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Phoebus cartel (wikipedia.org)
131 points by prawn on July 26, 2018 | hide | past | favorite | 48 comments



Reading up on it, it seems like the justification for creating Phoebus was to standardize the industry (it's the reason all of our lightbulbs today follow the same rating system and screw in the same way). But clearly they ran amok to serve their own interests.

Cartels are very interesting: historically few are successful long term - there is too much incentive for newcomers to undercut prices. They need something to keep new entrants at bay. It seems like in this case they pooled their patents together.

IEEE has a more detailed write-up: https://spectrum.ieee.org/tech-history/dawn-of-electronics/t...


>Cartels are very interesting: historically few are successful long term

OPEC has been around for 57 years and seems to be holding together. My uneducated hunch is that the success of a cartel has to do with how fungible the product is and oil is very near the top of the list.


You're correct, OPEC has been around for almost six decades and still wields significant power.

Yet, is it perhaps possible that it has less than it used to? The days when OPEC could single-handedly crash the economies of much of the Western world are mostly gone. There's too much oil production outside of OPEC nations. American frackers have shown an extraordinary ability to respond quickly to price rises, checking them and OPEC's power both.

OPEC is holding together as a group and cartel! But, outside pressure and internal political differences have severely weakened it...


OPEC has taken to fighting among themselves as well. Saudi Arabia has noped out of agreements at will (granted other OPEC members may have been cheating and doing the same without saying it), notably once during the crazy sub $1 a gallon period in 1998.


OPEC was meant to be a reaction to the Seven Sisters cartel and is much weakened compared to the days of the seventies oil crisis. The majority of world production has been outside of OPEC for years.

What they do have is the most reserves.


I think that legister means that few Cartels, as in a cartel-collaboration-pricing-strategy, are successful in the long term.

Yes OPEC exists as an organization, but it's price-fixing & supply-fixing strategies have failed. Especially in the late 80s there were a lot of defectors from the cartel strategy during the oil glut.

https://en.wikipedia.org/wiki/OPEC#1979%E2%80%931980_oil_cri...


It also helps that it's an intergovernmental organisation rather than a private cartel.


I suppose that's true, but I'm not sure it's fair to attribute the rise of a newcomer to the death of this specific cartel. WWII did a number on the global economy


Lightbulbs aren't all that standardized though:

https://en.wikipedia.org/wiki/Lightbulb_socket

I had never seen a bayonet mount before I moved to Australia, but they're still reasonably common here.


The split between bayonet and screw in Australia does my head in, especially if you're in an older house where the landlord is cheap/doesn't care and half your sockets are bayonet and half are screw.

I need to replace a lightbulb in my hallway, but I don't know if it's screw of bayonet. I always forget to check at home, and then when I'm at the shops I don't know what one to get. It's been like that for a month now.


I end up owning like 4 spare of each type for this reason. And then you get newfangled low-profile bulbs with a smaller socket for the screw or bayonet.

One day I'll be pissed off enough at the problem to buy the solution but I suspect that'll take some time since the infrequency with which I replace bulbs means it doesn't sit in my active memory as something to do.


Bayonet mounts are common for car turn signals, or at least they were in the 1980s and 1990s.


Yes but there's a fair bit of variation in size, proportion, and terminal location among the lights of various cars.


And headlights.


Great link in the wikipedia article to Gravity's Rainbow. Love this quote from the Byron the Bulb episode:

"His youthful dreams of organizing all the bulbs in the world seem impossible now—the Grid is wide open, all messages can be overheard, and there are more than enough traitors out on the line. Prophets traditionally don't last long—they are either killed outright, or given an accident serious enough to make them stop and think, and most often they do pull back. But on Byron has been visited an even better fate. He is condemned to go on forever, knowing the truth and powerless to change anything. No longer will he seek to get off the wheel. His anger and frustration will grow without limit, and he will find himself, poor perverse bulb, enjoying it."


I was wondering what had caused me to know about this before!


Bulb efficiency and bulb life are at odds. In railroad signals, the practice was to use low-power bulbs that barely glowed, and lasted basically forever(nowadays it is all LEDs, Iguess). I am sure no one wants 5W bulbs glowing deep orange at home. Targeting a rather low life is the same as targeting a minimum efficiency.


If this was the case they could simply have left it up to the market to decide the balance of efficiency and life. If your supposition was correct then the hypothetical "5W deep orange" bulb would not have sold.


Assuming that the collusion actually took place, which I don't put my bets in. I remember seeing 'long life lamps' on supermarket when bulbs were a thing, BTW.


The Phoebus cartel was defunct by 1940.


Are you implying that the article is a lie?


Emerged here: https://en.wikipedia.org/wiki/Centennial_Light from the Wikipedia rabbit hole, could be considered related.


" worked to standardize the life expectancy of light bulbs at 1,000 hours (down from 2,500 hours), and raised prices without fear of competition. The cartel tested their bulbs and fined manufacturers for bulbs that lasted more than 1,000 hours.".. Wow. How is this legal?


It isn't, they were a cartel.


It was legal at the time.


Oh my gosh, when has legal ever mattered?


It has always mattered. Illegality drives up risk, businesses seek to minimize risk.

The flip side is that if something is illegal but the perceived risk of being caught is lower than the perceived gain, the laws are likely to be broken. That's why fines to businesses tend to be quite steep.

Of course in this case, there was no risk, as cartels were legal at the time.


In the days of incandescents I'd pay more for a bulb that burned hotter for a higher CCT (3500k or above), even at the expense of lifetime.


I just wanted to share this very relevant video:

https://www.youtube.com/watch?v=lW17rr20tGY

I miss fox ADHD.


philips mentioned here, fun fact about their current tactics... bought some lamp from them which is alarm, it lights instead of makes sounds. simple thing, helps me wake up. the light bulb whent, so i though hey, replace it. easy. unfortunatley, they had superglued the bulb into the socket with a thick layer of hard glue, making it impossible to replace. had to buy an entire new unit (40 euros) instead of light bulb for 1 euro.... ofcourse i didnt/ i just binned it.


Someone linked to this in a recent thread on philips colluding over something else.

=(. Sad.


This is what results from truly free markets.


The article is incredibly biased. Although Phoebus was a price fixing cartel, the "planned obsolescence" is bullshit. Walmart replaces all of their lights and ballasts (power converters for the lights) on a regular schedule. That is why you rarely see lights not working at Walmart anymore.

They don't do it because they want all the lights to work. They do it because if they don't, it costs more in energy and the brightness goes down.

Long life incandescents also put out less light per watt and end up using more energy as the bulb ages as well as the light decreasing. Often times I would replace the bulbs before they died because the light was too low.

We do not have "truly free markets" and never have. This is not an example of that because there are no examples of that.


> The cartel tested their bulbs and fined manufacturers for bulbs that lasted more than 1,000 hours

If their motivations were pure, they would set a standard for efficiency and/or brightness, or a minimum but not maximum of 1,000 hours.


Maybe there is no "free market". But without Phoebus, customers could have chosen between shorter-life bulbs that were more efficient, and longer-life bulbs with lower replacement costs. How is that bad?


[flagged]


You're being sarcastic, right?

It doesn't matter what the "unwashed masses" lack. What matters is that they have the choice.

Your argument is tantamount to "I have this gun, so I know best how to maximize the utility of your wallet."


First off, that's a false analogy.

That being said, it's 50/50. Yeah, obviously people should be allowed to make their own choices but you also have to realize that people like 'us' (20-40yo tech career westerners) live a far different life and probably employ much better personal criteria than others do. It's not inherently a false statement but it shouldn't be used to take power from people.

Long story short I agree with you but a lot of people don't fully understand the ramifications of their actions.


> the "planned obsolescence" is bullshit

Nonsense. We could have light-bulbs that last longer but we don't because someone wants to make more money and can externalize the costs of waste. Planned obsolescence is rampant and getting worse. (How many iPhones have you bought?)


Lightbulbs that last longer can't burn as bright, will use more electricity and do cost more. Nothing stops any company from creating long-lasting lightbulbs and they do in fact exist, but the consumer demand for them isn't necessarily higher because of it.

>> How many iPhones have you bought?

Three. Got a 6S right now, still running well and I'm not looking to upgrade. If I cared about it becoming obsolete, I could get a Shift phone instead.

The reality is that most consumers don't mind swapping phones on a regular basis, they want to go with the technological progress. On the other hand, smartphones aren't getting that much better anymore and consumers are delaying upgrades. If they truly valued long-lasting phones with replaceable parts, those phones would be successful. They're not, they are a small niche.


> Lightbulbs that last longer can't burn as bright, will use more electricity and do cost more.

Bah. Even if that's true now it's not inherently true.

> Nothing stops any company from creating long-lasting lightbulbs and they do in fact exist

Common-sense and self-interest stops them from making longer-lasting bulbs cheaper. We are discussing this on a thread about a lightbulb cartel, are we not?

I'm not saying all businessmen are evil or anything like that, I'm pointing out that various forms of more-or-less deliberate obsolescence and waste are endemic to our economies. This is hardly controversial.

> most consumers don't mind swapping phones on a regular basis

To hell with what "consumers don't mind" it's wasteful. Close the loop: imagine what goes into making one of those things and what happens to it after you're done with it.

> technological progress

The display is better, the super computer is thinner and lighter. I get it. It's incremental improvement on the Tricorder from Star Trek.

But Apple isn't making new phones every N months because "consumers don't mind" but because they want to make even more money. They have more cash than Scrooge MacDuck. And they know they can get people to hand over hundreds of dollars a pop just to track that sweet "technological progress", just like sports sneakers.

I'm kind of in awe of the Apple Store. It's like a cattle call. People line up, the technician plugs in the diagnostic widget and performs the sacrament, then tells them how much money to put in the box to make the magic stone work again.

Apple is beyond planned obsolesce. Not only have they installed a digital shopping mall in the purses and pockets of Jane and Joe Average, they have trained their users to return again and again to keep "fixing" their malls.

Now, I wouldn't mind but for the waste! We are surrounded by waste.

If you go into your kitchen and kneel down in front of the fridge and open the door you'll feel a wash of cold air pouring out. Warm air is rushing in at the top to replace it. This happens every time you open your fridge. You pay for the electricity to cool that air.

Why are refrigerators built like cabinets rather than drawers?

Pilot lights in heaters and stoves.

Gasoline is what's left over after all the other useful things in petroleum are extracted. After all the high-grade fuel and plastic and whatnot are made, the leftover oil is treated and sent to the gas stations. Cars and trucks function, in part, as a waste disposal system for the oil industry.

You can put a spark plug in your tail pipe with a switch on the dash and send twenty-foot flames shooting out of the back of your car. People used to do it for kicks. This works because the carburetor doesn't fully "atomize" the fuel: there are blobs and streamers and these do not burn completely in the engine and are flushed out in the exhaust. There are dozens of "magic" carburetors and carburetor mods that can improve your gas mileage.

I collect ideas, like some people collect stamps or butterflies. It's fun, but it's also frustrating, because I started to realize that we do not live in the best of all possible worlds. There are all sorts of technologies that are completely neglected that would be so cool to have available. Light bulbs that last twenty or thirty years are nothing.

The bottom line is we live in an inferior timeline largely to to venality and ignorance. "Planned obsolesce" is a real thing and a curse.


Source about Walmart?


Competition killed the cartel... not government.


> The cartel ceased operations in 1939 owing to the outbreak of World War II.

World War II was a kind of competition, I guess.


> In the late 1920s, a Swedish-Danish-Norwegian union of companies (the North European Luma Co-op Society) planned an independent manufacturing center. Economic and legal threats by Phoebus did not achieve the desired effect, and in 1931 the Scandinavians produced and sold lamps at a considerably lower price than Phoebus.

WW2 might have been the deathknell but it was already well on its way to its own demise.

Cartels only really work when you have governments to enforce them (see: wireless and ISP pricing in Canada)... these voluntary cartels very rarely work for a long period of time in a 'free market'. At most they'll get a few years before the public and competitors realize it.

This entire scheme was predicated on the benefit of the lack of awareness by the public/markets. In the 1920s you could rely on a lack of free flow of information (or at most a severely inefficient flow of information), such as pricing awareness in different markets:

> The cartel operated without the knowledge of the public

The internet would have killed this type of thing way faster. But given it was the 1920s and an international operation in a pre-global marketplace it took some time for competition to react. Plus many of the 'controlled' markets were colonial countries where information/markets could be far easier to control than an actual free market with a free press.


> these voluntary cartels very rarely work for a long period of time in a 'free market'.

The Phoebus Cartel worked for fifteen years. That's plenty of time to prove that "free" markets just don't work.

> Cartels only really work when you have governments to enforce them (see: wireless and ISP pricing in Canada)

I don't know about the specifics of the situtation in Canada, but networks are natural monopolies. Competition does not make sense in that sphere to begin with.


Truly free markets don't have patents. Abusing the power of the state to destroy competition does not work in a truly free market.


I don't see how this is relevant in today's world.

- sent from my iPhone


Nothing the god of capitalism wouldn't let you into heaven for.




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