Are Apple & China the world's future superpowers?

20 Jul 2011

Last night Apple announced record profits, driving their shares price through $400 for the first time. A few days ago Apple's shares were buoyed by the news that China's biggest mobile operator will start selling the iPhone. Apparently Apple's Chinese stores are by far it's busiest and highest earning outlets in the world. For the last several years, the Chinese government has been successfully encouraging its people to play the piano and listen to Classical Music as part of a campaign to instil advanced aesthetics and cultural values, now China combines Japanese love of technology with European love of design. Therefore China is Apple's ideal market, because Apple's only competition is at the lower end of the market, the iPhone is the only aesthetically idealistic smart phone on the market. No wonder then that newspapers are full of stories about Chinese people clamouring for Apple gadgets.

Although this blog is about philosophy and geopolitics, I have written several articles about Apple on this web site, in fact many years ago my interest in political philosophy was fertilized  by my analysis of the Microsoft Apple Debate (eg here). Also, when I was a kid my father bought a Commodore Pet computer which introduced me to the joys of computer programming at an early age, and in later life I became a quantitative trader writing c++ models. For a while I even headed up a team of computer programmers building financial software, and GUI design became one of my obsessions (eg here).

So my interest in Apple reflects my interest in computing, GUI, financial markets and philosophy. The Ancient Greeks used to believe in a sort of new age like man-society-universe connection, and Carl Jung's synchronicity is just a special case of this non-random harmony in the universe. Jung talked about strange coincidences that have no causal relationship in nature, yet have some meaningful psychological connection. For example, you try to call a friend at the same moment he tries to call you. Today some quantum physicists talk about holistic quantum physics effects which lack the determinacy of simple mechanical models, and could therefore manifest a sort of man-society-universe connection. What has this to do with Apple? I feel that Apple is a "meaningful coincidence", an omen, a manifestation of the emerging zeitgeist, a living demonstration of the new economic paradigm. Therefore I often talk about Apple in order to illustrate New Eastern Philosophy in a practical way. For example, quoting from one of the links earlier:

One fascinating aspect of the Windows vs Apple debate is the way it reflects some of the issues in the economic debate between free markets vs state capitalism. The following three points illustrate this:

1. The chaos of laissez-faire. Apple is famous for its closed hardware system, the PC is famous for open standards and competition. You would have thought we would all prefer an open system, but it can become chaotic... This is another example of the famous Railway Privatisation Problem in the UK which was designed to introduce competition but ended in chaos... A closed system is often associated with higher prices, but economies of scale can actually work to the advantage of a more monopolised market. For example, Apple now has economies of scale no iPhone or iPad competitor can touch... Apple is the private sector equivalent of Chinese Infrastructure, State Owned Enterprise, and unstoppable Economies of Scale...

2. The evils of laissez-faire. A key element of the Apple concept is the App Store, of protecting the consumer from bad software. One of the problems with commercial software is that it tends to become, to some extent, mal ware. Look at Norton Anti Virus - my personal favourite example of a god awful product driven by commercial pressures. Norton pay lap top manufactures to include it on on the machine. They make it as hard as they can to uninstall. They fill it with lots of junk features you don't actually need, but because you are not an expert, you can be tricked into thinking you do need. They love messages that pop up so you retain brand awareness. They report harmless things as malicious to trick you into thinking they are doing a great job... The complaint against capitalism is that the limited expertise and irrationality of consumers, combined with the selfish motives of producers, creates anomalies which destroy the utility maximizing process. Instead you end up with products that damage personal contentment.

3. The need for authority. Apple is famous for its top down management style... A "top down" approach is one in which decision making is concentrated at the top of an organisation... What has all this to do with economics and politics? If human beings have vastly different levels of skill in a certain areas, it calls into question the efficiency of allowing individuals to make decisions about these areas. Why have a free market in mobile handsets if the ability of Steve Jobs to judge the relative worth of competing handsets is infinitely higher than the average mans? Free will in this choice becomes worthless, it just hurts people by letting them make the mistake of purchasing Windows Mobile... The point is that once human beings are no longer equal in all areas, once you believe in specialization instead of individualism, flaws open up in the democratic and capitalist model.

Exceptional hardware design, tasteful GUI design, economies of scale, and a little PR have turned Apple into America's most enviable and important company. To be honest, Apple do have some small problems with shallowness (try searching on iBooks & iFilms), but Apple are, by in large, real Zen Buddhist like perfectionists, not PR obsessed hypnotic liars. In other words, unlike Google they are not trying to take over the world with new product launches every week, their genius is in their single pointed Zen Master like mental discipline which focuses on what it is they are supposed to do and does it as well as possible. Steve Jobs is or was a Zen Buddhist by the way, and of course Apple's focus is consumer computing.

Yet the world at Apple's feet is absolutely vast, and now the financial resources are in place, and the way of Zen like perfection has been demonstrated, I think it's time for the Steve Jobs era to come to an end. Over the next few years we will see whether Apple can make the leap to the greatest company the world has ever seen, or whether it will get caught in inside itself as so many others have done. As I have explained many times on this blog, the new economic paradigm is like comparing the economic achievements of the Romans with the Greeks, the scale of it is mind blowing. Now Apple is right there at the very forefront of it, it's the corporate equivalent of China, the world's superpower. Did you notice the iPad was released in 2010, the year the of the clashing ideological tigers, the year China usurped America.

This next step for Apple depends on self knowledge, allowing one to see one's flaws clearly, allowing one to detach from oneself, letting go of everything one is, and in this dehumanization becoming perfectly devoted to the customer with godlike clarity and mastery. Think of a great tennis player, when that ball is in the air he turns into a machine, every shred of humanity has gone and every shed of his mind is focused on one point. His personality, if personality is needed, is perfectly in tune with the challenge, he has no personal baggage, he rejects the Christian and liberal concept of intrinsic human worthiness. That's the endpoint of human life, and the new paradigm begins when the tennis player gives up on himself and starts trying to be what he is not.

Apple's desktop / laptop operating system (OS X) was designed long ago before Apple grew into greatness. It's still a slight quirky consumer toy, it's not really fit for the enterprise market. If Apple went out and designed a whole new ultra-secure operating system based on specialist hardware innovations, preventing viruses, jailbreaking, and content protection cracking, and they combined this new system with a business like Windows XP GUI and an App Store with both internal corporate and external commercial levels, they could own the enterprise market and truly own the world. Both the US National Security Agency and the Chinese National University of Defence Technology are thought to have security enhanced versions of linux which use various innovations to prevent cyber warfare, but corporations increasingly need this technology too. Will this be Apple fate? I suspect it won't be, one day a Chinese SOE stuffed full of scientists will own the world of desktop / laptop computers, but we shall see. Anyway, this is no time to be selling your Apple shares, Apple shares aren't over priced and things are only just starting to get interesting.