1.

Planned obsolescence: background of the policy

Geneva, December 1924, the top representatives manufacture company of the lightbulbs’ market,
including the Dutch Philip, the German Osram, the British Associated Electrical Industries, and
the American General Electric, met to give birth to the first cartel in history to have an international
wingspan. The Phoebus cartel was founded to overcome the stagnation in the sells that
characterized the lightbulbs’ market of the first half of the 20th century. The cause must be
attributed to the technologic progress recorded by the incandescent lamp’s market prior to this.
The increase of the lifespan led to an extension of the re-buying period that induced a contraction
in the global sells of the lamp’s makers. The cartel forced the members to reduce the lifetime of
their lamps, de facto creating a first global tentative of planned obsolescence. At the end of the
decade the great depression crashes the markets in all developed countries. It is 1930 when
Keynes published “A Treatise on Money”, anticipating his major job, he pictures the relation
between consumption and employment. For him, it is the amount of income available for
consumption coming from the Wage Founds that pulls the production that generates workplaces.
The depression heavily contracted the profits in all sectors, every industry had to account for a
change in the costumer’s behavior: the purchasing intention of the consumers dropped compared
with the level pre-crisis. The negative expectations for the future of the economy were the major
cause. In 1932 Bernard London, consistent with Keynes’ theory, harshly criticizes the consumers
behavior post-depression, that aims to extract the last possible value of the product. He re-
proposed the model of economy experimented by the Phoebus cartel, where the useful lifetime
of the product is artificially shorten in order to maintain the level of production and prices. Latouche
attempts to define the phenomenon proponing a division in three categories:
(a). Technical obsolescence describes the downgrading that affects products and
services, even if this last one with a less visible impact, due to the technical progress. The steam
engine that replaces the stagecoach, or the iron axe that succeeds the bronze, that in turn had
taken over the paleolithic rock axe, are examples of physiological substitution that derives from
the advancing technology. In 1965 Moore, basing on empirical observation, predicted that the
number of transistors in a microchip could double every year (18 months). This rate well describes
the speed of the technical obsolescent that characterizes the chip revolution.
(b). Psychological obsolescence refers to the perception of a product, or service, as being
outdated, induced by the fashion in vogue. The change, between the new product and the old,
lays in the look, in the design, i.e. the update concerns the form rather than the substance – it can
be argued that the image of the product, or the image (status) that can be acquired by the usage
of the product, is part of its substance, but it is excluded here for simplification -. The fashion
industry is the major originator of these changes, and it is strictly linked with the specific historical
and geographical culture.
(c). Planned obsolescence gathers under its meaning all the artificial tentative purposely
experimented in order to stimulate the consumptions, and thus, the profits. The distinctive element
is the corporation purpose to negatively alter the attributes, physical, as in case of the Phoebus
cartel, or psychological, of the product to increase the number of sells.

2. Why is unethical?

The concept beyond the production pulled by the demand is abstracted by the neoclassical theory
in the customer’s sovereignty. Under the assumption of a market that has perfect competitions
within the companies, the consumers drive the market. Real markets, however, present several
impedances to the perfect competitions, leaving fertile breeding ground to ethical threats. An
industry cartel with the intent to have an immediate obsolescence, reduces, or annihilates, the
costumer’s power to boycott a company in favor of another. Exploiting the information asymmetry
to deceive the customer, is another channel to spread the planned obsolescence. For General
Electric, the reduced lifespan of the incandescent bulbs approved by the Phoebus cartel, was
edulcorated by campaign that emphasized the increased brightness of the new lamps.
Consumers are one of the most important stakeholders of a corporation. These tactics are
questionable from an ethical perspective primarily because they infringe the duty to be honest
and truthful, violating the deontological precepts such as the ‘golden rule’ or Kant’s categorical
imperative test. Moreover, they can be illegal. At its extreme, the obsolescence can be induced
after market. In 2017 came to light that Apple manipulated the performance of older iPhone in
order to induce the customers to replace the device with a new one. The company was fined in
US, and in EU by the French regulator. In UK the self-regulator body, the Advertising Standards
Authority (ASA), suggested that advertisements should be ‘legal, decent, honest and truthful’, and
the United Nations, proposed the Guidelines for Consumer Protection, globally embracing the
ethic issue of the costumers.
Furthermore, planned obsolescence campaigns propagandize consumerism and materialism,
that creates insecurity and perpetual dissatisfaction, as consequence of an infinite chase of
something new. Considering the post-modern consumer, that satisfies its need of identity through
the shopping, Bauman alerts about the instability of these identities, that are built on deliberately
unstable shaped products.
Eventually, planning or inducing a shorter life of the products contributes to maintain the vertical
economy as standard accepted model, where the raw materials come back to the environment in
form of waste. Only the 1% of the rare earth elements (REE), vital in the production of the modern
tech gadgets, are recycled from end-products, with the rest accumulated as wastes outside of the
materials cycle. The preeminent disincentive is the lack of cost-effective methods to separate the
REE from the mixture generated during the recycling of retails electrical and electronic equipment.
A parallel method of the planned obsolescence is to push the trade-off repair vs replace towards
the re-buy activity. To reach this scope, the firms must have the control on the repairing market,
therefore the devices are built and designed to disincentive fix from users or firm not authorized.
This complicates and undermine the possibility to recycle the resources utilized in the production
process.

3. How can it be changed?

(1). Repairing program reasonable less priced compared with the purchase of a brand-new
product.
The strategy to maintain the repairing market inside the firm’s umbrella, founds its explanation
analyzing not just the profits that came from the lucrative sells of the replacement’s pieces, but
the potential loss of sell in the firsthand market. To avoid it, the company fixes a floor price in the
secondhand market and preserves its appeal in the firsthand market. In November 2021, a new
iPhone 13 Pro Max costs 1200$, and the back glass replacement costs 600$ out of warranty,
leaving a margin to the owner that wishes to sell, between 50-400$ (it would be unrealistic to sell
at same or higher price in the secondhand market). If otherwise the replacing piece would be sold
by Apple at a price close to its cost, the secondhand market offer would be at a lower price,
cannibalizing the competitiveness in the firsthand market.
From an ethical perspective, Bauman, reflecting on the characteristics of the present-day
consumer, observes that the activity of choosing has assumed a higher level of importance,
compared with the matter that is being chosen. Consumers’ free choice is now the value pursued.
Nonetheless, he is concerned about the possibility that not all the choices advertised by the
company are realistic, and that the degree of reality must be measured compared with the
resources at the disposal of the chooser. In this sense, the cost of a repairing program should not
exceed considerably its production cost, to not represent a fake promise of choice to the customer.
The repairing program must be, indeed, less priced compared with the purchase of a brand-new
product to enter in the real portfolio of buying choices of the consumer.
(2). Right to repair
Another shape of the planned obsolesce is visible in the design of the product of the consumeristic
era that discourages the user repairment, forcing the user to the re-buy experience, to shield
against production surplus. The consumerist strategical answer to the surplus, it is represented
by the allocation of the excess outside of the product-cycle, decreasing in this way the quantity of
products and avoiding cutting the prices, in a continuous chasing of the profits. In a theoretical
socialist universe, to reduce the production surplus, on the contrary, the prices are cut. In the
socialist model a productive plant does not have any incentive to “sell more”, and potentially it is
stimulated in making long lasting goods with a minor level of complexity in the design to favor the
user-adjustability, that minimizes the consume of raw materials. In theory the socialist model
demonstrates to grant a higher level of satisfaction for all modern stakeholders, and therefore can
be considered more ethical than the capitalistic model.

(3). Right to upgrade and repair

In the early 60s, many customers were unwilling to purchase new electronic calculators due to
the risk of losing data or to rewrite all their existing programs because there was not compatibility
with previous hardware. In 1964, a decade before of the first personal computer, IBM with the
System/360 introduced the modular design, raising the curtain to a capitalism’s paradox. In order
to increase the sell, companies improved the design, and for the same reason, successively they
impaired it, reducing the product life.
In respect of the Aristotle teleological notions, an element can be described as being for the sake
of something - i.e., aiming to a scope -, if it could be utilized in accordance with art and skill. In
this sense, a planned premature termination of the product life not just compromises the duration
of the beneficiary enjoyment of the element, but affects irreparably the scope of the product. The
product can continue to create value and pursuing its scope, if its design allows the possibility to
be updated and repaired. However, in 2016 Google stopped the project Ara, early attempting to
a more sustainable approach in the smartphone market, preferring to proceed with more valued
projects. One year before a study conducted by the European Economic and Social Committee
(EESC) in Belgium, Czech Republic, Netherlands, France and Spain, involving nearly 3000
participants, demonstrated that the European customers are disponible to pay a premium for a
potential “built-in durability”.
4. Why the right to upgrade and repair is the most ethic

An opening towards the right to repay has been done by Apple that allowed customers to buy
spare parts. However, due to the degree of engineering complexity of the products, it is very
unlikely that an average user, with no specific skill in tearing down a complicated smartphone,
would proceed on its own. Although, the creation of demand for skilled workers can contributes
in the reducing of the price of the repairing costs, the call for a quicker transition towards a circular
economy cannot be ignored. It is not completely ethical the reduction of the reparation cost if
every year a new model with small update is out to pull up the sell. To move further in the process
of de-verticalization of the economy, not just the usable life of a product must be stretched, but
the design of the product has to allow a cost-efficient recycling of the materials. The Amsterdam
based Fairphone and Californian Framework laptop are reproposing the modular design where
the parts disassembled can be reused in other products, favoring the circular economy. The
safeguard of the employment through unsustainable models can have an end with the raising of
awareness for ethical problems in the market, as shown by the study of the EESC, where the
rational consumer is willing to pay a premium for a product that last more and has a reduced
environmental footprint.
References

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