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June-July 2024

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BROWN ON GREEN | Planned Obsolescence

By David Brown, CPA

At one time, things were built to last in the United States. This is no longer the case. Recently, my wife and I bought a new television. We were looking for a large screen for our upstairs area. We had narrowed our choices and began to ask the salesman about the differences between the sets.

He told us the main difference was how long they would last. He indicated the more expensive models could be expected to last four or five years, while the cheaper ones would last only two or three. I was shocked; we had enjoyed watching our current television for four
or five years.

The salesman was setting us up for planned obsolescence. The idea is that you must replace your TV every three or four years, either because they really do wear out, or because the old set is so far behind the times. Perhaps we will want to upgrade from 4k to 8k or even 16k. (There is a great deal of debate about whether the human eye can really tell the difference between 4k and 8k without getting super close to the screen, and why would anyone want to watch TV from a foot away?)

We live in a world where manufacturers either make their products in such a way you wish to replace them with something newer, or they make them where they cannot be repaired if they break. Sometimes they are hard to repair because they no longer use smaller parts that can be replaced individually; instead, they must replace a large part that incorporates all the smaller parts. The new integrated part may cost so much it simply makes more sense to replace than to repair the product.

Another method is to only make replacement parts for a limited time. Copiers fall into this category because they don’t want you to buy the copier but do a five-year lease. If you buy the copier, after it gets to be six or seven years old, they quit making parts for the “obsolete” copiers. They prefer ongoing five-year leases, which produces steady, reliable income for the company.

Around 70% of the American economy is driven by consumers. It seems many companies want to force consumers to repeat business more often than necessary to drive up their own profits. Does anyone make products built to last anymore?

Economists use the term “durable goods,” which is defined as goods you do not have to buy very often. Bricks for a house are considered durable goods because they could last a lifetime or more. This category must be getting pretty small. Automobiles are still considered to be durable goods and, honestly, last a long time. However, with new technology and driver assist features on newer models, will older cars (you know, the kind you actually have to drive yourself) soon become obsolete?

Welcome to the world of planned obsolescence.


About the Columnist: David Brown is director of Free Will Baptist Foundation. To learn more,
visit www.fwbgifts.com.

 


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