What is it your grandfather says? “Back in my day, things were built to last, not like this cheap junk manufactured halfway around the world that breaks as soon as it’s taken out of the packaging.” In other words, they don’t make ‘em like they used to. He is wise and experienced with gray hair, so he must be correct, right? A lot of people, even today’s youth, share the opinion that everything that was constructed 80 years ago had a thousand-year lifespan. A toy train, a refrigerator, or a car made during the administration of President Dwight D. Eisenhower would survive the Apocalypse. So, does this mean a Dick Tracy toy watch from a manufacturing facility in Taiwan dies after one use?
The Circle of Lifespans
Chances are, if you purchased an automobile yesterday, it would last you more than a decade. If you were gifted a Samsung Galaxy for Christmas, it would survive until 5G became ubiquitous. This is true for a whole host of goods produced in the free-market economy. The proof is in the data.
Using figures from the Bureau of Transportation Statistics, the American Enterprise Institute (AEI) published an interesting chart that highlighted the average age of U.S. cars and trucks from 1995 to 2019. Over this period, the average age has ballooned from 8.4 years to 11.8 years or more than 40%. The numbers prove how automotive technological advancements are leading to better cars and trucks on the road, which keeps motorists safe and saves consumers dollars since they are spending less on vehicles in their lifetime. You might not notice the innovation year-over-year, but it is there.
Many like to poke fun at younger consumers for always buying the latest Apple iPhone model, which is an unnecessary expense. Overall, various studies find that the life cycle of smartphones has been steadily increasing in recent years. Or, put in another way, you do not need to upgrade your mobile device after 18 months. Estimates suggest that your typical smartphone’s life cycle is around two to three years. There will be mass upgrades as the world shifts to 5G networks, but until then, users could stick to their iPhone 8.
Computers and their components maintain an incredibly greater average lifespan than they did years ago. The mean time between failure (MTBF) for computer parts is a lot longer than in 2005. As a result, performance is impressive, and components need replacement less frequently. In the end, consumers do not need to spend their hard-earned dollars on a new computer every couple of years.
We might classify the current U.S. market as the throwaway generation. When something breaks, we choose to replace it with something new since the cost to repair the broken item is as expensive as buying fresh from the store. This is true for footwear, a Blu-Ray player, or a laptop. Is it wrong? You decide.
Survivorship bias is a logical fallacy of focusing on goods or services that lived past a selection process while dismissing things that did not, due to a paucity of visibility. This produces a wide variety of falsehoods. In the marketplace, many people will aver that anything that survives from yesteryear suggests everything was built to last. The problem, however, is that the plethora of products that failed over the years are no longer noticeable or available to the public because they have been thrown in the garbage, broken apart as scrap, or recycled.
The U.S. enjoys the highest household disposable income per capita of all Organisation for Economic Co-operation and Development (OECD) nations. People have more disposable income, and greater purchasing power due to cheap imports. As a result, they do not need to be as careful as a family of four had to be with the television or radio set in the 1960s, which shows in the various YouTube videos featuring individuals purposely destroying a TV.
Subjective value is an important economic concept in this conversation. If you buy a pair of Nike sneakers, you know you are purchasing high-quality shoes that will survive a long time. They will also cost you a lot more than those $10 running shoes at Walmart that will inevitably fall apart sooner.
There is an adage: “I’m too poor to be cheap.” It explains that perhaps you may need to spend a bit more to ensure an item survives. Take the Dyson vacuum cleaner. It is a superior product that will set you back a few hundred dollars, but it will perform at a high-quality level for many years to come. A generic brand version is a lot more affordable for the average person, but its efficacy will diminish over a shorter timeframe.
Another misconception is that recycled materials pale in comparison to new raw materials. Many allude to steel as an example to support this argument, but it is a material that does not lose its properties when recycled. Recycled steel is as strong and durable as new steel.
Critics of the present-day marketplace will contend that manufacturers purposely sell products designed to break apart as soon as they are taken from the packaging. It is spurious reasoning that makes sense on the surface, but once you think about other considerations, it does not hold any weight.
Why do we believe things that were put together a hundred years ago were built to last? The likely reason is that poorly built consumer goods, capital expenditures, or buildings from the good old days do not exist anymore. We tend to think that premium quality comparable to what was prevalent during the Silent Generation is absent in today’s economic landscape. Consumers who yearn for vintage quality can still attain it, but they will need to pay higher prices – just as their ancestors did.
Read more from Andrew Moran.