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Suddenly, It’s Back to the Stone Age

Mises Daily: Monday, August 29, 2011 by

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Life is ticking along normally and then suddenly, out of nowhere and without warning, you find yourself plunged back in time, reduced to the level of a hunter-gatherer, unable to enjoy the conveniences of civilization that you otherwise take for granted. Anyway, that's how it felt when the refrigerator suddenly stopped working.

Here we have a thing that wasn't even a common household item as we know it until the 1950s, a thing that used to be called an "ice box" in the early years of the 20th century because it was powered by nothing but a block of ice, and now it is as essential to the way we live as indoor plumbing and the Internet.

Look at all that spoils once the disaster strikes. The eggs are gone. The milk is gone. The vegetables wilt and die. The jams and jellies and condiments are not long for this world. The meat must be devoured, and so too the fish and chicken. The fresh bread made without preservatives is terminal. The sour cream will soon be green, the mayonnaise will become poison, and the beer is suddenly undrinkable. Not even the cheese can last the week.

So what's to eat? Well, there are potatoes, rice, couscous, pasta, and other dry goods, but man cannot live on starch alone. Ramen noodles have a brilliant history, but only college freshmen want a steady diet of them.

There are some canned goods, and thank goodness for them. In the modern form, canned goods were invented in the 1880s. The whole process of canning in bottles dates back to the great work of French confectioner and chef Nicolas Appert, who perfected the process in 1810. This is what dramatically expanded the range of the human diet in the 19th century, long before the refrigerator came along.

Canning has a charming history, one that is bound up with the capitalistic marketplace that eventually distributes all good things to the whole of humanity, but hardly any of us is prepared to relive it on a moment's notice.

The more puzzling question is the one that eats at many people these days: why do our appliances today have such short lives? The refrigerators of my parents' day lasted decades, and you could hardly get them to stop working. This fridge that just went belly up lasted four years! What's up with this?

Well, consider the prices in real terms. It was actually possible in 1922 to buy a fridge for $714, which is about what I paid for mine. In real terms, that's $9,061 today. You could buy an incredibly high-end model for that. In 1980, the typical refrigerator cost about $500, which is $1,389 today. You can get a top-rated refrigerator for that price today. A very high-end model today runs $2,500, which is $595 in 1975 dollars, the price of a slightly better than average model.

So in general the prices have fallen. Today you can buy one for $400 if you so choose, which would be only $95 in 1975. That option simply did not exist in those days. Over time, with economic development, the market has created what we call the low end.

So one could say that had I spent what my parents spent, I would have acquired a fridge that would last 20 years or more. I didn't do that. Instead, I chose price over quality. Why might consumers be selecting less-durable products over more-durable products? We move more than we used to. We want nice widgets on our machine like water and ice dispensers, and we value these things over durability.

We might even favor spending less and changing our appliances out more often. This is certainly true with hand-held blenders. My mother's model, which she got when she was newly married, still works beautifully. I end up buying a new one every few years. But whereas my mother's was a serious investment, mine costs a few bucks at Walmart.

Still, four years is a bit lean in my view. Most refrigerators last about 12 years (which seems to me far less than those made in the 1970s). Ideally we would be paying less for the same or better durability. And that raises a serious question about the government regulations that force these machines to operate ever more efficiently.

Since the EPA was founded in 1970, it has waged relentless war on the refrigerator. It banned chlorofluorocarbons as coolant for dubious environmental reasons. It regulated how to dispose of old machines. It has centrally planned how much energy refrigerators use, so that today they use one quarter as much electricity as they did 30 years ago.

If the government gets its way, all will conform to the "Energy Star" ideal and use 40 percent less energy than they did in 2001. Even according to the government's own data, an Energy Star machine will save you only $71 over the average 12-year life of a refrigerator. That doesn't sound like a deal that consumers are going to jump at if it means giving up functionality or paying a much higher price.

And watch out! The thing that has replaced CFC is known as tetrafluoroethane. In exactly the same way that the environmentalists waged a campaign against CFCs, they are now going after tetrafluoroethane. It is banned in Eurozone countries starting this year for all new cars. California is restricting it more and more. Looking forward, we could find that the puritans will ban it in refrigerators too.

Has this regulatory force compromised quality? One can easily see how this might happen. If a fridge can only use so much energy, it has to be allocated to features consumers love like auto-defrost and ice makers rather than the essential machine components that make the fridge do what it is supposed to do. Remember those fantastic blasts of air that would rush out of refrigerators in the old days? That's gone. Now they seem to work more like solar calculators and are just about as quiet.

Had the market selected this approach, it would be unobjectionable. But government regulations on energy use distort the tradeoffs between price and quality/durability. They mandate what our values should be rather than permitting us to inform producers what they should be.

Obama held up refrigerator regulation as a case study of how regulations do not have to compromise quality in the course of making our products more socially responsible. That's doubtful. If it were possible to use less energy and save consumers on bills without increasing the price or reducing quality, why wouldn't manufacturers do this on their own? Why get the government involved with its hectoring, subsidizing, punishing campaigns?

The presumption of all these regulations is implausible at its root: the idea that private enterprise does not serve the consumer and has no incentive to make a product that is better for people. This is just false, and the history of the refrigerator proves it.

The free market is what made it possible for all of us to keep vast quantities of fresh meat, veggies, milk products, and more inside this little machine in our homes that also gives us ice and water. As with all products of the market, one doesn't really appreciate it until it suddenly goes away. And if the government gets its way, we might all eventually find ourselves living on potatoes, Ramen, and canned goods all year.