In 1845, French economist Frederic Batistat drafted a petition to the French government, ostensibly from candlemakers and "generally everything connected with lighting." That petition, translated here, satirically requested that the government ban the Sun -- after all, doing that would increase demand in the candlemakers' products and make them all much richer. But being satire, the petition was by no means real -- in 1845, there simply was no conspiracy of those in the lighting business to do anything whatsoever.
That would have to wait until December 23, 1924.
On that date, a group of light bulb and lamp manufacturers, including General Electric, Phillips, Osram, and most of the other major lighting companies of the time got together with a plan -- not to block out the sun, but certainly to reduce the amount of light available. The group formed a Swiss corporation called Phoebus -- "Phoebus S.A. Compagnie Industrielle pour le Développement de l'Éclairage" -- or, colloquially, the Phoebus Cartel.
The group entered into to a number of agreements aimed at increasing their profits at the expense of consumers. In order to limit price competition, the cartel divided the market into home territories, with each manufacturer receiving exclusive domain over its home country, absent from competition. Some other areas were allotted out to some of the companies, again absent from competition. Together, these ensured lower costs for the lighting manufacturers -- less money in marketing, etc. -- and of course, higher revenues, given the de facto monopolies created by the cartel in those areas.
But the Phoebus Cartel did not stop there. Light bulbs straddle the line between being durable goods (intended for re-use) and disposable ones (which are replaced often). A typical incandescent light bulb has a lifespan of about 1,000 hours of use -- a lifespan the cartel wanted to keep in place. To do so, the cartel standardized light bulbs, making the incandescent bulb (such as the one pictured above) common and expected. Further, the cartel members allegedly agreed to limit the amount of money invested in research and development, in order to make sure that better, more efficient lighting did not kill off their golden product.
The Phoebus Cartel was successful with limited interference for roughly 15 years, with the biggest challenge to it coming from a small group (another cartel, perhaps) of Northern European light bulb manufacturers which refused to participate. In 1939, when World War II broke out, the cartel collapsed as the war prevented the continuance of these types of cross-border agreements.
In the present inadequate economic organization of society, far too much is staked on the unpredictable whims and caprices of the consumer. Changing habits of consumption have destroyed property values and opportunities for employment. The welfare of society has been left to pure chance and accident.
In a word, people generally, in a frightened and hysterical mood, are using everything that they own longer than was their custom before the depression. In the earlier period of prosperity, the American people did not wait until the last possible bit of use had been extracted from every commodity.
They replaced old articles with new for reasons of fashion and up-to-dateness. They gave up old homes and old automobiles long before they were worn out, merely because they were obsolete. All business, transportation, and labor had adjusted themselves to the prevailing habits of the American people. Perhaps, prior to the panic, people were too extravagant; if so, they have now gone to the other extreme and have become retrenchment-mad.
In the future, we must not only plan what we shall do, but we should also apply management and planning to undoing the obsolete jobs of the past. This thought constitutes the essence of my plan for ending the depression and for restoring affluence and a better standard of living to the average man.
My proposal would put the entire country on the road to recovery, and eventually restore normal employment conditions and sound prosperity. My suggested remedy would provide a permanent source of income for the Federal Government and would relieve it for all time of the difficulties of balancing its budget.
Briefly stated, the essence of my plan for accomplishing these much-to-be-desired-ends is to chart the obsolesce of capital and consumption goods at the time of their production. I would have the Government assign a lease of life to shoes and homes and machines, to all products of manufacture, mining and agriculture, when they are first created, and they would be sold and used within the term of their existence definitely known by the consumer.
After the allotted time had expired, these things would be legally “dead” and would be controlled by the duly appointed governmental agency and destroyed if there is widespread unemployment. New products would constantly be pouring forth from the factories and marketplaces, to take the place of the obsolete, and the wheels of industry would be kept going and employment regularized and assured for the masses.
Every now and then I am asked about replacement parts for some ancient relic of a pressure cooker that is 40 or 50 years old, even older, dating back to early days of pressure cookery. Every time I'm asked about these old monstrosities I want to scream - "What are thinking!"
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