Apple creates poor societies




The GoodElectronics Network and SOMO have published a paper about Apple’s business model and its impact on society. “Rich corporations, poor societies. The financialisation of Apple” explains how Apple is short-changing societies by seeking to maximize financial returns on its enormous profits instead of reinvesting that value into the real economy.

The multinational shrewdly minimises its corporate costs through the relentless offshoring of production and related ‘activities’ to low-wage countries and tax havens. Its accumulated returns far exceed Apple’s capacity to reinvest its earnings productively. As a result, Apple increasingly operates like a large institutional investor, investing most of its mounting cash pile in financial markets.

While perhaps one of the most extreme examples, Apple is just one of countless multinational corporations that have collectively come to embrace Wall Street’s maxim of maximizing shareholder value at all costs, leading to a global ‘race to the bottom’. The overall outcome of these developments is paradoxical.

When corporations avoid paying their fair share of taxes, governments around the globe are forced to raise rates for other types of taxes (such as sales taxes)and/or reduce investments in public services. All this at comes a time when workers worldwide are struggling with reduced purchasing power. As a result, mounting corporate riches based on cheap labour and relentless tax dodging reinforce ballooning public and private debts.

Watch and share the video about Apple’s business model, and download the paper here

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