Is Progressive Obsolescence the Path Toward Increased Consumption?

Is Progressive Obsolescence the Path Toward Increased Consumption?

J. George Frederick, Advertising & Selling, Sept. 5, 1928, pp. 19-20, 44, 46.

I WONDER if we are not at last in sight of the mightiest of all our great modern levers for lifting ourselves up by our economic bootstraps and widening our industrial prosperity in a manner that sets old-time economics by the ear.

Let no one suppose that this is an introduction to some high-sounding economic theory, I am speaking directly to the point regarding the most intensely practical problem that faces the manufacturer today, that of securing more sales of his goods from more people in the United States, and operating at something more than 60 to 70 per cent capacity, which is the average in industry today.

If we are to have increasingly large-scale production there must likewise be increasingly large scale consumption. Our ingenuity in devising and inventing merchandise, and our skill in manufacturing it with less and less cost in human labor is stupendous. Few of us who are in the selling end of business have an adequate idea of the laboratory research, the science, the automatic marvels, and the brute capacity of our production departments. If the command were given today to produce twice as much goods in 1929 as in 1928, a million men would "spring to machines' (to paraphrase Bryan's famous remark) and do the trick with room to spare. They did it in war time, and they are "rarin' to go" and do it again. But the buyers are not there to buy the goods! 

Messrs. Foster and Catchings have been talking and writing theoretically about this question for four or five years and getting much attention. They say "get more money into the consumer's hands with which to buy," which is most admirable doctrine, but their only concrete recipe for doing this little piece of bootstrap-lifting is for the Government to employ men on Federal building projects. I think that it is self-evident that this is a mere minor stop-gap.

There is, however, a far greater and more powerful lever available.

I refer to a principle which, for want of a simpler term, I name progressive obsolescence. This means simply the more intensive spreading —among those people who now have buying surplus -- of the belief in and practice of buying more goods on the basis of obsolescence in efficiency, economy, style or taste. We must induce people who can afford it to buy a greater variety of goods on the same principle that they now buy automobiles, radio and clothes, namely: buying goods not to wear out, but to trade in or discard after a short time, when new and more attractive goods or models come out.

The pace of American progress is so rapid that 75 per cent of all our business buildings are obsolescent, 66 per cent of our homes and 75 per cent of our home furnishings; while 60 per cent of our office furniture and equipment and 50 per cent of our industrial equipment is also obsolete.

(The Government is just beginning a huge inquiry into factory obsolescence). Therefore the one salvation of American industry, which has a capacity for producing 80 to 100 per cent more goods than are now consumed, is to foster still more the progressive obsolescence principle, which means buying for up-to-dateness, efficiency and style, buying for change, whim, fancy and the sense of modernness rather than simply for the last ounce of use—which is a stodgy buying reason belonging to pioneer days of scarcity of goods.

The automobile and radio industries are brilliant examples of what can be done with rapid obsolescence, for they have educated a large section of the American public virtually to buy a new model every year and trade in the old. Research has recently shown that the average appraised value of a one-year-old automobile only 38 per cent of its original list price. A year ago this was 48 per cent, and as recently as 1923, it was 54 per cent. About a million and a half cars were scrapped last year. Radio is in more or less the same position. Here we see how two great industries foster progressive obsolescence, to the general good of the nation, for the automobile industry pays the highest wage rate per hour of all our major industries, and its pros• perity tremendously affects the prosperity of the nation.

We must either use the fruits of our marvelous factories in this highly efficient "power" age, or slow them down or shut them down. The way to keep them going is to foster the spirit of style and color, change and modernism in our purchases. The new modernistic trend, which is a basic style change, affecting all industries, is an illustration of the new spirit. This "modernistic" style is of the deepest consequence in the new progressive obsolescence trend, which is not a mere theory but an accomplished fact already in operation. Every time the American consumer decides on liking something new, it means that factory wheels spin, smoke-stacks belch smoke, and high wages and full employment occur. Every time an American consumer contents himself with antique furniture, old rugs, old silver, old pianos, old houses, last years suit or overcoat, and old goods of any description—instead of the newest products of our laboratories, science and factories, he is tightening the brake band around the American wheel of progress and is retarding our standard of living.

THERE is no point in inventing things and perfecting interesting products unless they are widely used— unless the old goods are either thrown away or traded in and passed on to a lower level of consumers.

We must get the story to the American people that American genius now makes it possible for almost everybody, eventually to possess a marvelous cornucopia of interesting products, of which there is such a great sufficiency that it may not only be owned in one model to last a lifetime, but in a kaleidoscopically rapid succession of colors, tastes, designs, and improvements.

There are now about 20,000,000 people in the United States who have the money to buy new models and newer designs as rapidly as they are developed. We no longer buy a house to live in until we die, a refrigerator to last until it falls apart, an automobile until it refuses to go, a radio that simply brings in a station. We are able to indulge in our own individual ideas, and in constant new offerings, promptly discarding the old. If this spirit of progressive obsolescence is encouraged and developed we will see a great new advance in American industry, and many of our most difficult problems will be solved.

We can see in England the dreadful results of slow obsolescence. They like to make suits that can't wear out, automobiles that run forever, and inventors have to fight to make their obvious improvements appreciated. The result is a low standard of living and idle factories.

But even England is seeing a little of the light. After one hundred years of being housed in an absurd old building that looks like an aquarium, the Bank of England is now erecting a 25-million dollar building that will eat up eight years' profits. Other big London banks are doing likewise. The result is busy factories and reduction of the ranks of British unemployed. All Europe is badly in need of even the present American rate of obsolescence, for Europeans still cling to the idea that you must wear goods out before you buy new ones. America, however, must go on to new heights of progressive obsolescence until many more millions are enjoying what science and modern industry can manufacture.

IN the past ten or fifteen years, the automobile has run past one so-called "saturation point" after another and has changed, to a great extent, the life of America. This was largely due to the fact that it fostered, with every particular energy, the principle of progressive obsolescence.

This has apparently benefited both buyer and seller, for the severe industrial test this policy imposes has been met, in frequent reduction of price level and increase of attractiveness, efficiency and economy. Even Ford has been forced to bow before the god of obsolescence.

A limited group of consumers is now educated to the new idea. They buy not only clothing, but goods of all types without consideration for the last ounce of use, but for style, for aesthetic advance, for novelty and change and for individual idiosyncrasy, as well as for the last word in scientific advance. They do not buy on price or calculate the longevity of their purchase beyond the psychological point when they might weary of it, or an improvement appear.

MRS. JONES no longer takes pride in the great square ebony piano of excellent tone her mother handed down to her, but on the contrary unsentimentally considers it a horror, and has perhaps bought several pianos of different shapes and woods in recent years—also several phonographs, radios, vacuum cleaners, washing machines, sewing machines, sets of furniture, china and rugs; trading in her "obsolescent" models (each good for years more of use) in part payment for the new. Indeed, the Joneses have, in a dozen years, built three homes, but moved out of and sold two of them, because they seemed obsolescent to this family, so rapidly moving up on the social scale. A new car every year, sometimes two, is a foregone conclusion. The Jones' radio buying history is a particularly classic instance of the working of the new principle. It started by buying a crystal set seven or eight years ago, and then, as often as twice a year for five years buying a new set, as new improvements developed; working up from a three tube to a nine tube set. The significant thing to note is that thus far the family kept pace exclusively with technical, scientific advance, by means of working the progressive obsolescence principle of purchase. Then a second phase of it began—a practical or coordinative phase. Purchases for the next year or two of new radio sets were combined with phonographs or desks, etc. Finally a third phase arrived — purchase for purely aesthetic reasons. Radio sets fitting the particular scheme of furnishings were then bought. And this is the principle operative now—the logical last phase of the obsolescence cycle; which now shows signs of starting the technical cycle of obsolescence all over again! 

Here we see "progressive obsolescence" in some of its typical extreme manifestations on certain well-to-do levels of American life. In a lesser degree but on precisely the same principle this occurs on successively lower levels of American life until we reach "hard-pan," or those approximately 93 millions who are too close to necessity to have done with their purchases much more before the last usage is out of them. But even these people are linked up with the developing progressive obsolescence system, for they buy second-hand automobiles, radio sets, etc., which are in their fourth or fifth and probably final stages of obsolescence. The unique and arresting point about this is, that under any but a progressive obsolescence régime, many such people would never be able to have an automobile at all. And now the same thing is occurring in regard to vacuum cleaners, washing machines, furniture, rugs, typewriters and other articles, using the polite word "re-built" instead of the more expressive ' 'hand-me-down."

If it may be asked, how is this acceleration of the idea of progressive obsolescence to be accomplished, there need be offered no "brilliant" new panacea. Advertising is the proved and tried tool. The more cooperative the advertising, the greater its power per dollar of cost. Dozens of live advertisers are doing a lone-handed job in this direction now. If all American industry were to combine in a really cooperative advertising campaign, paid for by every American manufacturer of every kind, aimed at the benefit of all industry, the task would be still easier. The consumers to be reached, let it be remembered, are the twenty millions with buying surplus who can now afford to buy on the progressive obsolescence principle, and who already do so in some lines. They should be faced with the powerful logic and attractiveness, even the economic patriotism, of practicing more rapid obsolescence in their purchasing. Since they already have gone a fifth of the way, they will surely go the rest of the way, and then we shall see remarkable things happen in business America and in advertising.

WE have had, to date, largely a horizontal development of consumption—an increase in number of consumers who are to some degree able to buy. What we need now is a stressing of vertical consumption, an increase in the volume of purchases of those now well able to buy. Just as the most up-to-date consolidations have passed from the horizontal to the vertical, so must our consumption. Only in this way we will again reach a position where we can spread consumption horizontally and increase the twenty millions to forty. This is the exact manner by which we have already lifted ourselves by our economic bootstraps, and what we did once we can do again; this time consciously, as befits an intelligent people.