Government intervention key to Apple success

A Globe and Mail Business journalist points out that one of the biggest reasons for Apple's success is technology whose development was funded by the United States government. Apple products like the iPhone or iPad are dependent on publicly funded technology like the lithium battery or liquid crystal display.

This point was also made by academic Mariana Mazzucato in a talk where she spoke of how important government investments in innovation is to the economy.

What the Globe and Mail article also points out is that, while Apple wants the benefits of public spending by the United States government, it doesn't want to pay for it. In fact Apple has become notorious for its use of tax havens.

As a Citizens for Tax Justice report from 2013 points out, Apple is not alone in wanting the benefits of public spending without helping pay for it. The report found 17 other Fortune 500 companies whose offshore profits appeared to be in tax havens and hundreds more companies that were likely using tax havens.

This should not surprise us. The hands off approach to the economy advocated by opponents of a modern industrial strategy ignore the role of public spending and the fact that when we aren't collecting the taxes needed to fund quality public services there are economic consequences.