Is planned obsolescence a good thing?

There is this recurring argument that goods don’t last as long today as they did fifty years ago. My father berated me a few months ago about my economics by saying that back in his time, goods lasted longer. I questioned his data (there are signs that goods last as long as they did twenty or thirty years ago). This new ATTN video on Repair Cafes would have caused my father to rejoice greatly. However, I am going to ask a question here and go a step further: is planned obsolescence the symptom of a good thing?

Here is my argument (feel free to throw rocks after).

Improving the lifespan of a good requires a greater level of inputs which increases the marginal costs of the good. Producing a higher-quality good basically shifts the supply curve leftwards. Basically, we pay a little more for something that lasts longer. However, if we are living in a world of rapid technological innovation, what is the point of expending more resources on a good with a twenty-year lifespan but which will be obsolete two years?

Take my previous iPhone – it lasted three years before it simply decided to not work. In the three years between my old phone and my new phone, there was a rapid change in quality: more memory, better camera, faster processing, better sound. Imagine that Apple had invested billions to increase the life of my iPhone from three to nine years. Would I have bought that phone? In all honesty, it would depend on the price increase but the answer would have been closer to “no” than to “yes”. So in a way, Apple reaches a marginal consumer like me by lowering the price and turns me into a technology adopter. However, let’s imagine this from Apple’s perspective. Its in a race for its life against competitors who keep inventing new widgets and features that change the manner in which we consume. So, its choice is the following:

A: Increase lifespan, higher marginal costs and a leftward shift of supply that causes slightly higher prices and less demand. These resources cannot be expended on R&D and innovation
B: Shorten lifespan, lower marginal costs, lower prices, more goods consumed; more resources on R&D and innovation.

If everyone is inventing rapidly, then B is the dominant strategy. If innovation is zero, A is the dominant strategy. Basically, in a Schumpeterian world like I am describing, the short lifespan of goods is a symptom of great innovations and better days to come.

What do you think?

 

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7 thoughts on “Is planned obsolescence a good thing?

  1. Does your father drive a car? Ask him about automobile technology then and now. In the 1950’s when I first became aware of cars, you had to grind the valves at 30,000 miles or so. You had to clean the points and plugs regularly and adjust the timing. After three years you had rusty fenders in cold climates. None of this is now necessary. A car that lived to 100,000 miles was a rarity. A moden car will give you 200,000 with a modicum of care.

  2. I think it was Friedman (David not Milton) that pointed out that planned obsolescence made sense in things like female fashion where the item would not be used much given rapid changes in taste.

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