"J.P. Morgan used his unique position to shape American capitalism in its glory days. This sometimes meant creating companies from scratch. Morgan had a sharp eye for world-changing innovations: he lent Thomas Edison the money to establish the Edison Electric Illuminating Company in 1878, and was the first person to install electric lights in his house."
"The 1880s saw the introduction of two revolutionary new technologies, electric power and the internal combustion engine. Economists call these 'general purpose technologies' because they are great inventions in their own right and lead inexorably to lots of smaller inventions that, taken together, completely change the tenor of life."
However, "There is often a significant time lag between the invention of a new technology and the boost in productivity that it produces. Four decades after Thomas Edison's spectacular illumination of Lower Manhattan in 1882, electricity had done little to make the country's factories more productive. Introducing electricity was not just a matter of plugging factories into the electricity grid. It involved redesigning the entire production processes and replacing vertical factories with horizontal ones to get the best out of new power source."
"The United States cannot claim a patent on these great inventions. The groundwork for the electricity revolution was laid by a United Nations of innovators...But America can certainly claim to have democratized these general-purpose technologies more successfully than any other country. America's genius lay in three things that are rather more subtle than invention: making innovations more user friendly; producing companies that can commercialize these innovations; and developing techniques for running these companies successfully."
"Some of the most important improvements are felt in the convenience of everyday life," such as "the spread of electricity from 1900 onward." "By 1914, Americans...lit and heated their houses with electricity. America established a huge lead over the rest of the world in new industries such as steel, cars, and electricity. But...it was not until the 1920s that industrial America made substantial strides into the electricity age."
"Electricity was such a powerful new technology that contemporaries regarded it as a variety of magic. It can be generated easily and transmitted long distances with minimal leakage, and without smoke or fumes. Electricity gave birth to electric tools for factories and homes; elevators; electric railways and underground trains; washing machines, stoves, irons, refrigerators; and, of huge significance for the sweltering South, air-conditioning."
THE MARCH OF THE ELECTRONIC SERVANTS
"The arrival of 'electronic servants' signaled something new in history: mass affluence. In the same year that the Communists seized power in Russia, General Electric celebrated a different revolution---the rise of 'electric servants' that are 'dependable for the muscle part of the washing, ironing, cleaning and sewing. They could do all your cooking---without matches, without soot, without coal, without argument--in a cool kitchen.'"
"In the early twentieth century, the electricity industry witnessed the biggest boost in productivity of any sector of the economy thanks to two developments: the construction of large central stations powered by high-pressure boilers and efficient turbines, and the construction of power transmission networks over ever-larger areas. Over the next three decades, the amount of electricity that Americans used increased tenfold--from 6 billion kWh in 1902 to 118 billion kWh in 1929. Over the same period, the cost of that electricity declined by 80 percent--from 16.2 cents per kWh in 1902 to 6.3 cents in 1929."
*Excerpts taken from Capitalism in America: A History by Alan Greenspan & Adrian Wooldridge
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