The Phoebus Cartel: How Global Giants Secretly Killed the 100-Year Lightbulb

“From factories to phones—cartels pull the strings.”

In Pakistan, the phrase "business cartel" wasn't just a term from a textbook; it was the unspoken truth of everyday existence. From my teenage years, I recall the constant chatter about price-fixing by cartels that controlled sugar, flour, wheat, and even the freshest vegetables. The industrial class here holds immense sway over our most basic necessities, a stark economic reality.

This kind of pervasive control, whether over essential crops in Lahore or the newest tech in Silicon Valley, is an old story, just repackaged. This parallel exists globally, especially within the technology industry—look at the endless new software updates for mobile devices or the planned life cycles of products from giants like Apple and Samsung. This focus on control, often driven by FOMO (Fear of Missing Out), causes consumer anxiety as we prioritize adapting rather than truly benefiting from our purchases.

To understand the nature of today's market manipulation, we need to revisit one of history's most notorious examples: the Phoebus Cartel—a group that, astonishingly, engineered the lightbulb's demise for the sake of profit.

The Unchanging Anatomy of Market Manipulation

Cartels, which have existed since industrialization began, are formed by businesses seeking to increase their profits. These groups usually form when companies agree not to compete, instead controlling consumer markets by fixing prices, manipulating bids, and dividing territories.

Although governments worldwide have created laws to stop these practices, because they hurt fair competition and consumers, cartels still exist, especially in developing countries where political and economic instability creates favorable conditions. The formation of cartels is particularly harmful because it discourages new businesses from entering the market and makes it very difficult for businesses that aren't part of the cartel to survive. As a result, consumers face a double disadvantage: they pay higher prices and have to replace products more often.

 The Shocking Story of the Phoebus Cartel (1924–1939)

In 1924, in Geneva, Switzerland, the world's leading lightbulb manufacturers—including Germany's Osram, the Netherlands' Philips, and the US's General Electric (via subsidiaries)—formed the supervisory authority known as the "Phoebus Cartel." Their immediate goal was simple: to control the incandescent lightbulb market globally by assigning production quotas and fixing prices.

The most infamous action of the cartel was the industrial strategy they perfected: planned obsolescence.

The cartel deliberately established a maximum limit of 1,000 hours for a standard household bulb. This was shocking, as the average bulb life before the cartel was between 1,500 and 2,000 hours. The bulbs were made "better" in terms of brightness and efficiency, but this was merely a justification to charge higher prices for a product that had half the useful life.

To enforce this, the cartel established a Swiss testing laboratory. Manufacturers were fined if their bulbs lasted longer or shorter than the regulated 1,000-hour lifespan. The objective was to maximize sales: by shortening the life while maintaining perceived quality, sales soared.

Economic Conditions and the Cartel's Shield

Economic conditions played a crucial role in the cartel's success. The cartel was formed just before the global economic downturn of the 1930s, known as the Great Depression.

Economist Bernard London, back in the day, proposed that planned obsolescence be a government-sanctioned strategy to boost the economy. While the idea stirred up debate and never gained widespread traction, it resonated with business moguls who envisioned a guaranteed, ongoing need for their wares. The 1920s saw a perfect convergence: a global economy in trouble and the high cost of entry into lightbulb production. This situation allowed the established players to band together, a move they swiftly turned into market manipulation.

The Enduring Lesson: From the Lightbulb’s Ghost to Your Smartphone’s Battery

The Phoebus Cartel's legacy isn't merely a footnote in history; it's a blueprint for the market manipulation we witness today.

The cartel’s ability to shorten the lightbulb’s life while simultaneously increasing its price is a chilling parallel to the pressure we feel today:

  • Think about software updates: Are they genuinely designed to enhance performance, or do they subtly cripple older devices, pushing you toward a new buy?

  • Your smartphone's battery life: Is it designed for longevity, or for a two-year upgrade cycle?

The lesson endures: from the lightbulb's ghost to your smartphone's battery. These massive corporations, both globally and locally, hold sway not just because of their sheer size, but because of their capacity to mold the very regulations meant to keep them in line.

Recognizing this pattern, from the 1920s to today, is the first critical step toward demanding markets that truly solve problems rather than perpetually manufacturing them.

What power do we have as consumers to break this cycle of planned obsolescence and demand products and policies that serve us, not the cartels? Share your thoughts below.



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