There is a problem with the free market and consumerism. You see, it is based upon increasing sales as much as possible. As soon as you sell something you want that same person to buy another product from you. You could do this by competing on price or quality, or you could build the product such that it either breaks down or goes out of fashion very soon. This process, known as Planned Obsolescence, is rarely discussed but quite logical and sensible.
Imagine I built a car that lasted for 50 years. This would probably be disastrous (for me). It would destroy the automobile industry and whatever company I worked for. Everyone would only buy one car and then the industry would be redundant. Instead imagine I built a car that lasted 5 years, half the time of most cars. I would probably do well as I would have a continuous stream of customers paying for repairs or buying new cars. Or if I designed it so that a 5-year-old car became unfashionable so that people would “upgrade” even if the car was in working order. My company would prosper and I could write myself a nice cheque. The lesson is to build things well but not too well.
I’m sure some of you can think of objections. Surely no one will buy defective cars? True, but nobody knows they’re defective. Hardly anyone knows anything about how a car runs and couldn’t tell the difference between a good or a bad car. Think about it, what do you know about cars? Could you name for me the highest and lowest quality cars? When people are buying cars, there is so much else to consider like price, colour, design, brand, space etc. Quality cannot be measured so it is ignored.
People also internalise their problems (and call it taking responsibility). If my car breaks, it must have been something I’ve done. Maybe I drove it over rough surfaces or shifted the clutch wrong or drove it too hard. Everyone else’s car is working so what did I do wrong? Unemployed people do something similar. They blame themselves not the system. This is why problems with a car can be so frustrating (especially for men). It is sometimes taken as a reflection of that person (broken, dodgy, not up for the job etc)
Guarantees and returns are meant to protect consumers but they don’t always work. For some products they can only be for a very short time. There are many loopholes companies can use to get out of repairing it. For example, if you hand a phone in for repair, the company will almost certainly claim there is water damage no matter what state it’s in. Returns are made as difficult as possible through long waiting periods. Finally, very few people try to get a broken product fixed. Part of it is due to internalisation (see above) but also it is in our nature to avoid conflict. We do not wish to argue with staff or imply their products are faulty (as though they would take it personally). It’s almost rude. Some of us feel we may come under suspicion for incompetent or mishandling the product (irrational guilt and fear is surprisingly common) Most people find the process too hassling or troublesome to go through with, so most faulty merchandise is simply thrown out.
People have a remarkable ability to adapt and accept their surroundings. People assume the current system is the “normal” way of doing things. So if people buy new iPods every 2 years, then they accept this as normal and don’t ask why they don’t last longer or why there needs to be a constant stream of new models. If cars break down often, then people will assume this and expect it to happen. Everyone seems to have accepted it as normal that fashion changes constantly and you have to spend constantly to keep up. Our throw culture of consumerism contributes to this. Shopping is considered a hobby and not having bought something recently is a sign of deprivation. We have a throw away culture where goods are dumped when they stop working. People consider it natural to buy a new version rather than have it fixed. In fact few repair businesses exist anymore.
An even more effective tool is fashion. As soon as you sell your product, bring out a new model. Make it shiner and you can convince people to buy the same thing twice. Take apple for example. What is the difference between the latest iPhone and earlier models? Or what is the point of the iPad mini? The product is essentially the same but the newer models make the old ones obsolete and uncool. Critics also point out that iPods scratch and damage easy, incentivising people to buy newer models. If something does go wrong with your iPod, you can’t easily fix it because it is designed so that it cannot be taken apart. So you must return it to be repaired, a process they deliberatively make as difficult as possible so that sometimes it’s easier to just buy a new one.
Have you ever seen how long a car can last? Have you ever run one until it could run no more? My family did and it lasted 14 years. By then it was a deeply unfashionable “banger” and almost an embarrassment (the only reason we kept was because I was learning to drive). Many people would buy a newer model after 5 years (though the recession has stopped this). In our society, status is hugely important and someone with an obsolete car might be obsolete themselves.
There are many examples of planned obsolescence. When light bulbs were first invented they had amazing lifespan. In fact there is a light bulb that is over 100 years old and still going. The problem is that it was too efficient. So light bulb companies came together to form a cartel. This Phoebus Cartel not only fixed prices and divided markets between them but it worked to reduce the lifespan of the average bulb from 2500 hours to 1000 hours. Printers come with a computer chip embedded in them that shuts the printer down after a certain number of uses even though it is still in working order. You can’t repair it; rather you must buy a new printer. Likewise it is discouraged to refill ink cartridges, the companies would prefer if you bought a new (and expensive) cartridge. Textbooks are another example with new editions coming out every year with only superficial changes. Video games too have constant updates and sequels making the old one obsolete (i.e. a new Fifa game every year)
For planned obsolescence to work you need an industry dominated by a small few firms (oligopoly). It works better if there are frequent return purchases. You need the consumers to be unable to measure quality or even understand how exactly the product works (asymmetric information), which is why so many examples come from the electronic technology sector. It helps if there are some social and fashion rules about this. Clothing for example is all about what’s cool and what isn’t and being ahead of the pack.
This is a story of perverse incentives. It is not in a business’s interests to make a perfect product but rather to make you keep buying theirs. They have an incentive to keep quality below maximum which in some cases can mean deliberatively building a product so that it will break down soon.