Yesterday, Apple overtook Exxon as the largest corporation in the world (excluding Russia and China). That is, as measured by their share values. Does this make them equally important? Not at all. Let’s carry out a brief Gedanken experiment. Suppose that both of them, and all their business assets, were to disappear from the world. What would happen?
In the case of Apple there would be a howl of protest from millions of people, particularly young people, all round the world. These would be those who are hoping to buy iPads or other Apple products in the near future. The US Treasury would almost certainly shut down the New York Stock Exchange immediately in order to avoid a general shares collapse. This would only need to be maintained for a few days until the world came to realize that its economy could, in fact, exist without Apple. Because almost all Apple’s production is already subcontracted then it would only be a matter of a few months, perhaps even only a few weeks, before Apple’s competitors would be filling the demand gap with iPad look- and do-alikes.
In the case of Exxon vanishing, however, the world economy would collapse immediately to some very low level, perhaps to 50% of what goes on now. All Western stock exchanges would probably close down for a while. This is not because Exxon occupies half of the world’s economy in financial terms — it’s only a small fraction — but its disappearance would be large enough to cause a significant disruption in the physical movement of oil and gas on which, of course, we vitally depend. The 50% economy would start recovering within days, but it would probably take between 5 and 10 years before all Exxon’s well-heads, pipelines, oil tankers, refineries and distribution systems to power stations, factories and cars were replaced.
The iPad is a conjunction of a personal computer and the original brick-sized mobile phone. Not only is the modern mobile phone is a unique product but the existence of businesses like Apple would have been inconceivable as recently as 30 years ago when IBM manufactured the first personal computer or when the first mass-produced radio phone appeared in Finland. The monetary value of Apple Inc lies almost exclusively in its brand name plus the innovative ability within the minds of a few key individuals. These could easily walk out and join another firm. If they were to do so, and subsequently design even more versatile alternatives, then Apple’s brand image would disappear quite quickly and the shares would then be worthless within a few months.
But if iPads and suchlike are little more than consumer gewgaws, having little direct bearing on the real economy of the world, they are certainly proving to be socially and politically explosive. The Arab Spring wouldn’t have happened without them. Nor would the riots, looting and arson of August last year, which spread immediately from London to other major cities in England, have occurred. Nor, in the next month, would Occupy St Paul’s Cathedral or Occupy Wall Street have happened (or, at least, not so very suddenly). Nor would the riots in Syria, which may yet develop into a full-scale civil war and revolution, have occurred on such a widespread scale without mobile phones.
And what about a possible revolution Moscow in the coming March when the next presidential election is going to take place and Putin will once again be putting himself up? Recent demonstrations, mainly by frustrated middle-class well-educated young people have already been enormous. The Grand-daddy of them all is now being organized, no doubt mainly by means of the iPod and similar. Garry Kasparov, the chess master, and Mikhail Prokhorof, another presidential candidate, both think (among many others) that the demonstration in March could turn into a revolution and that Putin will be arrested for trial for giving privileges to billionaire cronies. (Or, very possibly, Putin could lock up these two before then!)
And what about China. Since the credit-crunch of 2008 some very powerful events are going on there. Firstly, some large workforces in the prospering coastal provinces are now freqnently striking for more pay. These are usual in any fast-growing country and these are being quietly bought off one by one. But there’s now a secondary wave of many millions of ex-rural Chinese migrant workers who not only want better jobs than their present skivvying and begging, but also legal permits for health care, homes and schools for their children which residential workers already have but they don’t.
The bicycle, radio, telephone, car, and television all had huge social, political and infrastructural effects from about the 1870s and onwards. But each and all of these took many decades to fully reveal themselves — and they came about largely peacefully, too. But the celerity of the mobile phone (with the internet only recently behind it) is of a different order entirely. The taste of the Apple and other similar fruits is already explosive. We’ve probably only seen glimmerings yet.