s spending on wind energy development, possibly because of the heavy subsidisation costs, or maybe because they don’t want bloody great wind farms all over their Cotswold hunting ranges. The government is committed to increasing wind energy from its present 2.2 percent to 15 percent by 2015, if it’s to keep to its internationally agreed environmental targets. Fat chance of that. More realistically, its keen environmental concern is in not being held to ransom by the Russian gas oligarchs, and there are only so many nuclear power stations it can foist upon us.

Aside from gales-into-gigawatts, alternative energy research is throwing up other possibilities. Interesting research into Microbial Fuel Cells at Bristol UWE recently claimed a world first in proposing urine as a revolutionary new fuel (BBC Online, 9 November 2011). Its stored energy potential may not be particularly high but it is free to collect in large quantities, and may well save on sewerage costs into the bargain. Above all it would then allow us to point out what we’ve known all along, that the state’s environmental energy policy is all wind and piss.

Apple Stuffing

Apple’s trade in China (see this issue) is not without its downside. Apple has just lost a case against the company Proview in a Hong Kong court over the worldwide rights to the name ‘iPad’, which Proview thought of but which Apple claims it bought off them for use in ten countries. Now it is going to a mainland Chinese court, but the Chinese state is going to be nervous about upholding an intellectual rights case on its own turf when it flagrantly violates them over everything else. When you lie down with the dragon you can get your wallet singed.

Paddy Shannon

Houston, we have a problem (2012)

The Halo Halo! column from the March 2012 issue of the Socialist Standard

The revelation by his political opponents last year that Barack Obama may not actually be a US citizen and is perhaps a Muslim or, even worse, a socialist, has made it difficult to tell the difference between fact, fantasy and conspiracy theory in the run up to the US Presidential election.

Republican contenders for the job are taking the need to demonstrate their patriotic credibility very seriously. Newt Gingrich, for example, has expressed his intention to colonise the moon. “By the end of my second term we will have the first permanent base on the moon. And it will be American”, he promised his supporters. A difficult act to follow, you might think. But no, not if you have God on your side.

Space oddities come no odder than his opponent, Mitt Romney. He believes that with God’s help he, too, can boldly go where no man has gone before and solve America’s problems.

As a lifelong member of the Church of Jesus Christ of Latter Day Saints – a Mormon bishop in fact, he believes that the baptism of the dead to bring them into the Church is a sensible idea, and is guided in life by the ‘Book of Mormon’. The contents of this amazing volume were revealed to the church’s founder, Joseph Smith (who had 30 wives and was killed in a prison shootout) on golden plates and written in a mysterious language known as ‘Reformed Egyptian’ by an angel named Moroni. Fortunately, with the help of a pair of magical crystal spectacles, Smith was able to translate it into English.

In case that is not enough to convince voters of Romney’s suitability for the job, he believes, too, that God lives on a planet called Kolob and he wears special Mormon underpants. (Romney wears the special underpants, that is, not God). And if you want more details, or wish to order a pair, visit www.mormon-underwear.com.

So as Americans decide whether their future lies in a colony on the moon or in special underpants from planet Kolob, you may wonder whether things can get any more bizarre. Well unfortunately, yes, they can. While the space centre in Houston contemplates its future missions to Newt’s moon base and Planet Kolob, a strange object in the shape of ‘Lady Apostle Helen Ukpabio’ is hurtling asteroid-like towards them and is due to collide in March. And when it comes to cranky ‘out of this world’ ideas the Lady Apostle makes Gingrich and Romney look like mere space cadets.

She is a preacher from Nigeria with her own church who specialises in casting out witches, particularly from children. For her 12 day visit to Houston in March she promises deliverance from (amongst other things) bondage, bad dreams, witchcraft attacks, mermaid and other evil spirit possession, untimely deaths, lack of promotion, financial impotency and chronic and incurable disease.

All good, clean harmless fun? Well unfortunately no. Helen Ukpabio is no joke. In her book Unveiling the Mysteries of Witchcraft she explains how to identify a child witch. “If a child under the age of two screams in the night, cries and is always feverish with deteriorating health, he or she is a servant of Satan”, she advises. Her teachings are said to have contributed to the torture or abandonment of thousands of Nigerian children. “Suffer the little children” as the good book has it.

NW

News in Briefs (2012)

The Brief Reports Column from the March 2012 issue of the Socialist Standard

Eric Gherkin MP has expressed outrage that a local council has been banned by the High Court from discussing politics during council meetings, but former councillor Norman Shin is unrepentant about bringing the case: “Politics has got nothing to do with what the council does. All we do is line our pockets, create jobs for the boys and have banquets. When some of these dinosaurs try to drag politics into it, like local poverty or homelessness, it discriminates against people like me who are only in it for the money. It’s a matter of principle.”

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There was shock in the City this month on the announcement of a gigantic three million pound bonus for Bob Gland, a Tower Hamlets road-sweeper, for services to the transport infrastructure. Berkeley’s Bank Staff stood resolute behind the bonus: “Bob’s a diamond geezer. Besides, it’s vital to incentivise such work. We also plan to pay our toilet cleaners two mill each, plus preference shares in our range of cleaning products, and a villa in Belize. Ordinary everyday merchant bankers don’t seem to understand that they wouldn’t be able to go to work in the morning if it wasn’t for maintenance staff like ours. Without them, nothing would be cleaned and we’d all die of cholera in a traffic jam.”  Senior banking executives have responded that their work is important too, and they should be paid at least in line with the minimum wage, but Berkeley’s dismiss the claim: “They couldn’t lift a finger to pick their noses. The day they produce anything useful, we’ll eat our brooms.”

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Former Archbishop of Canterbury Lord Carey has said the Christian faith is facing “gradual marginalisation”. Blaming the rise of secularism and a modern ‘aggressive atheism’, he said that Christianity was suffering like Jesus on the cross from the slings and arrows of outrageous unbelievers. “We demand our human rights to inculcate everybody’s children with tales of heaven, everlasting torment, virgin births, raising the dead, walking on water and stoning homosexuals. How can children grow into moral, responsible adults if they’re not told these stories? Why, oh why does nobody take us seriously?”

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Iran’s President, Mahmoud Ahmadinejad, says “great” nuclear achievements will be announced in the next few days. Declining to give details, the president instead advised the population of Israel to make immediate travel plans. Barack Obama, the US president, hit back in a press statement, claiming that Iran was using its ‘domestic’ nuclear programme to intimidate rivals: “They’re aiming to use terror tactics to walk all over their neighbours and achieve global dominance. We know, that’s what we did. It is completely unacceptable for us not to have all the weapons. These farty little countries can’t be trusted with nukes. They might use them on us.” A White House special envoy is due to fly out to Tel Aviv to meet with the Knesset Interior Minister for a detailed discussion on how to shoot more Iranian nuclear scientists. There was no comment from North Korea, where the phone was off because of a power cut.

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Health Secretary Andrew Lansley says the government is “committed” to the NHS bill, amid reports that three Tory cabinet ministers have concerns. Speaking from an upstairs window in a Clapham bedsit, Mr Lansley defended allegations that he is now a ‘toxic’ minister whom nobody wants to touch with a barge pole: “David Cameron asked me to fillet the NHS like a haddock, but then panicked as soon as there was protest.  However he fully supports me falling on my sword, and I can confirm that this government is totally behind me like the back-stabbing bastards they all are.” Rejecting suggestions that there was division among senior Tories, he said “Mr Cameron’s cabinet is absolutely united in its unswerving resolve to blame me now that the shit’s hit the fan.” Mr Lansley is a member of BUPA.

Material World: The Changing World Power Configuration (2012)

The Material World Column from the March 2012 issue of the Socialist Standard

American global hegemony continues its steady decline. The most striking recent instance is the overt shift of Pakistan, long a US client state, into China’s sphere of influence.

The US, unable now to supply its forces in Afghanistan through Pakistan, has no choice but to withdraw rapidly from that country. (We know from WikiLeaks that the US asked China to allow a new supply route through Chinese territory but was refused.)

Afghanistan will revert to its traditional status as a dependency of Pakistan, whose tool the Taliban was from the start. Eventually Afghanistan too, with its rich unexploited mineral resources, may be integrated into the Chinese sphere. Or there may be renewed Russian and Uzbek intervention (advocated by some Russian strategists), with north-south partition the probable result.

Illusions of grandeur

America’s vast military spending and far-flung network of bases are now hugely disproportionate to its diminished economic strength and real influence over events. Multiple wars have left its troops overextended and exhausted. Yet the idea of deep reductions in military forces remains taboo in mainstream American politics, while the US and Israel again gear up for war with Iran (for an earlier analysis see Material World, Socialist Standard, January 2008).

Neither the special interests of the military-industrial complex nor the insatiable thirst for cheap oil fully explain such insanity (even by capitalist standards). Like the rulers of all dying empires, the US elite is in the grip of illusions of grandeur. Indeed, there is less realistic discussion of waning American power today than in the years following the 1987 publication of Paul Kennedy’s The Rise and Decline of the Great Powers, when the process was much less advanced.

The US – China relationship

The emerging axis of the world power configuration is the relationship between the old hegemon and the only conceivable (though not necessarily likely) candidate for the role of new hegemon – China.

The US has lost considerable ground to China in the rivalry over the resources of regions where its sway was previously unchallenged – Africa and Latin America (once known as Uncle Sam’s “backyard”). For instance, China is now Brazil’s No. 1 trading partner.

Other sources of tension between the US and China include disputes over territorial rights in the South China Sea (MW, April 2009), restrictions on exports of China’s rare earth metals (MW, May 2011), intellectual property rights, and currency exchange rates.

Until recently, however, these tensions were counterbalanced by a symbiotic interdependence between the US and Chinese economies, requiring a certain level of cooperation. China’s industrial expansion was fuelled by American (as well as Japanese, South Korean and Taiwanese) investment and imports of Chinese consumer goods.

The symbiosis disintegrates

This symbiosis is disintegrating under the impact of the economic crisis. Much consumption of Chinese goods was financed by debt, and now the bubble has burst. Other longer-term factors are also at work. The recent successes of China’s workers in raising their wages make China less attractive to foreign investors, who are now moving their money to countries like Vietnam and Bangladesh where they can still pay rock-bottom wages.

As a result, the US – China relationship is becoming more conflictual. China is deploying more forces to the South China Sea, while America is beefing up its military presence in the Philippines and Singapore and even plans a base in northern Australia.

At the same time, the US adroitly manipulates understandable fears of China in the countries along its borders. In particular, it seeks close relations with India (traditionally a Soviet/Russian ally), which it encourages to pursue its own regional rivalry with China. India tries to surround China with its client states, while China tries to do the same to India.

So although China has strengthened its positions in more distant regions, its control over its immediate neighbourhood is slipping, as signalled by Burma’s decision not to cooperate with China’s dam construction program. This could lead to a highly unstable “sandwich” pattern of great power rivalry.       

The Russia – China relationship

The relationship between Russia and China is marked by similar rivalries and ambiguities. Like the US, Russia is losing ground to China in a region where it used to predominate – post-Soviet Central Asia with its oil and gas. There are also tensions in cross-border relations, notably over Chinese firms’ exploitation of timber, fish and other resources in the Russian Far East.  

Nevertheless, the cooperative element in Russian-Chinese relations is also strong, and perhaps more resilient than US – China cooperation. The Shanghai Cooperation Organization (SCO) facilitates multilateral relations among China, Russia and the Central Asian countries, and this helps to mitigate Chinese-Russian rivalry in Central Asia.

In October 2008 this column suggested that the SCO might prefigure a Chinese-led bloc directed against US hegemony (MW, Oct 2008). Now it looks as if the conflict of interests between Russia and China may be too great to permit such a development.

An opaque multipolar world

Thus, in the foreseeable future there may be neither a new global hegemony to replace the US nor a new bipolar configuration. Rather, the current opaque multipolar world will continue to evolve in ways that are difficult to predict. This will occur in the context of enormous climatic change, accompanied by the scramble for the melting Arctic (MW, Sep 2007) and later on for the melting Antarctic.

Unless, that is, we can forge links of solidarity across all the actual and potential battle lines that scar our plundered planet. Unless we can dismantle all the rival state machines and set up a world socialist community.

Stefan

Apple, Foxconn and The iConomy (2012)

From the March 2012 issue of the Socialist Standard

Apple, the creators of the iMac, the iPod, the iPhone and iPad as well as other must-have devices, are now industry leaders in providing personal computing and related technologies. But amongst the latest gadgets and a total income of over $108bn (2011), what of the company’s workers and workforce? How do they fare under the influence of a company with more money than the US Government? (In July 2011 because of the debt-ceiling crises, Apple at one point had bigger cash reserves than the US State). Not so good would be the short answer.

Apple itself employs around 60,000 people worldwide and by some accounts can be a strange place to work. Despite the famous informality of jeans in the office, reports in a recent book (Inside Apple by journalist Adam Lashinsky) claim working for Apple is like being ‘in a cult’. With overbearing management, extreme secrecy and even ‘lock-down rooms’ constructed inside other rooms to prevent information being leaked outside the company, ‘paranoid’ may not be too strong a word. Many employees have been fired for discussing their jobs outside work and it is rumoured that company spies operate in bars and venues used by employees. Lashinsky states: ‘So there’s no confusion, the penalty for revealing Apple secrets, intentionally or unintentionally, is clear: swift termination.’ An ex-Apple employee goes further saying that Steve Jobs (now deceased) would make it clear before any media ‘company broadcast’ about new developments or products, that ‘Anything disclosed from this meeting will result not just in termination but in prosecution to the fullest extent our lawyers can.’

Lashinsky also describes Apple as ‘cultish’, and states that ‘neophytes are entrusted with only so much information’. He goes on: ‘As with any secret society, trustworthiness is not assumed. New additions to a group are kept out of the loop for a period of time, at least until they have earned their manager’s trust.’

A senior Apple engineer said: ‘People are so committed that they go home at night and don’t leave Apple behind them. What they do at Apple is their true religion.’ It is alleged that Apple operates around the concept of disclosure – Jon Rubinstein, a former senior hardware executive at Apple, says, ‘We have cells, like a terrorist organisation. Everything is on a need-to-know basis.’ So much for the ‘be inspired every day’ tag line on Apple’s recruitment page, then.

Outside America and Europe things are worse though. Despite early Apple claims to be ‘made in America’ the company have for years been outsourcing work to China and other far eastern countries. One of the main contractors for Apple abroad is a Taiwanese concern called Foxconn, part of the Hon Hai Precision Industries Company. With factories in China and Taiwan, Foxconn is staggeringly huge and is now estimated to employ well over a million people – 500,000 work at its huge Shenzhen facility in China alone. These mega factories are small cities in themselves with shops, barbers, banks and other facilities within the factory complex. Workers are housed in huge dormitories and never leave the site. Overcrowding is rife.  One online estimate states that it is ‘five times the density of population as Mumbai’. Working hours are long and pay is very low by western standards. In 2011 no fewer than ten workers killed themselves in the Shenzhen plant alone and another three attempted the same act. Many jumped from buildings, including one who had lost a prototype iPhone, prompting a media outcry.

The company responded in typically business-like fashion by introducing a new anti-suicide clause in its workers contracts – apparently those desperate enough to want to take their own lives will think again if it means a breach of contract. They also cynically raised wages twice in one week in 2011 which brought the average basic pay of an employee from 1200 to 2000 yen a month, or roughly from £130 to £200.

Death may not come by one’s own hand here though. In May of 2011, Foxconn again hit the headlines when a massive explosion ripped through the plant where the shiny aluminium backs for Apple’s iPad2 are polished, killing three workers and injuring many more.  From reading online news reports, however, the biggest worry seems not to be about the dead and their families but about whether the gadget-hungry fools in the West would get their iPad2 on time.

Workers in China travel far to get jobs in this plant. An in-depth article in the New York Times (25 January) reported on one such individual. It stated: ‘When Mr. Lai finally landed a job repairing machines at the plant, one of the first things he noticed was the almost blinding lights. Shifts ran 24 hours a day, and the factory was always bright. At any moment, there were thousands of workers standing on assembly lines or sitting in backless chairs, crouching next to large machinery, or jogging between loading bays. Some workers’ legs swelled so much they waddled. ‘It’s hard to stand all day,’ said Zhao Sheng, a plant worker.’

The article goes on to say ‘Banners on the walls warned the 120,000 employees: ‘Work hard on the job today or work hard to find a job tomorrow.’ Apple’s supplier code of conduct dictates that, except in unusual circumstances, employees are not supposed to work more than 60 hours a week. But at Foxconn, some worked more, according to interviews, workers’ pay stubs and surveys by outside groups. Mr. Lai was soon spending 12 hours a day, six days a week inside the factory, according to his paychecks.’

The long hours and low pay are not the only issue. The NYT article notes that: ‘Mr. Lai’s college degree enabled him to earn a salary of around $22 a day, including overtime — more than many others. When his days ended, he would retreat to a small bedroom just big enough for a mattress, wardrobe and a desk.’

‘Those accommodations were better than many of the company’s dorms, where 70,000 Foxconn workers lived, at times stuffed 20 people to a three-room apartment, employees said. Last year, a dispute over paychecks set off a riot in one of the dormitories, and workers started throwing bottles, trash cans and flaming paper from their windows, according to witnesses. Two hundred police officers wrestled with workers, arresting eight. Afterward, trash cans were removed, and piles of rubbish — and rodents — became a problem.’

Sadly, Mr Lai was one of the workers killed in the explosion at the iPad plant. He suffered 90% burns and died in hospital two days later, his girlfriend only recognising him from his legs. The explosion was later found to have been caused by aluminium dust igniting as three polishing lines worked continuously to keep up with demand a few weeks after the iPad2 was launched. In the drive for profits at any price, though, neither Apple nor Foxconn paid much heed it seems. Just seven months later in December 2011 an iPad factory in Shanghai exploded from……..igniting aluminium dust, resulting in 59 injured, 23 of them hospitalised.

Foxconn, however bad, are not the only villains in the piece and Apple has to take a lot of the blame. When the world’s media started publishing stories about these conditions, notably an undercover report from the Daily Mail, Apple were shocked into action. A massive auditing operation of their suppliers was carried out and the results published. Some of these results showed allegations of under-age workers (under 16 in China) being hired – one audit in 2010 acknowledged 91 employees found to be under this age or were when they were hired at Foxconn alone. Although seemingly going in the right direction, there is a large element of smoke and mirrors being deployed. As a former Apple executive with firsthand experience commented in the NYT report ‘Noncompliance is tolerated, as long as the supplier promises to try harder next time…’

But others disagree. Business for Social Responsibility (BSR) has twice been used by Apple to advise on such issues: ‘We’ve spent years telling Apple there are serious problems and recommending changes,’ said a consultant ‘They don’t want to pre-empt problems, they just want to avoid embarrassments.’

While Apple may indeed have spent 2010 getting more adept at identifying problems and forming action plans to put things right, the company’s own report admits that if situations have not been resolved within 90 days of an audit, it will only ‘continue to collaborate with the supplier towards further improvement.’ It is obvious that the die has been cast – Apple really has nowhere else to go to get its products made: it needs its suppliers as much as they need Apple. Both are caught in the relentless quest for profit at any cost. This is borne out by Apple being approached by companies desperate to become a new supplier. When Apple decides to see if they can supply a particular product or part, they contact the company. The NYT reports says: ‘When the news arrives that Apple is interested…small celebrations erupt. Then, Apple’s requests start.’

Apple typically asks suppliers to specify how much every part costs, how many workers are needed and the size of their salaries. Executives want to know every financial detail. Afterward, Apple calculates how much it will pay for a part. Most suppliers are allowed only the slimmest of profits. So suppliers often try to cut corners, replace expensive chemicals with less costly alternatives or push their employees to work faster and longer, according to people at those companies.

‘The only way you make money working for Apple is figuring out how to do things more efficiently or cheaper,’ said an executive at one company that helped bring the iPad to market. ‘And then they’ll come back the next year, and force a 10 percent price cut.’

The financial evidence for the above is also available. A recent Bloomberg chart shows that from 2007 and the introduction of the iPhone, Apple’s profit margins have increased to over 30%. Over the same period, Hon Hai Precision Industry (Foxconn’s parent) has stayed steady at just 1.5%.  

‘Hon Hai is willing to sacrifice margins so it can get volume and scale,’ said Vincent Chen, in the same candid report.  Chen is an analyst at Yuanta Financial Holding Co in Taipei who has a ‘buy’ rating on the stock. ‘Apple is also getting so large that it needs a supplier that can provide such scale.’

The iPad is ‘very difficult to make,’ Hon Hai founder and Chairman Terry Gou told shareholders in June. Gou’s strategy has earned him the nickname ‘Low-Cost Terry,’ according to Chen.’

Low cost indeed, but high profit for Apple. The real cost as always, is being incurred by millions of Chinese and Far Eastern workers, living in huge de-humanising factory complexes and  working long hours for little pay in often dangerous conditions. And not just at Foxconn. At another Chinese plant, this time owned by Wintek, the workers actually went on strike. They had been asked to use a noxious chemical called n-hexane which is known to cause nerve damage and paralysis. The substance replaced rubbing alcohol to clean iPhone screens, as it evaporates to the air three-times faster and speeds up production. Over a hundred employees suffered injuries as a result of its introduction, prompting the industrial action. The NYT noted:

‘In its supplier responsibility report, Apple said it had ‘required Wintek to stop using n-hexane’ and that ‘Apple has verified that all affected workers have been treated successfully, and we continue to monitor their medical reports until full recuperation.’ Apple also said it required Wintek to fix the ventilation system.

That same month, a reporter interviewed a dozen injured Wintek workers who said they had never been contacted by Apple or its intermediaries, and that Wintek had pressured them to resign and take cash settlements that would absolve the company of liability. After those interviews, Wintek pledged to provide more compensation to the injured workers and Apple sent a representative to speak with some of them.’

Half a year on, trade and business reports highlight the cut in prices being paid by Apple to Wintek for their services. Business has spoken, unlike Wintek which declines to comment on the issue.

So are Apple alone? Not really. They are merely following, very successfully in monetary terms, the rules of capitalism – namely rule Number One – Profit at All Costs. Moving production from a heavily regulated and therefore expensive country like the USA to a relatively unregulated and therefore much cheaper country like China makes perfect economic sense from a capitalist’s point of view. The market dictates all. An Apple executive sums up this attitude with a salient point: ‘You can either manufacture in comfortable, worker-friendly factories, or you can reinvent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards, and right now, customers care more about a new iPhone than working conditions in China.’

The reality of modern capitalism is that it transcends national borders. Barack Obama once asked Apple CEO Steve Jobs, ‘when are those manufacturing jobs coming back to the USA?’ Jobs famously replied, ‘Those jobs are never coming home.’ This exchange highlights the way that capital does not heed the often spouted patriotism and rhetoric of politicians but deals in cold hard financial facts. Workers would do well to note this and adjust their own attitudes accordingly. Perhaps if we cared less about new gadgets at any cost, humane and environmental, and instead forged stronger links with workers around the globe, we too could adopt a truly global resistance to the onslaught of capital and start paving the way towards socialism and the end of sweatshops and the consumer culture altogether.

David Humphries

Up close and personal (2012)

From the March 2012 issue of the Socialist Standard

Mike Daisey, who makes his living performing monologues on stage, is a self-confessed technology devotee, ‘an Apple aficionado’, ‘a worshipper in the cult of Mac’ – for 15 years or more a total Apple geek. Then one day he says he ‘started to think, and that’s always a problem for any religion, the moment when you begin to think.’ He decided he had to find out for himself what was actually going on within the Apple empire so he assumed the guise of a journalist and set off for Shenzhen, now China’s third largest city with a population of 14 million but just a small town thirty years ago. This is where Foxconn has a massive complex making electronics for Apple, Dell, Nokia, Panasonic, Sony and Samsung.

This is the facility infamous for the netting stretched around the outside of the buildings to thwart suicide attempts. Daisey found a place outside one of the gates away from the many security guards and with the help of a translator interviewed workers who queued up to talk to him, some only 12, 13 or 14 years of age and legally too young to be employed. He learned of the no talking rule on the assembly line, of the supposedly officially enforced eight hour shifts actually being 12 and often 16 hours, of the concrete box 12 foot by 12 foot dormitories with up to 15 beds, of the cameras on the assembly line, in the rooms, in the corridors, everywhere. And everything hand assembled because it’s cheaper than installing expensive high tech assembly equipment.

For more detail on Mike Daisey’s experiences in China researching Apple listen to or read ‘This American Life’ (LINK).

Blogger's Note:

From the above link, "NOTE: This American Life has retracted this story because we learned that many of Mike Daisey's experiences in China were fabricated".

Apple and the Great Chinese Take-Away (2012)

From the March 2012 issue of the Socialist Standard

 Last year Apple earned over $400,000 in profit per employee – more than Goldman Sachs, Exxon Mobil or Google. Apple has 43,000 employees in the US and 20,000 overseas; however, their contractors’ employees number around 700,000 engineers, assemblers, etc., in Asia, Europe and elsewhere (LINK).

Why China? Why not the US?

When Steve Jobs demanded new scratch-free screens for the new iPhone at short notice a Chinese company tendering for the contract constructed and prepared premises including on-site dormitories and a warehouse filled with glass samples with engineers on hand. Just in case they got the contract. They got it. And when the screens were ready and in transit to the Foxconn assembly line 8,000 workers were woken up around midnight, given tea and a biscuit and began a 12 hour shift, producing over 10,000 iPhones a day. According to one executive, ‘no American plant can match that.’ Apple had estimated that around 8,700 industrial engineers would be needed to ‘oversee and guide’ a 200,000 strong assembly line of workers who would be employed in manufacturing iPhones. Company analysts had forecast it would take up to nine months to find that many qualified engineers in the US. In China it took 15 days.

In 1983 the Apple Mac was ‘made in America’; by 2004 Apple products were in large part manufactured and assembled abroad. Currently the software and Apple’s ‘innovative marketing campaigns’ are created in the US by 100 full-time employees and the semiconductors are made in Texas by 2,400 employees of South Korea’s Samsung.

Manufacturing the iPhones in the US would increase the price of each phone by about $65 whilst the profit is often hundreds of dollars per phone. The main factor for having moved the vast majority of jobs to China is not the cost of wages but more to do with ‘inventory costs, supply chains and the time involved in scaling production up and down’, plus it’s still easier to bypass labour regulations and to hire and fire in China than in the US.

It is for reasons like these that so many ‘middle-wage’ jobs have disappeared in the last two decades from the US. Any new jobs that are created there are mostly in the service industry – restaurants, call-centres, hospitals and temporary work, with little upward mobility opportunities. Apple’s own high-tech plant in California became an Apple Care call centre with jobs at $12 per hour.

Martin Hart-Landsberg points out that the manufactured goods of China’s top exporters, though recorded as Chinese products, include around 60% of all items and 85% of the high-tech items produced by foreign companies operating in China. He also cites figures from the US Bureau of Labor Statistics showing manufacturing employment in China falling between 1994 and 2006 from 120.6 million to 111.61 million and, in particular, urban manufacturing (mostly foreign) falling from 54.92 million to 33.52 million. Significantly of total urban employment most growth was in the casual wage or self-employment area – 80 million of 81.7 million ‘informal’ workers.

The Chinese Take-Away

Of the thousands of jobs that have been created from developments in US solar and wind energy, and semiconductor fields within the last decade, much of the actual employment has been abroad. US facilities have been closed to re-emerge in China where executives say they are competing with Apple for shareholders. They are obliged to rival Apple’s growth and profits to survive. Capitalism and its shareholders have no regard for workers wherever they are; their loyalty is to the god of profit only.

Janet Surman