Problem: Obsolesence
By Bryce Goodman
Published Mar 2014
We live in an age when things are made to break. Your printer will go haywire after printing so many pages. Your phone will cease to charge after so many cycles. Your light bulbs will burn out after so many hours. And the number of pages, cycles, and hours are not the consequence of fate, but a product of design. So too are the product releases that render your software out of date and your clothes out of style. It is a design that transcends any one product and is ingrained in modern commerce itself. The modern origins of this design can be traced back to the 1920s, during a rivalry between Ford and GM to gain a greater share of the U.S. auto market. The rivalry was not merely commercial, but ideological. Henry Ford shared the view of other business magnates who came of age in the 19th century: The way to generate ongoing profits is through a monopoly, and the way to maintain a monopoly is to build a successful consumer product, and the most successful consumer product will be the cheapest, best performing, and most reliable on the market. For years, he refused to alter the design of the Model T, writing, “We cannot conceive how to serve the consumer unless we make for him something that, so far as we can provide, will last forever. It does not please us to have a buyer’s car wear out or become obsolete. We want the man who buys one of our cars never to have to buy another. We never make an improvement that renders any previous model obsolete.” While Ford rejected the notion of change for change’s sake, Alfred P. Sloan, then-head of GM, made it the foundation for his company’s business model. Sloan realized that the growth in manufacturing capacity brought about at the beginning of the 20th century, largely thanks to methods popularized in Ford’s factories, meant that companies were now capable of producing far more goods than customers would ever need. He required a way of stimulating demand that was no longer anchored to his customers’ needs. From a product-performance point of view, Sloan was years behind Ford: His cars were unreliable and performed poorly. But Sloan realized none of this really mattered, since a desire for novelty could, with the help of aggressive marketing, be used to seduce customers into purchasing an inferior product. His method was simple and ingenious. Whereas a Model T built in 1915 would be virtually identical to one built five years later, Sloan realized he could encourage repetitive consumption by repackaging the exact same product every year. As Sloan would later write, “Changes in the new model should be so novel and attractive as to create demand … and a certain amount of dissatisfaction with past models compared with the new one.” If necessity was once the mother of innovation, the tables were now turned, and planned obsolescence was born. By the 1950s, Sloan’s approach to product design became the norm. Speaking at an advertising conference in 1954, industrial designer Brooks Stevens summarized planned obsolescence as “instilling in the buyer the desire to own something a little newer, a little better, a little sooner than is necessary.” Selling products that have limited lifespans or that make older models obsolete is a practice that has become so commonplace it almost seems necessary. But, as Ford’s quote reminds, it is not. To hear the father of mass production deride practices aimed at encouraging repetitive consumption may come as a shock, but that is only because we have come to confuse capitalism with consumerism. The shift from engineering products to engineering consumption marked the transition to capitalism 2.0. In capitalism 1.0, Ford’s capitalism, the customer’s needs dictate the producer’s activities. If the customer thought goods too expensive, the producer’s job was to lower the cost. If the customer thought the goods of insufficient quality, the producer’s job was to develop a superior product. The order is such: The producer produces what the customer demands. In capitalism 2.0, the order is reversed. The customer demands what the producer produces. Demand no longer drives supply, since the producers have figured out how to engineer demand ex post. Marketing, not manufacturing, becomes the most important activity, since the goal is no longer to produce the best product, but to generate the greatest demand. But how to generate demand for a product consumers do not need? A market demand driven by need is limited, because needs are satiable. The answer is to shift away from satisfying needs and into stimulating desire. One of Buddha’s greatest insights was that desire—tanhã—is a response to an internal, not external, stimulus. What appear to be many different desires for many different things are actually manifestations of a single, fundamental desire, the desire to have pleasant experiences and avoid unpleasant ones. In other words, our desires are only indirectly related to the objects we encounter: We do not crave this object or that object per se, but some pleasant experience we associate with possessing it. According to Buddha, misery is rooted in desire, because desire is, by definition and in practice, insatiable. It is insatiable by definition, because, as Ron Leifer states, “Desire means deprivation. … Thirst is the desire for water, and it occurs in the absence of water. Hunger is the feeling of lacking food. Desiring means not having, being frustrated, suffering.” It is insatiable in practice, because ultimately, both the objects we believe will satisfy us and the experiences we hope to have by possessing them are impermanent. They will fade, leading us back into a state of craving. Buddha taught that by focusing inwardly and experiencing the reality of impermanence, this craving could, eventually, be overcome. The insight of marketing and planned obsolescence is that the reverse is also true. By drawing consumers’ attention outward and into the narrative of buying a better life one product at a time, this craving could not only be deepened, but also multiplied indefinitely. And so long as consumers remain focused on “the desire to own something a little newer, a little better, a little sooner than is necessary,” they would ignore the detritus of their consumer lifestyles (debt, waste, etc.), and the reality of impermanence could be hidden in plain sight. Thus, like Buddha, capitalism 2.0 understands that people do not desire things per se. Because if they did, once they had those things, their desires would be fulfilled. They would stop buying new things. And that’s bad for business. And that, in turn, is bad for the economy. Why? Why is it bad for the economy that consumers’ needs have been satisfied? Surely this is a good thing! After all, it is the goal of producers in capitalism 1.0 to do precisely thus. Ah, but that is because capitalism 1.0 was born in the era before mass production made the prospect of satisfying people’s basic material needs a reality. It was born in a time where economists stupidly thought that if, thanks to technological innovation, people were able to accomplish in 15 hours what had taken 40, they would enjoy the difference as leisure. It was born in a time when businessmen believed their company could grow just by creating the best product on the market. Capitalism 1.0 and 2.0 both share the view that growth is good. The value of a company goes up when the company shows it will generate more revenue tomorrow than it does today: Earnings x Growth Multiple = Value Low Growth = Low Multiple = Low Value Ford can increase sales by selling more cars to more people. But what happens when everyone who wants a car has one? Growth slows. Value decreases. Ford cannibalizes its own market by delivering a durable product. Capitalism 2.0 is not so naïve. It appreciates Sloan’s insight that an inferior product with superior marketing wins every time. It agrees with Philip Kotler, the original leader in marketing thought, that “we are living in a world that is no longer facing a shortage of goods, but a shortage of customers.” And so the onus has shifted from satisfying customers to encouraging consumption. The ramifications of this philosophical shift are difficult to overstate. In capitalism 2.0, growth depends upon stimulating consumption, not satisfying needs. We measure the health of an economy by how much producers spew and consumers guzzle. The poor basically become economically irrelevant, since an iPhone boosts GDP a hell of a lot more than a loaf of bread. And the market rewards companies who can convert customer satisfaction into addictive consumption. The sad thing is that technological innovation—once seen as a force for delivering new, cheaper, and better goods—has largely become a lackey to these market forces. It is easy to forget, but the largest and greatest technology companies of the past decade—Twitter, Google, Facebook—are essentially advertising platforms. They derive the majority of their revenue from helping to sell products that they do not produce. In this way, “tech” has come to resemble other parasitic industries, such as finance, that profit from the movement of capital, rather than production of goods. And so the greatest engineers of our generation are no longer to be found building bridges or rockets, but optimizing ad placements and click-throughs.[3] The problems created by capitalism 2.0 are manifold. Responding to the environmental burden imposed by unfettered consumption, Sir David Attenborough famously remarked that “anyone who believes in infinite economic growth on a finite planet is either a madman or an economist.” And much could be said of the social ramifications incurred by a philosophy that values the manufacture of material desires over the satisfaction of material needs. But capitalism 2.0 does not merely pose a threat to environmental sustainability or social justice. If we give any weight to Buddha, Jesus, Muhammad, or any of the other prophets who warned against the trap of covetousness, it poses a spiritual challenge as well. For if desire is the root of unhappiness, any economic system that is premised upon insatiable demand condemns us all to inescapable misery.