January 5, 2017

Mukund Rathi explains why the tech bosses got on better with Trump than expected.

IN A much-hyped, closed-door meeting in December, President-elect Donald Trump and a big chunk of the tech elite discussed what the tech industry should expect as the country enters the Trump era.

As always, the public was left short on the details. The tech news website Recode reported, based on anonymous sources, that topics discussed included immigration, STEM education and diversity, job creation and, of course, tax havens and profit repatriation.

These are fairly predictable subjects for everyone involved in the meeting. What surprised some was, first, that the meeting happened at all, given that the tech industry overwhelmingly supported Hillary Clinton in the election; and second, that it didn't end up being a trainwreck.

In a bulletin to employees, Apple CEO Tim Cook explained well why no one should be surprised. "Governments can affect our ability to do what we do," Cook wrote, and so Apple must "engage." He wasn't lying when he wrote: "[W]e engage when we agree and we engage when we disagree."

Donald Trump meets with PayPal founder Petel Thiel (center) and Apple CEO Tim Cook (right) in Trump Tower

Cook, Amazon CEO Jeff Bezos, Larry Page and Eric Schmidt of Alphabet (Google's parent company) and their ilk lead huge corporations that dominate a massive and growing sector of the economy. So of course they're going to intervene politically, whether it's attending high-level meetings or hiring scores of lobbyists.

Cook insists that the tech giants are standing up for "privacy and security, education...human rights for everyone...combating climate change" and all of that good stuff. The "making the world a better place" line has gotten so bad that the satires of it are pretty widespread now.

When it comes to Apple and human rights, of course, most people probably think of Chinese sweatshop workers--and Apple convincing parts manufacturer Foxconn to install nets around its factories so those workers won't be able to commit suicide. (Qualifier: In no way is Apple the only tech company to use sweatshop labor, Foxconn's or otherwise, throughout its supply chain.)

There are plenty of things that the tech industry does that most people don't see as "making the world a better place"--sweatshop labor, hoarding profits in tax havens, supporting "free trade" deals and economic agreements like the Trans-Pacific Partnership and so on.

Still, Cook and the other tech bosses probably think of themselves as standing for progressive values, in contrast to Trump--but that they have to "engage" with the new president to achieve anything to do with them. Barack Obama, Hillary Clinton, Bernie Sanders, Elizabeth Warren and every other liberal hero you can think of has preached the same thing.

But they are also realistic in understanding that there are points of agreement. As Cook admitted, the tech chiefs all want to negotiate "things that are more business-centric--like tax reform."

TAX AVOIDANCE--to call it by its true name--is an obsession that Trump and the tech industry share. Speaking about the estimated $200 billion that Apple has stashed overseas in dummy subsidiaries to avoid paying the relatively higher U.S. corporate tax rate of 35 percent, Cook says that the company won't bring this money back to the U.S. until there is a "fair rate." (Qualifier: As Cook correctly says, "many, many other companies" do exactly the same thing.)

Those attitudes put Apple and the tech giants on the same page as Trump when he responded to Hillary Clinton's allegations that he hasn't paid income taxes by smirking that this merely made him "smart."

In August, Europe's competition chief announced that Ireland gave "illegal state aid" to Apple in the form of sweetheart tax deals and ordered the state to reclaim $14.5 billion in unpaid taxes and interest for 2003-14.

Cook was outraged by what he called "total political crap." "When you're accused of doing something that is so foreign to your values, it brings out outrage in you," he said.

Trump is openly sympathetic to Cook's hopes for "a fair rate"--meaning a really low one--to bring Apple's profits home. In August, the Republican presidential candidate promised to "bring that cash home" at a 10 percent tax rate. This would save Apple an estimated $40-50 billion.

Maybe Cook and friends think this is all truly reconcilable with Google's one-time "don't be evil" motto. But a closer look at the tech industry quickly tarnishes the progressive image it cultivates.

FOR A number of liberal commentators, it was inconceivable--or just plain stupid--that some working people believed Trump would "fight for the little guy" when he himself is a rich asshole. But somehow, there is no contradiction in Apple and other tech giants stating that they stand for "human rights for everyone" while having sweatshops in their supply chains.

In Apple's 2016 "Progress Report"--there is progress every year, including the year of the Shenzhen suicides, because of those nets--COO Jeff Williams opened with the typical rhetoric about the company being "deeply committed to making sure everyone in our supply chain is treated with the dignity and respect they deserve." Williams reported an unprecedented 97 percent compliance with work-hour limits. It isn't until 10 pages later that you find out the "respectful" limit is a 60-hour workweek.

Another example: 2016's biggest privacy showdown was the battle between Apple and the FBI over the locked iPhone that belonged to one of the assailants in the San Bernardino mass shooting in December 2015.

At the time, Trump called for a boycott of Apple products until the company cooperated with the FBI. Cook postured as a privacy champion, resisting the government's attempts to force the company to hack open the phone. Fellow tech companies and liberal media applauded Apple.

Forget that but for the FBI's incompetence, Apple was ready to hand over the locked phone's iCloud data. Forget that not so long ago, the tech industry was implicated for cooperating with the NSA's mass surveillance program--and getting paid for it to boot. And forget that Apple's business model of commodifying consumers' social lives--"there's an app for that!"--requires digitizing more people's communications and social interactions, which helps make state surveillance possible and more effective.

THIS IS why the tech companies aren't a reliable ally in the fight against Trump's suggestion of creating a Muslim registry. This would be something like a revival of the Bush-era NSEERS program, which required non-citizens from 24 Muslim-majority countries, plus North Korea, to register with the government and check in regularly.

It's worth keeping in mind that racist law enforcement and national security databases already exist. They typically don't target race or religion as explicitly as NSEERS did, but they do so at least indirectly.

Local police often maintain large databases with information gleaned from discriminatory tactics like stop-and-frisk. In Los Angeles, author Michelle Alexander reports that the result is "a database containing the...biographical information of the overwhelming majority of young Black men in the entire city."

These error-riddled databases are also used for deportation--something that Peter Thiel's company Palantir helps out with.

NSA surveillance programs like PRISM have a similar bias because of the "One-End Foreign (1EF) solution", which legally allows it to collect data on communications involving U.S. citizens as long as one ed of the exchange is overseas. This means that those of us who regularly communicate internationally--say, immigrants--are far more likely to be caught in the dragnet.

Still, a return to blatantly racist data collection would be intolerable, and it's heartening to know that many tech workers have voiced their opposition.

After IBM CEO Ginny Rometty wrote to Trump to express her support, services and advice, more than 500 IBM employees, including workers and higher-ups, signed a petition condemning the letter. "Hostile rhetoric towards immigrants, Muslims, Latinos, LGBT people and others impinge on our core values," the petition states--its signers vow to "refuse participation in any U.S. contracts that violate constitutional and civil liberties."

Another pledge signed by more than 2,000 tech employees calls for refusal to "build a database of people based on their constitutionally protected religious beliefs" or to "facilitate mass deportations." Notably, this pledge also recognizes "the roles that technology and technologists played in carrying [these threats] out," referencing IBM's role in the Holocaust. The employees call on their own organizations to "minimize the collection and retention of data that would facilitate ethnic or religious targeting."

Some tech writers found these statements praiseworthy, but also ironic because "ethnic or religious targeting" is a central element of the business model of many tech companies. These writers point out that a Muslim registry has effectively been created by Silicon Valley for advertising purposes, and it can be appropriated by the government easily.

This irony is real, but it isn't something to blame on tech workers. Most of those signing these statements are workers, but there are a few high-level managers and executives. The founder and the CEO of Foursquare have both signed up, for example--this is a company that relies on detailed user information and targeted advertising.

OF COURSE, the harms of commercial surveillance may seem minimal compared to state surveillance--there are fuller discussions of this question elsewhere. The point, for the purposes of this article, is to illustrate that Cook's claim of engaging with Trump to win concessions for progressive values collapses because the tech industry doesn't actually stand for such values itself.

So don't be surprised that Trump and tech are meeting and willing to work together. Peter Thiel gained infamy in Silicon Valley for supporting Trump, and his relationship with Trump has been scrutinized, and will be further.

But it would be hypocritical to single him out, because there will be people like the heads of Uber and Tesla who take on policy advisory roles in the new administration. Cook hosted a fundraiser for Paul Ryan, and Apple didn't suspend its financial support for the Republican convention last year.

It may be a bumpier road for tech compared to the Obama years, but the industry will continue participating in state surveillance, feeding user information to advertisers and meeting with those who hold power in Washington.

Justified by liberal rhetoric or not, tech capital is going to act as capital always does.