Planned Obsolescence

Ashton Keene

Mrs. Straub

AP Economics

13 October 2015

Planned Obsolescence

Why do products break down so easily? Why does they need repair or replacement so soon? With today's advanced technology, can't we build things to last? There is a theory that producers design goods with a purposely limited lifespan. This is the concept of planned, or built-in obsolescence. It is especially prevalent in today’s gadget market. Phone screens shatter with one drop, software is glitchy without constant updates, and new batteries never seem to be compatible with year-old products. Albeit a pain to consumers, this clearly benefits suppliers  because the need for product repair or replacement perpetuates consumption. In turn, more overall revenue, proceeds gained from selling goods, is generated. Constructing products to have deliberately short lifespans is nothing new -- the term “planned obsolescence” was coined near the end of the Great Depression and practiced in places like automotive manufacture (Meyers). In fact, there are many commonplace products of yesterday and today that may be subject to this policy. Check out this gallery. But is planned obsolescence a shady business tactic? Or can the scheme actually benefit society in some ways? Economists debate the merits of this manufacturing method.

Holistically, the practice of built-in obsolescence appears unfair to the consumers, nothing but a sinister plot by greedy business executives. Afterall, we keep spending money just to replace what we already had because suppliers designed those goods to last only a short while. The Guardian reports, “It’s standard practice for companies to plan obsolescence into their products --  including by introducing software upgrades that aren’t compatible with existing hardware --  and they simultaneously profit from the fact that the average laptop has a high likelihood of breaking within 3-4 years,” (Spinks). For most normal goods, which people buy more of when their incomes rise, this practice stimulates overall demand because the product needs to be repaired or replaced. Opponents emphasize that this is an unethical policy and unfair to consumers. Economy expert Rachel Botsman protests the tactic, criticizing that, “it’s almost unbelievable that consumers haven’t stood up and said the planned obsolescence of the gadget industry is absolutely obscene and not serving them,”  (“Planned”). Another point often made about this often-presumed malpractice is that it creates a tremendous amount of unnecessary waste. Constant disposal of the “old” phones, computers, and other gadgets adds up to a lot more debris in landfills. The picture below illustrates the amount of additional waste, almost 2.5 million tons of electronic scraps. Thus, planned obsolescence has negative externalities on the environment aside from the fact that consumers must buy more.

So if the method of planned obsolescence is so unethical, how do producers get away with it? Simply put, the free market economy in which Americans live allows suppliers to choose the type and quality of goods they produce. However, it is this free market economy that may render built-in lifespans as beneficial to consumers in some ways. Marketing guru Philip Kotler, in an article for The Economist, stated that “much so-called planned obsolescence is the working of the competitive and technological forces in a free society—forces that lead to ever-improving goods and services,” (“Planned”). It is true that this business practice must result in some advances in products, because that is the consumer’s incentive to buy it -- they want the new, better version. And in a way, today’s society calls for a shorter lifespan in their gadgets. with new trends always emerging, people wouldn’t want their iphone to last for ten years -- they want a newer, sleeker version. So, instead of spending more money on production costs to create a durable good that people will only want for a short time anyways, manufacturers can crank out more products at a lower cost. These lower input costs should then, in theory, result in a lower price for the consumer.

Ultimately, debating the virtues of planned obsolescence is left to normative economics. There are indeed arguments against practice, but there are also possible gains, so many different value judgements can be made about the fairness and economic effects of built-in obsolescence. Debates of good or evil aside, it is certain that this practice has been used in the past and is still influential in certain economic markets today, especially in technology. Like any economic strategy, it certainly benefits some people more than others, but it’s reach is unavoidable in the American economy, and other free market economies similar to ours.

Works Cited

"8 Surprising Products Designed to Fail Early." Popular Mechanics. N.p., 22 Feb. 2010. Web. 13 Oct. 2015.

Meyers, Glen. "The Greatest Invention: Planned Obsolescence." The Inspired Economist. N.p., 20 Sept. 2012. Web. 13 Oct. 2015.

"Planned Obsolescence." — The Centrist Party. N.p., n.d. Web. 13 Oct. 2015.

"Planned Obsolescence." The Economist. The Economist Newspaper Limited, 23 May 2009. Web.

Spinks, Rosie. "We're All Losers to a Gadget Industry Built on Planned Obsolescence." The Guardian. Guardian News and Media Limited, 23 Mar. 2015. Web.