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As many of my blogs seem to start anymore, I was listening to a podcast recently.  While that may not be surprising, I was surprised that this particular one grabbed my attention as I found the episode title rather peculiar and had no idea what the episode would cover.  But given the track record of genuinely interesting content from NPR’s Planet Money, a podcast focused on business and the broader economy, I gave The Phoebus Cartel a listen.

If you’re interested in listening to or reading a transcript of the show, you can click the link above.  The short version follows.

At the turn of the 20th century, light bulbs were becoming popular and widely available.  Competition was driving prices lower and lower as more and more of the world lit their homes and businesses using electricity.  Manufacturers struggled with their business model as light bulbs were unusually durable and would last for thousands and thousands of hours.  Some claimed that a well-crafted bulb might be able to burn forever.  This notion, while seemingly far-fetched, isn’t.  In fact, there’s a bulb that has been burning at the Livermore-Pleasanton Fire Station in Livermore, California since 1901.  Click here to see live streaming video of the bulb in all its glory.

There were a handful of major light bulb manufacturers across the globe that had effectively cornered the market that got together to make some changes to their industry.  They named themselves The Phoebus Cartel after Phoebus, the Greek god of light.  After going back and forth about how to change things, the companies involved finally made a pact to make their products worse in order to achieve greater sales and profit.

At that time, the average bulb lasted around 2,000 hours.  Their goal was to get it down to 1,000.  This actually proved somewhat difficult to achieve.  But over time, they were able to accomplish their goal and, so long as the cartel held, all the major manufacturers enjoyed higher sales.  This early case of planned obsolescence worked for many, many years until General Electric, the primary U.S. member of Phoebus, got into some anti-competition trouble and word of the cartel leaked.

Another very early adopter of planned obsolescence took a totally different approach.  Alfred P. Sloan, the long-time President, Chairman & CEO of General Motors, looked at Ford’s Model T with its one color and complete lack of options, and decided to take a different approach.  General Motors decided to offer different makes, models, price points, colors, etc. introducing choice to the consumer and, with some gentle nudges from GM’s marketing department, a sense of urgency.

Planned obsolescence had arrived and changed the automotive industry forever.

This time, though, no cartel was needed.  Consumer behavior took care of driving new business.  GM wanted to sell a new car to every potential car buyer every year.  They would even place a brochure for next year’s model on the seat of any new car sold.  Here’s the buyer in their brand-new car already getting a sense of being a little behind the times without having even driven off the lot yet!

Today, planned obsolescence is an accepted part of our economy, rearing its head all over our modern world.  The typical life span of a kitchen appliance these days is around 7-8 years.  Heating and cooling systems?  Maybe 10-15.  Your cell phone?  It becomes obsolete faster than those early Chevrolet’s.

There’s very little we can do about those things designed to break down just a moments after whatever warranty we hold on the product expires.  But the podcast really got me thinking about all the areas of our life where we do have control.

How often do we replace things because they truly need replaced versus because we tell ourselves a story that convinces us they do?  Because the neighbors got a new one or because we just don’t feel as good in the current model, whatever the product.

How much waste does this cause?  How much stress does this put on our ability to save for the things that really matter?  What else could the money we use for those purchases be doing for us or for others?

This isn’t a call for extreme minimalism or getting down to just 15 possession like this guy.  Instead, when looking at what needs replaced or purchased in our lives, maybe we should spend a little more time focusing on the “planned” part of planned obsolescence so as to ensure we own our possessions and not the other way around.