By Jonathan Chow
The iPod: a gadget we all crave and adore – sleek, functional, and affordable – well, affordable for middle-class America at least.
We all know that the Apple heads at Silicon Valley are responsible for the iconic aesthetic presentation and minimalist technical specifications of the iPod, but we think much less about where its low price comes from. Recently, however, we’ve been pretty startlingly reminded that there are laborers actually responsible for assembling these iPods, sometimes in substandard working conditions that might help cut costs, despite the compromise in ethics.
The controversy struck a high point last week with the incident involving the death of a Chinese employee at Foxconn, the company which assembles Apple’s iPhone.
So how much integrity do we actually sacrifice by buying the iPod at retail price and how does that compare to the normative fair-labor price – in other words, the “good” price, the price the iPod would cost had Apple not taken shortcuts and instead chose to produce them in U.S.-standard legal working conditions?
Umair Haque of Havas Medialab and Bubblegeneration did some research on this question and the results were surprising. He found that:
An American made iPod Classic costs just 23% more than a Chinese made iPod Classic: $58 more, to be precise. The same relationship holds across the iPod family (price differentials in the 20-30% range)…
Is a 23% price difference between a “Good” and “Evil iPod” worth it — to Apple, society, communities, and our economy? Would Apple’s business suffer from charging people $58 more for an iPod? Can we afford to pay 23% for goods made according to higher labour standards?
I think the real question is: how long can we afford not to? The less we invest in one another, the worse off we all are eventually. The higher standards we set for ourselves, the more potential value we can create.
Haque sees the American obsession with cost cutting as a destructive practice in both ethics and long-run economics. It outsources illegal labor practices to places too poor to refuse them only to spur the over-consumption of products that Americans can’t authentically afford.
Artificial prices and lax lending practice in the U.S. may be helpful in demandside economics, but on the supplyside Hauqe insists that “today, [America’s] lack of standards and manufacturing competence has led to a dearth of innovation exactly when [they] need it most.”
Haque suggests that Apple practice constructive capitalism for it’s own good. Below is Haque’s table on the price comparisons between “Evil iPods” and “Good iPods”:
As for us, we’re not so sure we’d object to a small price raise if we knew, absolutely, that it was contributing to better business practices. The problem is knowing when the increase isn’t just contributing to a healthier bottom line.