Ending the depression through planned obsolescence

by Bernard London

In the description of things under the present organization of society, we continually make use of a system of weights and measures. Thus, a commodity is evaluated in terms of size—shape, weight, value, etc. The weights and measures we use are standardized and regulated by the Government so that they may not be violated. But, though we may not realize it, this system is incomplete because in the description of things it omits consideration of two elements which are equal in importance to those in everyday use in determining real values. These are life and time, life with respect to the commodity produced, and time, the period it should last.

If we add the elements of life and time to our measurement of what we produce, and say that the life of this automobile shall be not more than 5 years, or the life of this building shall last not more than 25 years, then, with the addition of our customary measurement of these commodities, we will have a really complete description of them right from the beginning. And, when capital purchases the automobile or the building, it will be doing so only for that limited period of years, after which the remaining value left in the product will revert to labor, which produced it in the first place, and which thus will receive its rightful share in the end, even if it did not do so in the beginning.

Miracles do not happen. They must be planned in order to occur. Similarly in this time of economic crisis, we must work out our own salvation.

If we can afford to sink ships, that cost millions of dollars to construct, merely for the purpose of giving target practice to the gunner, then surely we can afford to destroy other obsolete and useless products in order to give work to millions and pull the country out of the dire catastrophe in which it is now wallowing.

At the present time our country has plenty of everything, yet people are in want because of a breakdown in distribution, an inadequate division of the fruits of labor. Worn-out automobiles, radios and hundreds of other items, which would long ago have been discarded and replaced in more normal times, are being made to last another season or two or three, because the public is afraid or has not the funds to buy now. The Government should be enabled to advance a sum of money to certain Trust Agencies to purchase part of these obsolete buildings and machines and clothing. They should be thrown into a junk pile, and money lent toward creating new buildings, machines and commodities.

The State can lend money for the erection of new buildings at an interest rate of no more than 2½ or 3 per cent. Suppose, though, that new builders or owners of the buildings pay 5 or 5½ per cent interest. Two and a half per cent of this would go to the Government as interest and 2½ or 3 per cent for amortization or to a sinking fund, out of which to pay back for the construction of the building within 25 or 30 years, computed on a basis of compound interest. At that time, the building can be destroyed and a new one erected, with resultant stimulus to employment. The original building in the intervening years would have served its purpose and fairly repaid its owner.

Capital should be willing to invest its wealth on a 2½ or 3 per cent interest basis under such circumstances, because the investment will be safe, steady and permanent. In the present economic chaos, investments at great interest rates are in jeopardy and, while at present lenders are getting large returns for their money, their capital is in constant danger of being wiped out altogether.

The tax-collecting machinery at present used by the Government could readily be converted into the media for carrying into operation the system here proposed. It could be used with the same force and effect, and new laws passed concerning everything produced, just as our present excise and tariff laws cover in their fixing of rates thousands of individual items and categories. Such a means of solving our economic problem could be brought into operation quickly and in a few months the machinery of administration perfected so that thousands of people could be put back to work within a comparatively short time.

If this plan were in operation, speculators would not acquire fortunes simply by manipulating and creating false values or synthetic wealth. If it were decreed that the life of wheat were to be no more than two years, for example, no man would buy the grain solely for speculation, thus creating an artificial market and holding a club over the farmer’s head, as today. He would not dare because he would know that he would have to pay the Government a tax on the wheat after it had lived its legal life and this would make it unprofitable or at least highly dangerous to buy speculatively and hold for the future.

The widespread suffering from unemployment and want in this country today is a symptom of a fundamental maladjustment—a sickness, if you like, in our body economic. Almost every sickness can be cured, provided we get the right doctor to diagnose the case and prescribe the proper medicine, but the patient must take the medicine in order to get well. My plan is in essence a prescription for the relief and cure of the ailments from which our economic organization is today suffering.