Tim Cook and ‘moral responsibility’ of corporations in the age of gridlock

Is the charm offensive of Apple’s CEO the real thing, or an attempt to placate criticism by President Trump?

Apple CEO Tim Cook is taking on a more public role, arguing that big companies have a duty to get things done for the public in an age of political gridlock or backsliding. In a talk with the New York Times’ Andrew Ross Sorkin, he marveled at the accomplishments of LBJ’s Great Society. Then:

“I think we have a moral responsibility to help grow the economy, to help grow jobs, to contribute to this country and to contribute to the other countries that we do business in.”

I can imagine Howard Schultz, who prominently advocated common-sense politics last year (how’d that work out), saying, “Hey, buddy, work your own side of the street!” And Milton Friedman, who argued that companies only had an obligation to make money for shareholders, spinning in his grave.

The comment also makes me reflexively tetchy. Apple was a leader in destroying America’s high-tech manufacturing base, sending assembly of its products to the suicide-prone factories of Foxconn and prompting a famous jeremiad from Intel’s Andy Grove. It also drew criticism and threats of tariffs from President Donald Trump. Apple also has nearly a quarter-trillion dollars parked offshore to avoid taxes (it is, of course, far from alone in legal tax avoidance).

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Cook trumpeted a new Apple data center in Iowa, although the company is taking $208 million in incentives from the state and the facility will have only 50 employees. He wants to push coding classes down to community colleges, the better to give people skills to make apps. Unfortunately, most apps don’t make much money and “gig economy” app makers lack the healthcare and other benefits, including retirement nest eggs, of traditional jobs.

Also, Cook presided over construction of Apple’s new headquarters, a flying saucer out of the movie Independence Day. But it’s totally cut off from Cupertino and the Caltrain commuter system, as heavily dependent on cars as a 1960s office “park.” Although Apple has made laudable efforts to run its U.S. sites on renewable energy (it offshores pollution to Chinese factories), the headquarters is an insult to sustainability.

Sorkin, as always, wants to give Cook the benefit of the doubt. And Cook’s stance is better than (the original) J.P. Morgan’s famous declaration, “I owe the public nothing.”

Apple claims it is “one of the biggest job creators in the United States.” But check its web page on the subject and the numbers seem squishy, running from Apple store workers to suppliers who no doubt do business with other companies. It’s unclear how many well-paid, full-time jobs we’re talking about. Apple’s saucer is built to accommodate 12,000. Microsoft employs about 46,000 in the Puget Sound region alone. Amazon employs 40,000 in Seattle.

Cook could make a serious start by encouraging companies to wind down the tax evasion and lead by example. He could rebuild America’s high-tech manufacturing base, as Grove advocated, not toss out symbolic data centers to red states. And he could advocate for the federal government to invest in science and address climate change.

Today’s Econ Haiku:

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An amazing thing to see

Now distilling risk


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