Economics, Free Enterprise

Steve Jobs’s Comparative Advantage

The passing of Steve Jobs means that we will soon learn where he chose to bequeath his vast fortune, estimated to be in excess of $8 billion. In Jobs’s case, the question is particularly interesting because Jobs was notoriously un-philanthropic in public settings throughout his life. Jobs largely escaped the typical miserly-capitalist critique, but occasional complaints about his supposed lack of concern for philanthropic causes have lingered.

Jobs may have been privately philanthropic, so his charitable giving is simply unknown. This seems unlikely. The Steven P. Jobs Foundation was closed less than a year after opening, having given away very little money. Under Jobs, Apple’s philanthropic arm closed, and Apple was branded one of “America’s Least Philanthropic Companies” by the Stanford Social Innovation Review. Additionally, Jobs refused to join the “Giving Pledge,” an organization aimed at convincing America’s wealthiest to give away at least half their fortunes.

Far more likely is the possibility that Jobs viewed Apple’s output as hugely valuable in raising social welfare. Just like Sam Walton, who thought Wal-Mart’s core contribution to social benefit was to reduce the cost of living for ordinary Americans, Jobs viewed Apple’s operations as a means of making life better for people through innovation.

Jobs realized his comparative advantage was in creating new technology, not poverty alleviation, education transformation, cancer treatment, or any of the other causes he could have offered his wealth. As he told Playboy in 1985, “in order to learn how to do something well, you have to fail sometimes… most of the time, the people who come to you with ideas don’t provide the best ideas. You go seek the best ideas out, and that takes a lot of time.”

By using his comparative advantage in the marketplace, Jobs has done a lot to better many other people’s lives. Apple employs 34,000 people directly and thousands more in factories around the world. Jobs worked tirelessly to create devices that can identify currency for the blind, raise money for charities, accelerate the transfer of medical records, teach dyslexic and autistic children to read and write, and do scores of other things that benefit real people.

Jobs dedicated his life to free enterprise—something that has reaped dividends in increasing standards of living. Absent a better guide, we should probably judge Jobs through his own words on philanthropy: “In that area, actions should speak the loudest.”

4 thoughts on “Steve Jobs’s Comparative Advantage

  1. I wonder what other companies would have the audacity and the credibility to assert that their mere existence is benefit to humankind. Godspeed Steve, we miss you.

  2. The two way benefit of people and societies are the essence of capitalism. This is exactly what the dipshits marching on Wall Street simply don’t get. By creating goods and services for sale on the free market, those who would purchase those benefit directly as recipients of a good or service that improves their lives, and the compensation of the provider is the currency of the realm. All parties benefit. The notion that people need to simply be stripped of their wealth on account they have it and therefore must be ill-gotten is the exact rot the communists and socialist kiddies protesting around the country are whining about. If they spent their time more like Steve Jobs, I’d wager at least one could rise a shining star in the free market with an idea we’d all be happy to purchase.

  3. Neither Steven Jobs nor any other person owes a duty of charity to anyone. He engaged in voluntary trade with others his entire life, benefitting each trader. Few, and recent, were the times that Apple tried to use the law to quell competitors and then it was a matter of IP disputes, best left to the courts to decide.

  4. MattD, you say “By creating goods and services for sale on the free market … All parties benefit.”

    I agree with this, with respect to MOST enterprises. But what real goods or services do multi-billionaire hedge fund managers create? They’re making money of the backs of real creators of G&S by speculating on their stock, and getting taxed at a much lower rate than those creators … I can’t see how “all parties” truly benefit here.

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