Failures of Capitalism: Manufactured Needs and Planned Obsolescence

Capitalism is incentivized to make products that easily break and which cannot be repaired

The Stupidity of the Individual and the Wisdom of the Crowd

However individuals are often terrible at deciding what they need, otherwise nobody would be doing drugs, smoking, eating junk food, gamble and borrow too much money to buy things they can’t afford.

Companies are not passive bystanders responding to our needs and demands, rather they are actively manipulating us to desire and buy things we often don’t need.

Okay, that came across as overly conspiratorial, but consider this: Most advertisement is not focused on giving us clear information about products. They are not designed to encourage a sensible buying decision based on actual needs. Instead ads are almost entirely focused on emotions. The field of marketing is strongly focused on learning new ways of emotionally manipulating consumers into desiring the products a company sells.

GM pioneered the idea of changing the style of the car model frequently.

Planned Obsolescence

A related but different problem is that products, while actually needed, are made to last an artificially short time. This trend is attributed to General Motors in the early 1900s. Eventually Ford and GM managed to provide all American families with cars which made demand plummet. A core problem was that they made sturdy cars which lasted. The head of General Motors came up with the concept of Planned Obsolescence as a solution. It meant they would create cars with new styling every year and make their cars last for shorter time. This way they would get consumers to frequently change or upgrade their cars, thus creating a perpetual demand. It is how General Motors beat Ford, which focused primarily on making good and affordable cars.

Final Remarks

This series is part of an effort to foster a healthy skepticism towards many of the claims made about the wonders of capitalism. I don’t believe everything in capitalism is bad. Quite the contrary. There are made positive sides to capitalism. But it is important to understand that markets are often imperfect in quite profound ways, and that is why regulation is often needed to deal with these issues.

Geek dad, living in Oslo, Norway with passion for UX, Julia programming, science, teaching, reading and writing.

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