Everything Everywhere Daily – The Phoebus Cartel

Host: Gary Arndt
Date: November 21, 2025

Overview:

In this episode, Gary Arndt explores the remarkable and unsettling history of the Phoebus Cartel—an international consortium of light bulb manufacturers who conspired in the 1920s and 30s to deliberately reduce the lifespan of light bulbs, giving birth to the concept of “planned obsolescence.” Gary explains the cartel’s origins, motives, operations, and enduring legacy, showing how this event shaped both consumer industries and modern antitrust perspectives.

Key Discussion Points and Insights

1. The “Problem” of Product Longevity

• Timestamp 02:55
  • Early 20th-century light bulbs were becoming increasingly durable, with some lasting well over 2,500 hours; experimental bulbs even exceeded 100,000 hours.
  • The famous “Centennial Light” in Livermore, California, has burned almost continuously since 1901—a testament to the era’s engineering.
    • Gary: “The bulb...has been operating non-stop for 125 years, totaling over a million hours of service.” (03:45)
  • This created a dilemma for manufacturers: longer-lasting bulbs meant fewer purchases and declining profits.

2. Market Instability and Rising Competition

• Timestamp 05:00
  • Companies like GE, AEG, Siemens, Philips, and Tungsram began battling for global market share through patents, price wars, and aggressive international expansion.
  • The industry saw early forms of cartelization and patent pooling, such as Osram's “International Glouvlampen Preisvereinengung.”

3. The Formation of the Phoebus Cartel

• Timestamp 06:45
  • On December 23, 1924, executives from leading global lighting firms met in Geneva, Switzerland, forming Phoebus SA.
  • The cartel’s explicit goal: standardize bulb lifespan at 1,000 hours, down from existing standards of 2,500 hours or more.
    • Gary: “The primary objective of the Phoebus cartel was to standardize the lifespan of incandescent light bulbs at precisely 1,000 hours, a dramatic reduction from the 2,500-hour light bulbs that were common at the time.” (07:02)
  • Presented as “standardization” and “efficiency,” this was in reality a coordinated reduction in product quality.

4. Enforcement and Fines

• Timestamp 08:25
  • The cartel instituted rigorous testing: if a company’s bulbs exceeded 1,005 hours, fines were imposed, calculated according to overage and volume.
  • As a result, the industry average quickly dropped to the 1,000-hour standard worldwide.

5. Market Division, Patent Sharing, and Suppression of Innovation

• Timestamp 09:15
  • Cartel members divided markets, avoided competition in each other’s regions, shared patents, and actively prevented technological advances that could threaten their agreements.
  • The arrangements and divisions were documented, leaving a rich archive for historians.

6. Public Knowledge and Legal Ambiguity

• Timestamp 10:08
  • While not a secret within the industry or to regulators, the specifics—especially about enforced lifespan limits—were intentionally withheld from the public.
    • Gary: “Phoebus SA was set up as a legal corporation and its creation was announced in the official Swiss Commercial Register, which listed its name, purpose and shareholders...but almost no one in the public does.” (10:16)
  • At its peak, the cartel controlled about 90% of global light bulb production.

7. Global Reach and Tactics

• Timestamp 11:10
  • Phoebus enforced compliance aggressively, especially against non-member independents.
  • In the U.S., General Electric dominated both domestic and international coordination.

8. The Cartel’s Decline

• Timestamp 12:13
  • The onset of the Great Depression triggered greater scrutiny of anti-competitive practices.
  • The outbreak of WWII in 1939 (“the final blow”) made international coordination untenable as companies found themselves on different sides of the conflict.
  • Despite the cartel’s end, the 1,000-hour standard remained entrenched in manufacturing and consumer expectations.

9. Legal and Economic Legacy

• Timestamp 13:45
  • The Phoebus Cartel operated in legal gray areas: international law was ill-equipped to handle global cartels, and the Swiss legal environment was favorable to such arrangements.
  • After WWII, the cartel became a key antitrust case study; seized documents confirmed price-fixing and deliberate reduction of product quality.

10. Technical Justifications and Their Limits

• Timestamp 15:10
  • There were technical arguments favoring the 1,000-hour limit (shorter life offers brighter, more efficient light).
    • Gary: “A filament run at lower temperature can last much longer, but it produces dimmer, yellower and less efficient light. By contrast, a hotter filament gives brighter, whiter illumination and higher efficiency, but it burns out sooner.” (15:30)
  • Gary notes that if this were purely technical, no cartel would have been necessary.

11. Planned Obsolescence: Then and Now

• Timestamp 16:37
  • Planned obsolescence persists today, though legal changes and new technologies have altered strategies.
  • Example industries:
    • Smartphones: “Smartphones...have to consistently release new features in the hopes that it will entice people to buy new phones. And every year this becomes more difficult.”
    • Automobiles: Previously wore out at 100,000 miles; now often exceed 200,000, pushing companies to increase prices or add features instead of relying on rapid obsolescence.
  • Cartels are now rare due to tight antitrust scrutiny—except when governments themselves act as a cartel, e.g., OPEC.

12. The Long-Lasting Influence

• Timestamp 18:20
  • The 1,000-hour light bulb standard still shapes industry conventions and consumer expectations, despite the original cartel ending nearly a century ago.
  • The Phoebus Cartel provides lasting lessons for policy makers and economists on collusion, anti-competitive behavior, and regulatory oversight.

Notable Quotes and Memorable Moments

• On the central dilemma facing manufacturers:

  • “If their product is too good, then people might not need to buy it again, or at least for a very long time.” (00:06)

• On the cartel’s core achievement:

  • “The cartel had successfully engineered a less durable product and convinced most of the global market to accept it.” (08:58)

• On legal ambiguity:

  • “If you were a competitor, a lawyer, or a government official paying attention to industrial organization, Phoebus was not some mysterious cabal in the shadows. It was a known cartel in a sector where patent pools and market sharing agreements were already common.” (10:32)

• Reflecting on modern obsolescence:

  • “Rather than forming cartels, most companies solve the problem through product improvements...Smartphone manufacturers are finding that consumers aren't upgrading their devices as often.” (16:52)

Important Timestamps

• 02:55-04:15: The problem of durable light bulbs and the Centennial Light
• 06:45-07:34: Formation and official goals of the Phoebus Cartel
• 08:25-09:15: Cartel enforcement and the rise of the 1,000-hour standard
• 10:08-11:10: Public knowledge versus industry secrecy
• 12:13-13:40: Decline and dissolution of the cartel during WWII
• 15:10-16:37: Technical arguments for shorter lifespans and comparison to planned obsolescence today
• 18:20-19:10: The Phoebus legacy and its influence on future industry collusion and regulation

Tone and Style

Gary’s tone is accessible, curious, and lightly skeptical. He favors clear explanations, highlights historical ironies, and draws comparisons to present-day industries for broader relevance.

Summary:
Gary Arndt’s exploration of the Phoebus Cartel on Everything Everywhere Daily reveals how major companies once orchestrated a global reduction in product quality to drive consumer sales, setting a dark precedent for planned obsolescence. The cartel’s legacy endures not just in the persistence of the 1,000-hour light bulb but as a foundational case for antitrust law and economic regulation, marking a cautionary tale for modern businesses and regulators alike.