US Senator John McCain caused a bit of a kerfuffle this week when he said in an interview that Apple manufactures its iPads and iPhones in the United States.
McCain later claimed he misspoke. Critics ignored the backtrack, pointing out that not only does Apple do most of its manufacturing in China, the company's Chinese subcontractor received wide publicity last year after reports of deplorable working conditions.
But McCain's statement, while bone-headed, does point to a real issue. With supply lines lengthening, can we really define where something is “made” and should we even bother?
Within hours of McCain’s comments, and the subsequent piling-on, Clyde Prestowitz at Foreign Policy was making the argument that people working closer to the electronics supply chain already know. Prestowitz, citing an Asian Development Bank Institute study helpfully called “How iPhones are Produced,” pointed out that the hit device wasn't really “made” in any one place. According to ADBI, via Prestowitz:
- The battery chargers, camera lenses, and timing crystals all come from Taiwan. The screen is from Japan, the video processing chip from South Korea, and many of the other chips Taiwan's Taiwan Semiconductor Manufacturing Company. In all, over nine countries produce the parts and components that all head to final assembly in China. So, it is indeed, quite possible that the United States has a trade surplus with China qua China on the iPhone.
That doesn't mean McCain was right. But his critics were hardly more subtle. What the dustup, and Prestowitz's useful explanation, point up is that the whole debate about “sending jobs overseas” is a lot more complicated in the electronics industry, and perhaps many industries, than it seems.
The truth is that everybody makes the iPhone. And your car. And anyone who works on a supply chain knows this, because those parts are being sourced from all over. What's bizarre is that more than a decade after the advent of what we once called “globalism,” it's still common to hear rhetoric about factory jobs heading overseas.
That's not to minimize the effects of collapsing manufacturing economies — notably, in the United States. Rather, it's to say that the controversy over McCain's comments was a conversation from 1995, not 2011.
Everything we know about modern globalized electronics manufacturing tells us that interdependence between companies and employees in different parts of the world is extraordinarily high for many digital products. What's weird is that we're comfortable discussing how the use of these products can shrink the world, but not comfortable, at least in this case, noting how a similar effect transpires through their manufacturing.
In the McCain case, the two choices were either a factory in China, or one in the US. But if there are at least nine countries represented in one mobile product, the issue isn't a zero-sum debate between the value of a worker in California and one (or three) in China. The issue McCain and his critics could have been debating is about the vastly complicated chain of ideas and material that has to operate to get a phone into a store — and how much of the $500 sale price gets left in each place, as the device, moving from being nothing to being something, passes through each.