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Planned Obsolescence

Laura Gao • April 18, 2022 • 5 min read

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According to the United Nations, global e-waste production increased by 21% from 2014 to 2019.

At this pace, e-waste production will double every 16 years.

This is bad news for fish that live in rivers, plants that can't grow healthily with lead in its soil, or anyone who likes to breathe non-toxic air, as e-waste accounts for 70% of the world's toxic waste.

How is this happening?

Let's zoom out.

In 1925, there were about 8 light bulb manufacturers who together controlled all the light bulbs flowing out of stores. These eight companies came together for a meeting, and asked, how can we can double the amount of light bulbs that consumers have to purchase? That will double the revenue that we bring in. The 8 companies collaborated to launch their new plan, and sure enough, it worked. In fiscal year 1926–27, 335.7 million light bulbs were sold worldwide. Four years later, sales soared to 420.8 million.

Now, what was their brilliant plan? Was it a better quality light bulb that made consumers want to buy 2x more? Was it a genius marketing strategy? Was it doubling the need for light bulbs?

No. It was not any of those honest tactics that you'd expect to see in the thriving free market of western capitalism. It was planned obsolescence.

What is planned obsolescence?

Planned obsolescence, in a nutshell, is when products are intentionally built to be worse quality. At that time, a standard quality light bulb had a lifespan of about 2500 hours. Manufacturers decided to all agree to manufacture bulbs that are built to last 1000 hours—less than half the standard lifespan. Now, consumers ran out of light bulbs more than 2x faster, giving them the need to visit the light bulb store 2x more often and buy 2x as much bulbs, meaning 2x as much revenue on average for each of the companies involved in this contract.

Most consumers wouldn't find out about this. The ones that did were left powerless - because every single light bulb in stores was produced by one of these eight manufacturers, consumers who didn't like the 1000 hour light bulbs could not get better quality light bulbs anywhere else.


Planned Obsolescence, Price Collusion, and Monopolies

3 practices that capitalism suckers hate

When I first heard of planned obsolescence, it deeply unsettled me—it completely violated all intuition about the cherished free market that I had grown used to. The essence of capitalism is that producers try to make the best quality product that they can, and consumers will pick the product that is the highest quality with the lowest price, forcing producers to compete with each other to make the best product possible. Through natural selection, with companies that appeal to consumers living on to reproduce and companies who failed to do so dying, the products that eventually succeed are the ones that consumers like the best. Capitalism is supposed to cause the best products to surface to the top, which is beneficial for consumers (the products consumers can purchase just keep getting better and better over time).

Planned obsolescence completely violates all that. When mega-corporations get together to agree to shorten the lifespan of a light bulb, they get successful because they intentionally produced a worse quality product without lowering the price. Furthermore, consumers are the one who lose in this situation: having to pay more than 2 times more for the same product. The free market fails at one of its core purposes: bringing out the best products for the consumers.

Hmm, companies who form agreements to cheat the free market and hurt consumers to bring themselves more profit? That sounds suspiciously similar to price collusion.

Price collusion is when a few companies that control the whole market combined get together, and form an agreement to raise prices. e.g. if all bread manufacturers decided to simultaneously double the price of bread today. You don't like the higher bread prices? Well too bad for you, every loaf of bread you find at your local Food Basics will be made by one of these companies taking part in doubling their bread price. Too bad for you, you have to pay 2x the cost for the same item, because a few big corporations wanted the extra profit. You think you meager consumer can win against a company with millions of dollars?

However, there is a crucial difference between price collusion and planned obsolescence: price collusion is illegal. It was outlawed citing reasons as "limiting the free market," "against the spirit of competition", and "hurting consumers". Well, planned obsolescence does all of that too!

Same with monopolies - they are outlawed for the same reason.

Similarities between monopolies, price collusion, and planned obsolescence:

  • Big company/companies that control the market sign an agreement
  • Exploitative to consumers
  • Companies take in a lot more revenue
  • Against the spirit of free market competition

Hint hint if you're a lawmaker reading this

End of side note