Is it true to say things were made better in the past because ‘products were made by engineers, not accountants’?

My FIL works in HVAC and says this all the time. Apparently the compressors nowadays limp around 10 years and are planned to give out around when their warranty ends. Keeps the customer coming back. Older compressors work for 30+ years. He says that in the past the engineers did all the developing, but now companies are ‘smart’ and the MBAs get involved to get planned obsolescence to maximise profit

I was thinking this is probably why things are getting worse even as tech is getting better. Companies don’t operate on good will anymore, they just care about their profits. So their actions to maximise profits at the expense of consumers roll back the gains consumers receive from technological progress and productivity gains.

Come to think of it outside of tech (which is advancing up its S-curve) I can’t say anything is better quality now than it was a decade ago. Definitely not at the same price point. Is there research into this? It feels like a decline in quality of life that can’t be captured by economic indices.

Is it true to say things were made better in the past because ‘products were made by engineers, not accountants’?
byu/Aggressive_Still4503 inAskEconomics

Posted by Aggressive_Still4503

urnbabyurn on September 13, 2026 5:22 pm

Quality isn’t just durability. Computers, TVs, Cars all are by most metrics “higher quality” today. Durability is just one of many attributes. Consumers may simply not find the added cost worth the added durability – and particularly for products that are constantly improving in other attributes and getting cheaper over time.

Another factor is that monopolies indeed may purposefully reduce durability for reasons beyond cost versus consumer benefit. A durable good monopolist essentially competes against its future self and the resale (used) market (see ALCOA antitrust studies), so there is an incentive to maintain more monopoly power over prices by reducing durability. Or, shifting to a rental model versus purchases. See Coase Conjecture and Planned Obsolescence (Bulow, 198?). Having said that, the general public tends to overstate this as a factor. In a competitive market, for example, a firm that can produce valuable durability increases beyond the cost of adding it will find it profitable to do so. Consumers are generally rational and will choose products that are best priced accounting for how much use time they will get. A consumer will pay *almost* double for a good that lasts twice as long (almost, because we have to discount future benefits).

What complicates the GE case was that at the time there was a cartel antitrust case where manufacturers were in agreement to limit durability. OTOH, the government agencies found that the standard 1000 set by the cartel was a reasonable durability standard for the tech at the time – so durability limits were agreed as a way to limit competition between firms, but also probably wasn’t the cause since more durable bulbs weren’t necessarily that much more cost effective if at all. Similarly, firms selling more durable lightbulbs weren’t necessarily credible for consumers so asymmetric information may also be the limiting factor.

At the end of the day, more durability isn’t always efficient. It’s not worth a product that lasts twice as long if it costs twice as much to manufacture. So much of this is simply cost minimizing given how technology works as well as a consumer preference for less durability such as with tech products which become out of date more quickly anyway. A car from 10 years ago has a lot fewer features than a car produced today. So many consumers don’t want cars lasting 20 years for even 75% more cost.

Another factor is it is perfectly rational in cases for consumers to not purchase more expensive durable goods if there is uncertainty about future advances. I may skip buying a lightbulb that provides 10,000 hours over one that produces 1000 hours despite costing less than 1/10th the price if i anticipate being able to purchase a 20k hour lightbulb in a years time. (See Hasset and Metcalf)

Lightbulbs are also a good example of a classic case of this debate. The “conventional wisdom” by the public is GE withheld longer lasting lightbulbs because 1. They had a monopoly or large market share and so ability to set prices and durability, and 2. Purposefully withheld or overpriced durable lightbulbs despite being efficient in order to make more sales revenues.

The problem with this claim is that even a monopoly has incentive to maximize efficiency in lightbulb durability since it means minimizing the cost of lightbulb use hours. If a lightbulb getting twice the hours can be produced at less than twice the cost, a monopolist could double the price and sell those more durable lightbulbs, selling for the same revenues but with a lower cost. Lightbulbs aren’t resold so the anticompetitive role of less durability isn’t a factor.

2 Comments

urnbabyurn on September 13, 2026 5:22 pm

Quality isn’t just durability. Computers, TVs, Cars all are by most metrics “higher quality” today. Durability is just one of many attributes. Consumers may simply not find the added cost worth the added durability – and particularly for products that are constantly improving in other attributes and getting cheaper over time.

Another factor is that monopolies indeed may purposefully reduce durability for reasons beyond cost versus consumer benefit. A durable good monopolist essentially competes against its future self and the resale (used) market (see ALCOA antitrust studies), so there is an incentive to maintain more monopoly power over prices by reducing durability. Or, shifting to a rental model versus purchases. See Coase Conjecture and Planned Obsolescence (Bulow, 198?). Having said that, the general public tends to overstate this as a factor. In a competitive market, for example, a firm that can produce valuable durability increases beyond the cost of adding it will find it profitable to do so. Consumers are generally rational and will choose products that are best priced accounting for how much use time they will get. A consumer will pay *almost* double for a good that lasts twice as long (almost, because we have to discount future benefits).

What complicates the GE case was that at the time there was a cartel antitrust case where manufacturers were in agreement to limit durability. OTOH, the government agencies found that the standard 1000 set by the cartel was a reasonable durability standard for the tech at the time – so durability limits were agreed as a way to limit competition between firms, but also probably wasn’t the cause since more durable bulbs weren’t necessarily that much more cost effective if at all. Similarly, firms selling more durable lightbulbs weren’t necessarily credible for consumers so asymmetric information may also be the limiting factor.

At the end of the day, more durability isn’t always efficient. It’s not worth a product that lasts twice as long if it costs twice as much to manufacture. So much of this is simply cost minimizing given how technology works as well as a consumer preference for less durability such as with tech products which become out of date more quickly anyway. A car from 10 years ago has a lot fewer features than a car produced today. So many consumers don’t want cars lasting 20 years for even 75% more cost.

Another factor is it is perfectly rational in cases for consumers to not purchase more expensive durable goods if there is uncertainty about future advances. I may skip buying a lightbulb that provides 10,000 hours over one that produces 1000 hours despite costing less than 1/10th the price if i anticipate being able to purchase a 20k hour lightbulb in a years time. (See Hasset and Metcalf)

Lightbulbs are also a good example of a classic case of this debate. The “conventional wisdom” by the public is GE withheld longer lasting lightbulbs because 1. They had a monopoly or large market share and so ability to set prices and durability, and 2. Purposefully withheld or overpriced durable lightbulbs despite being efficient in order to make more sales revenues.

The problem with this claim is that even a monopoly has incentive to maximize efficiency in lightbulb durability since it means minimizing the cost of lightbulb use hours. If a lightbulb getting twice the hours can be produced at less than twice the cost, a monopolist could double the price and sell those more durable lightbulbs, selling for the same revenues but with a lower cost. Lightbulbs aren’t resold so the anticompetitive role of less durability isn’t a factor.
MachineTeaching on September 13, 2026 5:37 pm

This is anywhere between wrong and misleading.

At best, I think you could argue that there are more less durable products on the market, at least in some categories.

But obvious cases of planned obsolescence are actually not particularly easy to find. It’s not easy to distinguish between a product that is designed to fail or a product that is merely designed to be cheap.

Also, for lots and lots of products, higher quality versions *do exist*, people just often have strong preference for low prices. Clothing is probably the most obvious category. “High quality clothes” aren’t even gone, they just cost more or less what they always did. And thanks to the internet, it’s kind of easier than it’s been in decades to find them. You can get a pair of leather boots made just the same as a hundred years ago and they will probably last that long as well. You can buy a pair of jeans made from American cotton that would make any old school cowboy happy. It’s just that those boots cost $400 and those jeans cost $150 when Walmart sells boots for $50 and Shein sells jeans for $5.

The same goes for many products. “Back in the day”, the only option that existed was the expensive one. Nowadays, you get expensive and cheap, and people buy cheap. You’re expecting to pay $200 for a fridge and have it last forever because in the 60s, a fridge that cost the equivalent of $2000 lasted for a long time. Of course that doesn’t work out.

And obviously many products do cost more or less the same (adjusted for inflation) and improve in quality. Cars are consistently more fuel efficient, safer, need less maintenance and last for longer. The $300 TV you can buy today is leagues better than the $2000 TV you could buy 10 years ago.

Also, the “they want the product to break just after warranty so people come back” reasoning also doesn’t make that much sense. Because people don’t want their stuff to break right after warranty. Because competition exists. Because they’ll buy something else. Obviously not everyone cares all of the time, but buying the fifth vacuum in a row from the same brand because they keep breaking would be a bit silly, wouldn’t it.

In any case, the empirical evidence “for” widespread planned obsolescence is quite scarce and there are plenty of other decent explanations, like “people like cheap stuff”.

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