That’s Where The Money Is
I sparked off an interesting Twitter conversation yesterday when I made a wisecrack about Apple withdrawing from the Republican National Convention. Specifically, one of my friends wondered why Apple was involved in the first place. I found the question itself to be shocking.
Why was Apple involved in a political party’s convention? For the same reason that Willie Sutton robbed banks: Washington is where the money is.
Another friend of mine jumped into the fray defending Apple, with the following factoid:
@rnewquist Apple operating income $53B FY2015 – spent 0.008% on direct lobbying. Google by comparison spent 0.07% of operating income.
— Michael Beatty (@protomech) June 27, 2016
To which I can only respond… so what?
For the record, I have not bothered to fact check these numbers. I know Michael well in real life, and I strongly suspect that he has a good source. Even so, the reality is that this is irrelevant.
First of all, that still means Apple spent over $4 million dollars on direct lobbying. That’s not a trivial sum. Even a company the size of Apple doesn’t throw that kind of money around without expecting a return.
Second, the fact that Apple is spending less than Google could mean that it’s getting a better return on the dollars it is spending. Or it could mean that it’s found that it’s not getting a great return, so it spends in other areas.
Third, this isn’t an apples-to-apples comparison (forgive the unintentional pun). Google has several products that it sells directly to government customers and/or government contractors: Google Maps Servers (recently discontinued, but I know firsthand that government was one of their big users), GMail and related apps (Google went to a lot of effort and expense to get GMail approved for use by government contractors) and more. They’ve also been the target of real and threatened anti-trust lawsuits. Apple, on the other hand, sells boutique products – high end devices at premium prices. That’s the exact opposite of the government’s typical spending patterns. In short, Google has more reason for direct lobbying than Apple does.
Fourth, never forget that direct lobbying is only part of the story. All of the major tech companies have been playing roles in the conventions of both political parties for the last several cycles, and those roles have been getting larger. Why? Because we live in the digital age, and conventions need tech to operate. Providing wi-fi for thousands of people is a logistical nightmare. Streaming video of all of the important speeches is a big deal. Getting an app together for convention goers is expected these days. And that’s just the big stuff. Some of those services are donated and classified as political contributions. Some of those services are paid contracting services. This is, after all, part of what these tech companies do. Providing these services as a paid contractor is influential all by itself, even if you haven’t offered any discounts.
Fifth, Apple is a highly unusual company. But it’s a highly unusual company that’s in the process of becoming a rather typical big company. The Apple of today is already not the same company that it was under Steve Jobs. Expect that change to become more pronounced over the next decade. That’s exactly what happened to Microsoft after Bill Gates stepped down, and I don’t know anybody who would argue that Jobs was less directly influential on his company than Gates was.
This last comparison is even more apt than it at first seems. Microsoft spent very little money on lobbying – very little… until the late 1990s. What changed? In 1998 Microsoft was hit with a massive anti-trust lawsuit. But it didn’t come out of the blue. Everybody had known it was coming for a few years before that. Bill Gates later expressed regret that he resisted spending money on lobbying in the early days of Microsoft’s history.
The simple fact of the matter is that Washington controls a tremendous amount of money. Government in the US collects 26% of GDP in tax revenue. Granted, that includes state and local governments. But the federal government’s $4 trillion budget is the lion’s share of it. That’s a hell of a lot of money. If you’re a major corporation like Microsoft, Google, or Apple, and you’re not making the effort to get at least some piece of that pie, you’re missing out. But that’s only part of the story. Government regulation plays a huge role in the economics of major companies: trade rules, tariffs, taxes, labor laws, environmental regulations, intellectual property rules, finance law – all of these things and more effect the bottom line of big companies. A small regulation change in any of these areas can literally cost – or save – a company like Apple millions of dollars. You’d better believe that they have their fingers in that pie.
This isn’t a diatribe against Apple. They’re not doing anything differently than any other huge corporation. But it is a simple reality: big government and big corporations feed and nourish each other by necessity. You cannot have one without the other.
But to finish with the thought that kicked off the whole discussion: don’t let yourself think for a minute that Apple gives a damn about gay rights or any other rights. If it did, then it would stop doing business with countries like Saudi Arabia that kill gay people – not just states that say you don’t have to bake them a wedding cake. Why does Apple do business with Saudi Arabia? Because it’s profitable. Why did it pull out of the RNC and stop doing business with South Carolina? Because that’s good PR for its core customer base: upper middle class coastal elites.
Like all big corporations, Apple doesn’t give a damn about your values or mine. It only cares about one value: the almighty dollar.