Slashdot Mirror
What the iPod Tells Us About the World Economy
Hugh Pickens writes "Edmund Conway has an interesting article in the Telegraph where he analyzes where the money goes when you buy a complex electronic device marked 'Made in China,' and why a developed economy doesn't need a trade surplus in order to survive. For his example, Conway chooses a 30GB video iPod 'manufactured' in China in 2006. Each iPod, sold in the US for $299, provides China with an export value of about $150, but as it turns out, Chinese producers really only 'earned' around $4 on each unit. 'China, you see, is really just the place where most of the other components that go inside the iPod are shipped and assembled.' Conway says that when you work out the overall US balance of payments, it shows that most of the cash for high tech inventions has flowed back to the United States as a direct result of the intellectual property companies own in their products. 'While the iPod is manufactured offshore and has a global roster of suppliers, the greatest benefits from this innovation go to Apple, an American company, with predominantly American employees and stockholders who reap the benefits,' writes Conway. 'As long as the US market remains dynamic, with innovative firms and risk-taking entrepreneurs, global innovation should continue to create value for American investors and well-paid jobs for knowledge workers. But if those companies get complacent or lose focus, there are plenty of foreign competitors ready to take their places.'"
Each element that you speak of, right down to the packaging and external box labels, are manufactured.
The problem is that most of these pieces don't happen in the USA, they're individually made mostly in China and the ASEAN countries. We've exported the labor component, as have many US companies.
The 'shareholder' value is corporate speak for being enslaved to Wall Street for the task of producing excellent quarter after excellent quarter. No regard is made for US labor at all, and the fact that the labor is exported is lauded.
Yes, innovation and IP from Apple are rewarded handsomely. And the US labor market keeps looking uglier and uglier because US manufacturers can't deal with manufacturing processes that utilize cost-effective US labor in its products. What do Chinese laborers get? Not very much. OSHA and pollution controls? Not very many. People hungry for work? Plenty.
---- Teach Peace. It's Cheaper Than War.
Considering that American recovery (and quite a few other countries according to wikipedia) from the Great Depression began in 1933, I'm gonna say you're the one who's making things up.