Tim Cook as James Taggart?
You might have read -- and I meant to blog about this last week, but it got lost in the shuffle -- about the kerfuffle between Apple CEO Tim Cook and conservative think tank (and Apple shareholder) National Center for Public Policy Research. NCPPR wants Apple to spend less money on alternative energy sources for its data centers and offices and whatnot, and pay more attention to the bottom line. Cook got angry, and compared Apple's alternative energy efforts to its efforts to make its devices more accessible to the disabled -- it's not about the bottom line, it's about doing what he feels as CEO is "right."
PJM's own Walter Hudson had this to say about it:
Stockholders went on to vote down a proposal to halt environmental efforts which hurt the company’s bottom line. In other words, stockholders voted against making money.
The episode evokes comparisons to Ayn Rand’s Atlas Shrugged and the character of James Taggart, heir to a railroad company who squanders his inherited wealth on altruistic efforts which ruin both his company and the national economy. Like Cook, Taggart believes business should be motivated by more than profit. Like Cook, Taggart believes business holds some inarticulate responsibility to help people.
I respect and admire my colleague, but I'm more than a little suspect of his formulation. Taggart was the titular head of a railroad he didn't know how to run, and sought to fix its declining fortunes through political pull instead of actually taking care of business. "It's not my fault!" he was known to shout at every disaster that occurred under his watch. Taggart didn't even want to run a railroad company; he just wanted to be loved.
Tim Cook is the hands-on CEO of one of the world's most valuable and profitable companies. Before that, he was its operations officer -- and Apple was and is widely considered to have the sharpest operations of any big company on the planet. Cook runs Apple and runs it well. Does he want to be loved? Dunno. He's too busy running Apple to ever talk about his personal life. Ever.
So I find any Cook-Taggart comparison... a bit silly.
When Big Government takes my tax dollars and gives it to some dead-end "green" company to make car batteries nobody wants, I get angry because there's nothing I can do about it, at least not until the next election. And we just saw how the "next election" turned out. When a private company -- even one I might own a few shares of -- decides to do the same, I can sell my shares or stop buying their products.
Or I might think, "This could be very cool."
And I say that for a couple of reasons.
The first is that alternate energy is worth pursuing, even if you don't believe the science is settled on global warming. I certainly don't believe that it is. But the fact is that we have all sorts of un- or under-tapped energy sources, and they're not going to improve because of government diktats. We'll get to those sources because private industry will find profitable ways to tap them. It could be a fracker in North Dakota or a tech giant building out server farms around the world. Hopefully it will be both, because cheap energy is one of the keys to wealth creation and upward mobility for millions if not billions of human beings.
That's worth pursing, even if in the short run it shaves a few cents or even a few dollars off the share price.
Now for the second reason.
Apple is one of the biggest users of batteries on the planet. Every iPhone, every iPad, every MacBook runs on battery power. Apple devices also tend to get the best battery bang for the size, compared to the competition. This is a company which understands better than probably any other on the planet how to make devices which conserve power while still producing best-in-class performance. If Apple wants to continue to improve, they should absolutely pursue every kind of energy source Cook believes might produce future improvement for Apple's devices and for its customers. Will there be blind alleys and dead ends? Sure.
The Apple Newton was a dead-end device, but creating that product also resulted in the super-low-power ARM chips which run damn near every decent mobile device on the planet. Progress is sometimes what happens when you fail, as any Megan McArdle reader can tell you.
If somebody is ever going to invent the sci-fi solar-hyrdogen-kinetic battery-capacitor-hybrid or whatever that never needs a charge, I bet that company will be Apple. And the reason is precisely because Tim Cook is willing to take his eye off the bottom line in the pursuit of something that might just end up insanely great.
ONE MORE THING: Apple's shareholders cheered at Cook's statement, and Walter has a problem with that. But why? A company is owned by its shareholders and if they want to pursue their green dreams, who are we to tell them no? If Walter wants to sell his shares (if he owns any) or quit buying Apple products (if he has any) then that's his happiness to pursue.
But I'm a happy Apple owner in both senses -- and plan to remain one.
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