Where’s Hoover?



March 20, 2005

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The inkjet printer represents one of the worst business models ever devised. They sell the things for practically nothing. “What?” you think. “I can buy a printer for less than a hundred dollars?” Then you discover that the cartridges cost twenty-five to thirty dollars each, and that they wear out all the time, so that you’ll pay for the printer several times over within a year or two.

Not only that. They make a slightly different cartridge for each series of models, so that you can’t interchange them. If you had a stash left over from your old printer, too bad. They design them to be hard to refill — with most types you actually have to use a drill. If you do refill anyway, the cartridge won’t send the proper signal back to your computer, so the control mechanism gets thrown off.

The manufacturers have other cute tricks. My HP printer won’t let me turn off the color, so I have to drain that super-expensive cartridge even if I generally don’t need color. And of course the whole thing is patented so I can’t buy a less expensive version. Sometimes you can buy a “remanufactured” cartridge — one that is cleaned and refilled by another company. But the big boys are trying to defeat these. Some use a kind of foam inside that breaks down quickly. HP builds a drop-dead date into its cartridges, after which the thing ceases to function.

Industry spokespeople say it’s for our own good. Without all this rigmarole and expense, quality would suffer. Well, I can tell you that quality with remanufactured and even refilled cartridges is just fine. The issue here is not quality. It’s money — and the perverse use of “intellectual property” to accumulate it. Innovation is supposed to make our lives better. This kind of innovation, by contrast, seeks to build a patent wall around a technology so that the rest of us have to spend more money.

It is the same strategy Microsoft uses with its closed computer operating system, and the results are much the same. With an open system, some ingenious person could make a better cartridge. They could make it easy to refill, and last longer. There might even be a technology standard, so that a given cartridge could work with a wide range of brands and models, the way a CD will work in any brand of player. With a closed system we are stuck, and the waste is enormous. Not only do we have to spend a small fortune on the cartridges when a few pennies worth of ink would do. More, the plastic and metal piles up in the landfills, and there are big inventory costs as well. Office supply stores have to devote entire sections to inkjet cartridges. Business and government purchasing departments have to keep track of them. The time and energy of engineers gets diverted into protecting corporate patent regimes, instead of inventing things that are new and useful.

I don’t know exactly where this abysmal model started. It goes back at least to another writing implement, the pen. Like the bicycle, the fountain pen was a product of elegant practicality, a near perfect marriage of technology and task. Unlike old quill pens it carried its own ink supply so it did not need to be constantly dipped. It lasted years with minimal upkeep. Ink was basically generic, so any bottle would do. You could write all day for maybe a few dollars a year.

Then came ballpoint pens, which had certain conveniences to be sure. But the main advantage was for the manufacturer. Now the ink could be patented, in the form of the refill. Each model could have a different size and shape, so once you bought the pen, you were a captive customer for refills. Then someone — was it Bic? — went that one better, or worse. It made the pen so that it couldn’t be refilled; the customer had to buy a whole new pen each time out. Soon this brilliant thinking crossed back over into fountain pens, which started to come with ink cartridges instead of wells that you could fill from a bottle..

Now you had to pay much more for ink; plus you had to find a store that had that particular kind of cartridge in stock. (I used to refill cartridges with an insulin syringe that I got someplace. Now that I think of it, it was practice for the drill-and-needle routine for refilling inkjet cartridges today.)

To their great credit, a few manufacturers made pens that could use either cartridges or bottle ink. But they were the minority. The land fills were filling up. The nation was sinking deeper into oil addiction in part to make plastic. Merchants were going batty trying to keep all the different models in stock. Pen users were spending a lot more money. But the economists were cheering the nation’s “growth”, and urging more of it. So we soldiered on, into a future that surely would grow brighter by the day.

The principle of the proprietary — or patented — refill has metastasized throughout the economy. It’s how Gillette sells razor blades and Proctor and Gamble sells mops, by “hooking consumers on premium-priced refills,” the Wall Street Journal observed recently. The occasion for that observation was the latest chapter in this sad story — proprietary coffee packets. Until now coffee has been basically a commodity, and wonderfully so. If you had a coffee maker, or just some filter paper, you could get whatever kind of coffee you wanted. Folgers, Starbucks, Costco house brand — it was up to you. The drip machine or espresso maker worked with any of them.

Well, Professor Friedman may write paeans to choice in market theory. But in market practice, choice is the last thing a corporation wants you to have. They much prefer situations in which you pretty much have to buy what they are selling, and coffee is the latest example. The big new thing, the Journal reports, is coffee makers designed to accept only a certain kind of pre-filled coffee packets — a kind patented by the company that made the machine. Kraft Foods for example is coming out a model called the Tassimo, which makes coffee, tea or hot chocolate from the company’s pre-filled packs. Roger Deromedi, CEO of Kraft, says the machine could “revolutionize the way people think of drinking coffee at home.”

Revolution isn’t quite what it was back when Washington and Lafayette were making it. Certainly the Tassimo could change how Americans pay for drinking coffee. The machine alone will sell for about $189.00, which is about five times the cost of a good drip machine. (And that’s cheap. A “Nespresso “ machine made by — yes — Nestle will sell for more than $2,000.) But as with inkjet printers the real money is in the cartridges, which are called T-discs. Sold this way, the coffee will cost from 30 to 60 cents a cup, as opposed to 4 cents a cup for Maxwell House. “For Kraft,” the Journal observes, “selling the machines means months, if not years, of T-disc sales to come.”

Now that’s a revolution.

At least two other companies are going the open route. Proctor and Gamble and Sara Lee both are making machines that will work with any coffee packet. But I have a feeling the boxes for the Tassimo machines will not feature the super-expensive, proprietary refills (just as printer boxes don’t warn you about the price of cartridges.) I suspect a lot of people will buy them the way I bought my first inkjet printer — unaware.

Whether the Kraft approach succeeds or fails, though, it tells us something about the entrepreneurial id in this country and the fundamentally wrong turn it has taken — a turn enabled by the copyright and patent laws. These laws are supposed to promote invention that solves problems and makes life better. They are not supposed to drive invention in a direction that creates problems for the benefit of those who hold the patents. More precisely, the problem solved is not supposed to be the desire of the corporation for a copious run of captive income.

Nearly a century ago, Herbert Hoover, then the nation’s first Secretary of Commerce, tackled an enormous problem in the new national economy: a lack of uniformity in parts. Nuts, bolts, auto tires, kitchen plumbing — these varied by company and locality, and the result was chaos. Hoover pushed and cajoled the manufacturers to accept standard sizes so that the economy could move more efficiently. Builders and plumbers could order nuts and pipes secure in the knowledge that they would fit the parts already installed. Today we face a similar problem for different reasons. We need a new Hoover to bust open the creeping enclosure that has stalled and perverted innovation and subjected the rest of us to monumental hassle and expense. We need to restore the free open spaces of commerce so that the economy — and we who comprise it — can breathe.

We also need to take a fresh look at the Constitution. The copyright and patent clause declares that the purpose of patent monopolies is to promote science and the useful arts. Is it truly useful to have inkjet cartridges that can’t be refilled, or coffee makers that will work only with a particular packet of coffee? If so, useful to whom, and to what end? Is it useful to create more waste, hassle and expense? A question like that causes market fundamentalists to blow a fuse. They have a mental system that absolves us humans of asking the kinds of questions we were designed — and therefore perhaps intended — to ask.

But if the freedom to choose means anything, it means the freedom to choose the kinds of questions we will ask and the problems we will solve. Certainly it means the freedom to revise a crummy business model that the government itself has enabled.

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