Ending the depression through planned obsolescence

by Bernard London

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 with 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.

I am not advocating the total destruction of anything, with the exception of such things as are outworn and useless. To start business going and employ people in the manufacture of things, it would be necessary to destroy such things in the beginning—but for the first time only. After the first sweeping up process necessary to clean away obsolete products in use today, the system would work smoothly in the future, without loss or harm to anybody. Wouldn’t it be profitable to spend a sum of—say—two billion dollars to buy up, immediately, obsolete and useless buildings, machinery, automobiles and other outworn junk, and in their place create from twenty to thirty billion dollars worth of work in the construction field and in the factory? Such a process would put the entire country on the road to recovery and eventually would restore normal employment and business prosperity.

An equally important advantage of a system of planned obsolescence would be its function in providing a new reservoir from which to draw income for the operation of the Government. The actual mechanism involved would be briefly something like this:

The people would turn in their used and obsolete goods to certain governmental agencies, situated at strategic locations for the convenience of the public. The individual surrendering, for example, a set of old dining room furniture, would receive from the Comptroller or Inspector of such a Station or Bureau, a receipt indicating the nature of the goods turned in, the date, and the possible value of the furniture (which is to be paid to him in the future by the Government). This receipt would be stamped in a receipt book with a number, which the individual would have received when he first brought in an obsolete article to be destroyed. Receipts so issued would be partially equivalent to money in the purchase of new goods by the individual, in that they would be acceptable to the Government in payment of the sales tax which would be levied as part of my plan.

For example, a consumer purchasing a $100 radio, on which the sales tax is 10 per cent or $10, the purchaser would pay cash for the radio, but could offer $10 worth of receipts for obsolete merchandise turned in, in payment of the sales tax. The merchant or manufacturer would have to accept these receipts for this purpose, and would turn them back to the Government in payment of the sales tax, which must be borne ultimately by the consumer in any event.

Under this system, the purchaser would feel he had been paid for the used-up article which he turned in to the Government, yet the Government would not have had to pay a cent of cash for the goods so surrendered. As a result of the process, nevertheless, the wheels of industry would be greased, and factories would be kept busy supplying new goods, while employment would be maintained at a higher level.

I maintain that taxes should be levied on the people who are retarding progress and preventing business from functioning normally, rather than as at present on those who are cooperating and promoting progress. Therefore I propose that when a person continues to possess and use old clothing, automobiles and buildings, after they have passed their obsolescence date, as determined at the time they were created, he should be taxed for such continued use of what is legally “dead.” He could not deny that he does not possess such goods, as he might hide his income to avoid paying an income tax, because they are material things, with their date of manufacture known. Today we penalize by taxation persons who spend their money to purchase commodities, which are necessary in order to create business. Would it not be far more desirable to tax instead the man who is hoarding his money and keeping old and useless things? We should tax the man who holds old things for a longer time than originally allotted.

Under the present estate and inheritance tax system, the State has to wait an indefinite period, and allow the owner of a building or commodity to keep on earning and adding more to his fortune until he dies, before it can collect its inheritance tax. With obsolescence of merchandise computed in advance, the Government will collect when the article dies, instead of when its owner dies.

Moreover, the present method of collecting revenue under the income tax is speculative and uncertain, because the profits of industry and business, upon which the income tax is based, are subject to vast fluctuations.

If the plan I propose is adopted, there will be a source of permanent income to the State from goods and merchandise in existence, and which are bound to continue to exist. Through a process of checking control of what the manufacturer sells to the dealer, and through reports by retailers of what they sell to the consumers, the Government will know by the end of the year just what income it will be sure of getting, and this amount it will be paid irrespective of whether people are making big profits or not.